ReSA

The Review School of Accountancy

Tel. No. 735-9807 & 734-3989

FINANCIAL ACCOUNTING & REPORTING July 23, 2021(Friday)

First Pre-Board Examination 6:00 PM to 9:00 PM

MULTIPLE CHOICE
INSTRUCTIONS: Select the correct answer for each of the following questions. Mark
only one answer for each item by shading the box corresponding to the letter of
your choice on the sheet provided. STRICTLY NO ERASURES ARE ALLOWED. Use pencil
no. 2 only.

1. Which statement is incorrect concerning investment property?

D a. If the property comprises a portion that is held to earn rentals
and another portion that is held for use in production of goods
and these portions could not be sold separately, the property
is an investment property only if an insignificant portion is
held for use in production of goods.
b. When the owner of an office building provides security and
maintenance services to the lessees, the office building is an
investment property because the ancillary services are
insignificant.
c. An owner-managed hotel is an owner-occupied property rather
than investment property because the services provided to the
guests are significant.
d. If a property is leased by a subsidiary to another subsidiary,
the property is owner-occupied property in the individual
financial statements of the subsidiary that owns it but
investment property in the consolidated financial statements
of the group.

2. How would an increase in the fair value of the ordinary shares affect
the investment account under each of the following appropriate
classification?
Trading equity securities Investment in Associate
B a. Increase Increase
b. Increase No effect
c. No effect No effect
d. No effect Increase

3. Gains or losses on sale of Investment at FVOCI are recognized

B a. In profit or loss whether debt or equity securities
b. In profit or loss when debt securities only
c. In other comprehensive income whether debt or equity securities
d. In profit or loss when equity securities only

4. Assume an investor purchases bonds at a premium the bonds are to be

held as a long-term investment which of the following statement is true
regarding the amount of bond interest revenue to be reported over life
of the bonds?
D a. The periodic amount of bond interest revenue will always be
above the periodic amount of cash received for interest
b. The pattern of the periodic amt. of bond interest rev. is an
increasing amount
c. The periodic amount of bond interest revenue will always be
equal to the periodic amount of cash received
d. The periodic amount of bond interest revenue will always be
less than the periodic amount of cash received
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5. Which of the following is not included in the computation of cost ratio
under the average retail inventory method?
A a. Employee discounts
b. Purchase discounts
c. Mark-up cancellation
d. Departmental transfer-in

6. When a company uses the perpetual inventory system in accounting for

its merchandise inventory, which of the following is false?
A a. Total cost of goods sold is computed by deducting ending
inventory from total goods available for sale
b. The inventory account is updated after each sale
c. One of the entries to record return of goods is debit inventory
and credit cost of goods sold
d. None of the above

7. If the owner-occupied property is transferred to investment property

that is to be carried at fair value, the excess of carrying amount of
the property over its fair value shall be
A a. Included in profit or loss.
b. Included in other comprehensive income.
c. Treated as an adjustment to the opening balance of retained
earnings.
d. Included in equity.

8. Which of the following terms would not result to recognition of freight-

in on the books of the buyer?
B a. FOB Seller
b. FOB Buyer
c. FOB Shipping point, freight prepaid
d. FOB Shipping point, freight collect

9. Which of the following items should be treated as dividend income?

C a. Reverse stock split
b. Cash received in lieu of shares
c. Shares received in lieu of cash
d. Cash dividend under equity method

10. Which of the following is true with regards to the accrued interest on
bonds payable that are sold between interest dates?
D a. The accrued interest is computed using the effective rate
b. The accrued interest will be paid to the seller when the bonds
mature
c. The accrued interest is extra income to the buyer and treated
as bond issue cost of the buyer
d. The accrued interest is added to the issue price of the bond
to determine the total cash proceeds from bond issuance

11. Whichcash item should be reported as current asset?

C a. Cash segregated for payment of long-term bonds payable
b. Cash set aside for the acquisition of furniture and fixtures
c. Restricted compensating balance for which the related loan is
short-term
d. Restricted compensating balance for which the related loan is
long-term

FAR FIRST PRE-BOARD EXAMINATION (BATCH 42)

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12. Which of the following can be classified as Cash and cash equivalents
under PAS 7 Statement of Cash Flows?
a. b. c. d.
B a. Redeemable preference shares Yes No Yes No
due in 180 days
b. Loan notes held due for Yes No No No
repayment in 100 days
c. Equity investments for trading No No Yes Yes
purposes
d. Bank drafts and demand No Yes No Yes
deposits

13. The petty cash fund account under the imprest fund system is debited
D a. Only when the fund is created.
b. When the fund is created and every time it is replenished.
c. When the fund is created and when the fund is decreased.
d. When the fund is created and when the size of the fund is
increased.

14. Book credit error of current month corrected in the same month shall
be:
D a. Deducted from disbursements and deducted from ending cash
balance.
b. Added to receipts and added to ending cash balance.
c. Deducted in receipts and deducted from ending cash balance.
d. Deducted from disbursements and deducted from receipts.

15. Bank service charges of the previous and current month in the proof of
cash shall be:
i. Deducted in books previous month cash balance – NSF check
previous month
ii. Deducted in books current month cash balance – NSF check
previous month
iii. Deducted in disbursements – NSF check previous month
iv. Added in books disbursement – NSF check current month
v. Deducted in books ending cash balance – NSF check current month
C a. i,ii,iv and v only
b. i,iii, iv only
c. i,iii,iv and v only
d. i,ii,iii,iv and v

16. Which of the following concepts relates to using the allowance method
in accounting for accounts receivable?
A a. Bad debt expense is an estimate that is based on historical
and prospective information.
b. Bad debt expense is based on the actual amounts determined to
be uncollectible.
c. Bad debt expense is an estimate that is based only on an
analysis of the receivables aging.
d. Bad debt expense is management’s determination of which
accounts will be sent to the attorney for collection.

17. Which of the following is true when accounts receivable are factored
without recourse?
C a. The transaction may be accounted for either as a secured
borrowing or as a sale, depending upon the substance of the
transaction.
b. The receivables are used as collateral for a promissory note
issued to the factor by the owner of the receivables.

FAR FIRST PRE-BOARD EXAMINATION (BATCH 42)

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c. The factor assumes the risk of collectibility and absorbs any
credit losses in collecting the receivables.
d. The financing cost (interest expense) should be recognized
ratably over the collection period of the receivables.

18. On October 1 of the current year, an entity received a one-year note

receivable bearing interest at the market rate. The face amount of the
note receivable and the entire amount of the interest are due on
September 30 of next year. The interest receivable on December 31 of
the current year would consist of an amount representing
A a. Three months of accrued interest income
b. Nine months of accrued interest income
c. Twelve months of accrued interest income
d. The excess on October 1 of the present value of the note
receivable over its fact amount

19. How would the interest-bearing note collectible in installment shall

be reported in the statement of financial position?
B a. the entire carrying value is always reported as non-current
asset.
b. the carrying value maybe reported as partly current and partly
non-current.
c. the entire carrying value is always reported as current asset.
d. the carrying value is not reported in the statement of financial
position.

20. A component of an entity is classified as “Held for Sale” when the

component is available for immediate sale and the sale is highly
probable. Which of the following statements is incorrect when
considering a sale to be highly probable?
C a. Management is committed to a plan to sell the component.
b. Active program to locate a buyer is initiated.
c. The component is actively marketed for sale at a price that is
higher than its acquisition cost.
d. The sale is expected to qualify as a completed sale within one
year from the date of classification as “held for sale”.

21. At a minimum, the results of a discontinued operation, net of tax shall

be presented
B a. As a single amount on the face of the income statement or
statement of comprehensive income with no details disclosed in
the notes.
b. As a single amount on the face of the income statement or
statement of comprehensive income with appropriate disclosure
of the details in the note.
c. Side by side with continuing operations with details for
revenues and expenses attributable to the discontinued
operation shown on the face of the income statement or the
statement of comprehensive income.
d. In the notes to the financial statements only

22. If the fair value less cost to sell is higher than the carrying amount
of a non-current asset classified as held for sale, the difference is
A a. Not accounted for.
b. Accounted for as an impairment loss.
c. Deferred gain as a component of equity.
d. Gain to be recorded in profit or loss.

FAR FIRST PRE-BOARD EXAMINATION (BATCH 42)

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23. An entity classified a noncurrent asset accounted for under the cost
model as held for sale on December 31, 2020. Because no offers were
received at an acceptable price, the entity decided on July 1, 2021
not to sell the asset, but to continue to use it. In accordance with
IFRS 5, the asset should be measured on July 1, 2021 at
C a. The lower of its carrying amount and its recoverable amount.
b. The higher of its carrying amount and its recoverable amount.
c. The lower of its carrying amount on the basis that it had
never been classified as held for sale and its recoverable
amount.
d. The higher of its carrying amount on the basis that it had
never been classified as held for sale and its recoverable
amount.

24. Which of the following is not true in relation to bearer plant?

D a. It is a living plant that has a remote likelihood of being sold
as agricultural produce, except for incidental scrap sales
b. The bearer plant and the related agricultural produce are
accounted as two separate assets
c. Plants which have a dual use or exclusive to be harvested as
agricultural produce is not a bearer plant
d. Bearer plant should be measured initially at fair value less
estimated cost of disposal

25. The following provides examples of biological assets, agricultural

produce and products that are the result of processing after harvest.
Which is a correct combination?
Biological asset Agricultural produce Product after harvest
C a. Dairy cattle Cheese Milk
b. Sheep Yarn Wool
c. Pigs Carcass Sausages
d. Grapes Vines Wine
Use the following information for the next two questions

The cash balance of Trese Company had the following information:

November December
Cash balances per book P1,200,000 P1,450,000
Cash balances per bank 1,400,000 1,838,500
Bank service charges 12,000 11,500
NSF checks 100,000 150,000
Notes collected by the bank 350,000 410,000
Deposit in transit 320,000 ?
Outstanding checks ? 185,000
Book debit error 25,000 –
Book credit error 50,000 70,000
Bank credit error – 65,000
Bank debit error 75,000 90,000
Bank receipts 2,550,000
Book disbursements 1,920,000

Note: errors were corrected in the following period. No other errors

affecting the cash balances.

26. How much is the amount of deposit in transit for the month of December?
C a. P110,000
b. P100,000
c. P90,000
d. P80,000

FAR FIRST PRE-BOARD EXAMINATION (BATCH 42)

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27. How much is the amount of outstanding checks for the month of November?
D a. P112,000
b. P192,000
c. P272,000
d. P332,000

Solution:

Book Nov Receipts Disb Dec

Unadjusted balances 1,200,000 2,170,000 1,920,000 1,450,000
BSC - Nov (12,000) (12,000)
BSC - Dec 11,500 (11,500)
NSF checks - Nov (100,000) (100,000)
NSF checks - Dec 150,000 (150,000)
Notes collected - Nov 350,000 (350,000)
Notes collected - Dec 410,000 410,000
Book debit error (25,000) (25,000)
Book credit error 50,000 (50,000)
Book credit error (70,000) 70,000
Adjusted balances 1,463,000 2,180,000 1,874,500 1,768,500

Bank Nov Receipts Disb Dec

Unadjusted balances 1,400,000 2,550,000 2,111,500 1,838,500
DIT - Nov 320,000 (320,000)
DIT - Dec 90,000 90,000
OC- Nov (332,000) (332,000)
OC- Dec 185,000 (185,000)
Bank credit error (65,000) (65,000)
Bank debit error 75,000 (75,000)
Bank debit error (90,000) 90,000
Adjusted balances 1,463,000 2,180,000 1,874,500 1,768,500

In preparing its August 31, 2021 bank reconciliation, Kirk Corp. has
available following information:
Balance per bank statement, 8/31/21 P18, 050
Deposit in transit, 8/31/21 3, 250
Return of customer’s check for insufficient funds, 8/29/21 600
Outstanding checks, 8/31/21 2, 750
Bank service charges for August 100
Check disbursement recorded in August (correct amount is
P5,000) 500
Kirk deposited P15,000 in August but credited by bank at 1,500

28. What is the unadjusted balance per book on August 31, 2021?
A a. P37, 250
b. P35, 050
c. P32, 050
d. P28, 250
Solution:
Bank Book
Unadjusted balances 18,050 37,250
DIT 3,250
OC's (2,750)
NSF check returned (600)
BSC for August (100)
Book error in August (4,500)
Bank error in August 13,500
Adjusted cash balance 32,050 32,050

FAR FIRST PRE-BOARD EXAMINATION (BATCH 42)

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Casio Company had a unadjusted cash balance in its cash in BDO Bank as of
December 31, 2021 of P2,100,000, the following transactions were recorded
in this account as of 12/31/2021:
• Check payable to Casio dated January 3, 2022 was recorded as receipts
as of December 31, P145,000.
• Check payable to Casio amounting to P210,000 dated December 27, 2021
recorded as receipts on 12/27 and returned by bank on 12/29 marked as
“NSF” and was immediately redeposited on 12/30. The return of the check
was not recorded on 12/29 but the redeposit was recorded as receipts
on 12/30.
• Check payable to Grab (a supplier), dated January 2, 2022 was delivered
on December 30, 2021 amounting to P120,000.

29. What is the correct balance of cash in BDO bank as of December 31,
2021?
B a. P2,075,000
b. P1,865,000
c. P1,745,000
d. P1,625,000
Solution:
Unadjusted cash in BDO 2,100,000
Customer postdated check (145,000)
Error in recording NSF check (210,000)
Company's postdated check 120,000
Adjusted cash in BDO 1,865,000

Health Company established as petty cash fund of P12,000. Details of the PCF
are as follows:

Unreplenished expense vouchers:

Date Payee Description Amount

12/21/2021 Coffee Bean Coffee and pastries P1,400
12/26/2021 Anytime Pitnes Zumba for employees 1,200
12/28/2021 Frap, Employee Advances for business trip 1,500
12/30/2021 Honest Bee Meals 1,300
01/02/2022 Bonds and Papers Office Supplies 2,800
01/03/2022 Mr. Taxi U Transportation 1,550

The count of remaining bills and coins in the petty cash box were as follows:

Bills Counted Coins Counted

P100 2 pieces P1.00 20 pieces
50 3 pieces 0.50 500 pieces
20 4 pieces 0.25 200 pieces

A replenishment check amounting to P1,500 was also found inside the petty
cash box.

30. How much is the balance of petty cash fund reported in its December
31, 2021 statement of financial position?
C a. P2,250
b. P5,100
c. P6,600
d. P7,100

FAR FIRST PRE-BOARD EXAMINATION (BATCH 42)

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Solution:
Bills and coins 750
Replenishment check 1,500
Vouchers dated January (2,800 + 1,550) 4,350
Petty cash fund as of 12/31/2021 6,600

One Company had the following items in its “Cash equivalents” account as
of December 31, 2021:

Money market fund due in 3 months acquired 1 month ago P250,000

Investment in equity designated in OCI – expected to 500,000
disposed in 3 months
Time deposit – 2 months maturity, acquired on 12/1/2021 600,000
Treasury bills – due in 3 months from date of acquisition 250,000
(12/30/2021)
Redeemable preference shares – purchased on 11/30/2021 due 300,000
on 3/31/2022

31. How much should be the correct amount of cash and cash equivalents as
of December 31, 2021?
D a. P1,900,000
b. P1,400,000
c. P1,100,000
d. P850,000

Solution:
Time deposit 600,000
Treasury bills 250,000
Total cash equivalents 850,000

The Kirkland Corporation reported cash in Matt Bank of P2,450,000. The

following checks were disbursed and are part of outstanding checks as of
December 31, 2021:

Check payable to a supplier dated 3/31/2021, released 3/1/2021 P120,000

Check payable to a supplier dated 12/30/21, released 1/2/2022 70,000
Check payable to a supplier dated 12/30/2021, released 11/28/2021 90,000
Check payable to a supplier dated 1/4/2022, released 12/28/2021 100,000
Check payable to a supplier dated 12/1/2021, released 12/29/2021 60,000

32. How much is the correct cash balance in Matt Bank as of December 31,
2021?
B a. P2,890,000
b. P2,740,000
c. P2,620,000
d. P2,450,000

Solution:
Unadjusted balance in Matt Bank 2,450,000
Stale check 120,000
Unreleased check 70,000
Company's postdated check 100,000
Adjusted balance in Matt Bank 2,740,000

FAR FIRST PRE-BOARD EXAMINATION (BATCH 42)

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May Co. prepared an aging of its accounts receivable at December 31, 2021
and determined that the net realizable value of the receivables was
P300,000. Additional information is available as follows:

Allowance for uncollectible accounts at 1/1/21—credit balance P 34,000

Accounts written off as uncollectible during 2021 23,000
Accounts receivable at 12/31/21 325,000
Uncollectible accounts recovered during 2021 5,000

33. For the year ended December 31, 2021, May's uncollectible accounts
expense would be
D a. P25,000
b. P23,000
c. P16,000
d. P9,000

Solution:
Allowance, beginning 34,000
Write off (23,000)
Recovery 5,000
Uncollectible account expense 9,000
Allowance, end (325,000 - 300,000) 25,000

On December 1, 2021, Yuclid Corp. engaged the following transactions:

• The company pledge P600,000 of its accounts receivable as a security

for a P500,000 loan with Yureka Bank.
• Factored P1,300,000 of accounts receivable without recourse on a
notification basis with Yuterpe Finance Company. Yuterpe Finance
charged a factoring fee of 10% of the amount of receivable factored
and withheld 15% of the receivable factored.
• A customer’s P700,000, 7-month, 5% note receivable dated August 1, 2021
was discounted with Yummy Bank at 8% discount rate on a with recourse
basis.

34. How much is the total cash received from the financing of receivables?
B a. P1,681,008
b. P2,181,008
c. P2,291,508
d. P2,200,508
Solution:
Face value of note 700,000
Total interest (700,000 x 5% x 7/12) 20,417
Maturity value 720,417
Discount (720,417 x 8% x 3/12) (14,408)
Proceeds from discounting 706,008
Proceeds from pledging 500,000
Proceeds from factoring 975,000
Total proceeds 2,181,008

FAR FIRST PRE-BOARD EXAMINATION (BATCH 42)

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The following is the summary of transactions of Pillar Company in 2020 and
2021:

2021 2020
Credit sales P6,000,000 P5,620,000
Collections of outstanding receivables 5,830,000 4,800,000
Accounts written off 60,000 20,000
Recovery of accounts previously written off 15,000 none

Days past invoice date at December 31

0 – 30 600,000 500,000
31 – 90 150,000 180,000
91 – 180 110,000 ?
Over 180 ? 30,000

The company’s policy to provide allowance on its account receivable at year

end as follows: 0-30 days – 2%; 31-90 days – 5%; 91-180 days – 10%; and over
180 days – 15%.

35. How much is the uncollectible accounts expense in its 2021 profit or
loss?
D a. P42,500
b. P40,280
c. P39,550
d. P38,000
Solution:
Beginning balance of AR (5,620 - 4,800 - 20) 800,000
Credit sales in 2021 6,000,000
Collection of outs receivables (5,830,000)
Write off - 2021 (60,000)
Recovery - 2021 -
Ending balance of AR 910,000

Days outs 0-30 31-90 91-180 >180 Total

Amounts 600,000 150,000 110,000 50,000 910,000
% uncollectible 2% 5% 10% 15%
Allowance 12,000 7,500 11,000 7,500 38,000
Net realizable value 12/31/2021 872,000

Allowance, beginning 32,500

Write off (60,000)
Recovery 15,000
Uncollectible account expense 50,500
Allowance, end 38,000

On January 1, 2021, Decade Company sold an equipment costing P10,000,000 and

accumulated depreciation of P2,500,000. Decade received a P1,000,000 cash
and a 10%, 7-year, P7,000,000 note receivable every December 31 in equal
annual installment of P1,000,000 plus interest starting December 31, 2021.
Interest effective on this note when received is at 8%.
36. How much is the amount of gain (loss) on sale should Decade recognized
on January 1, 2021?
C a. (P51,593)
b. (P48,178)
c. P948,407
d. P782,882

FAR FIRST PRE-BOARD EXAMINATION (BATCH 42)

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37. How much is the interest income in Decade’s statement of comprehensive
income for the period ending December 31, 2021?
A a. P595,873
b. P507,542
c. P420,146
d. P333,757

Solution:
1,000,000 700,000 1,700,000 0.925926 1,574,074
1,000,000 600,000 1,600,000 0.857339 1,371,742
1,000,000 500,000 1,500,000 0.793832 1,190,748
1,000,000 400,000 1,400,000 0.735030 1,029,042
1,000,000 300,000 1,300,000 0.680583 884,758
1,000,000 200,000 1,200,000 0.630170 756,204
1,000,000 100,000 1,100,000 0.583490 641,839
Total PV of note on 1/1/2021 7,448,407

Date Principal NI (10%) EI (8%) Amort CV

1/1/2021 7,448,407
12/31/21 1,000,000 700,000 595,873 104,127 6,344,280
12/31/22 1,000,000 600,000 507,542 92,458 5,251,822
12/31/23 1,000,000 500,000 420,146 79,854 4,171,968
12/31/24 1,000,000 400,000 333,757 66,243 3,105,726
12/31/25 1,000,000 300,000 248,458 51,542 2,054,184
12/31/26 1,000,000 200,000 164,335 35,665 1,018,519

12/31/27 1,000,000 100,000 81,481 18,519 (0)

Selling price (7,448,407 + 1M) 8,448,407

CV of equipment (10M - 2.5M) (7,500,000)
Gain on sale 948,407

On May 1, 2021, Network received a 3-year, P1,200,000 note receivable due on

April 30, 2024. The note was received upon sale of an old machinery of
Network which is no longer use in its operation. The interest effective of
similar note is at 7%.

38. How much is the carrying value of the note as of December 31, 2022?
B a. P1,075,193
b. P1,097,039
c. P1,121,495
d. P1,143,925
Solution:
Principal 1,200,000
PV factor (1.07^-3) 0.816298
Initial CV of note 979,557

Date EI (7%) CV
5/1/21 979,557
12/31/21 45,713 1,025,270
5/1/22 22,856 1,048,126
12/31/22 48,913 1,097,039
5/1/23 24,456 1,121,495

FAR FIRST PRE-BOARD EXAMINATION (BATCH 42)

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On January 1, 2021, Alias Company received a 5%, P6,000,000, note collectible

in installment plus interest every December 31 of each year until December
31, 2023. The note is collectible in principal as follows:

December 31, 2021 P1,000,000

December 31, 2022 2,000,000
December 31, 2023 3,000,000

The interest effective on January 1, 2021 is at 3%, on December 31, 2021 is

at 4%.

39. How much is the carrying value of the note on December 31, 2021?
C a. P5,330,882
b. P5,512,041
c. P5,153,643
d. P5,391,939

40. How much is the interest income in its statement of comprehensive income
for the period ending December 31, 2021?
A a. P187,970
b. P154,609
c. P188,620
d. P155,709
Solution:
1,000,000 300,000 1,300,000 0.970874 1,262,136
2,000,000 250,000 2,250,000 0.942596 2,120,841
3,000,000 150,000 3,150,000 0.915142 2,882,696
Total PV of note 6,265,673

Date Principal NI (5%) EI (3%) Amort CV

1/1/2021 6,265,673
12/31/21 1,000,000 300,000 187,970 112,030 5,153,643
12/31/22 2,000,000 250,000 154,609 95,391 3,058,252
12/31/23 3,000,000 150,000 91,748 58,252 -

Hydrogen Company acquired a building on April 1, 2021 for P 18,000,000. The

building is being leased out under operating lease wherein the lessee pays
rent on a quarterly basis amounting to P 30,000. At that date, the building
had an estimated useful life of 30 years and depreciated using the straight-
line method. On December 31, 2021, the fair value of the building was P
19,200,000.

41. How much is the total net increase/decrease in profit for the year 2021
assuming the company is using fair value model?
A a. 1,290,000
b. 1,200,000
c. 1,320,000
d. 840,000
Solution:
FAIR VALUE model
Depreciation expense 0
Unrealized gain 1,200,000
Rent income 90,000
1,290,000

FAR FIRST PRE-BOARD EXAMINATION (BATCH 42)

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Beryllium Company purchased 10,000 shares of Be Corp.’s ordinary shares at
P50 share on January 3, 2021 and classified the investment as fair value
investment. On August 31, 2021, Beryllium received 5,000 shares of Be
ordinary shares in lieu of cash dividend of P25 per share. On this date, the
Be Corp.’s ordinary share has a quoted market price of P30 per share. The
fair value of Be Corp.’s ordinary share on Dec. 31, 2021 is P 45 per share.

42. How much is the total income that should be reported in the statement
of comprehensive income for the year 2021?
D a. 0
b. 150,000
c. 250,000
d. 175,000

Solution:
FAIR VALUE model
Fair Value ( 10,000+5,000 x 45) 675,000
Carrying Value( 500,000+150,000) -650,000
Unrealized gain 25,000
Dividend income 150,000
Total income reported in SCI 175,000

Information pertaining to the inventory of Boron Company for the year ended
December 31, 2021 follows:

Beginning inventory P 200,000* Ending Inventory P 300,000**

Total Purchases 830,000 Purchase returns 35,000
Freight-in 10,000 Purchase discounts 5,000

*Includes items A and B costing P20,000 and P30,000, respectively. The

net realizable value of item A is P15,000 and item B is P27,000.
** Includes cost of items A and B still unsold at the end of the year.
The net realizable value of item A is P23,000 and item B is P29,000.

43. How much is the ending inventory that should be reported in the
statement of financial position on December 31, 2021 using the allowance
method?
C a. 300,000
b. 293,000
c. 299,000
d. none of the choices
Solution:
FAIR VALUE model
Ending inventory at COST 300,000
Allowance for inventory write-down, 12/31/2021 -1,000
Ending inventory at NRV 299,000

Allowance for inventory write-down-Item A

Beg. Balance 5,000
5,000
Ending balance 0

Allowance for inventory write-down-Item B

Beg. Balance 3,000
2,000
Ending balance 1,000

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Fluorine, Inc. bought 40% of F Corp.’s outstanding ordinary shares on January

2, 2021, for P4,000,000. The carrying amount of F’s net assets at that date
totaled P9,000,000. Fair values and carrying amounts were the same for all
items except for a machinery, for which fair value exceeded its carrying
amount by P900,000. The machinery has an estimated remaining useful life of
15 years. During 2021, F Corp.’s reported net income of P1,200,000 and paid
a total P 200,000 cash dividend. During 2022, F Corp.’s reported a net profit
of P825,000 and Fluorine received a cash dividend of P40,000.

44. How much from the acquisition cost is attributable to goodwill?

D a. 0
b. 376,000
c. 400,000
d. 40,000
Solution:

Cost 4,000,000
Fair value of net assets acquired -3,960,000 (9,000,000+900,000 x 40%)
Goodwill 40,0000

45. How much is the carrying value of investment on December 31, 2022?
A a. 4,642,000
b. 4,376,000
c. 4,666,000
d. 4,650,000
Solution:
INVESTMENT IN ASSOCIATE
BB-4,000,000 Dividends-80,000
SNI- 480,000 Amortization of Excess-24,000
CV, 12/31/21- 4,376,000 Dividends-40,000
SNI-330,000 Amortization of excess-24,000
CV, 12/31/22-4,642,000

Amortization of Excess=900,000 x 40%/15 years=24,000/year

On October 1, 2021, Neon Company purchased a P2,000,000 face value 10% debt
instrument for P1,977,800 and classified this as investment at fair value
through profit or loss. The effective rate for this type of investment is
12%. The debt instrument pays interest semi-annually on June 1 and December
1. On December 31, 2021, the fair market value of the instruments is 97.

46. How much is the interest income for the year 2021?
B a. 116,667
b. 50,000
c. 59,334
d. 47,778
Solution: Interest Income= 2,000,000 x 10% x 3/12 = 50,000
47. How much is the unrealized gain or loss that should be taken to profit
or loss for the year 2021?
A a. 28,867
b. 37,800
c. 47,800
d. 38,270

Solution:
Fair value (97% x 2,000,000) 1,940,000
Carrying value (1,977,800 - 66,667) -1,911,133
Unrealized gain 28,867

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On January 1, 2021, Magnesium Company purchased 3,000 of the P1,000 face
value, 9%, 5-year debt instruments of MG Company. The debt instruments
mature on January 1, 2022 and pay interest annually beginning December 31,
2021. The debt instruments were purchased to yield an 11% rate of interest.
The bonds were classified as Investment at amortized cost. Present value
factors were as follows:

PV factor of 11% after 5 periods .5935

PV factor of ordinary annuity of 11% after 5 periods 3.6959

On July 1, 2022, Magnesium sold P1,000,000 face value at a prevailing market

rate of 10.5%. As a result of the sale, the management decided to change its
current business model to a business model in managing the financial assets
wherein any changes in fair value of the investment are taken to profit or
loss. The fair value of investment on December 31, 2022 is 10% and remained
unchanged at the end of 2023.

48. How much is the carrying value of investment that should be reported
in the statement of financial position on December 31, 2022?
D a. 2,853,558
b. 1,950,242
c. 1,926,118
d. 1,902,372
Solution
Amortized cost, 12/31/22
(2,778,393 x 1.11-270,000x1.11-270,000 x 2M/3M) 1,902,372

49. How much is interest income for the year 2023?

A a. 180,000
b. 209,261
c. 195,024
d. 190,237
Solution:
Interest Income - 2023
(2,000,000 x 9% ) 180,000

On October 1, 2021, a fire damaged a warehouse of Aluminum Corporation. The

entire company and many accounting records stored in the warehouse were
completely destroyed. Although the inventory was not insured, a portion could
be sold for scrap. Through the use of microfilmed records, the following
data were gathered:
Inventory, January 1 P 575,400
Accounts payable, January 1 352,560
Accounts payable, October 1 491,400
Goods out on consignment on Oct. 1 at cost 195,000
Payments to suppliers, January to Oct. 1 1,950,000
Collections of accounts receivable, Jan. 1 to Oct. 1 3,015,200
Accounts receivable, January 1 522,360
Accounts receivable, October 1 515,560
Goods in transit on Oct.1 purchased FOB shipping point
( included in total purchases ) 69,500
Gross profit rate on sales 30%

50. How much is the estimated cost of inventory loss?

B a. 363,360
b. 293,860
c. 488,860
d. 558,360

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Solution:
ACCOUNTS RECEIVABLE
BB- 522,360
CREDIT SALES =3,008,400 3,015,200
515,560

ACCOUNTS PAYABLE
BB- 352,560
1,950,000 CREDIT PURCHASES =2,088,840
491,400

Beginning Inventory 575,400

CREDIT PURCHASES =1,950,000 2,088,840
TGAS 2,664,240
COGS ( 3,008,400 x 70% ) -2,105,880
Estimated Ending Inventory 558,360
Goods intransit -69,500
Cosigned goods -195,000
Estimated Inventory loss 293,860

On January 1, 2021, Silicon Corp. acquired 20,000 shares of the 125,000

outstanding of Si Company’s ordinary shares for P5,000,000. Silicon does not
have any significant influence nor control over the financial and operating
policy of Si. Si Company reported during 2021 a total net income of P4,000,000
and distributed dividends of P400,000. On January 1, 2022, Silicon purchased
additional 10,000 ordinary shares at P260 per share. The net assets of Si
are fairly valued. During 2022, Si Company reported net income of P2,000,000
and distributed a total dividend of P100,000.

51. What is the carrying value of Investment on December 31, 2022?

B a. 7,800,000
b. 8,256,000
c. 8,700,000
d. 5,456,000
Solution:
16% 5,200,000 (20,000 x 260)
8% 2,600,000 (10,000 x 260)
Total initial cost of Investment in Associate 7,800,000
SNI 480,000 (24% x 2,000,000)
DIVIDENDS -24,000 (24% x 100,000)
CV, 12/31/2022 8,256,000

On January 1, 2021, Phosphorus Corp. acquired 200,000 shares of the 625,000

outstanding shares of P Corp.’s ordinary shares for P3,200,000. P Corp.
reported during 2021 a total net income of P4,000,000. P Corp. also
distributed total dividends at year end of P1,000,000. On January 1, 2022,
P Corp. received P7,500,000 arising from additional shares sold by P Corp.
which Phosphorus did not purchase any of these shares. The shares were sold
at P20/share. P Corp. reported during 2022 a net income of P2,500,000 and
distributed a total dividends of P400,000.

52. How much is the total net dilution gain/loss that should be recognized
by Phosphorus Corp.?
C a. 668,000
b. 840,000
c. 60,000
d. none of the choices
Solution:
Share in proceeds 1,500,000 ( 20% x 7,500,000 )
CV of Investment in Associate deemed sold -1,560,000 ( 12/32 x 4,160,000 )
Dilution loss -60,000

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53. What is the carrying value of Investment in P Corp. on December 31,

2022?
D a. 3,912,000
b. 4,100,000
c. 4,000,000
d. 4,520,000
Solution:
INVESTMENT IN ASSOCIATE
BB-3,200,000 Dividends-320,000
SNI- 1,280,000
CV, 12/31/21- 4,160,000 Dilution loss - 60,000
CV after Dilution - 4,100,000
SNI-500,000 Dividends-80,000
CV, 12/31/22-4,520,000 D

Note:
Before dilution 200,000/625,000 32%
After dilution 200,000/1,000,000 20%

7,500,000/20 PER SHARE 375,000 shares

Previous outstanding shares 625,000 shares
1,000,000 shares

COST RETAIL
Beginning inventory 250,000 390,000
Purchases 898,500 1,460,000
Purchase returns -60,000 -80,000
Purchase discount -18,000
Freight-in 80,000
TGAS 1,150,500 1,770,000
Net sales ( 1,260,000-97,500 ) -1,162,500
EI at RETAIL 607,500

SALES ( 1,234,800 /98% ) 1,260,000

SALES RETURNS ( 95,550/98% ) -97,250
NET SALES 1,162,500

COST RATIO-FIFO 1,150,500-250,000

1,770,000-390,000 65.25%

COST RATIO-AVERAGE 1,150,500

1,770,000 65.00%

Sulfur Corporation had the following amounts under retail inventory method:

Beg. inventory-cost 250,000 Purchases-cost 898,500

Purchase returns-cost 60,000 Sales (net of 2% discount) 1,234,800
Freight-in 80,000 Beg. inventory-retail 390,000
Sales returns 95,550 Purchases-retail 1,460,000
Purchase returns-retail 80,000
Purchase discount 18,000

54. How much is the estimated cost of ending inventory under FIFO method?
C a. 393,607
b. 394,875
c. 396,394
d. 395,121

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ReSA - The Review School of Accountancy Page 18 of 25

Solution:
COST RETAIL
Beginning inventory 250,000 390,000
Purchases 898,500 1,460,000
Purchase returns -60,000 -80,000
Purchase discount -18,000
Freight-in 80,000
TGAS 1,150,500 1,770,000
Net sales ( 1,260,000-97,500 ) -1,162,500
EI at RETAIL 607,500

SALES ( 1,234,800 /98% ) 1,260,000

SALES RETURNS ( 95,550/98% ) -97,250
NET SALES 1,162,500

COST RATIO-FIFO 1,150,500-250,000

1,770,000-390,000 65.25%

COST RATIO-AVERAGE 1,150,500

1,770,000 65.00%

ENDING INVENTORY AT RETAIL 607,500

COST RATIO-FIFO 65.25%
ENDING INVENTORY AT COST-FIFO 396,394

55. How much is the estimated cost of ending inventory under AVERAGE method?
B a. 393,607
b. 394,875
c. 396,394
d. 395,121
Solution:
ENDING INVENTORY AT RETAIL 607,500
COST RATIO-AVERAGE 65%
ENDING INVENTORY AT COST-AVERAGE 394,875
On January 2, 2021, Chlorine Company decided to convert one of its building
into an investment property that is to be carried at fair value. The building
was previously used as an owner-occupied property. The building was acquired
on January 1, 2019 at a cost of P10,000,000 with an estimated useful life of
10 years using the straight-line method. The fair value of the building on
January 2, 2021 was reliably valued at P7,500,000.

56. What amount should be taken directly to equity on the date of

transfer?
A a. 0
b. 500,000
c. 1,500,000
d. 7,500,000
Solution: 0 - the decrease in Fair value should be taken to Profit or Loss
During January 2021, Argon Company recorded the following information
pertaining to its inventory:

UNITS UNIT COST TOTAL COST

Jan. 1 balance 20,000 P 10 P 200,000
Jan. 15 sales 15,000
Jan. 18 purchase 20,000 11 220,000
Jan. 20 purchase 15,000 12 180,000
Jan. 25 sales 24,000
Jan. 30 purchases 14,000 15 210,000
Jan. 31 sales 10,000

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ReSA - The Review School of Accountancy Page 19 of 25

57. How much is the cost of inventory should Argon report in its January
31, 2021 balance sheet assuming the company maintains perpetual
inventory records?
B a. 240,000
b. 260,000
c. 280,000
d. 300,000
Solution:
20,000 @ 10 200,000
(15,000 ) @ 10 -150,000
5,000 @10 50,000
20,000 @11 220,000
25,000 @ 10.80 270,000
15,000 @ 12 180,000
40,000 @ 11.25 450,000
(24,000) @11.25 -270,000
16,000 @ 11.25 180,000
14,000 @ 15 210,000
30,000 @ 13 390,000
(10,000) @ 13 -130,000
20,000 @ 13 260,000

58. Using FIFO method, what amount of inventory should Argon report in its
January 31, 2021 balance sheet?
D a. 240,000
b. 260,000
c. 280,000
d. 282,000
Solution:
14,000 @ 15 210,000
6,000 @ 12 72,000
20,000 282,000

Calcium Company has a herd of 50, 2-year-old animals and 50, 1-year old animals
on Jan. 1, 2021. 20 animals aged 2.5 and 20 animals aged 1.5 were purchased
on July 1, 2021.No animals were born during 2021. The fair values less cost
to sell per unit were as follows:
1.0-year old on Jan. 1, 2021- P2,500
1.5-year old on Jan. 1, 2021- 3,750
2.0-year old on Jan. 1, 2021- 5,000
2.5-year old on Jan. 1, 2021- 6,250
3.0-year old on Jan. 1, 2021- 7,500
1.0-year old on July 1, 2021- 3,000
1.5-year old on July 1, 2021- 4,500
2.0-year old on July 1, 2021- 6,000
2.5-year old on July 1, 2021- 7,500
3.0-year old on July 1, 2021- 9,000
1.0-year old on Dec.31, 2021- 3,500
1.5-year old on Dec.31, 2021- 5,250
2.0-year old on Dec.31, 2021- 7,000
2.5-year old on Dec.31, 2021- 8,750
3.0-year old on Dec.31, 2021- 10,500

59. How much is the increase in the fair value of the biological assets due
to physical change?
B a. 190,000
b. 420,000
c. 385,000
d. 130,000

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ReSA - The Review School of Accountancy Page 20 of 25
Solution:
10,500 -7,000 x 50 175,000
7,000 - 3,500 x 50 175,000
10,500 - 8,750 x 20 35,000
7,000 - 5,250 x 20 35,000
Increase in FV due to PHYSICAL CHANGE 420,000

60. How much is the carrying value of biological assets on December 31,
2021?
D a. 1,085,000
b. 1,470,000
c. 1,145,000
d. 1,225,000

Solution:
10,500 x 70 animals 735,000
7,000 x 70 animals 490,000
CV, 12/31/2021 1,225,000

On January 1, 2020, Vanadium Company purchased a debt instrument for

P8,711,250. The market rate for this type of investment is 8.25%. The debt
instrument pays a contract rate of 5% on the face value of P10,000,000 at
the end of each financial year for five years. The effective rate is 7.5% as
a result of transaction cost paid by Vanadium amounting to P277,700. The
fair values of the debt instrument are 98 and 101 on December 31, 2020 and
December 31, 2021, respectively. The business model in managing the financial
assets is to collect contractual cash flows and to sell the debt instrument
in an open market.

61. How much is the carrying value of the investment on December 31, 2021?
A a. 10,100,000
b. 9,800,000
c. 9,350,355
d. 9,492,058
Solution:
CV of Investment ( @ FAIR VALUE ), 12/31/2021 10,100,000
( 10,000,000 x 1.01 )

62. How much is the total amount of income recognized in the statement of
comprehensive income for the year 2021?
D a. 112,766
b. 300,000
c. 987,234
d. 800,000
Solution:
Unrealized gain-OCI 112,766
Interest income ( 9,163,121 x 7.5 % )-P/L 687,234
Total income -SCI 800,000

On January 31, 2021, Manganese Corp. acquired 35,000 shares of the 125,000
ordinary shares outstanding of Mn Inc. at P25 per share. The book value of
Mn Inc.’s net assets on this date amounted to P3,000,000. All identifiable
assets had fair values equal their book values. Mn reported total
comprehensive income in 2021 at P550,000 which is net of a foreign translation
loss amounting to P500,000. It also distributed total dividends at year-end
amounting to P500,000. Fair value of shares on December 31, 2021 was at P34
per share.
On January 1, 2022, Manganese sold 15,000 shares at fair value existing at
the end of 2021. During 2022, Manganese reported net income of P800,000 and
distributed total dividends amounting to P100,000. Fair value per share on
December 31, 2022 is P37.
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ReSA - The Review School of Accountancy Page 21 of 25
63. How much is the total net amount of income that should be reported in
profit or loss for the year ended 2022 assuming the investment was
reclassified to FVOCI?
B a. 166,000
b. 201,500
c. 261,500
d. 245,500
Solution:

UG/UL-EQUITY
636,879-EQUITY 12/31/20 *
112,766-OCI
749,645-EQUITY 12/31/21 **

FV, 12/31/20 ( 10,000,000 x 98% ) 9,800,000

Amortized cost ( 8,988,950 x 1.075 -500,000 ) -9,163,121
UG, 12/31/20 636,879 *

FV, 12/31/21 ( 10,000,000 x 101% ) 10,100,000

Amortized cost ( 8,988,950 x 1.075 -500,000 x 1.075
-500,000 ) -9,350,355
UG, 12/31/21 749,645 **

COST ( 35,000 X 25 ) 875,000

Acquired on Jan. 31 so 11 mos.
SNI ( 28% x 1,050,000 x 11/12 ) 269,500 only
DIVIDENDS ( 28 % x 500,000 ) -140,000
SOCI-LOSS ( 28% x 500,000 ) -140,000 No need to prorate if OCI
CV with OCI 864,500
CV w/o OCI 1,004,500

REMAINING/RECLASSIFIED (
SOLD ( REALIZED ) UNREALIZED )
FAIR VALUE 510,000 680,000
CV OF INVESTMENT -430,500 -574,000
CESSATION GAIN/LOSS (P/L ) 79,500 106,000

ReclassifIcation gain, 1/1/22 106,000

Dividend income ( 100,000 x 16% ) 16,000
Gain on sale , 1/1/22 79,500
Total Income taken to P/L 201,500
64. How much is the total net amount of income that should taken to profit
or loss for the year ended 2022 assuming the investment was reclassified
to FVPL?
C a. 166,000
b. 201,500
c. 261,500
d. 245,500
Solution:
ReclassifIcation gain, 1/1/22 106,000
Dividend income ( 100,000 x 16% ) 16,000
Gain on sale , 1/1/22 79,500
Unrealized gain ( 34-37 x20,000 ) 60,000
Total income taken to P/L 261,500

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The following items were reported as inventories by Iron Company as of
December 31, 2021:
Goods displayed in the store 100,000
Goods stocked in the warehouse, not covered by any
sales contract 50,000
Goods purchased, in transit, shipped FOB Seller 250,000
Goods sold, in transit, shipped FOB Buyer 80,000
Goods held on consignment 20,000
Goods out to customers awaiting approval 40,000
Goods in the hands of traveling salesman 30,000
Storage cost of goods completed 60,000
Goods manufactured to customer’s specification
awaiting instruction for delivery by the customer 150,000
Freight paid on goods sold 10,000
Unused office supplies 5,000
Goods sold with a buyback agreement 55,000

All amounts are stated at cost.

65. How much is the total correct amount of inventories as of December 31,
2021?
A a. 605,000
b. 755,000
c. 550,000
d. 715,000
Solution:
Goods displayed in the store 100,000
Goods stocked in the warehouse 50,000
Goods purchased in transit, FOB SELLER 250,000
Goods sold in transit, FOB BUYER 80,000
Goods out to customers awaiting approval 40,000
Goods in the hands of traveling salesman 30,000
Goods sold with a buyback agreement 55,000
Correct amount of inventories 605,000

Cobalt Company purchased 150,000 ordinary shares of the 750,000 ordinary

shares and 50,000 preference shares of the 200,000, P100 par, 12% cumulative
preference shares of Co Company. On December 31, 2021, Co company reported
net income of P3,000,000 and declared dividends to preference shareholders.

66. How much is the total income taken to 2021 profit or loss statement
related to the Investment in Associate?
A a. 120,000
b. 720,000
c. 600,000
d. 480,000
Solution:
SNI = ( 3,000,000 2,400,000 ) x 20% 120,000
Total income-P/L 120,000

On January 1, 2020, Silver Company classifies a hotel property as non-current

asset held for sale. Immediately before the classification as held for sale,
the carrying amount of the hotel property is P400,000,000(cost of
P500,000,000 and accumulated depreciation of P100,000,000). The hotel
property is depreciated using the straight-line method with a useful life of
50 years. The estimated fair value less cost to sell on this date was
P350,000,000. On January 1, 2021, no buyer could be identified. On this date,

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 ReSA - The Review School of Accountancy Page 23 of 25
management concludes that the criteria for classification as held for sale
could not be met. The estimated fair value less cost to sell was revised to
P340,000,000 while the value in use at that time was estimated at P
380,000,000.

67. How much should be taken to profit or loss on the date the asset was
reclassified back to property plant and equipment?

A a. 30,000,000
b. 50,000,000
c. 100,000,000
d. 0

Solution:
As if no reclassification as
HFS from the very start
CV, 1/1/21 ( 400,000,000 - 10,000,0000 ) 390,000,000
Recoverable value ( Value in USE ) 380,000,000
Initial cost of PPE, 1/1/21 ( whichever is LOWER ) 380,000,000

Initial cost of PPE, 1/1/21 ( whichever is LOWER ) 380,000,000

CV of NCAHFS, 1/1/21 350,000,000
Gain on reclassification - P/L 30,000,000

68. How much is the depreciation expense for the year 2021 after the asset
was reclassified back to property, plant and equipment?
D a. 10,000,000
b. 8,974,359
c. 8,717,949
d. 9,743,590
Solution:
Depreciation expense- 2021
( 380,000,000 / 39 years ) 9,743,590

Alpha Corporation has two business segments, Segment A and Segment B. Segment
A’S business operation is continuing. Segment B met the criteria to be
classified as “Held for Sale “. The board of directors was able to dispose
this segment (B) on September 1, 2021. Net proceeds from the sale were P
20,000,000; while the segments’ carrying value on September 1, 2021 was P
18,000,000.

The following pertains to the results of the operation of Segment A & B during
2021:

Segment A Segment B

Jan 1- Dec. 31, 2021 Jan 1- Aug. 31, 2021

Revenues 25,000,000 12,000,000

Selling and general expenses 15,000,000 15,000,000
Income tax rate (35%)

69. How much shall be presented as Profit /Loss on the face of the income
statement for the year ended 2021?
D a. 6,500,000
b. 4,550,000
c. 1,950,000
d. 5,850,000

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Solution:
CONTINUING DISCONTINUED
Revenues 25,000,000 12,000,000
Expenses -15,000,000 -15,000,000
Gain on sale ( 20,000,000 - 18,000,000 ) 2,000,000
Net income or loss before tax 10,000,000 -1,000,000
Income Tax ( 35% ) -3,500,000 350,000
Net income or loss after tax 6,500,000 -650,000

TOTAL NET INCOME presented on the face of

Income Statement
( 6,500,000 - 650,000 ) 5,850,000

The adjusted trial balance of Chemistry Company includes the following

accounts at December 31, 2021

Sales revenue P 5,000,000

Commission income 28,000
Interest expense 180,000
Inventory, 12/31/21 520,000
Purchase, net of returns 2,800,000
Sales commission 500,000
Administrative salaries 720,000
Office supplies expense 110,000
Dividends declared 800,000
Dividend income 16,000
Gain on sale of equipment 100,000
Rent expense 400,000
Unrealized gain on investment at fair value through
profit or loss 55,000
Unrealized gain on investment at fair value through other
comprehensive income 88,000
Depreciation expense – store equipment 70,000
Depreciation expense – office equipment 50,000
Freight-in 80,000
Freight-out 120,000

Additional information:
• Merchandise inventory, January 1, 2021, P450,000
• Income tax rate, 30%
• Rent expense is allocated 60% selling, 40% administrative.

70. How much is the total comprehensive income for the year 2021?
B a. P167,300
b. P228,900
c. P255,300
d. P327,000

FAR FIRST PRE-BOARD EXAMINATION (BATCH 42)

ReSA - The Review School of Accountancy Page 25 of 25

Sales revenue 5,000,000

COGS -2,810,000 (450,000+80,000+2,800,000-520,000)
Gross profit 2,190,000
Dividend income 16,000
Commission income 28,000
Sales commission expense -500,000
Administrative salaries -720,000
Office supplies expense -110,000
Rent expense -400,000
Depreciation expense - store equipment -70,000
Depreciation expense - office equipment -50,000
Freight- out -120,000
Income from operations 264,000
Gain on sale of equipment 100,000
Unrealized gain - FVPL 55,000
Interest expense -180,000
Income before tax 239,000
Income tax (30%) -71,700
Net income / Profit 167,300
OCI: Unrealized gain - FVOCI, net of tax (
88,000 x 70% ) 61,600
TOTAL COMPREHENSIVE INCOME 228,900

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FAR FIRST PRE-BOARD EXAMINATION (BATCH 42)