Академический Документы
Профессиональный Документы
Культура Документы
What amount should be reported as Total Current Liabilities on December 31, 2011?
a. P 3,500,000 c. P 2,300,000
b. P 2,700,000 d. P 2,500,000
What is the carrying amount of the asset that should be reported in the Statement of
Financial Position on December 31, 2011?
a. P 5,000,000 c. P 4,400,000
b. P 4,000,000 d. P 4,250,000
PROBLEM 3: Below are selected accounts and their balances for the Stonefly
Company as of December 31, 2007:
PROBLEM 4: Account balances and supplemental information for the Bighorn Corporation
as of December 31, 2007, are given below:
Accounts Payable ....................................... $ 75,900
Accounts Receivable .................................... 141,600
Accumulated Depreciation--Equipment .................... 84,000
Bonds Payable .......................................... 300,000
Cash ................................................... 243,900
Common Stock ........................................... 1,560,000
Deferred Income Tax Liability (noncurrent) ............. 6,900
Dividends Payable ...................................... 45,000
Equipment .............................................. 840,000
Income Taxes Payable ................................... 91,500
Inventory .............................................. 395,100
Investment in Land ..................................... 510,000
Investment in Stock of Subsidiary ...................... 492,000
Note Payable ........................................... 120,000
Notes Receivable ....................................... 150,000
Prepaid Insurance ...................................... 7,200
Retained Earnings ...................................... 453,600
Salaries and Wages Payable ............................. 42,900
Compute the amount of current assets and current liabilities for the year ended December
31, 2007.
PROBLEM 5 : The following totals are taken from the December 31, 2007, balance sheet
of Streamer Company:
Additional information:
(a) Cash of $38,000 has been placed in a fund for the retirement of long-term debt.
The cash and long-term debt have been offset and are not reflected in the financial
statements.
(b) Long-term assets include $50,000 in treasury stock.
(c) Cash of $14,000 has been set aside to pay taxes due. The cash and taxes payable
have been offset and do not appear in the financial statements.
(d) Advances on salespersons' commissions in the amount of $21,000 have been
made. Also, sales commissions payable total $24,000. The net liability of $3,000 is
included in Current Liabilities.
After making any necessary changes, what are the totals for Streamer's current assets and
current liabilities?
PROBLEM 6 : The following totals are taken from the December 31, 2007, balance sheet of
Bartholomew Company:
Additional information:
(a) A building costing $100,000 was purchased by taking out a $100,000 mortgage. Since
the building serves as collateral on the mortgage loan, both have been excluded from
the financial statements.
(b) Cash in the amount of $45,000 is in a restricted fund for the purchase of equipment.
This cash has been included in Current Assets.
(c) Long-term liabilities include a bank loan of $80,000. Of this loan, $15,000 must be
repaid within the coming year.
(d) Investment securities totaling $27,000 are included in Current Assets. These securities
represent stock purchases made as a long-term equity investment in a major supplier.
After making any necessary changes, what are the totals for Bartholomew's long-term
assets and long-term liabilities?
PROBLEM 7: The December 31, 2007, balance sheet of Madden Inc., reported total
assets of $1,050,000 and total liabilities of $680,000. The following information
relates to the year 2008:
The stockholders' equity section of the December 31, 2008, balance sheet would report a
balance of:
2008 6,000,000
2009 6,500,000
In the determination of the net income, the following items are ignored:
2008 2009
What would MacShine report as total expenses if the company uses the natural
presentation?
a. P 63, 000 c. P 127, 000
b. P 123, 000 d. P 134, 000
PROBLEM 10: Happy Company keeps limited record. Its assets and liabilities at the
beginning and end if the current year are as follows:
Beginning Ending
Cash in Bank P 30, 000 P 50, 000
Account Receivable, net 50, 000 70, 000
Merchandise Inventory 100, 000 80, 000
Accounts Payable 40, 000 20, 000
Notes Payable- bank 20, 000 25, 000
Equipment, net 80, 000 60, 000
During the year, the owner withdraws cash of P 120, 000, and made additional investment
of P 50, 000. How much is the net income/loss for the year?
PROBLEM 11: The net sale of Grass Manufacturing Company in 2014 is P 580, 000. The
cost of goods manufactured is P 480, 000. The beginning inventories of Goods Process and
Finished Goods are 82, 000 and 65, 000 respectively. The ending inventories are: Goods in
Process – 75, 000, Finished Goods- 55, 000. The selling expenses and general and
administrative expenses are 5% and 2.5% cost of sales respectively. How much would be
net profit before tax in the year 2014?
PROBLEM 12: The following information was taken from the accounting records of Gomez
Company for the year ended December 31, 2014:
PROBLEM 13: The changes in account balances of the Clearwater Corporation during
2008 are presented below:
Increase
Assets ............................................... $133,500
Liabilities .......................................... 40,500
Common Stock ....................................... 90,000
Additional Paid-In Capital ........................... 9,000
Assuming there are no changes in retained earnings except for net income and a dividend
payment of $19,500, the net income for 2008 should be:
PROBLEM 14: The financial records or Ronalyn Company were destroyed by fire at the end
of the current year. However, certain statistical data related to the income statement are
available.
The beginning inventory was P400,000 and decreased 20% during the year. Administrative
expenses are 25% of cost of goods sold but only 10% of gross sales. Four-fifths of the
operating expenses relate to sale activities. Ignoring income tax, how much was the net
income for the current year?
PROBLEM 15: Capiz Company provided the following for the current year:
PROBLEM 16: Darwin Company provided the following relevant information involving its
operating activities for the year ended December 31, 2011.
12.31.10 12.31.11
Accrued interest payable recognized 40,000 50,000
Depreciation recognized 72,800 75,600
Prepaid expenses recognized 3,100 4,940
For the year ended December 31, 2011, Darwin Company reported a net income after tax of
P648,000.
What is the net cash flow from operating activities that would be shown in the cash flows
statement?
a. 637,000 c. 731,760
b. 637,080 d. 735,440
PROBLEM 17: During 2011, Search Company which uses the allowance method of
accounting for doubtful accounts, recorded a provision for doubtful accounts expense of
P30,000 and in addition, it wrote off as uncollectible accounts receivable of P12,000. As a
result of these transactions, net cash flow from operating activities would be calculated
(indirect method) by adjusting net income with a (an):
a. 12,000 increase c. 18,000 increase
b. 18,000 decrease d. 30,000 increase
PROBLEM 18: The Sage Corporation prepared, for 2008 and 2007, the following balance
sheet data:
December 31
2008 2007
Cash .................................... $ 87,375 $ 63,750
Available-for-sale securities (not cash 17,250 105,000
equivalents) ..........................
Accounts receivable ..................... 90,000 86,250
Merchandise inventory ................... 187,500 163,500
Prepaid insurance ....................... 1,125 1,500
Land, buildings, and equipment .......... 1,378,875 1,087,500
Accumulated depreciation ................ (558,750) (498,750)
Total ................................. $1,203,375 $1,008,750
Additional information:
(a) Sold available-for-sale securities (not cash equivalents) costing $87,750
for $90,000.
(b) Equipment costing $18,750 with a book value of $3,750 was sold for
$4,500.
(c) Issued 8% bonds payable at par, $375,000.
(d) Purchased new equipment for cash, $310,125.
(e) Paid cash dividends of $22,500 during the year.
(f) Net income for 2005 was $45,000.
(g) Proceeds from the notes payable were used for operating purposes.
Compute the net cash flow provided by operating ,investing and financing activities for the
year ended December 31, 2008.
PROBLEM 19: The general ledger of Lopez Company provides the following information:
End of Year Beginning of Year
Accounts Receivable $ 60,000 $ 94,000
Inventory 350,000 230,000
Accounts Payable 40,000 65,000
The company's net sales for the year was $1,000,000 and cost of goods sold amounted to
$700,000.
Compute the following:
PROBLEM 20: Alpha Company had the following activities during the current year:
In the statement of cash flows, what amount should be reported as net cash used in
investing activities?
a. 3,725,000 c. 3,980,000
b. 3,805,000 d. 4,100,000
PROBLEM 21: Czarina Company carried a provision of P2,000,000 in its draft financial
statements on December 31, 2012 in relation to an unresolved court case. On January 31,
2013, when the financial statements on December 31, 2012 had not been yet authorized for
issue, the case settled and the court decided the final total damages payable by Czarina to
be P2,800,000. What amount should be adjusted on December 31, 2012 in relation to this
event?
PROBLEM 22: Jaja Company’s draft financial statements showed the profit before tax of
the year ended December 31, 2012 at P9,000,000. The board of directors authorized the
financial statements for issue on March 20, 2013. A fire occurred at one of Jaja’s sites on
January 15, 2013 with resulting damage costing P7,000,000, only P4,000,000 of which is
covered by insurance. The repairs will take place and be paid for in April 2013. The
P4,000,000 claim from the insurance entity will however be received on February 14, 2013.
What amount should be reported as profit before tax in Jaja’s financial statements?
PROBLEM 23: Jejasa Company provided the following events that occurred after
December 31, 2012:
3/11/2013 A court case involving Jejasa as the defendant was settled and
the entity was obligated to pay the plaintiff P1,500,000. Jejasa
previously has not recognized a liability for the suit because
management deemed it possible that the entity will lose the
case.
PROBLEM 24: Simple Company is completely the preparation of its draft financial
statements for the year ended December 31, 2012. The financial statements are
authorized for issue on March 31, 2013. On March 15, 2013, a dividend of
P1,750,000 was declared and a contractual profit share payment of P350,000 was
made, both based on the profit for the year ended December 31, 2012. On February
1, 2013, a customer went into liquidation having owed the entity P340,000 for the
past 5 months. No allowance had been made against this debt in the draft financial
statements. On March 20, 2013, a manufacturing plant was destroyed by fire
resulting in a financial loss of P2,600,000.
What total amount should be recognized in profit or loss for the year ended
December 31, 2012 to reflect adjusting events after the end of reporting period?
a. 2,600,000 c. 690,000
b. 3,290,000 d. 1,750,000
PROBLEM 25: The following data are provided by S3PD Company. The end of reporting
period is December 31, 2012 and the financial statements are authorized for issue on
March 15, 2013.
S3PD Company measures its investments in listed shares as held for trading at
fair value through profit r loss. On December 31, 2012, these investments were
recorded at the market value of P5,000,000. During the period up to February
15, 2013, in the portfolio, and on February 15, 2013, the market value had fallen
to P2,000,000.
S3PD Company had reported a contingent liability on December 31, 2012 related
to a court case in which S3PD was the defendant. The case was nt heard until the
first week of February 2013. On February 11, 2013, the judge handed down a
decision against S3PD Company. The judge determined that S3PD Company was
liable to pay damages and costs totaling P3,000,000.
On December 31, 2012, S3PD Company had a receivable from a large customer
in the amount of P3,500,000. On January 31, 2013, S3PD Company was advised
in writing by the liquidator of the said customer that the customer was insolvent
and that only 10% of the receivable will be paid on April 30, 2013.
What total amount should be reported as “adjusting events” on December 31, 2012?
a. 6,150,000
b. 6,500,000
c. 9,150,000
d. 9,550,000
PROBLEM 26: On Jan. 1, 2008, Clan Company Purchased a Machine for 5,280,000 and
depreciated it by the straight line method using an estimated useful life of eight years with
no residual value. On Jan. 1, 2011, Clan determined that machine had a useful life of six
years from the date of acquisition and will have a residual value of 480,000. An accounting
change was made in 2011 to reflect these additional data. What is the accumulated
depreciation for the machine on Dec. 31, 2011?
PROBLEM 27: During 2011, Mar Company determined that machinery previously
depreciated over seven-year life had a total estimated useful life of only five years. An
accounting change was made in 2011 to reflect the change in estimate. If the change had
been made in 2010, accumulated depreciation would have been 800,000 on Dec. 31, 2010,
instead of 600,000. As a result of this change, the 2011 depreciation expense was 50,000
greater. The income tax rate was 30 %. What amount should be reported in Mar’s income
statement for the year ended Dec. 31, 2011 as the cumulative effect on prior years of
changing the estimated useful life of the machinery?
PROBLEM 28: On Jan. 2011, Cris Company change from average cost method to the FIFO
method to account for its inventory. Ending inventory for each method was as follows:
2010 2011
Average cost 500,000 900,000
FIFO Cost 700,000 1,400,000
The income statement information calculated by the average cost method was as follows:
2010 2011
Sales 10,000,000 13,000,000
Cost of goods sold 7,000,000 9,000,000
Operating expenses 1,500,000 2,000,000
Tax Expense 450,000 600,000
Cris Company accrues tax expense on Dec. 31 of each year and pays tax in April of the
following year. The income tax rate is 30 %. What is the net income to be reported in 2011
after the change to the FIFO inventory method?
PROBLEM 29: During 2012, Jean Company engaged in the following transactions:
What total amount should be included as related party disclosures in Jean’s 2012
financial statements?
PROBLEM 30: Gabriel Company is part of a major industrial group and is known to
accurately disclose related party transactions in its financial statements. Remuneration and
other payments made to the entity’s chief executive officer during 2012 were:
What is the total amount that should be disclosed as “compensation” to key management
personnel to conform with the related party disclosure required by PAS 24?
PROBLEM31: Operating profit and loss figures for the seven segments of Helium
Company are as follows:
Segments Amount
K P13,000,000
L 1,200,000
M 7,800,000
N (2,400,000)
O ( 600,000)
P 600,000
Q ( 1,800,000)
P 17,800,000
What segments are reportable based on the operating profit or loss criterion?
a). segments k,l,m and p c). segments n,o and q
b). segments k,m, and n d). none is reportable
PROBLEM32: The following information pertains to the White Company and its division
for the year ended December 31,2014:
Sale to unaffiliated Customers P10,000,000
Intersegment sales of product similar to those sold to
Unaffiliated customers 2,000,000
White Company and all of its division are engaged solely in manufacturing operations.
What has a reportable segment‘s revenue is-
Appropriate common expenses are allocated to segments based on the ratio of segment
sales to total sales. Segment D’s operating profit was:
PROBLEM34: Congo Company does business in several different industries. The income
statement for 2011 is as follows:
Sales 60,000,000
Cost of goods sold (28,000,000)
Congo has two major reportable segments X and Y. An analysis reveals that P 1,000,000 of
the total Depreciation expense and P 2,000,000 of the expense are related to general
corporate activities. The remaining expenses are directly allocable to segment activities
according to the following percentage: