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2nd NCR CUP Jr.

MAD AccounTEAng Match

Level 1

Question # 1
1. Easy Theory BASIC TOA Which of the following is usually considered cash?

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B. Postdated check

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A. Checking accounts

C. Money market savings certificates

D. Certificates of deposit

Question # 2
2.Diff Theory Economics Identify the choice that best completes the statement or answers the question. (refer to the copy..) Panel a Production is:

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A. possible at points J, L, M, and N, but efficient only at point N.

B. possible at points J, K, L, and M, but efficient only at points J, L, and M.

C. possible at points J, L, M, and N, but efficient only at points J, L, and M.

D. possible at points J, K, L, and M, but efficient only at point K.

Question # 3
3. Diff Theory Economics Some economic indicators lead the economy into a recovery or recession, and some lag it. An example of a lagging indicator is

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A. Housing starts

B. Chronic unemployment

C. Orders for consumer and producer goods

D. Consumer expectations

Question # 4
4. Easy Theory Oblicon P authorized A, a minor, to sell his car for P1M in cash. A sold the said car to X on installments at a lesser price of P9M. P is now repudiating the contract with X in the ground that he is not bound since X contracted with a minor who exceeded his authority. Decide.

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A. P is liable provided the sale is in cash for P1M

B. P is liable under the contract because it is enough that the principal is capacitated side he is the one entering into the contract. D. P is not liable for the sale of installments since it is unenforceable because his agent acted beyond his powers.

C. P is not liable because the agent is minor with whom X contracted

Question # 5
5. Easy Problem Partnership A cash distribution plan (payment priority program) for the Matthew, Norell, and Reams partnership appears below: (refer to the copy..) If P550,000 of cash is to be distributed, how much will be received by the priority creditors, Matthew, Norell and Reams?

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A. Priority creditors (0), Matthew (0), Norell (0), Reams (0)

B. Priority creditors (0), Matthew (121,000), Norell (187,000), Reams (242,000)

C. Priority creditors (300,000), Matthew (55,000), Norell (85,000), Reams (110,000)

D. Priority creditors (300,000), Matthew (108,000), Norell (58,000), Reams (84.000)

Question # 6
6. Ave Problem Business Math Diane Corp. made a coupon payment yesterday on its "6.25s12" bonds that mature on October 9, 2032. The required return on these bonds is 9.2% APR, and today is April 10, 2013. What should be the market price of these bonds?

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A. 734.85

B. 651.76

C. 561.76

D. 173.09

Question # 7
7. Easy Problem Business Math Consider the following years and annual historical returns for an investment: Year 2005: 10%; Year 2006: 6%; Year 2007: 8%; Year 2008: 1.5%; Year 2009: 7.5%. What is the standard deviation for these returns? (a) (b) 12.48% (c) 14.18% (d) 15.85%

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A. about 6%

B. about 9%

C. about 8%

D. about 7%

Question # 8
8 Easy Theory Basic TOA If a company employs the gross method of recording receivable from customers, then the sales discounts taken should be

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A. Reported as a deduction from accounts receivable in determining the net realizable value

B. Reported as a deduction from sales in the income statement

C. Reported as an item of other expense in the income statement

D. Reported as sales discounts forfeited in the cost of sales section of the income statement

Question # 9
9. Easy Problem-Business Math A firm just had its first debt issue of P1M (M = million) worth of perpetual bonds with a yield-to-maturity of 7.5%. The total market value of the firm after the issue is P6M. Assuming the corporate tax view of capital structure, what was the market value of the firm before the issue if the firm's tax rate is 40%? A. P5.6 million B. P5.4 million

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C. P6.0 million

D. P5.8 million

Question # 10
10. Ave Problem Each year for eight years, an investment will generate incremental sales of P8,000 and cash operating expenses of P2,500. The applicable tax rate is 30% and depreciation is P2,000. What is the net cash flows for each of the eight years?

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A. 6,500

B. 8,000

C. 4,500

D. none of these

Level II

Question # 1
1. Diff Theory Basic TOA When a portion of inventories has been pledged as security on a loan,

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A. the value of the portion pledged should be subtracted from the debt.

B. the fact should be disclosed but the amount of current assets should not be affected.

C. the cost of the pledged inventories should be transferred from current assets to noncurrent assets.

D. an equal amount of retained earnings should be appropriated.

Question # 2
1. Ave Problem basic P1 On July 1, 2012, Long Company purchased a coal mine for P2 million. The estimated capacity of the mine was 700,000 tons. During 2012, the company mines 10,000 tons of coal per month and sells 9,000 tons per month. (refer to the copy..) Assuming the company uses the FIFO cost flow assumption, compute the companys expenses included on the 2013 statement of comprehensive income.

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Question # 3
3. Ave- Theory Basic TOA An entity classifies expenses by logistics, quality control, manufacturing, plant engineering, sales and marketing, research and development, finance and administration. The classification basis is by

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A. Services received

B. Object of expenditure

C. Area of responsibility

D. Function performed

Question # 4
4. Ave Theory Economics Policies such as rent control and trade barriers persist in spite of the fact that economists are virtually united in their opposition to such policies, probably because

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A. economists theories are not easily confirmed or refuted in laboratory analysis.

B. economists have not yet convinced the general public that the policies are undesirable.

C. economists engage in positive analysis, not normative analysis.

D. economists have values that are different from the values of most non-economists.

Question # 5
4. Diff Problem On August 1, 2013, Polar Company enters into a contract with Solar Company that gives Polar Company the right to sell, and Solar Company the obligation to buy the fair value of 4,000 shares of Polar Companys own ordinary share outstanding as of January 31, 2014 at a strike price of P392,000 (P98 per share) on January 31, 2014, if Polar Company exercises the right. The contract will be settled net in shares; however, if Polar Company does exercise the right, no payment will be made. (refer to the copy..) If the option is exercised, shareholders equity of Polar Company is being reduced by

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Question # 6
Easy Problem The AA, BB and CC Partnership was formed on January 2, 2011. The original cash investments were as follows: AA 96,000, BB 144,000, CC 216,000 According to the general partnership contract, the partners were to be renumerated as follows:(refer to the copy..) If the salaries to partners are to be recognized as operating expenses by the partnership, the capital balance of CC on December 31, 2011 is?

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A. 217,540

B. 208,540

C. 200,224

D. 194,940

Question # 7
7. Diff Theory Basic TOA A major advantage of the retail inventory method is that it

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A. provides reliable results in cases where the distribution of items in the inventory is different from that of items sold during the period. C. gives a more accurate statement of inventory costs than other methods.

B. hides costs from competitors and customers. D. provides a method for inventory control and facilitates determination of the periodic inventory for certain types of companies.

Question # 8
Ave- Theory Basic TOA How do these prepaid expenses expire?

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B. Rent: With the passage of time Supplies: With the passage of time

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A. Rent: With the passage of time Supplies: Through use and consumption

C. Rent: Through use and consumption Supplies: Through use and consumption

D. Rent: Through use and consumption Supplies: With the passage of time

Question # 9
9. Easy Theory Economics Which statement is correct about a factor that causes a nations currency to appreciate or depreciate in value?

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A. if the supply of a nations currency decreases, all else equal, that currency will depreciate

B. if the demand for a nations currency increases, all else equal, that currency will depreciate

C. if the supply of a nations currency increases, all else equal, that currency will depreciate

D. if the demand for a nations currency decreases, all else equal, that currency will appreciate.

Question # 10
10. Easy Problem P1 Presented below is a list of items that may or may not reported as inventory in SUITS Companys December 31 statement of financial position. (refer to the copy..) How much of these items would be reported as inventory in the financial statements?

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Level III

Question # 1
1. Easy Theory Economics Choose the correct and incorrect statements. I. The expression P0 = D1 / (r g) is the value of a perpetuity growing at a constant rate (g). II. The expected rate of return for a stock is often called a capitalization rate. III. A high P/E (which is often deemed good) can also result from a bad year. A. True, True, True B. True, false, false

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C. False, true, false

D. False, false, true

Question # 2
2. Diff Problem P1 Lally Company builds and sells equipment used in manufacturing pharmaceuticals. On December 31, 2013, the entity reported accounts receivables as follows: (refer to the copy..) What is the total impairment of receivables for 2013?

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Question # 3
3. Ave Theory Economics Economies often experience inflation but seldom experience long period of deflation. Which of the following is true about deflationary economy?

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A. Actual GDP is above potential GDP

B. Companies are hesitant to make investment

C. The lower prices encourage consumers to make major purchases

D. Interest rates tend to be high

Question # 4
4. Ave Problem A car rental company acquired vehicles for a total cost of P15,000,000 with the intention of holding them as rental cars for a limited period and then selling them. The car rental company, in the ordinary course of business, routinely sells vehicles acquired for car rental. The estimated life of the vehicles acquired was 8 years and after 6 years, the said vehicles will be available for sale. The proceeds from the sale of the vehicles was P10,000,000 which happened at the end of the 7th year. What is the amount of revenue from the subsequent sale of these vehicles recognized in the 7th year applying PAS 16?

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Question # 5
5. Diff Problem Basic P1 An SME has a deferred tax asset (DTA) account with a balance of P300,000 at the end of 2012 due to a single cumulative temporary difference of P750,000. At the end of 2013, this same temporary difference has increased to a cumulative amount of P1,000,000. Taxable income for 2013 is P1,700,000. The tax rate is 40% for 2013, but the enacted tax rates for all future years are 35%. It is probable that 70% of the DTA will be realized. What amount should be reported for DTA at December 31, 2013?

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Question # 6
6. Diff Problem Basic P1 On July 1, 2011, Parry Company purchased an 8%, 4-year, P8,000,000 face value bonds for P7,492,800. The bonds are dated July 1, 2011 and pays interest every June 30. Effective rate of the bonds is 10%. The company has a business model of collecting all the contractual cash flows and has no intention of trading and making profits. (refer to the copy..) What is the amount of impairment reversal should Parry Company report in its profit or loss for the year-ended June 30, 2013? (Assume early adoption of PFRS 9 since January 1, 2011)

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Question # 7
7. Diff Theory Basic TOA Under PFRS, revenue from bill-and-hold sales is recognized when I. It is probable that goods will be delivered II. The item is identified, on hand, and ready for delivery III. The goods (services) exchanged are dissimilar in nature IV. The buyer acknowledges the deferred delivery arrangement V. Usual payment terms apply

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A. I, III, IV, and V.

B. I, II, III, IV, and V.

C. I and V.

D. I, II, IV, and V.

Question # 8
7. Diff Problem A lessee is required to pay a refundable deposit of P100,000 to the lessor at the inception of an operating lease for which no interest is receivable. The fixed lease term is 10 years. The market interest rate is 5% (i.e., that is the interest rate the lessor would have to pay if he borrowed P100,000 for a 10 year term from a third party). The date of inception is February 1, 2013. Assuming the annual lease payment is P60,000, determine the net amount recognized in lessees profit or loss as of December 31, 2014 applying PAS 17 Leases and financial instruments standards. (Round PV factors to 4 decimal places)

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Question # 9
Ave Theory Basic TOA An electronics store is running a promotion where for every video game purchased, the customer receives a coupon upon checkout to purchase a second game at a 50% discount. The coupons expire in one year. The store normally recognized a gross profit margin of 40% of the selling price on video games. How would the store account for a purchase using the discount coupon?

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A. The reduction in sales price attributed to the coupon is recognized as premium expense.

C. Premium expense is not recognized.

B. The difference between the cost of the video game and the cash received is recognized as premium expense. D. The difference between the cost of the video game and the selling price prior to the coupon is recognized as premium expense.

Question # 10
Easy Problem Joanne Corporation had the following information in its financial statements for the years ended 2012 and 2013: (refer to the copy..) What is the rate of return on common stock equity for Joanne Corporation for the year ended 2013?

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A. 6.5%

B. 6.0%

C. 5.6%

D. 5.2%