SHE Equity Contributed.

PAMANTASAN NG LUNGSOD NG VALENZUELA
POBLACION II, MALINTA, VALENZULEA CITY

ACCOUNTANCY DEPARTMENT
MIDTERM DEPARTMENTAL EXAMINATION

ACADEMIC YEAR 2017-2018, 2nd SEM.
PRACTICAL AUDITING [ACCTG11]

----------------------------------
GENERAL DIRECTIONS: Use black permanent ink pen in writing your final answers
in your answer sheet. Erasure and/or superimposition of any kind is strictly not
allowed. Doing such shall automatically render your answers INCORRECT. Answers
are case sensitive. DO NOT CHEAT. GOD IS WATCHING YOU.
Problem I
Chonsu Corporation had the following equity account balances at December 31, 2009:
Preference Share Capital 1,800,000

Share premium- preference 90,000
Ordinary share capital 5,150,000
Share premium- ordinary 3,500,000
Retained earnings 4,000,000
Net unrealized loss on FVOCI securities 245,000
Treasury shares- ordinary 270,000
Chonsu ‘s preference and ordinary shares are traded on the over- the- counter
market. At December 31, 2009, Chonsu had 100,000 authorized shares of P 100 par,
10% cumulative preference shares and 3,000,000, no par, authorized ordinary shares
with a stated value of P 5 per share.
Transactions during 2010 and other information relating to the equity accounts were
as follows:
a. On January 10, 2010, Chonsu formally retired all the 30,000 treasury shares
and had them revert to unissued basis. The treasury shares had been acquired
on January 20, 2009. The shares were originally issued at P 10 per share.
b. Chonsu owned 10,000 ordinary shares of Benny, Inc. purchased in 2009 for
P750,000. The Benny shares were included in Chonsu ’s trading securities
portfolio. On February 15, 2010, Chonsu declared a dividend in kind of one
share of Benny for every hundred ordinary shares of Chonsu held by
stakeholders of record on February 28, 2010. The dividend in kind was
distributed on March 12, 2010.
c. On April 1, 2010, 1,000,000 share rights were issued to the ordinary
shareholders permitting the purchase of one new ordinary share in exchange
for four rights and P 11 cash. On April 25, 2010, 840,000 share rights were
exercised when the market price of Chonsu ’s ordinary share was P 13 per
share. Chonsu issued new shares to settle the transaction. The remaining
160,000 rights were not exercised and thus expired.
d. On January 1, 2007, Chonsu granted share options to employees for the
purchase of 100,000 ordinary shares of the company at P 8 per share which
GOD IS WATCHING YOU | 1

ACADEMIC YEAR 2017- 2018, SECOND SEMESTER
was also the market price. The options are exercisable within a three- year
period beginning January 1, 2009. On July 1, 2010, employees exercised 80,000
options for P 8 per share. On July 1, 2010, the market price of Chonsu ’s
ordinary share was P 8 per share. Chonsu used new shares to settle the
transaction.
e. On December 12, 2010, Chonsu declared the yearly cash dividend on
preference shares, payable on January 14, 2011, to shareholders of record on
December 31, 2010.
f. After year- end adjustment, the net unrealized loss on FVOCI securities
account had a debit balance of 135,000 at December 31, 2010.
g. On January 15, 2011, before the accounting records were closed for 2010,
Chonsu became aware that rent income for the year ended December 31, 2009
was overstated by P 500,000. The after- tax effect on the 2009 profit was
275,000. The appropriate correcting entry was recorded the same day.
h. After correcting the rent income, profit for 2010 was P 2,600,000.
Questions:
Based on the above and the result of your audit, determine the following as of
December 31, 2010:
1. Ordinary share capital?
A. 6,330,000
B. 6,450,000
C. 7,950,000
D. 8,250,000
E. None of the choices
2. Share premium- ordinary
A. 5,000,000
B. 4,880,000
C. 3,380,000
D. 4,970,000
3. Total Contributed Capital
A. 13,220,000
B. 8,250,000
C. 18,615,000
D. 16,725,000

4. Retained Earnings
A. 5,275,000
B. 5,445,000
C. 5,170,000
D. 5,395,000
5. Total Shareholders’ Equity
A. 18,615,000
B. 18,255,000
C. 18,480,000
D. 18,530,000
Problem II
Penn Company began operations on January 1, 2017 by issuing at P 15 per share one-
half of the 950,000 ordinary shares of 10 par value that had been authorized for sale.
In addition, the entity has 500,000 authorized preference shares of P 5 par value.
During 2017, the entity had P 1,025,000 of net income and declared P 230,000 of
dividend. During 2018, the entity had the following transactions:
- Issued 100,000 ordinary shares for P 17 per share.
- Issued 150,000 preference shares for P 8 per share.
- Authorized the purchase of a custom- made machine to be delivered in January
2019. The entity restricted P 300,000 of retained earnings for the purchase of
the machine.
- Issued additional 50,000 preference shares for P 9 per share.
- Reported P 1,215,000 of net income and declared on December 31, 2018 a cash
dividend of P 635,000 to shareholders of record on January 15, 2019 to be paid
on February 1, 2019.
Questions:
6. What is the shareholders’ equity on December 31, 2017?
A. 7,920,000
B. 7,125,000
C. 8,150,000
D. 8,380,000
7. What is the shareholders’ equity on December 31, 2018?
A. 11,850,000
B. 11,550,000
C. 12,485,000

D. 10,635,000
Problem III
On January 1, 2017, Alterra company granted 60,000 share options to employees. The
share options will vest at the end of three years, provided, the employees remain in
service until the said time. The option price is P 60 and the par value per share is P
50. At the date of grant, the entity concluded that the fair value of the share options
cannot be measured reliably.
The share options have a life of 4 years which means that the share options can be
exercised within one year after vesting.
The share prices are P 62 on December 31, 2017, P 66 on December 31, 2018, P 75
on December 31, 2019 and P 85 on December 31, 2020. All share options were
exercised on December 31, 2020.
Questions:
8. What is the compensation expense for 2019?
A. 120,000
B. 240,000
C. 200,000
D. 660,000
9. What is the compensation expense for 2020?
A. 900,000
B. 600,000
C. 660,000
D. 450,000
10. What is the share premium upon exercise of the share options on December
31, 2020?
A. 2,100,000
B. 1,500,000
C. 600,000
D. 900,000

Problem IV
On January 1, 2017, Folk company changed from the average cost method to the FIFO
method to account for the inventory.
The entity provided the following ending inventory for each method:
2017 2018
Average 500,000 900,000
FIFO 700,000 1,400,000
The income statement information calculated by the average cost method was as
follows:
2017 2018
Sales 10,000,000 13,000,000
Cost of Goods sold 7,000,000 9,000,000
Operating Expense 1,500,000 2,000,000
Tax expense- 30% 450,000 600,000
Questions:
11. What amount of net income should be reported in 2017 after the change to the
FIFO inventory method?
A. 1,050,000
B. 1,500,000
C. 1,250,000
D. 1,190,000
12. What amount of net income should be reported in 2018 after the change to the
FIFO inventory method?
A. 1,610,000
B. 2,300,000
C. 1,750,000
D. 1,890,000

Problem V
Lake Company had the following investments on January 1, 2017:
Share capital:
Kar Company (1,000 shares)- 100,000
Aub Company (5,000 shares)- 1,000,000
Real Estate: Parking lot (leased to Day Company) – 3,000,000
Other: Trademark- 250,000
Total investments- 4,350,000
Lake owns 1% of Kar and 30% of Aub. The Day lease, which commenced on January
1, 2017, is for 10 years at an annual rental of P 480,000. In addition, on January 1,
2017, Day Company paid a non- refundable deposit of 500,000, as well as a security
deposit of 80,000 to be refunded upon expiration of lease.
The trademark was licensed to Barr Company for royalties of 10% of sales of the
trademarked items. Royalties are payable semi- annually on March 1 for sales in July
through December of prior year, and on September 1 for sales in January through
June of the same year.
During the year ended December 31, 2017, Lake Company received cash dividend of
10,000 from Kar, and 150,000 from Aub, whose net incomes were P 750,000 and P
1,500,000, respectively.
Lake Company also received P 480,000 rent from Day Company in 2017, and the
following royalties from Barr Company:
March 1 September 1
2016 300,000 500,000
2017 400,000 700,000
Barr Company reported that sales of the trademarked items totalled 2,000,000 for the
last half of 2017.
Questions:
13. In Lake’s 2017 income statement, what amount should reported for dividend
revenue?
A. 160,000
B. 24,000
C. 10,000
D. 1,500

14. In Lake’s 2017 income statement, what amount should be reported for royalty
revenue?
A. 1,400,000
B. 1,300,000
C. 1,100,000
D. 900,000
15. In Lake’s 2017 income statement, what amount should be reported for rental
revenue?
A. 430,000
B. 480,000
C. 530,000
D. 538,000
Problem VI
Shannon Company began operations on January 1, 2016. The financial statements

contained the following errors:
2016 2017
Ending Inventory 160,000 understated 150,000 overstated
Depreciation Expense 60,000 understated
Insurance expense 100,000 overstated 100,000 understated
Prepaid Insurance 100,000 understated
On December 31, 2017, fully depreciated machinery was sold for 108,000 cash but
the sale was not recorded until 2018. No corrections have been made for any of the
errors.
Questions:
Ignoring income tax, what is the total effect of the errors on
16. Net income, 2016?
A. 200,000 over
B. 200,000 under
C. 260,000 under
D. 0

17. Net income, 2017?
A. 302,000 over
B. 302,000 under
C. 410,000 over
D. 410,000 under
18. Retained earnings on December 31, 2017?
A. 102,000 over
B. 102,000 under
C. 200,000 over
D. 200,000 under
19. Working Capital on December 31, 2017?
A. 42,000 over
B. 58,000 under
C. 60,000 under
D. 98,000 under
Problem VII
Mariot Company reported income before tax of P 3,700,000 for 2016 and P 5,200,000
for 2017. An audit produced the following information:
- The ending inventory for 2016 included 5,000 units erroneously priced at P 59
per unit. The correct cost was P 95 per unit.
- Merchandise costing P 175,000 was shipped to Mariot Company, FOB shipping
point, on December 26, 2016. The purchase was recorded in 2016 but the
merchandise was excluded from the ending inventory because it was not
received until January 4, 2017.
- On December 28, 2016, merchandise costing P 30,000 was sold to Deluxe
Company. Deluxe had asked Mariot in writing to keep the merchandise until
January 2, 2017. The merchandise was included in the inventory count. The
sale was correctly recorded in December 2016.
- Gray company sold merchandise costing P 15,000 to Mariot Company. The
purchase was made on December 29, 2016 and the merchandise was shipped
on December 20, 016. The terms were FOB shipping point. Because the
bookkeeper was on vacation, neither the purchase not the receipt of goods was
recorded until January 2017.

20. What is the corrected income before tax for 2017?
A. 4,870,000
B. 4,815,000
C. 4,890,000
D. 5,525,000
Problem VIII
Your audit of Edu Company revealed that your client kept very limited records.
Purchases of merchandise were paid for by check, but most other items were out of
cash receipts. The company’s collections were deposited weekly. No record was kept
of cash in the bank nor was a record kept of sales. Accounts receivable were recorded
only by keeping copy of tickets, and these copies were given to the customers when
paying their accounts.
The company started its operations on January 2, 2006 and issue common stock,
216,000 shares with 100 par, for the following considerations: cash of 1,800,000,
building, useful life of 15 year, worth 16,200,000 and Land amounting to 5,400,000.
An analysis of the bank statements showed total deposits, including original cash
investment of 12,600,000. The balance in the bank statement on December 31, 2006,
was 900,000 but there were checks amounting to 180,000 dated in December but not
paid by the bank until January 2007. Cash on hand on December 31, 2006 was 450,000
including customers’ deposit of 135,000.
During the year, Edu borrowed 1,800,000 from the bank and repaid 450,000 and
90,000 interest.
Disbursements paid in cash during the year were as follows: utilities- 360,000;
salaries- 360,000; supplies 720,000; and dividends- 540,000.
An inventory of the merchandise taken on December 31, 2006 showed 2,718,000 of

merchandise.
Tickets for accounts receivable totalled 3,240,000 but 180,000 of that amount may
prove uncollectible.
Unpaid supplier invoices for merchandise amounted to 1,260,000.
Equipment with a cash price of 1,440,000 was purchased in early January on one-
year installment basis. during the year, checks for the down payment and all maturing
installments totalled 1,602,000. The equipment has a useful life of 5 years.
Based on the above data provided and the result of your audit, determine the following
information:

21. Collections from customers in 2006?
A. 14,760,000
B. 11,430,000
C. 11,295,000
D. 12,960,000
22. Total sales on accrual basis in 2006?
A. 14,535,000
B. 14,670,000
C. 11,295,000
D. 11,430,000
23. Total purchases on accrual basis in 2006?
A. 10,818,000
B. 9,738,000
C. 9,558,000
D. 10,998,000
24. Cost of Goods sold in 2006?
A. 8,100,000
B. 8,280,000
C. 6,840,000
D. 7,020,000
25. Net income for the year ended December 31, 2006?
A. 4,680,000
B. 4,860,000
C. 3,015,000
D. 5,310,000

Problem IX
Beans Court Tease Company was organized on January 1, 2015. On the same date,
25,000, P100 par value, ordinary share were issued in exchange for PPE valued P
3,000,000 and Cash of P 1,000,000. The following data summarize activities for 2015.
a. Profit for the year ended December 31, 2015 was P 1,000,000.
b. Raw materials on hand on December 31 were equal to 25% of raw materials
purchased.
c. Manufacturing costs were distributed as follows: Materials used- 50%; Direct
Labor- 30%; Factory Overhead- 20% (includes depreciation of building, P
100,000)
d. Work-in-process inventory remaining in the factor as of December 31 was
equal to 1/3 of the cost of goods available for sale.
e. Finished goods remaining in stock on December 31 was equal to 25% of cost
of goods sold.
f. Operating expenses were 30% of sales.
g. Cost of goods sold was 150% of the operating expenses.
h. 90% of sales were collected during 2015. The remaining balance was
considered collectible.
i. 75% of the raw materials purchased were paid for. There were no expense
accruals or prepayments at the end of the year.
Determine the balances of the following accounts at December 31, 2015.
26. Sales?
A. P 4,000,000
B. P 5,000,000
C. P 2,000,000
D. P 3,000,000
27. Total Manufacturing Costs?
A. P 4,166,667
B. P 5,000,000
C. P 666,667
D. P 2,850,000

28. Cash?
A. P 1,900,000
B. P 1,150,000
C. P 650,000
D. P 500,000
29. Total Current Assets?
A. P 4,000,000
B. P 2,600,000
C. P 2,575,000
D. P 3,861,111
Problem X
You are auditing the balance sheet of the Ballares Company on December 31, 2004,
which has the following items on the equity side of the balance sheet:
Current Liabilities 2,858,000

Bonds Payable 3,000,000
Reserve for Bonds Retirement 1,600,000
6% Cumulative Preference Share, P100 par value
(entitled to P110 and accumulated dividends
per share in voluntary liquidation). Authorized,
30,000 shares; issued, 20,000 shares; in treasury,
1,500 shares 1,850,000
Ordinary share, P100 par value, authorized,
100,000 shares; issued and outstanding, 40,000
shares 4,000,000
Premium on preference share 100,000
Premium on ordinary share 673,000
The company proposes to finance a plant expansion program by issuing an additional

20,000 shares of ordinary share.
Ordinary shareholders of record October 1, 2004 were notified that they will be
permitted to subscribe to the new issue at P150 per share up to 50% of their holdings.
The market value of the share on October 1, 2004, was P172.50. The share goes
ex-rights in the market on October 3, 2004.

Questions:
30. How much is the total shareholders’ equity as of December 31, 2004?
A. 5,535,000
B. 7,500,000
C. 9,535,600
D. 2,035,000
31. The book value per share of ordinary share as of December 31, 2004 is?
A. 178.52
B. 172.50
C. 165.00
D. 203.55
Problem XI
You were engaged by Catacutan Company, a publicity held company whose shares
are traded in the Philippines Share Exchange, to conduct an examination of its 2004
financial statements. You were told by the company’s controller that there were
numerous equity transactions that took place in 2004. The shareholders’ equity
accounts at December 31, 2003, had the following balances:
Preference share, P100 par value, 6% cumulative; 15,000

shares authorized; 9,000 shares issued and outstanding P 900,000
Ordinary share, P1 par value, 900,000 shares authorized:
600,000 shares issued and outstanding 600,000
Additional paid-in capital 1,200,000
Total shareholders’ equity P5,898,000
You summarized the following transactions during 2004 and other information relating
to the shareholders’ equity in your working papers as follows:
 January 6, 2004 – issued 22,500 shares of ordinary share to Difficult Company in

exchange or land. On the date issued, the share had a market price of P16.50 per
share. The land had a carrying value of P201,000, and an assessed value for
property taxes of P135,000.

 January 31, 2004 – Sold 1,350, P1,000, 12% bonds due January 31, 2006, at 98
with one detachable share warrant to each bond. Interest is payable annually on
January 31. The fair value of the bonds without the share warrants is 95. The
detachable warrant entitles the holder to purchase 10 shares of ordinary share at
P10 per share.
 February 22, 2004 – Purchased 7,500 shares of its own ordinary share to be held
as treasury share for P24 per share.
 February 28, 2004 – Subscriptions for 21,000 shares of ordinary share were
received at P26 per share, payable 50% down and the balance by March 15.
 March 15, 2004 – The balance due on 18,000 shares was received and those
shares were issued. The subscriber who defaulted on the 3,000 remaining shares
forfeited the down payment in accordance with the subscription agreement.
 April 30, 2004 – Declared a dividend of inventory to ordinary shareholders. The
inventory had a carrying value of P910,000:fair value on relevant dates were:
Date of declaration (April 30, 2004) P950,000

Date of record (May 15, 2004) 900,000
Date of distribution(May 31, 2004) 920,000
 August 30, 2004 – Reissued 3,000 shares of treasury share for P20 per share.
 September 14, 2004 – There were 945 warrants detached from the bonds and
exercised.
 November 30, 2004 – Declared a cash dividend of P2 per share to all ordinary
shareholders of record December 15, 2004. The dividend was paid on December
30, 2004.
 December 15, 2004 – Declared the required annual cash dividends on preference
share for 2004. the dividend was paid on January 15, 2004.
 January 8, 2005 – Before closing the accounting records for 2004. Catacutan
became aware that no amortization had been recorded for 2003 for a patent
purchased on July 2, 2003. The patent was properly capitalized at P480,000 and
had an estimated useful life of eight years when purchased. Catacutan is subject
to 32% regular corporate income tax. The appropriate correcting entry was
recorded on the same day.
 Adjusted net income after tax for 2004 was P1,860,900.
Based on the given data and result of your audit investigation, answer the following:
32. Retained Earnings?

33. Total shareholders’ equity?
34. Additional paid- in capital?

Problem XII
BEBE Co. was formed on July 1, 2014. It was authorized to issue 900,000 shares of
P 10 par value ordinary shares and 300,000 shares of 8 percent P 25 par value,
cumulative and non-participating preference shares. BEBE Co. has a July 1- June 30
fiscal year.
The following information relates to its shareholders’ equity:
Ordinary shares
Prior to the 2016- 2017 fiscal year, BEBE Co. had 330,000 ordinary shares issued as
follows:
1. 255,000 shares were issued for cash on July 1, 2014, at P 31 per share.
2. On July 24, 2014, 15,000 shares were exchanged for a plot of land which costs
the seller P 210,000 in 2008 and had an estimated market value of P 660,000
on July 24, 2014.
3. 60,000 shares were issued on March 1, 2015, for P 42 per share.
During 2016- 2017 fiscal year, the following transactions regarding ordinary shares
took place:
November 30, 2016- BEBE Co. purchased 6,000 of its own shares on the open market
at P 39 per share.
December 15, 2016- BEBE Co. declared a 5% stock dividend for shareholders of
record on January 15, 2017, to be issued on January 31, 2017. BEBE Co. was having
a liquidity problem and could not afford a cash dividend at the time. BEBE Co.’s
ordinary shares were selling at P 52 per share on December 15, 2016.
June 20, 2017- BEBE Co. sold 1,500 of its own ordinary shares that it had purchased
on November 30, 2016, for P 63,000.
Preference Shares
BEBE Co. issued 120,000 preference shares at P 44 per share on July 1, 2015.
Cash Dividends
BEBE Co. has followed a schedule of declaring cash dividends in December and June,
with payment being made to shareholders of record in the following month. The cash
dividends which have been declared since inception of the company through June 30,
2017, are shown below:

Declaration date Share Capital- Ordinary Share Capital- Preference

12/15/15 P 0.30 per share P 1.00 per share
06/15/16 P 0.30 per share P 1.00 per share
12/15/16 - P 1.00 per share
No cash dividends were declared during June 2017 due to the company’s liquidity
problems.
Retained Earnings
As of June 30, 2016, BEBE Co’s retained earnings account had a balance of P
2,070,000. For the fiscal year ending June 30, 2017, BEBE CO. reported net income
of P 120,000.
Required:
Compute the adjusted balances of the following as of June 30, 2017:
35. Total Contributed Capital

36. Total Retained Earnings
37. Total Shareholders’ Equity

Problem XIII
You were engaged by CITY Corporation, a publicly held company whose shares are
traded on the Philippine Stock Exchange, to conduct an audit of its 2017 financial
statements. You were told by the company’s controller that there were numerous
equity transactions that took place in 2017. The shareholders’ equity accounts at
December 31, 2016, had the following balances:
Share capital- preference, P 100 par value, 6% cumulative;

9,000 shares authorized; 5,400 shares issued and outstanding P 540,000
Share capital- ordinary, P 1 par value, 540,000 shares authorized;
360,000 shares issued and outstanding 360,000
Share premium 720,000
Retained Earnings 294,000
Total shareholders’ equity P 1,914,000
You summarized the following transactions during 2017 and other information relating
to the shareholders’ equity in your working papers as follows:
January 6, 2017 Issued 13,500 ordinary shares in exchange for land. On the
date issued, the shares had a market value of P 16.50 per
share. The land had a carrying value of P 126,000, and an
assessed value for property taxes of P 147,000.
January 31, 2017 Sold 720, P 1,000, 12% bonds due on January 31, 2027, at
98 with one detachable share warrant attached to each bond.
Interest is payable annually on January 31. The fair value of
the bonds without the share warrants is 95. The detachable
warrants have a fair value of P 50 each and expire on
January 31, 2018. Each warrant entitles the holder to
purchase 10 ordinary shares at P 10 per share.
February 22, 2017 Purchased 4,500 of its own ordinary shares to be held as
treasury shares for P 24 per share.
February 28, 2017 Subscriptions for 12,600 ordinary shares were received at P
26 per share, payable 50% down and the balance by March
15.
March 15, 2017 The balance due on 10,800 ordinary shares was received
and those shares were issued. The subscriber who defaulted
on the 1,800 remaining shares forfeited the down payment
in accordance with the subscription agreement.
August 30, 2017 Re- issued 1,800 treasury shares for P 20 per share.
September 14, 2017 There were 567 warrants detached from the bonds and
exercised.
November 30, 2017 Declared a cash dividend of P 0.50 per share to all ordinary
shareholders of record, December 15, 2017. The dividend
was paid on December 30, 2017.
December 15, 2017 Declared the required annual cash dividends on preference
shares for 2017. The dividend was paid on January 15, 2018.

January 8, 2018 Before closing the accounting records for 2017, CITY
became aware that no depreciation had been recorded for
2016 for a machine purchased on July 1, 2016. The machine
was properly capitalized at P 288,000 and had an estimated
useful life of eight years when purchased. The appropriate
correcting entry was recorded on the same date.
Adjusted net income for 2017 was P 252,000.
Based on the foregoing and result of your audit, answer the following (Ignore income
tax implications):
38. How much is the total contributed capital on December 31, 2017?
39. How much is the total shareholders’ equity on December 31, 2017?
-END OF AGONY/ EXAMINATION-
May the Lord grant you the SERENITY to ACCEPT the things you can no longer
change, the COURAGE to CHANGE what you could and the WISDOM to KNOW the
difference. <3
It’s not the loads that weights you down; it’s the way you carry it.
“You may ask me for anything in my Name, and I will do it.” – Jesus Christ
-John 14:14

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PAMANTASAN NG LUNGSOD NG VALENZUELA

POBLACION II, MALINTA, VALENZULEA CITY

MIDTERM DEPARTMENTAL EXAMINATION

PRACTICAL AUDITING [ACCTG11]

Preference Share Capital 1,800,000

GOD IS WATCHING YOU | 1

1. Ordinary share capital?

2. Share premium- ordinary

3. Total Contributed Capital

GOD IS WATCHING YOU | 2

5. Total Shareholders’ Equity

6. What is the shareholders’ equity on December 31, 2017?

7. What is the shareholders’ equity on December 31, 2018?

GOD IS WATCHING YOU | 3

8. What is the compensation expense for 2019?

9. What is the compensation expense for 2020?

GOD IS WATCHING YOU | 4

GOD IS WATCHING YOU | 5

Lake Company had the following investments on January 1, 2017:

GOD IS WATCHING YOU | 6

Shannon Company began operations on January 1, 2016. The financial statements

16. Net income, 2016?

GOD IS WATCHING YOU | 7

17. Net income, 2017?

18. Retained earnings on December 31, 2017?

19. Working Capital on December 31, 2017?

GOD IS WATCHING YOU | 8

20. What is the corrected income before tax for 2017?

An inventory of the merchandise taken on December 31, 2006 showed 2,718,000 of

Unpaid supplier invoices for merchandise amounted to 1,260,000.

GOD IS WATCHING YOU | 9

21. Collections from customers in 2006?

22. Total sales on accrual basis in 2006?

23. Total purchases on accrual basis in 2006?

24. Cost of Goods sold in 2006?

GOD IS WATCHING YOU | 10

Determine the balances of the following accounts at December 31, 2015.

27. Total Manufacturing Costs?

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29. Total Current Assets?

Current Liabilities 2,858,000

The company proposes to finance a plant expansion program by issuing an additional

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Preference share, P100 par value, 6% cumulative; 15,000

 January 6, 2004 – issued 22,500 shares of ordinary share to Difficult Company in

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Date of declaration (April 30, 2004) P950,000

32. Retained Earnings?

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The following information relates to its shareholders’ equity:

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Declaration date Share Capital- Ordinary Share Capital- Preference

Compute the adjusted balances of the following as of June 30, 2017:

35. Total Contributed Capital

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Share capital- preference, P 100 par value, 6% cumulative;

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Adjusted net income for 2017 was P 252,000.

-END OF AGONY/ EXAMINATION-

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