1.

You are given the following information which may be relevant to the computation of the cash balance of Bella Corporation on December 31, 2009; Two checks for P125000 were received in December from a customer for payment of its returned in January A check was received and deposited for P175555 in December. The check was returned by the bank in January marked NSF A check from a customer for P87000 was received and deposited in December. In January it was discovered that it was in payment of an invoice in the amount of P78000. A check for P9000 was issued and mailed by the company to the customer.

Using the above data, what is the total amount to be included in the cash balance for purpose of the December 31, 2009 balance sheet? a. P20,3000 b. P21,2000 c. P38,7000 d. P37,8000

2. The following pertains to Malpighi, Inc. On April 30, 2009: Correct cash balance in a general checking account with PCI Bank P32000; overdraft in a special checking account with Family Bank (Malpighi does not have another account with Family Bank ) P2000; Cash accumulated in a special fund that will be used for plant expansion in five years P15000; cash surrendered value of life policy P3200; cash travel advances in the hands of sales personnel P1200; currency and coins in petty cash fund (the company has not replenish the fund to the imprest amount of P2000) P58. How much cash should Malpighi report as cash on the balance sheet? a. P33,258 b. P32,058 c. P32,200 d. P30,200

3. Cookie Company is negotiating a loan with Excel Bank. Cookies needed P3600000. As a part of the loan agreement, Excel Bank will require Cookie to

maintain a compensating balance of 15% of the loan amount on deposit in checking account at the bank. Cookie currently maintains a balance of P200000 in the checking account. The interest rate Cookie is required to pay on the loan is 21%. Excel pays 1% interest on checking accounts. The amount of the loan is a. P4,000,000 b. P3,800,000 c. P3,600,000 d. P3,400,000

4. If a petty cash fund is established in the amount of P250, and contains P200 in cash and P45 in receipts for disbursement when it is replenished, the journal entry to record replenishment include credit to the following accounts. a. Petty Cash, P45 b. Petty Cash, P50 c. Cash, P45; Cash over and Short, P5 d. Cash, P50

5. The cash account show a balance of P38,000 before reconciliation. The bank statement does not include a deposit of P2,300 made on the last day of the month. The ban statement shows a collection by the bank of P940 and customers check for P220 was returned because it was NSF. A customers check for P450 was recorded on the books as P540, and a check written for P79 was recorded as P97. The correct balance in the cash account was a. P38,612 b. P38,828 c. P38,648 d. P40,048

6. You obtained the bank statement, paid checks, and other memoranda relating to Emerson Companys Bank account for December, 2009. In

reconciling the bank balance at December 31, 2009, you observed the following facts:

Balance per bank statement, 12/31/09 P1,465,800 Outstanding check, 12/31/09 624,750 Receipt of 12/31/09, deposited 1/2/10 95,550 Proceeds of bank loan, 12/15.09, discounted for 90 days at 10% per year , omitted from records 195,000 Deposit of 12/23/09/ omitted from bank statement 53,000 Check 733 of Ralph Waldo, charged by the bank in error to Emerson Co. 82,100 Proceeds to note receivable of Emerson CO. collected by the bank 12/10/09, not entered in cash records (Principal, P40,000; Interest, P400l Collection Charge, P100) 40,300 Erroneous debit memo of 12/31/09, to charge companys account with settlement of bank loan, paid by check no. 9344 on same date 100,000 Deposit of Ralph Waldo of 12/6/09 credited in error to Emerson Co. 25,000 The cash balance per books of Emerson Co. on December 31, 2009 is a. P1,491,000 b. P1,146,700 c. P961,800 d. P911,400 7. The following date were taken from the records of Aii Corporation for the year ended December 31, 2009:

Sales on Account Notes Receivable to settle accounts 400,000 Provision for doubtful accounts 90,000 Accounts Receivable determined to be worthless 25,000 Purchases on account 3,900,000 Payment to creditors 3,200,000 Discounts allowed by creditors 260,000 Merchandise returned by customer 15,000 Collection received to settle accounts 2,450,000 Notes given to creditors in settlement of accounts 250,000 Merchandise returned to suppliers 70,000 Payment on notes payable 100,000 Discount taken by customers 40,000 Collection received in settlement of notes 180,000

P3,600,000

What is the amortized cost of accounts receivable on December 31, 2009? a. P605,000 b. P890,000

c. P825,000 d. P670,000

8. Based on information:

Credit Sales Collection on accounts receivable during the year 1,700,000 Cash Sales Unadjusted balance in allowance for doubtful accounts 500 debit Sales returns and allowanced for credit sales 40,000 Accounts receivable, beginning of the year 140,000

P1,720,000

8,100,000

If bad debt are estimated to be 1 % of ending accounts receivable, in the adjusting entry to recognize bad debt, you would debit bad debt expenses for a. P2,300 b. P1,900 c. P1,300 d. P1,800 9. On January 1, 2009, Sosimo Company provided interest-free loans to ten employees for a five-year term, payable at the end of five years. The total loan amount is P2,000,000. A market rate of interest for a similar five-year loan is 5%. The net amount to be recognized in 2009 profit or loss related to these interest-free loans is a. P354,650 b. P78,350 c. P433,000 d. P 0

10.On January 1, 2009, Santayana Company sold a special machine that had a list price of P900,000. The buyer paid P100,000 cash and signed an P800,000 note. The note specified that it would be paid off in four equal annual

payments of P274,565 each starting on December 31, 2009. The carrying amount of the receivable of December 31, 2009 is a. P525,435 b. P637,435 c. P701,435 d. P725,435 11.During your review of the records of Yoko Corporation for the year 2009, you noted that Yoko sold a machine with a carrying amount of P640,000 (cost is P1,600,000) on June 20, 2009. Yoko received an P800,000 non-interest nearing note due in 3 years. There is no established market value for the machine. The prevailing interest rate for a note of this type is receivable for P800,000 and crediting Machinery for P640,000 and Gain on sale of Machine for the difference. Because of this, Yokos profit for the year ended December 31, 2009 had been overstated by a. P196,394 b. P162,227 c. P125,834 d. P55,274 12.On January 1, 2009, the lending company made a P200,000, 8% loan. The interest is receivable at the end of each year, with the principal amount to be received at the end of 5 years. As of December 31, 2009, the interest for the current year has not been received nor recorded because the borrower is experiencing financial difficulties. The lending company negotiated a reconstructing of the loan. The principal will be delayed until the end the 5year loan term. In addition, the amount of the principal repayment prevailing interest rate for similar type of loan as of December 31, 2009 is 10% The loan impairment loss to be recognized in 2009 profit or loss is a. b. c. d. P67,700 P73,506 P77,492 P 0

13.An enterprise often factors its account receivable. The finance company requires an 8% reserve and charges 1.5% commission on the amount of the receivable. The remaining amount to be advanced is further reduced by an annual interest charge of 16%. What proceeds (rounded to the nearest peso) will the enterprise receive from the finance company at the time a 110,000 account that is due in 60 days is turned over to the finance company? a. P83,630 b. P81,950

c. P99,550 d. P96,895 14.On July 1, 2008, Jolly Corporation sold equipment to Vee Company for P1,000,000. Jolly accepted a 10% note receivable for the entire sales price. This note is payable in two equal installment of P500,000 plus accrued interest on December 31, 2008 and December 31, 2009. On July 1, 2009, Jolly discounted the note at the bank at an interest rate of 12%. Jolly proceeds from the discounted note were a. P484,000 b. P503,500 c. P493,500 d. P517,000 15.The inventory on hand at December 31, 2009 for Fair Company valued at a cost of P947,800. The following items were not included in this inventory amount: a. Purchased goods, in transit, shipped FOB destination invoice price P32,000 which included freight charges of P1,600 b. Goods held on consignment by Fair Company at a sale price of P28,000 including sales commission of 20% of the sales price. c. Goods sold to Gartcia Company, under terms FOB destination invoiced for P18,500 which includes P1,000 freight charges to deliver the goods. Goods are in transit. d. Purchased goods in transit, terms FOB shipping point, invoice price P48,000, freight cost, P3,000. e. Goods out on consignment to Manil Company, sales price P36,200, shipping cost of P2,000. Assuming that the companys selling price is 140% of inventory cost, the adjusted cost of Fair Companys inventory at December 31, 2009 should be a. P1,039,300 b. P1,039,500 c. P1,055,700 d. P1,037,300 16.The Tiger Corporation included the following in its unadjusted trial balance as of December 31, 2009: Inventory, 12/31/08 P 19,450,000 Purchases P127,850,000 Additional Information:

The inventory at December 31, 2009 was counted at a cost of P8.5million. This include P500,000 of slow moving inventory that is expected to be sold for a net amount of P300,000. Sales include P8million goods sold in December 2009 for cash to Beer Finance Company. The cost of these goods was P6million. Beer Finance Company has the option to require Tiger to repurchase these goods within one month of year-end at their original selling price plus a facilitating fee of P250,000

The cost of this sales for the year ended December 31, 2009 is a. P138,800,000 b. P133,000,000 c. P132,800,000 d. P139,000,000 Use the following information for the next two questions Maximilian uses a perpetual inventory system. Maximilians inventory transactions for August 2009 were as follows: No Unit Cost. Total Cost 01 Aug. Beg. Inventory 20 P4.00 P80.00 07 Aug. Purchases 10 4.20 42.00 10 Aug. Purchases 20 4.30 86.00 12 Aug. Sales 15 ? ? 16 Aug. Purchases 20 4.60 92 20 Aug. Sales 40 ? ? 28 Aug. Sales Returns 3 ? ? 17.Using the information, assume that the Maximilian uses FIFO cost flow method and that the sales returns related to the 20 August sales. The sales return should be costed back into inventory at what unit cost? a. P4.00 b. P4.30 c. P4.07 d. P4.60 18.Assuming that Maximilian uses the weighted average cost flow method, the 12 August Sales should be costed at what unit cost? a. P4.16 b. P4.30 c. P4.07 d. P4.60

19.On January 1, 2009, Horse Corp. signed a three year non cancelable purchase contract, which allows Horse to purchase up to 500,000 units of a computer part annually from Dark Supply Co. at P10 per unit and guarantees a minimum annual purchase of 100,000 units. During 2009, the part unexpectedly became obsolete. Horse had 250,000 units of this inventory at December 31, 2009, and he believes these parts can be sold as scrap for P2 per unit. What amount of probable loss from the purchase commitment should Horse report in its 2009 profit or loss? a. P2,400,000 b. P2,000,000 c. P1,600,000 d. P 800,000 20.On May 6, 2009, a flash flood caused damage to the merchandise stored in the warehouse of Cabanatuan Co. You were asked to submit an estimate of the merchandise destroyed in the warehouse. The following data were established.: a. Net sales for 2008 were P800,000, matched against cost of P560,000 b. Merchandise Inventory, Jan. 1, 2009 was P200,000, 90% of which was in the warehouse and 10% in downtown showrooms. c. For Jan. 1, 2009 to date of flood, you ascertained invoice value of purchases (all stored in the warehouse), P100,000; freight inward, P4,000; purchases returned, P6,000. d. Cost of merchandise transferred from the warehouse to show-rooms was P8,000 and net sales from January 1, to May 6, 2009 (all warehouse stocks) were P320,000. Assuming gross profit rate in 2009 to be same as in the previous year, the estimated merchandise destroyed by the flood was a. P80,000 b. P66,000 c. P50,000 d. P46,000

Yumil Company provided the following data: Cost Beginning inventory P 160,000 400,000

Retail P

Purchases 2,800,000 Freight in 40,000 Markup 300,000 Markup Cancellation 30,000 Markdown Markdown Cancellation 40,000 Sales 3,000,000 Physical Inventory at year end 500,000 Estimated normal shrinkage is 4% of sales

3,200,000

160,000

21.Assuming the company uses the average retail inventory method, the estimated inventory shortage is a. P104,000 b. P130,000 c. P200,000 d. 4,000 Use the following information for next three questions. A herd of 10 2 year old animals was held at 1 January 2009. One animal aged 2.5 years was purchased on 1 July, 2009 for 108m and one animal was born on 1 July, 2009. No animals were sold or disposed of during the period. Per-unit fair values less estimated point-of-sale costs were as follows: 2 year old animal on January 1, 2009 Newborn Animal at July 1, 2009 2.5 year old animal on July 1, 2009 Newborn animal on December 31, 2009 72 0.5 year old animal on December 31, 2009 2 year old animal on December 31, 2009 2.5 year old animal on December 31, 2009 3 year old animal on December 31, 2009 100 70 108

80 105 111 120

22.The increase in fair value of biological assets in 2009 due to price change is a. P 55 b. P 222 c. P 53 d. P212

23.The increase in fair value of biological assets in 2009 due to physical change is a. P 70 b. P229 c. P237 d. P167 24.The carrying amount of biological assets as of December 31, 2009 is a. P1,292 b. P1,400 c. P1,338 d. P1,320