MINDANAO MISSION ACADEMY Fundamentals of ABM

Accountancy, Business and Management

Semi-final Examination
September 6-6, 2019
Name: ___________________________________________ Score: __________________

General instructions
º No calculator, no exam
º No borrowing/exchanging of calculators while taking the exam
º Ask directly from the teacher in-charge if you have questions
º Talking to your seatmates is considered cheating

I. Multiple Choice: Encircle the letter of your choice

1. A financial statement that explain the net change in cash for the year.
a. Statement of changes in equity c. Statement of Financial position
b. Statement of comprehensive income d. statement of cash flows

2. The excess of the issue price over the par

a. Capital stock c. Additional Paid-In Capital
b. Retained earnings d. Paid-In capital

3. Which of the following is false?

a. Statement of cash flows explains the observed difference in the cash balance from the beginning to the end of the period
b. Cash payment for bank loans are reported under cash flows from operating activities
c. Salary and utilities are reported as operating activities
d. The bottom line of the statement of cash flows is equivalent to the cash balance presented on the statement of financial position.

4. Undistributed earnings of a corporation

a. Capital stock c. Additional Paid-In Capital
b. Retained earnings d. Paid-In capital

5. One of the following events decreases equity. Which is it?

a. Michael invested P50,000 in Jolen Corporation. This was a new issuance of shares and Michael received 5,000 common shares.
b. Jolen corporation paid P10,000 for electricity expense .
c. A used truck, carries in Jolen Corporation’s books at P100,000, was sold for P500,000 resulting in a gain.
d. Jolen Corporation, engaged in the business of selling small glass balls, reported sales of P12,000,000 for the year.

6. Which of the following is false?

a. APIC arises from the difference between par value and proceeds from share issuance
b. Sole proprietorship can never have APIC
c. Interest payments are financing activities
d. Cash collections on accounts receivable are operating activities

7. One of the following events increases equity. Which is it?

a. A fire in Quezon City partially destroyed the headquarters of Monlee Corporation. The loss was estimated to be P400,000
b. Monlee Corporation incurred expenses of P7,000 to buy office supplies
c. Monlee Corporation’s investment in RP Corporation increased in value between the years 2017 and 2018.
d. Monlee Corporation pays its dividends to the outstanding shareholders.

8. Statement I: Dividends distributed by corporation are credited against retained earnings.

Statement II: The number of capital accounts presented in a SoCE of partnership is equal to the number of partners.
a. Both statements are true c. Both statements are false
b. Only statement II is true d. Only statement I is true

9. Statement I: All equity accounts have normal credit balances

Statement II: Paid-in capital is the amount of contributions given to the corporation in exchange for the shares of stock
a. Both statements are true c. Both statements are false
b. Only statement II is true d. Only statement I is true

10. Partners Anna, Bana and Cana reported a net profit of P93, 400. According to the partnership agreement, the partner’s profit sharing ratio is
35%, 40%, and 25% for Anna, Bana, and Cana. How much is the share of Bana in the partnership profit?
a. 32, 690 c. 31, 133
b. 23, 350 d. 37, 360

II. Cash Flows:

Pia has the following cash transactions for the year 2019. She asked for your help to identify the remaining cash balance and the classification of each
cash transaction. Could you help Pia?

I don’t know
how….could you
help me?
Directions:
1. Journalize the following transaction by writing it on the second column.
2. Then identify the said transaction whether it is an operating (O), investing (I), or a financing (F) activity.
3. Compute the total cash balance using the “T-account” format in the last column. (you may write the amount only)

Cash flow
Transactions Journal entry
classification
Invested 20,000 to start her
business
Bought furniture for her office
worth 3,000
Bought goods to be sold worth
4,000

Sold merchandise worth 9,800

Withdrew 5,000 for the dress

she wore in her friend’s
wedding

Paid dividends worth 1,200

Sold merchandise on account

worth 3,500
Obtain a loan and issued a
promissory note in BDO for
14,000 cash

III. Statement of changes in Equity

- Maine, Nancy, and Betty formed a partnership named MNB Enterprise. The beginning capital balances of the partners were P58,
000.00, P63,200.00, and P64, 890.00 respectively. The partnership generated net income of P75,000 in the current year.
According to the partnership contract, profit and loss will be divided equally. Maine made additional contribution of P7, 640.00,
while Nancy withdrew P5, 000.00. Betty also made an additional investment of P10,000 but withdrew P6, 500.00.
Required: Prepare a Statement of Changes in equity for the year ended December 31, 2017.

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