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The accounts below appear below in the December 31, 2012 trial balance of Jhe-Ar Company:
Authorized share capital
5,000,000
2,000,000
1,000,000
Subscription receivables
400,000
Share premium
500,000
600,000
300,000
Revaluation surplus
200,000
100,000
In the December 31, 2012 statement of financial position, what amount should be reported as
shareholders equity?
a.
b.
c.
d.
5,100,000
5,500,000
4,900,000
4,800,000
P 2,550,000
150,000
3,000,000
In RANs statement of shareholders equity, the number of issued and outstanding shares for each class
of stock is
Common Stock
a.
b.
c.
d.
60,000
60,000
63,000
63,000
Preferred Stock
17,000
18,000
17,000
18,000
3. Ashley Company was organized on January 1, 2011, with authorized capital of 100,000 shares of
P200 par value. During 2011, Ashe had the following transactions affecting shareholders equity:
January 10 Issued 25,000 shares at P220 a share
March 25 Issued 1,000 shares for legal services when the fair value was P240 a share
September 30 Issued 5,000 shares for a tract of land when the fair value was P260 a share
a.
b.
c.
d.
What amount should Ashley report for share premium in December 31, 2011?
840,000
800,000
540,000
500,000
4. Baka Company issued 200,000 ordinary shares when it began operations in 2010 and issued an
additional 100,000 shares in 2011. Biik also issued preference shares convertible into 100,000
ordinary shares. In 2011, Beck purchased 75,000 ordinary shares to be held in treasury.
On December 31, 2011, how many ordinary shares were outstanding?
a.
b.
c.
d.
400,000
325,000
300,000
225,000
5. Balimbing Corporation was organized on January 2, 1999 with authorized capital of 100,000
shares of P10 par value common stock. During 1999, Balimbing had the following:
Jan 12 Issued 20,000 shares at P12 per share.
April 23 Issued 1,000 shares for legal services when the market price was P14 per share.
a.
b.
c.
d.
What should be the amount of additional paid-in capital as of December 31, 1999?
4,000
14,000
40,000
44,000
6. Krystel and Patrick have the following condensed income statement for the year ended Dec. 31,
2012:
Net sales
P600,000
Cost of sales
200,000
Gross income
P400,00
Operating expenses
150,000
Net income
P250,000
P155,000
P156, 667
P93,333
P95,000
Patrick
P95,000
P93,333
P156,667
P155,000
7. Based on #6 question. What would be the journal entry to record distribution of net income?
a. Income and Expense Summary
250,000
Krystel, Drawing
156,667
Patrick, Drawing
93,333
b. Income and Expense Summary
250,000
Krystel, Drawing
93,333
Patrick, Drawing
156,667
c.
Income and Expense Summary
250,000
Krystel, Drawing
95,000
Patrick, Drawing
155,000
d. Income and Expense Summary
250,000
Krystel, Drawing
155,000
Patrick, Drawing
95,000
For numbers 8-10.
Compute for the distribution of income and losses under the given independent cases.
Chuchu and Chacha earned P120,000 net income in its first year of operation ended December 31,
2011. Other selected data are as ff:
Chuchu
chacha
Capital, January 2, 2011
P170,000
P268,000
Withdrawals
28,000
44,000
1) Assume that the net income is divided under the following independent cases:
a) Based on 6:4 ratio between Chuchu and Chacha, respectively.
b) Based on the partners capital account balances at the beginning of the year.
8.
a.
b.
c.
d.
9.
Chuchu
a.
b.
c.
d.
63,680
(16,940)
20,860
6,260
Chacha
56,940
(23,060)
(41,720)
140
10.
Chuchu
a.
b.
c.
d.
63,680
(16,940)
20,860
6,260
Chacha
56,940
(23,060)
(41,720)
140
11. The partnership agreement of R and S provides that interest at 10% per year is to be credited to
each partner on the basis of weighted-average capital balances. A summary of the capital
account of S for the year ended December 31, 2012, is as follows:
Balance, January 1
P420,000
Additional investment, July 1
120,000
Withdrawal, August 1
(45,000)
Balance, December 31
495,000
What amount of interest should be credited to Ss capital account for 2012?
a. 45,750
b. 49,500
c. 46,125
d. 51,750
12. CC, PP, and AA, accountants, agree to form a partnership and to share profits in the ratio of 5:3:2.
They also agreed that AA is to be allowed a salary of P28,000, and that PP is to be guaranteed
P21,000 as his share of the profits. During the first year of operation, income fees are 180,000,
while expenses total P96,000. What amount of net income should be credited to each partners
capital account?
CC
a.
b.
c.
d.
28,000
25,000
24,000
25,000
PP
16,800
21,000
22,000
21,000
AA
11,200
38,000
38,000
39,000
a.
b.
c.
d.
Dividends on preference share have been paid through 2009 but have not been declared for
2010 and 2011. On December 31, 2011, what is the book value per ordinary share?
25.00
27.20
26.40
29.00
14. Herbert and Hill share profits and losses on a 1:1 basis. What is the journal entry for the
distribution of profits/losses using the following account balances?
Expenses
Revenues
Income and Expense Summary
60,000
60,000
80,000 80,000
60,000
80,000
a. Income and Expense Summary
Herbert, Drawing
20,000
20,000
20,000
Hill, Drawing
c.
Income and Expense Summary
Herbert, Drawing
Hill, Drawing
d. Herbert, Drawing
Hill, Drawing
Income and Expense Summary
20,000
20,000
10,000
10,000
10,000
10,000
20,000
15.
Expenses
60,000
60,000
Revenues
80,000 80,000
30,000
30,000
30,000
30,000
30,000
15,000
15,000
15,000
15,000
30,000
19. A business whereby two or more persons bind themselves together to contribute money,
property, or industry to a common fund with the intention of dividing the profits among
themselves.
a. Sole proprietorship
b. Partnership
c. Corporation
d. None of the above
20. Primarily intended to update the balances in the book of accounts
a. Cross footing
b. Adjusting entries
c. Accrual accounting
d. Correcting entries