Cagayan State University

Tuguegarao City
College of Business, Entrepreneurship and Accountancy
Practical Accounting 2 – Mockboard exams
Multiple Choice

Instructions: .Choose the BEST answer for each of the following items. Mark only one answer for each item on the
Special Answer Sheet provided. Any alteration or erasure is considered a wrong answer. Do not write on the
questionnaire. Submit questionnaire together with the answer sheet and supporting computations.

1. Carl Corporation purchased 20,000 shares of previously unissued common stock directly from Master Corporation for
P450,000 on January 1, 2009. Master’s stockholders’ equity at December 31, 2008, consist of P200,000 of P10
common stock and P150,000 retained earnings. The book value of Carl’s interest in Master Corporation on January 1,
2009 is
a. P800,000 b. P552,000 c. P448,000 d. P400,000
QUESTIONS 2 AND 3 ARE BASED ON THE FOLLOWING INFORMATION
Selected information from the separate and consolidated balance sheets and income statements of Pard Inc. and its
subsidiary, Spin Co., as of December 31, 2009 and for the year then ended is as follows:
Pard Spin Consolidated
Accounts receivable 26,000 19,000 39,000
Inventory 30,000 25,000 52,000
Investment in Spin 67,000
Goodwill 30,000
Minority interest 10,000
Stockholders’ equity 154,000 50,000 154,000

Revenues 200,000 140,000 308,000

Cost of goods sold 150,000 110,000 231,000
Gross profit 50,000 30,000 77,000
Equity in earnings of spin 11,000
Net income 36,000 20,000 40,000
During 2009, Pard sold goods to Spin at the same markup on cost that Pard uses for all sales. At December 31, 2009, Spin
had not paid for all of these goods and still held 37.5% of them in inventory.
2. What was the amount of intercompany sales from Pard to Spin during 2009?
a. P3,000 b. P6,000 c. P29,000 d. P32,000
3. In Pard’s consolidated balance sheet, what was the carrying amount of inventory that Spin purchased from Pard?
a. P3,000 b. P6,000 c. P29,000 d. P12,000
4. The Vince Company owns 65% of the Mink Company. On the last day of the accounting year Vince sold to Mink a
non-current asset for P1,000,000. The asset originally cost P2,500,000 and at the end of the reporting period its
carrying amount in Vince’s books was P800,000. What adjustments should be made to the consolidated statement of
financial position figures for non-current assets and retained earnings?
Non-current assets Retained earnings
a. Increase by P1,500,000 Increase by P525,000
b. Reduce by P200,000 No change
c. Reduce by P200,000 Reduce by P70,000
d. Increase by P1,500,000 No change
5. Com Corp. and Bo Corp. are sister companies. Com Corp owns 140,000 shares of stock out of the 200,000 shares of
stock outstanding of Bo Corporation. On the other hand, Bo Corp. owns 120,000 shares out of the 600,000 shares
outstanding of Com Corporation. Com Corp. announced a net income of P84,080 for the year 2009, while Bo Corp.
sustained a loss of P12,000 for the same year. The net income and loss of both corporations were arrived at without
consideration of the earnings of the affiliate. The net income or loss of Bo Corporation for 2009 on consolidated basis
was
a. P5,600 b. P8,400 c. P13,600 d. P(5,200)
6. The following information pertains to Ara Co.’s manufacturing operations:
Inventories March 1 March31
Direct materials P 36,000 P 30,000
Work in process 18,000 12,000
Finished goods 54,000 72,000
Additional information for the month of March:
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 Direct materials purchased 84,000
Direct manufacturing labor 60,000
Direct manufacturing labor rate per hour 7.50
Factory overhead rate per direct labor hour 10.00
For the month of March, prime cost was
a. P90,000 b. P120,000 c. P144,000 d. P150,000
QUESTIONS 7 TO 10 ARE BASED ON THE FOLLOWING INFORMATION:
Kim Manufacturing uses a process cost system to manufacture Dust Density Sensors for the mining industry. The
following information pertains to operations for the month of May.
Units
Beginning work in process inventory, May 1 16,000
Started in production during May 100,000
Completed production during May 92,000
Ending work in process inventory, May 31 24,000
The beginning inventory was 60% complete for materials and 20% complete for conversion costs. The ending inventory
was 90% complete for materials and 40% complete for conversion costs. Costs pertaining to the month of May are as
follows:
 Beginning inventory costs are: Materials, P54,560; Direct labor, P20,320; and Factory overhead, P15,240.
 Cost incurred during May are: Materials used, P468,000; Direct labor, P182,880; and Factory overhead,
P391,160.
7. Using the First-in, First-out (FIFO) method, the equivalent units of production for materials are
a. 97,600 b. 104,000 c. 107,200 d. 108,000
8. Using the First-in, First-out (FIFO) method, the equivalent unit conversion cost for May is
a. 5.65 b. 5.83 c. 6.00 d. 6.20
9. Using the FIFO method, the total cost of units in the ending work in process inventory at May is
a. 153,168 b. 154,800 c. 155,328 d. 156,960
10. Using the weighted average method, the equivalent unit cost of materials for May is
a. 4.12 b. 4.50 c. 4.60 d. 5.02
11. Dennis Manufacturing Company manufactures two joint products. Product A sells at P30, while product B sells at
P60. The company uses the net realizable value method for allocating joint costs. For the month of June, the
production activities were as follows:
Joint product costs:
Raw materials P30,000
Direct labor 15,000
Factory overhead 10,000
Further processing costs after the split-off point in order to finish the products into their final form were P24,000 for
Product A and P36,000 for Product B. Total number of units produced during the month were 2,000 for Product A
and 1,000 for Product to A was
a. 22,000 b. 33,000 c. 27,500 d. 36,000
QUESTIONS 12 and 13 ARE BASED ON THE FOLLOWING INFORMATION:
The U.R. Good Company produces a product using the standard costs as follows:
I. Standard cost per unit
Materials 7 kilos at P3.50 per kilo
Labor 8 hours at P1.75 per kilo
Overhead: Fixed P1.15 per hour or P9.20 per unit
Variable P0.85 per hour or P6.80 per unit
II. Overhead applied on direct labor hours
III. Actual performance (1month)
a. Volume produced 800
b. Labor hours 6,300
c. Overhead P13,200
d. Material cost P3.45 per kilo
e. Labor cost P1.80 per kilo
f. Materials used 4,800 kilos
12. The total material variance is
a. 2,800 favorable b. 2,800 unfavorable c. 3,000 unfavorable d. 3,040 favorable
13. The total overhead variance in a 3- variance method is
a. 200 favorable b. 500 favorable c. 400 unfavorable d. 400 favorable
14. Carlo, Vivian and Martin enter into a partnership on January 1, 2009 with the following investments:
Carlo Vivian Martin
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 (cost) (cost) (cost)
Cash P 12,000 P 10,000
Inventory (Fair value P34,000) 28,000
Land (Fair value P 20,000) P 35,000
Building (Fair value P 20,000) 10,000
Equipment (Fair value P 25,000) 30,000
Mortgage on land (5,000)
Assume that the partners agreed to have equal capital balances in the partnership. If partnership net assets are not
to be revalued, the partner’s capital balances after the formation of the partnership are
a.Carlo, P46,000; Vivian, P46,000; and Martin, P 46,000
b.Carlo, P40,000; Vivian, P40,000; and Martin, P 40,000
c.Carlo, P45,000; Vivian, P45,000; and Martin, P 45,000
d.Carlo, P42,000; Vivian, P42,000; and Martin, P 42,000
15. The partnership agreement of Darlene and Ethel provides that income should be allocated in the following manner:
I.Each partner receives interest of 20% of beginning capital;
II.Darlene receives a salary of P25,000 and Ethel receives salary of P21,000;
III.Darlene also receives bonus of 10%; and
IV.Remaining balance to be shared equally
The beginning capital balances were Darlene, P30,000; and Ethel, P40,000. If Ethel’s share in profit
is P39,500 and bonus is based on net income before interest, salaries and bonus, the amount of bonus and net
income distributed is
a. Bonus, P 8,100; and Net income, P 81,000
b. Bonus, P 9,000; and Net income, P 99,000
c. Bonus, P 9,000; and Net income, P 90,000
d. Bonus, 10,000; and Net income, P 100,000
16.Faith and Grace are partners who share profits and losses in the ratio of 3:2 respectively. On January 1, 2010, their
capital balances were as follows:
Faith P80,000 Grace P50,000
On that date, they agreed to admit Helen as a partner with one-third interest in capital and profits and losses, for an
investment of P 50,000. If the agreed partnership capital is P210,000, the capital balances of the partners after
admission of Helen is
a.Faith, P80,000; Grace, P50,000; and Helen, P 50,000
b.Faith, P86,000; Grace, P54,000; and Helen, P 70,000
c.Faith, P80,000; Grace, P50,000; and Helen, P 65,000
d.Faith, P74,000; Grace, P46,000; and Helen, P 60,000

17.Irene, Joy and Kate are partners in IJK Consultants Inc. Their respective capital balances and profit and loss ratios on
December 31, 2009 are as follows:
Partners Capital balance Profit & loss ratio
Irene P 250,000 4
Joy 150,000 2
Kate 100,000 2
Irene wishes to withdraw from the partnership on January 1, 2010. Joy and Kate have agreed to pay Irene P 300,000
from the partnership assets. After the withdrawal of Irene, the capital balances of Joy and Kate using the total
implied goodwill method is
a.Joy, P125,000; and Kate, P 125,000
b.Joy, P175,000; and Kate, P 125,000
c.Joy, P125,000; and Kate, P 75,000
d.Joy, P150,000; and Kate, P 100,000
18. Partners Lucky, Mercy, and Nancy have capital balances of P20,000, P50,000, and P90,000 respectively. They split
profits in the ratio of 2:4:4, respectively. Under a safe cash distribution plan, one of the partners will get the
following total amount in liquidation before any other partners get anything.
a. P 0 b. P15,000 c. P40,000 d. P180,000
QUESTIONS 19 and 20 ARE BASED ON THE FOLLOWING INFORMATION:
The Odessa Branch in Palawan submitted on December 31, 2009 the following financial data to the home office in
Makati.
Petty cash fund P 12,000
Shipments from home office 540,000

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 Sales on account 880,000
Expenses* 150,000
Accounts receivable, 1.1.2009 136,000
Inventory, 1.1.2009 150,000
Inventory, 12.31.2009 120,000
*Includes prepaid expenses in 2008 of P 8,000 and accrued expenses in 2009 of P 5,000.
The branch remitted to home office all its cash collection from accounts receivable amounting to P765,000.
19. The balance of Home Office Account on January 1, 2009 is
a. P298,000 b. P378,000 c. P306,000 d. P255,000
20. If Home Office bills the branch for merchandise shipments at 120% of cost, the branch net income as far as the home
office is concerned is
a. P298,000 b. P378,000 c. P306,000 d. P255,000
21. The investment in Quezon branch account on the home office books has a balance of P120,000 on December 31,
2009. A reconciliation of reciprocal accounts showed the following discrepancies:
a) The branch remittance of P15,000 to the home office on December 29, 2009 was recorded on the home office
books on January 5, 2010.
b) A branch receivable of P16,000 was collected and recorded by the home office on December 28, 2009 but failed
to notify the branch.
c) Merchandise costing P25,000 sent to the branch by home office was recorded by the branch as P13,000.
d) Home office allocated P4,000 advertising expense to the branch. The branch forgot to record this transaction.
e) A P15,000 collection from Home office customer, Mr. Quezon was credited to the branch
The adjusted balance of Investment in Quezon Account on December 31, 2009 is
a. P120,000 b. P135,000 c. P105,000 d. P90,000
QUESTIONS 22 and 23 ARE BASED ON THE FOLLOWING INFORMATION:
Romblon Corporation sells merchandise to independent retailers as well as ships merchandise to its branch for resale to
customers. The branch also makes its own purchases from outsiders. Selected items from the trial balances of Romblon’s
home office and the branch outlet on December 31, 2009 are as follows:

Home Office Branch

Books Books
Debits:
Inventory, 1.1.2009 P 120,000 P 120,000
Purchases 630,000 150,000
Shipments from home office 312,000
Expenses 200,000 60,000
Credits:
Shipments to branch 240,000
Sales 830,000 540,000
Unrealized profit on branch inventory 94,500
On December 31, 2009 home office inventory is P90,000. Branch ending inventory is P55,000 that includes P16,000
acquired from outsiders.
22. The correct cost of branch beginning inventory is
a. P72,000 b. P22,500 c. P85,500 d. P97,500
23. The combined net income of home office and branch is
a. P480,000 b. P502,500 c. P518,500 d. P588,000
24. Rose corporation’s home office ships merchandise to its Sampaguita Branch at a billing price of 120% of cost. During
2009, the home office makes the following entry:
Sampaguita branch P 60,000
Shipments to Sampaguita branch P 60,000
At year end 2009, P12,000 of this merchandise remains in the Sampaguita branch inventory. The year end adjusting
entries of Rose corporation will include a
a. Debit, Shipments to Sampaguita branch P12,000
b. Debit, Allowance for overvaluation of branch inventory P 2,000
c. Credit, Sampaguita branch P10,000
d. Credit, Sampaguita branch income summary P8,000
25. Thelma Company uses the installment method of accounting for its installment sales. Summary of transactions are
presented below:

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 2009 2008 2007
Cost of installment sales P182,400 P120,000 P 78,000
Cash collections: 2009 sales 90,000
2008 sales 100,000 40,000
2007 sales 20,000 50,000 10,000
Realized gross profit on installment sales 50,550 21,000 2,200
The installment sales for 2009, 2008 and 2007 is
a. 2009, P182,400; 2008, P120,000; and 2007, P 78,000
b. 2009, P240,000; 2008, P160,000; and 2007, P100,000
c. 2009, P220,000; 2008, P140,000; and 2007, P 98,000
d. 2009, P212,400; 2008, P136,000; and 2007, P104,000
26. United Appliances Inc. sold a television set, costing P20,000 for P32,000 on September 30, 2009. The down payment
was P3,200, and the same amount was to be paid at the end of each succeeding month. Interest (rounded to the
nearest peso) was charged on the unpaid balance of the contract at 1% a month, payments being considered as
applying first to accrued interest and the balance to principal.
On January 31, 2010, the customer defaulted. The television set was repossessed in February 14, 2010. It was
estimated that the TV had a value of P11,200 on a depreciated cost basis. The company uses the installment method
in accounting for its sales. The total realized profit on December 31, 2009 is
a. P5,285 b. P4,704 c. P4,509 d. P4,000
27. The Valiant Machines Inc. regularly made installment sales at 125% of cost. The recorded installment sales for the
year 2009 were P900,000. The installment receivable at the end of 2009 is P300,000. The estimated value of the
machines repossessed during 2009 was P36,000, and the balance owed on the repossession was P60,000. Perpetual
inventory accounts were not maintained.
The gain /(loss) on repossession is
a. P(12,000) b. P4,500 c. P(9,000) d. P4,000
28. Wilma Company sold a certain article that cost P1,350 for P2,000. A used article is accepted as down payment. The
company estimated reconditioning costs of the used article at P40 and sales price after reconditioning of P550. The
company normally expects a 20% gross profit on sales of used goods. If the agreed trade-in value of the used article
is P600, the over/(under) allowance on merchandise traded-in is
a. P 0 b. P200 c. P(200) d. P100
29. On September 1, 2009, Xerox Products, a Philippine Company, acquired goods from Tokyo Industries, a Japanese
firm, for Php 40,000, or Yen 200,000 payable on March 1, 2010. The accountant of Xerox Products presented the T-
account of Accounts payable (Yen) for your review as follows:

Accounts Payable (Yen)

2010: 2009:
March 1 1,800 September 1 40,000
March 1 40,200 December 31 2,000

The exchange rate of Peso to Yen on December 31, 2009 and March 1, 2010 is
December 31, 2009 March 1, 2010
a. Php 1.000 = Yen 5.000 Php 1.000 = Yen 4.975
b. Php 0.201 = Yen 1.000 Php 1.000 = Yen 4.762
c. Php 1.000 = Yen 4.975 Php 0.210 = Yen 1.000
d. Php 0.210 = Yen 1.000 Php 0.201 = Yen 1.000
30. On November 1, 2009, Yoyoy International enters into a 90-day forward contract to purchase 10,000 Euro currency
when the current quotation for 90-day futures in Euro currency is P65.00. The spot rate for Euro currency on
November 1, 2009 is P65.40. Exchange rates at December 31, 2009 and January 30, 2010 are as follows:
December 31, 2009 January 30, 2010
30 day futures P 65.50 P 65.80
Spot rate 66.00 65.30
The exchange gain/(loss) on December 31, 2009 is
a. P 6,000 b. P 5,000 c. P(2,000) d. P(7,000)

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31. On December 1, 2009, Zenith Products, a Philippine company, sold goods on account to Tokyo Industries, a Japanese
firm, for Yen 2,000,000. The billing date for the sale is December 1, 2009, and payment is due on January 30, 2010.
Concurrent with the sale, Zenith Products enters into a contract to deliver Yen 2,000,000 to its exchange broker in 60
days. Exchange rates for Japanese Yen are as follows:
Dec. 1, 2009 Dec. 31, 2009 Jan. 30, 2010
Spot rate Php 0.25 Php 0.24 Php 0.25
30-day futures Php 0.26 Php 0.25 Php 0.26
60-day futures Php 0.27 Php 0.28 Php 0.28
The net exchange gain/(loss) from this transaction and hedge that will be reported in Zenith Products 2010 income
statement is
a. P 00,000 b. P 20,000 c. P(20,000) d. P40,000
QUESTIONS 32 to 34 ARE BASED ON THE FOLLOWING INFORMATION:
Lugi Corporation is a financially distressed corporation with assets and liabilities as of January 1, 2009 as follows:
Cash P 5,000
Accounts receivable 28,000
Allowance for doubtful accounts 3,000 25,000
Inventory 60,000
Plant & equipment (net) 360,000
Total assets 450,000

Accounts payable 72,500

15% Notes payable, due Dec. 1, 2008 50,000
Interest on notes payable 7,500
10% Notes payable, due Jan. 1, 2010 100,000
Interest on notes payable 5,000
Capital stock, P100 par 200,000
Retained earnings 15,000
Total liabilities & stockholders’ equity 450,000
32. Lugi Corporation transfer its accounts receivable (fair value P23,000) as full payment for a P30,000 account payable
to Kita Company. The gain/(loss) as a result of debt restructuring in Lugi books is
a. P 00,000 b. P 5,000 c. P(7,000) d. P10,000
33. Lugi Corporation issues 500 shares of its stock to Finance Company in full settlement of the 15% note payable and
accrued interest. The shares have a fair value of P50,000 and the debt is carried at its P40,000 cost by Finance
Company. The gain/(loss) on debt restructuring in Lugi books is
a. P 00,000 b. P 7,500 c. P(7,000) d. P10,000
34. Boss Company, holder of Lugi’s 10% note, agrees to modification of terms as follows:
 Accrued interest is condoned
 Interest rate is reduced to 8%
 Maturity date is extended to January 1, 2011
 Maturity value is reduced to P90,000
The gain/(loss) on debt restructuring in Lugi books is
a. P 10,000 b. P 600 c. P(600) d. P15,000
QUESTIONS 35 and 36 ARE BASED ON THE FOLLOWING INFORMATION:
Hirap Corporation is a financially distressed corporation with the following financial information on April 15, 2009.
Estimated
Book Values Realizable Values
Cash P 20,000 P 20,000
Accounts receivable, net 100,000 75,000
Inventories 150,000 70,000
Plant assets 250,000 280,000
Total assets 520,000

Accounts payable 150,000

Liabilities for priority claims 80,000
Notes Payable 100,000 Secured by Accts. Receivable
Mortgage payable 220,000 Secured by all Plant assets
Total liabilities 550,000
35. The net free assets is
a. P 175,000 b. P105,000 c. P150,000 d. P70,000
36. The expected recovery for the unsecured claims is
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 a. P 145,000 b. P150,000 c. P105,000 d. P60,000
QUESTIONS 37 and 38 ARE BASED ON THE FOLLOWING INFORMATION:
Asia Erectors Company was awarded a contract to construct a sewage system for Maynilad Company for a price of
P13,000,000. The original estimate of cost to complete the contract was P11,500,000. The contract provides for periodic
progress billings. A final billing equal to 25% of the contract price is to be made upon final inspection and acceptance by
Maynilad company. The records for the construction are as follows:
Date Cost to date Estimated cost to complete
Dec. 31, 2007 P 4,600,000 P 6,900,000
Dec. 31, 2008 9,590,000 4,110,000
Aug. 15, 2009 13,700,000
The construction was inspected on August 15, 2007, January 15, 2008, and October 1, 2008, and the progress billings
equal to 25% of the contract price were made on each of these dates. The sewage system was completed and final
inspection and acceptance was on August 21, 2009.
37. The profit realized in year 2008 is
a. P 600,000 b. P(700,000) c. P(1,300,000) d. P000,000
38. The profit realized in year 2009 is
a. P 600,000 b. P(700,000) c. P(1,300,000) d. P000,000
QUESTIONS 39 and 40 ARE BASED ON THE FOLLOWING INFORMATION:
Builders Company has used the cost to cost percentage of completion method of recognizing revenue. The following
information regarding a recently completed building with a contract price of P3,000,000.
2007 2008 2009
Gross profit/(loss) ? ? P(30,000)
Cost incurred each year 540,000 930,000 1,230,000
Percent of completion 20% ? 100%
39.The profit realized in year 2007 is
a. P 70,000 b. P60,000 c. P50,000 d. P40,000
40.The profit realized in year 2008 is
a. P 330,000 b. P270,000 c. P300,000 d. P210,000
QUESTIONS 41 to 43 ARE BASED ON THE FOLLOWING INFORMATION:
On July 1, 2004, Cathay Machines Company signed a franchise contract with Mc Bee Foods Inc., a franchisor, an initial
franchise fee of P3,000,000 with a down payment of P1,000,000 cash and the balance payable with a non interest
bearing note in 5 equal semi-annual installment. Implicit rate is 10%. The franchisor incurred the following cost in the
performance of the franchise contract services:
December 31, 2004 P 400,000
January 31, 2005 692,720
The franchise outlet commenced operation on February 14, 2005.
41.If collection of the note is not reasonably assured, the realized gross profit in 2005 is
a. P 000,000 b. P 1,192,815 c. P 1,313,410 d. P 446,265
42.If collection of the note is not reasonably assured, the realized gross profit in 2006 is
a. P 000,000 b. P 1,192,815 c. P 1,313,410 d. P 446,265
43.Assuming that the initial down payment is not refundable and represents a fair measure of the services already
provided, with a significant amount of services still to be performed by the franchisor in future periods, and
collectability of the note is reasonably assured, the revenue from franchise fee in 2004 is
a. P 3,000,000 b. P 2,731,800 c. P 2,700,000 d. P 1,000,000
44.The KKK a not for profit organization is in need of the services of a CPA and a Lawyer. Ms. Katrina, a CPA-Lawyer
performed the audit of KKK’s financial statements at no charge was valued at P15,000, and those of legal services to
the organization at no charge had a value of P6,000. Incidental accounting and legal expenses of Ms. Katrina
amounting to P3,000 was paid by KKK. The revenue to be recorded is
a. P 24,000 b. P 18,000 c. P 21,000 d. P 15,000
QUESTIONS 45 and 46 ARE BASED ON THE FOLLOWING INFORMATION:
The JJJ a not for profit organization have an endowment fund investment balance of P 5,000,000 on January 1, 2009.
During the year, JJJ received dividends and interest on endowment fund investment amounting to P400,000, of which
P150,000 is restricted for research grants and the remainder is unrestricted. JJJ awarded P100,000 in research grants
during the year.
45. The balance of endowment investment fund on December 31, 2009 is
a. P 5,400,000 b. P 5,000,000 c. P 5,250,000 d. P 5,300,000
46. The restricted investment income for the year 2009 is
a. P250,000 b. P 150,000 c. P 50,000 d. P 400,000

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QUESTIONS 47 to 49 ARE BASED ON THE FOLLOWING INFORMATION:
On December 31, 2009, selected ledger accounts of LGU-Caritan shows the following:
Total NCA received for the year P 5,000,000
Total MDS checks issued 4,975,000
Prepaid rent (10.1.2009 to 9.30.2010) 12,000
Public infrastructures (completed) 2,500,000
47. The entry to record the transfer of the Public infrastructures to the Registry of Public infrastructures at the end of the
year will include
a. Debit, Registry of public infrastructures, P2,500,000
b. Debit, Government equity, P2,500,000
c. Credit, Construction in Progress, agency assets, 2,500,000
d. Posting to obligations column of RAO-CO, 2,500,000
48. The adjusting entries at the end of the year will include
a. Debit, Subsidy income from national government, P28,000
b. Credit, Government equity, P34,000
c. Debit, Rent expense, P3,000
d. Credit, Construction in Progress, agency assets, 2,500,000
49. The closing entry to revert the unused NCA at the end of the year will include
a. Debit, Cash-National treasury-MDS, P5,000,000
b. Debit, Subsidy income from national government, P25,000
c. Credit, Government equity, P4,975,000
d. Credit, Construction in Progress, agency assets, 2,500,000
50. On October 13, 2009, the Bureau of Internal Revenue refunded to Fortune Tobacco Company the excess collection of
excise taxes from 2005 to 2008 amounting to P10,000,000,000. (this refund was included in the 2009 budget) The
entry to record the refund will include
a. Debit, Prior years income, P10,000,00,000
b. Debit, Excise tax on articles, P10,000,000,000
c. Credit, Due to Fortune Tobacco Company, P10,000,000,000
d. Credit, Cash, National treasuty-MDS, P10,000,000,000

GOD HAS A WONDERFUL PLAN IN STORE FOR YOU – A

PLAN THAT BEGINS TODAY!

The uncertainties of the present always give way to the

enchanted possibilities of the future.
Gelsey Kirkland

“I say this because I know what I am planning for you,”

says the Lord. “I have good plans for you, not plans to
hurt you, I will give you hope and a good future.”
Jeremiah 29:11