Short Quiz: AC 510

General Instruction: In a one whole sheet of paper, answer the following questions. Write
your supporting computations. No supporting computation, no credit. This test is good only
for 45 minutes. Maximize your time.

1. Cash in bank balance of Tim James Company on January 1, 2013 was P70,000,
representing 35% paid-up capital of its authorized capital stock of P200,000. During
the year, you ascertained the following postings to some accounts.
Debit Credit
Petty cash fund P 2,000
Accounts receivable trade 450,000 290,000
Subscription receivable 60,000 50,000
Delivery equipment 50,000
Accounts payable trade 280,000 430,000
Bank loan 35,000 80,000
Accrued expenses 1,500
Subscribed capital stock 60,000
Unissued capital stock 130,000
Authorized capital stock 200,000
Sales 450,000
Purchases 430,000
Expenses (including depreciation of
P5,000, and accrued expenses of
P1,500)


90,000


Required: Compute the cash in bank balance as of December 31, 2013. (10 pts.)

2. The following information pertains to Dwayne Parker Inc. for the year 2013.
Cash sales P 64,000
Cash collected on accounts receivable 440,000
Accounts receivable, January 1, 2013 110,000
Accounts receivable, December 31, 2013 95,000
Doubtful accounts written off 6,500
Purchases, net 350,200
Inventory, December 31, 2013 84,000
Gross margin on sales 35%

Required: Compute for the merchandise inventory on December 31, 2012. (10 pts.)



3. Based on the following data, reconstruct the adjusting entries prepared at the end of
the year. (10 pts.)
Before adjustment After adjustment
1. Taxes P 40,000 42,500
2. Advertising 3,000 1,500
3. Rent income 4,200 3,000
4. Interest income 100 150
5. Doubtful accounts -- 2,000

4. Immediately after posting the reversing entries, the ledger showed the following
account balances:
Debit Credit
1. Royalty income P 2,100
2. Taxes and licenses 2,500
3. Advertising expense P 2,100
4. Interest income 50
5. Interest expense 500

Required: What reversing entries were prepared at the beginning of the period? (10 pts.)

5. During the year ended December 31, 2013, Dilaginiirecord Company paid interest
totaling P100,000. The prepaid interest expense is P23,500 and P18,000, respectively,
on December 31, 2012 and 2013. The interest payable is P45,000 and P53,500,
respectively on December 31, 2012 and 2013. What interest expense should be
reported for 2013? (5 pts.)
A. P 86,000 C. P97,000
B. P 114,000 D. P103,000

6. For the year 2013, P1,100,000 of wages expense was reported in the income
statement. The previous years statement of financial position reported P100,000 of
wages payable. An analysis of the payroll records showed wage payments during the
year of P950,000. If the previous years adjusting entry for unpaid wages was
reversed on January 1, 2013, what is the amount of the adjusting entry for accrued
wages payable on December 31, 2013? (5 pts.)
A. P250,000 C. P400,000
B. P850,000 D. P150,000


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Nothing follows.