1.

The following data pertained to Pogi Companys construction jobs, which commenced
during 2008:
PROJECT 1 PROJECT 2
Contract Price P420,000 P300,000
Cost incurred during 2008 240,000 280,000
Estimated cost to complete 120,000 40,000
Billed to customers during 2008 150,000 270,000
Received from customers during 2008 90,000 250,000
If Pogi company used the percentage of completion method, what amount of profit (loss)
would Pogi Company report in its 2008 income statement?
a. P(20,000) c. P22,500
b. P20,000 d. P40,000

2. On April 1, 2008, Ringo Corp. entered into franchise agreement with Quart Corp. to sell
their products. The agreement provides for an initial franchise fee of P4,218,750 payable
as follows: P1,181,250 cash to be paid upon signing of the contract and the balance in five
equal annual payment every December 31, starting at the end of 2008. Ringo signs 12%
interest learning note for the balance. The agreement further provides that the franchise
must pay a continuing franchise fee equal to 5% of its monthly gross sales. On August 30
the franchisor completed the initial services required in the contract at a cost of
P1,350,000 and incurred indirect costs of P232,500. The franchise commenced business
operations on September 3, 2008. The gross sales reported to the franchisor are
September sales, P110,000; October sales, P125,000; November sales P138,000; and
December sales, P159,000. The first installment payment was made on due date.

Assume the collectivity of the note is reasonably assured. In its income statement for the
year ended December 31, 2008 how much is the realized gross profit?
a. P2,868,750 b. P2,936,225 c. P2,895,350 d.
P3,168,725

3. At the beginning of 2008, S Video established a QC Branch and a MC Branch in order to

provide wider distribution of its merchandise. Merchandise is transferred to the branches at a
price 30% above cost. All branch merchandise is acquired from the home office. At the end of
2008, the QC Branch and the MC Branch reported net income and ending inventory balances
as follows:
Net income Ending inventory
QC Branch P45,500 P65,000
MC Branch 52,000 78,000
The year-end balances in the home office accounts allowance for unrealized gross margin
in branch inventory are P 48,750 for the QC Branch and P58,500 for the MC branch.
The income from Branch, home office should record is:
a. P171,750 b. P97,500 c. P130,500 d. P74,250

4. The trustee for John Corp. prepares a statement of affairs which shows that unsecured
creditors whose claims total P 540,000 may expect to receive approximately P 405,000 if
assets are sold for the benefit of creditors.
a. Danielle Corp. holds a note for P22,500 on which interest of P1,350 is accrued,
property with a book value of P18,000 and a realizable amount of P 27,000 is
pledged on the note.
b. Randolph, an employee is owed P6,750 for his salary.
c. Baltimore Corp. holds a note of P54,000 on which interest of P2,700 is accrued,
securities with a book value of P 58,500 and a realizable amount of P45,000 is
pledged on the note.
d. Nick Corp. holds a note for P9,000 on which interest of P500 is accrued, nothing
has been pledged for the note.
 How much may each of the following creditors receive? Danielle Corp; Randolph Corp;
Baltimore Corp.; Nick Corp., respectively.
a. P 27,000 ; P5,063; P53,775 ; P 0 c. P27,000 ; P6,750; P56,700 ; P 0
b. P 23,850; P 6,750; P56,700; P7,125 d, P23,850; P6,750; P53,775 ; P
7,125

5. C Company has underapplied factory overhead of P45,000 for the year ended December 31,
2008. Before disposition of the underapplied overhead, selected December 31, 2008, balances
from Cs accounting records are as follows:
Sales P1,200,000
Cost of goods sold 720,000

Inventories:
Direct materials 36,000
Work in process 54,000
Finished goods 90,000
Under Cs cost accounting system, over or underapplied overhead is allocated to
appropriate inventories and cost of goods sold based on year end balances. In its 2008
income statement, C should report cost of goods sold of
a. P682,500 b. P684,000 c. P756,000 d. P757,500

6. Violeta company adds materials at the beginning of the process in Department A.

Information concerning the materials used in April 2008 is as follows:
Units
Work in process April ............... P10,000
Started during April.. 50,000
Completed & Transferred to the next department during April. 36,000
Normal spoilage incurred 3,000
Abnormal spoilage incurred 5,000
Work in process at April 30. 16,000
Under Violetas accounting system, the cost of normal spoilage are treated as part of the
cost of good units produced. However, the cost of abnormal spoilage is charged to factory
overhead. Using weighted average method, what are the equivalent units for the materials
unit cost calculation for the month of April?
a. 47,000 b. 52,000 c. 55,000 d. 57,000

7.Caine, Osman, and Roberts formed a partnership on January 1, 20x4, agreeing to distribute
profits and losses in the ratio of original capitals. Original investments were P625,000,
P250,000 and P125,000 respectively. Earnings of the firm and drawings by each partner for
the period 20x4-20x6 follows:
Drawings .
Net income (loss) Caine Osman Roberts
20x4 P440,000 P150,000 P78,000 P52,000
20x5 185,000 150,000 78,000 52,000
20x6 ( 105,000) 100,000 52,000 52,000
At the beginning of 20x7, Caine and Osman agreed to permit Roberts to withdraw from
the firm. Since the books for the firm had never been audited, the partners agreed to an audit
in arriving at the settlement amount. In withdrawing, Roberts was allowed to take certain
furniture and was charged P15,000, although the book value was P45,000; the balance of
Roberts interest was paid in cash.

The following items were revealed in the course of the audit.

End of 20x4 End of 20x5 End of 20x6
Understatement of accrued expenses P 4,000 P 5,000 P 6,500
 Understatement of accrued revenue 2,500 1,000 1,500
Overstatement of inventories 15,000 20,000 20,000
Understatement of depreciation expense
On assets still held 1,500 3,500 2,000
How much must Roberts received from the partnership?
a. P511,250 b. P156,500 c. P15,250 d. P11,250

8. New Rage Cosmetics has used a traditional cost accounting system to apply quality control
costs uniformly to all products at a rate of 14.5% of direct labor cost. Monthly direct labor cost
for Satin Sheen makeup is $27,500. In an attempt to distribute quality control costs more
equitably, New Rage is considering activity-based costing. The monthly data shown in the
chart below have been gathered for Satin Sheen.
Quantity for
Activity Cost Driver Cost Rates Satin Sheen
Incoming material inspection Type of material $11.50 per 12 types
type
In-process inspection Number of units $0.14 per unit 17,500 units
Product certification Per order $77per order 25 orders
The monthly quality control cost assigned to Satin Sheen makeup using activity-based
costing is
a. $88.64 per order.
b. $525.50 lower than the cost using the traditional system.
c. $8,500.50
d. $525.50 higher than the cost using the traditional system.

9. Craft Concept manufactures small tables in its Processing Department. Direct materials are
added at the initiation of the production cycle and must be bundled in single kits for each unit.
Conversion costs are incurred evenly throughout the production cycle. Before inspection, some
units are spoiled due to nondetectible materials defects. Inspection occurs when units are 50%
converted. Spoiled units generally constitute 5% of the good units. Data for December 20x3
are as follows:

WIP, beginning inventory 12/1/20x3 10,000 units

Direct materials (100% complete)
Conversion costs (75% complete)
Started during December 40,000 units
Completed and transferred out 12/31/20x3 38,400 units
WIP, ending inventory 12/31/20x3 8,000 units
Direct materials (100% complete)
Conversion costs (65% complete)

Costs for December:

WIP, beginning Inventory:
Direct materials $ 50,000
Conversion costs 30,000
Direct materials added 100,000
Conversion costs added 140,000

42. What is the number of total spoiled units?

a. 1,600 units c. 2,700 units
b. 2,000 units d. 3,600 units
10. Chem Manufacturing Company processes direct materials up to the splitoff point
where two products (X and Y) are obtained and sold. The following information was
collected for the month of November.
 Direct materials processed: 10,000 gallons (10,000 gallons yield 9,500 gallons of good
product and 500 gallons of shrinkage)

Production: X 5,000 gallons

Y 4,500 gallons

Sales: X 4,750 at $150 per gallon

Y 4,000 at $100 per gallon

The cost of purchasing 10,000 gallons of direct materials and processing it up to the split
off point to yield a total of 9,500 gallons of good products was $975,000.

The beginning inventories totaled 50 gallons for X and 25 gallons for Y. Ending inventory
amounts reflected 300 gallons of Product X and 525 gallons of Product Y. October costs
per unit were the same as November.

Using the physical-volume method, what is Product X's approximate gross-margin

percentage?
a. 32% c.35%
b. 33% d.38%

11. Brand Company provided the following information for 2015:

December 31 January 1
Cash ? 620,000
Accounts Receivable 900,000 670,000
Merchandise Inventory 780,000 860,000
Accounts Payable 480,000 530,000

The sales and cost of goods sold were 7,980,000 and 5,830,000 respectively. All sales and
purchases were made on credit. Various expenses paid of 1,070,000 were paid in cash. There were
no other pertinent transactions. What is the cash balance on December 31, 2015?
a. 1,090,000 c. 1,500,000
b. 2,570,000 d. 3,050,000

12. The following information for the Comcam Company for the year 2015:

Regular Sales 4,423,500

Down Payment 157,375
Installment Accounts Receivable, Dec. 31, 20x4 1,718,125
General and Administrative expenses 212,650
Realized Gross Profit is 66 2/3% of Recovered cost 202,950

What is the amount of installment sales?

a. 2,255,000 b. 2,022,550 c. 2,225,500 d. 2,522,500

13. Robocop Inc. manufactures specialized precision electronic kits. In late March, Job orders #0412
and #0413 were started. Estimated materials cost were 90,000 for both orders (60% for #0412
while direct labor hours were estimated at 700 for #0412 and 400 for #0413. Labor rate is 18 per
hour while variable overhead rate is 10 per hour. By the end of April, 755 of the required materials
have been issued to production in the amount of 90,000 and both job orders have been 50%
converted with 360 hours charged to #0412 and 180 hours charged to #0413 at the hourly rates
given.

The total cost charged to Job Order #0412 was:

a. 64,080 c. 67,600
b. 45,800 d. 66,700

14. The balance in Accumulated Profits and Losses at December 31, 2014 was 720,000 at
December 31, 2015 was 582,000. Net income for 2014 was 500,000. A share dividend was
declared and distributed which increased ordinary share by 200,000 and share premium by
110,000. A cash dividend was declared and paid.

What is the amount of cash dividends being declared and paid?

a. 248,000 c. 442,000
b. 328,000 d. 638,000

15. The Gula Manufacturing Company produces only for customer order and most work is shipped
within thirty-six hours of the receipt of an order. Gula uses a raw and in process (RIP) inventory
account and expenses all conversion costs to the cost of goods sold account. Work is shipped
immediately upon completion, so there is no finished goods account. At the end of each month,
inventory is counted its conversion cost component is estimated, and the RIP account balance is
adjusted accordingly. Raw materials cost is backflushed form RIP to Cost of Goods Sold. The
following information is for the month of May:

Beginning balance of RIP account, including 1,300

of conversion cost 12,300
Raw materials received on credit 246,000
Ending RIP inventory per physical count, including
2,100 conversion cost estimate 12,100

Compute the amount to be backflushed from RIP to Cost of Goods Sold:

a. 247,200 c. 245,000
b. 246,200 d. 247,000

16. Brain-Tech was newly from early in 20x4. The following information relates to the full year:

Raw materials purchased(net) 10,500,000

Direct Labor costs 7,000,000
Factory Overhead 5,250,000
Selling, General and Administrative 2,450,000

Additional Information:
75% of the available raw material was transferred into production.
60% of the work in process was completed.
80% of the finished goods were sold.
15% of factory overhead is related to depreciation
25% of Selling, General and Administrative is related to depreciation

Compute the ff:

1. Cost of Goods Sold
2. Selling, General and Administrative expense for the period.
3. Ending inventories of raw materials, work in process, and finished goods.
17. The following data are taken from the records of Apple Corporation for the year ended
December 31, 20x4: (Use 360-day year)

Sales 9,625,000
Merchandise Inventory 12/31/20x4 3,000,000
Merchandise Inventory 12/31/20x3 2,700,000
Accounts Receivable 12/31/20x3 2,875,000
Accounts Payable Turnover 2.5 times
Freight-In 540,000
Freight-Out 360,000
Selling and Administrative Expense 325,000
Interest Expense 225,000
Gross Profit Rate (based on cost) 66 2/3 %

Additional Information:

Accounts Receivable 12/31/20x4 is 33 1/3 % of collections

Purchase discounts amounted to 65,000
An income generated from rent amounted to 250,000
Finance cost amounted to 275,000
Tax rate is 20%
All sales and purchases were made on credit

Compute the ff:

1. Collections
2. Purchases
3. COGAS
4.. Accounts Payable 12/31/20x4
5. Net Income

18. The ABC Builders Inc. signed a 10,000,000 contract to build an environmentally friendly access
trail to Tacloban City, Leyte. The project was expected to take approximately 5 years. ABC Builders
Inc. uses percentage of completion method for recognizing income on the contract. The following
information for the project is as follows:

Accumulated Cost Estimated Cost to Complete % of Completion Gross Profit to date

20x3 450,000 ? ? ?
20x4 ? 6,800,000 ? 300,000
20x5 ? ? ? 1,800,000
20x6 5,700,000 4,400,000 95% ?
20x7 ? - 100% ?

The Construction in Progress, beginning balance in 20x4, 20x5, 20x6 and 20x7 are 500,000,
1,500,000, 4,500,000 and 5,600,000 respectively. Profit recognized in 20x7 is 100 1/3% of profit
recognized in 20x5.

1. How much is the Estimated Cost to Complete in 20x5?

2. How much profit (loss) is recognized in 20x6?
3. How much is the Cost incurred to date in 20x7?

19. On January 1, 2015, Jose Lopez and Joseph Torres are both sole proprietors who combined their business
units and made the following contributions.
 Lopez Torres
Cash 150,000 120,000
Accounts Receivable 80,000 95,000
Merchandise Inventory 130,000 180,000
Furniture and Fixtures 200,000 150,000
Acc. Depn Furniture
and Fixtures (10,000) (8,000)

They agree that the following adjustments should be made on their respective book of accounts.

a. An Allowance for Doubtful Accounts should be established at 10% and 15% respectively.
b. Merchandise inventory should have a net realizable value of 125,000 and 170,000 respectively.
c. Furniture and Fixtures has a fair market value of 220,000 and 180,000 respectively.
d. Prepaid expenses of 15,000 for Lopez and Accrued expenses of 10,000 for Torres should be recognized.

After the adjustment have been made the partnership started its operation. Subsequently, results of operation
at the end of December 31, 2015 showed that Revenues exceed Cost and Expenses by 180,000.

The following provision for profit distribution is as follows:

1. Lopez is the managing partner and as such shall receive 35,000 salary and Torres shall receive 25,000.
2. Both partners shall receive 15% interest on their beginning capital balance to offset whatever difference in
capital investment they have.
3. Lopez is allowed a bonus of 20% of profit after salary but before bonus.
4. Any remainder shall be divided according to the ratio of 60%-40%.

Required: Compute the respective shares of Lopez and Torres based on the above agreement