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10.
11.
12.
13.
14.
Inventory
600,000
Deferred charge
40,000
Cash surrender value
60,000
Land held for future sale
200,000
What is the amount of current assets?
a. P1,490,000
b. P1,650,000
c. P1,450,000
d. P1,500,000
Dysas #18 2nd PB C
On December 31, 2011,Flat Corporation reported the following information on its accrual-based financial
statements:
December 31
2011
2010
Inventory
P15,000
P8,000
Accounts payable
(merchandise creditors)
4,000
12,000
Cost of goods sold
5,000
3,000
All purchased of merchandise inventory are made on account
Flats cash payments for inventory during the year amounted to:
a. P2,000
b. P8,000
c. P15,000
d. P20,000
Dysas 2nd PB #23 D
R Company has expanded rapidly and segment reporting is now required. The entity has no intersegment sales.
The following data are for the year ended December 31, 2009:
Operating
Segment
Operating
Identifiable
Segment
Revenue
Profit(loss)
Assets
1
620,000
200,000
400,000
2
100,000
20,000
80,000
3
340,000
70,000
300,000
4
190,000
(30,000)
140,000
5
180,000
(25,000)
180,000
6
70,000
10,000
120,000
7
120,000
(20,000)
140,000
Others
380,000
(25,000)
140,000
The others category include five operating segments, none of which has revenue or assets greater than
P80,000 and none with an operating profit.
Operating segments 1 and 2 produce very similar products and use very similar production processes,
but serve different customer types and use quite difference product distribution system. These differences
are due in part to the fact that Segment 2 operates in a regulated environment while Segment 1 does not.
Operating Segments 6 and 7 have similar products, production processes, product distribution systems,
but are organized as separate divisions since they serve substantially different types of customers.
Neither Segments 6 nor 7 operated in a regulated environment.
What are the reportable segments for the year ended December 31, 2009?
a. Segments 1,3,4 and 5
c. segments 1,2,3,4,and 5
b. Segments 1,3,4,5 and 7
d. segments 1,3,4,5 and segments 6 and 7 combined as one
segment
Dysas 2nd PB # 24 D
On January 1, 2009, Ace Company paid a real estate taxes on its property for the calendar year 2009 in the
amount of P600,000. In the first week of April 2009, Ace made unanticipated major repairs to its plant equipment
at a cost of P2,400,000. It is ascertained that these repairs will benefit operations for the remainder of the
calendar year. How should these expenses be reflected in Aces quarterly profit or loss statement for 2009?
March 31
June 30
September 30
December 31
a. P150,000
P950,0000
P950,000
P950,000
b. P750,000
P750,000
P750,000
P750,000
c. P150,000
P2,150,000
P150,000
P150,000
d. P600,000
P2,400,000
P
0
0
Dysas 2nd PB #25 A
For the month of July, Cassandra had the following information: bank service charge for July, P16,500, NSF
check, P40,000. Upon the review of its records, Cassandra determined the following: deposit in transit P143,000,
outstanding checks P110,000 and an unrecorded customer check of P38,500. If the cash in bank balance per
ledger is P920,000, how much is the adjusted balance?
a. 863,500
b. 935,000
c. 896,500
d.902,000
cpar 1st PB #13 D
Excel reported P70,000 of inventory on December 31, 2011, based on physical count. Additional information was
given as follows:
Included in the physical count were small equipments billed to a customer, FOB shipping point, on
December 31, 2011. The small equipments had a cost of P3,000 had been billed at P5,000. The shipment
shipment is ready for pick-up by the delivery contractor.
Goods were in transit from a vendor. The invoice cost was P8,000 and goods were shipped FOB shipping
point on December 31, 2011.
Work in progress costing P500 was sent to an outside processor for finishing on December 31, 2011.
Goods out on consignment amounted to P4,600 (sales price); shipping costs, P120 (markup is 15% on
cost).
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
Borrowed P550,000 under a long-term loan agreement. Used the cash from the loan proceeds as follows:
P150,000 for purchase of additional inventory, P300,000 to pay cash dividends, and P100,000 to increase
the cash balance.
What amount should be reported as net cash used in investing activities?
a. 1,200,000
b. 2,200,000
c. 400,000
d. 750,000
CPAR Final PB #16 D
Maroons Companys income statement for the year ended December 31, 2011 reported income before tax of
P5,000,000. The auditor questioned the following amounts that had been included in income before tax:
Equity in earnings of Bulldogs Company
1,600,000
Dividends received from Bulldogs Company
320,000
Adjustment of profit of prior year for arithmetical error in depreciation
(1,400,000)
Maroons owned 20% of Bulldogs share capital. What amount should be reported by Maroons Company as
income before tax?
a. 3,400,000
b. 4,680,000
c. 4,800,000
d. 6,080,000
CPAR Final PB #15 D
Tamaraws Company accumulated the following quarterly cost data for the current year:
Raw materials - beginning inventory
90,000 units @ P7.00
630,000
Purchases
75,000 units @ P8.00
600,000
120,000 units @ 8.50
1,020,000
The entity transferred 195,000 units of raw materials to work in process during the year:
Work in process - beginning inventory
50,000 units @ 14.00
700,000
Direct labor
3,100,000
Manufacturing overhead
2,950,000
Work in process - ending inventory
48,000 units @ 15.00
720,000
The entity uses the FIFO method for valuing raw materials. What is the cost of goods manufactured for the current
year?
a. 7,535,000
b. 8,235,000
c. 7,515,000
d. 8,280,000
CPAR final PB #17 C
Hopeless Companys checkbook balance on December 31, 2011 was P212,000. In addition, Hopeless held the
following items in its safe on December 31.
A check for P4,500 from Payless Company received December 30, 2011, which was not included in the
checkbook balance. An NSF check from Gamer Company in the amount of P9,000 that had been deposited at the
bank, but was returned for lack of sufficient funds on December 29, 2011. The check was redeposited on January
3, 2012. Coin and currency on hand amounted to P14,500. What is the proper amount to be reported as cash on
December 31, 2011?
a. 213,000
b. 204,000
c. 222,000
d. 207,500
CPAR final PB #19 C
Lions Companys petty cash fund is established in the amount of P2,500. Upon examination of the records, the
petty cash fund contains currency and coins in the amount of P1,500 and receipts for disbursements of P950.
When the fund is replenished under the imprest system, the entry to record the replenishment will include a credit
to
a. Petty cash fund P750
c. Cash in bank P950 and cash short and over P50
b. Petty cash fund P1,000
d. Cash in bank P1,000
CPAR final PB #20 D
Vanessa Company uses the allowance method. The following schedule was prepared from an aging of the
accounts receivable outstanding on December 31, 2011:
0 - 30 days
5,000,000
.98 collectible
31 - 60 days
2,000,000
.90 collectible
Over 60 days
1,000,000
.80 collectible
Cost
180,000
2,990,000
40,000
150,000
29.
30.
31.
32.
33.
34.
35.
36.
Retail
450,000
4,350,000
Inventory, January 1
Purchases
Purchase discounts
Freight in
Markup
s
1,050,000
Markdowns
400,000
Sales
400,000
Sales discount
50,000
What is the estimated cost of the inventory on December 31, 2011?
a. 3,131,000
b. 3,120,000
c. 3,100,000
d. 2,031,000
CPAR Final PB #23 B
On May 1, 2012, a flash flood caused damage to the merchandise stored in the warehouse of Chooks Company.
The following data were established.
Net sales for 2011 were P800,000, matched against cost of P560,000.
Merchandise inventory, January 1, 2012 was P200,000, 90% of which was in the warehouse and 10% in
downtown showrooms.
From January 1, 2012 to date of flood, the invoice value of purchases (all stored in the warehouse) is
ascertained to be P100,000; freight inward, P4,000; and purchase return, P6,000.
Cost of merchandise transferred from the warehouse to showrooms was P8,000 and net sales from
January 1 to May 1, 2012 (all warehouse stock) amounted to P320,000.
What is the estimated cost of merchandise destroyed by the flood?
a. 46,000
b. 50,000
c. 66,000
d. 80,000
CPAR final PB #24 A
Ziegler Company purchased 250,000 ordinary shares of Sherman Company for P40 per share on April 2, 2011.
Sherman Company had 1,000,000 ordinary shares outstanding during 2011,paid cash dividends of P600,000
during 2011,and reported net income of P2,000,000 for 2011. What amount should Ziegler Company as report
revenue from investment for 2011?
a. 500,000
b. 375,000
c. 525,000
d. 150,000
Cpar final PB #26 B
During 2011, Gargamel Company made the following expenditures relating to plant machinery and equipment:
Renovation of a group of machines at a cost of P500,000 to secure greater efficiency in production over
their remaining five-year useful life. The project was completed on December 31, 2011.
37.
38.
39.
40.
41.
42.
43.
Nonoy elected to estimate its doubtful accounts by using percent of accounts receivable method. Nonoy
determined that 6% would be a good estimate. There were no writeoffs nor recoveries during the year. What
amount should be reported as doubtful accounts expense in the current year as a result of this change?
a. 240,000
b. 360,000
c. 480,000
d. 310,000
Cpar 1st PB #6 D
On January 1, 2009, Mara Company purchased equipment for P3,000,000 with a 5-year useful life and no
residual value. On January 1, 2010, Mara incurred repairs for P500,000 and inappropriately capitalized the entire
amount. The error was discovered on January 1, 2011 and the assets residual value was estimated to be
P400,000 also on this date. What amount should be recognized as prior period error in the opening balance of
retained earnings on January 1, 2011?
a. 500,000
b. 375,000
c. 125,000
d.
0
CPAR 1st PB #7 B
Maple Company provides for doubtful accounts expense are the rate of 3 percent of net credit sales. Maples
credit terms are 2/10, n/30. The following data are available for the current year:
Accounts written off as uncollectible during the year
60,000
Collection from customers beyond discount period
(including recovered accounts of P15,000)
1,500,000
Credit sales, year-ended December 31
3,300,000
Sales returns and allowances
200,000
Collection from customers within discount period
882,000
Allowance for doubtful accounts, January 1
54,000
Accounts receivable, January 1
950,000
What is the net realizable value of the accounts receivable at December 31?
a. 1,605,000
b. 1,521,000
c. 1,503,540
d. 1,488,540
CPAR 1st PB #14 C
Jacky Company sold accounts receivable without recourse with a face amount of P4,000,000. The factor charged
a service fee of 10% of the accounts factored and withheld 5% of the accounts factored as protection against
customer returns and other adjustments. Jacky previously established an allowance for doubtful accounts of 8%
of the accounts factored. How much is the gain or loss on factoring?
a. 80,000 loss
b. 400,000 loss
c. 320,000 gain
d. 280,000 loss
CPAR 1st PB #15 A
On January 1, 2009, Sookie Bank loaned P7,000,000 to another entity. Interest of 10% is payable annually every
December 31 of each year and has a 5-year term. Sookie was able to collect the 2009 and 2010 interest but failed
to collect the 2011 interest from the entity because of financial difficulties. The entity did not accrue the interest on
December 31, 2011. The entity negotiated with Sookie on December 31, 2011 and agreed on the following:
The principal amount will be collected on December 31, 2014.
The new interest rate is 8%. Sookie forgave the 2011 interest but the remaining interest payments will be
collected together with the principal on December 31, 2014.
How much is the impairment loss on December 31, 2011?(round off PV factor to decimal.)
a. 1,330,000
b. 1,750,000
c. 490,000
d.
0
CPAR 1st PB #17 C
Acura Motor Sales exchanged a car from its inventory for a sophisticated copying machine to be used as a longterm asset. The following information relates to the exchange:
Carrying amount of the car
650,000
Fair value of the copying machine
900,000
List selling price of the car
1,200,000
Cash difference paid by Acura
150,000
What amount of gain or loss should Acura recognized?
a. 550,000 gain
b. 100,000 gain
c. 300,000 loss
d. 400,000 gain
CPAR 1st PB #26 B
Punk Company acquired an existing building in exchange for 50,000 ordinary shares. The list price of the building
is P8,000,000 and the shares have a fair value of P120 per share. Punk also incurred the following costs:
Payment to tenants to vacate the building
65,000
Unpaid property taxes assumed by Punk
78,000
Assessment by city for sewerage project
7,000
Driveways and parking bays
550,000
Cost of grading and leveling
45,000
Cost of new wing attached to the building
750,000
Cost of new ventilation system
300,000
Remodeling costs prior to occupancy
200,000
What is the total cost of the building?
a. 9,093,000
b. 7,093,000
c. 7,393,000
d. 9,393,000
Cpar 1st PB #28 B
Atom Company installed a production assembly line to manufacture tennis balls. In the current year, Atom
acquired a machine and rearranged the assembly line to install the machine. The rearrangement resulted
efficiency in production. The following expenditures were incurred:
Purchase price of the machine(VAT inclusive, 12%)
1,008,000
Labor cost to install machine
130,000
Parts added in rearranging the assembly line
400,000
Cost of testing the machine
150,000
Proceeds from sale of samples produced from testing
12,000
Cost of training worker who will operate the machine
20,000
What total amount of the expenditures should be capitalized?
44.
45.
46.
47.
48.
a. 1,568,000
b. 1,580,000
c. 1,600,000
d. 1,676,000
Cpar 1st PB #29 A
Kirkland Company acquired a tract of land containing an extractable natural resources. Kirkland is required by the
purchase contract to restore the land to a condition suitable for recreational use after it has extracted the natural
resource. Geological survey indicated that recoverable reserves will be 2,500,000 tons and the extraction will be
completed in 5 years. Relevant cost information follows:
Land
9,000,000
Exploration cost
1,000,000
Restoration cost
1,500,000
Credit-adjusted risk free interest rate
10%
What is the depletion charge per ton?(round PV factor to 2 decimal)
a. 4.00
b. 4.37
c. 3.97
d. 3.60
Cpar 1st PB #31 B
On June 30, 2011, the statement of financial position of Lourdes Company reported the following balances:
Machinery at cost
5,000,000
Accumulated depreciation
1,500,000
The equipment was measured using the cost model and depreciated on a straight-line basis over a 10-year
period. On December 31, 2011, the directors of Lourdes decided to change the basis for measuring the machinery
from the cost model to the revaluation model. The machinery was revalued to its fair value of P4,550,000 with an
expected remaining life of 5 years. The entry to record the revaluation using the proportional method will include
a. A debit to machinery of P1,300,000
b. A credit to accumulated depreciation of P2,450,000
c. A debit to accumulated depreciation of P700,000
d. A debit to accumulated depreciation of P1,750,000
Cpar 1st PB #32 C
Karla Company acquired a machine for P3,200,000 on August 31, 2008. The machine has 5- year life, a
P500,000 residual value, and was depreciated using the straight line method. On May 31, 2011, a test for
recoverability reveals that the expected net future undiscounted cash inflows related to the continued use and
eventual disposal of the machine total P1,500,000. The machines fair value on the same date is P1,350,000 with
no residual value. What is the impairment loss to be recognized in 2011?
a. 365,000
b.215,000
c. 90,000
d.
0
Cpar 1st PB #33 A
Hoyt Company started construction on a building on January 1, 2011 and completed construction on December
31, 2011. Hoyt had only two interest notes outstanding during the year and both of these notes were outstanding
for all 12 months of 2011. The following information is available:
Average accumulated expenditures
4,500,000
Ending balance in construction in progress before capitalization of interest
5,400,000
7% note incurred specifically for the project
2,400,000
12% long term note
6,000,000
What is the cost of the building on December 31, 2011?
a. 5,715,000
b. 5,400,000
c. 5,820,000
d. 4,815,000
Cpar 1st PB #30 C
The following data were taken from the records of Katcelynne Company:
Cash sales
2,500,000
Sales on account
850,000
Cash purchases
1,700,000
Credit purchases
400,000
Expenses paid
750,000
Accounts receivable-January 1
250,000
Accounts receivable-December 31
300,000
Accounts payable-January 1
150,000
Accounts payable -December 31
200,000
Inventory-January 1
500,000
Inventory -December 31
600,000
Accrued expenses-December 31
20,000
Prepaid expenses-December 31
30,000
Equipment-December 31
1,000,000
Interest received
40,000
Interest receivable-January 1
10,000
Interest receivable-December 31
20,000
On July 1, 2010, an equipment was acquired for P200,000. The terms are P50,000 down and the balance to be
paid after one year. The useful life of equipment is 10 years with no residual value.
What is the net income under cash basis?
a. 550,000
b. 570,000
c. 540,000
d. 640,000
59-13 p1072 V ans. A
Selected accounts, cash receipts and disbursement of Emmyrelle Company for 2010 are as follows:
December 31
January 1
Accounts receivable
250,000
300,000
Notes receivable
`150,000
100,000
Accounts payable
120,000
160,000
Notes payable
Prepaid insurance
200,000
30,000
150,000
10,000
d. 2,380,000
d. 1,830,000