Rmbe Afar For Printing

Advanced Financial Accounting and Reporting
National Federation of
Junior Institute of Accountants
Region 1 and Cordillera
In partnership with:
REGIONAL MOCK BOARD EXAMINATIONS

ADVANCED FINANCIAL ACOUNTING
AND REPORTING
1. Under the build-operate-transfer (BOT) scheme covered by IFRIC 12, any
borrowing costs incurred by the private operator for infrastructure projects shall
be:
a. Expensed (Financial Asset model); Capitalized (Intangible Asset Model)
b. Expensed (Financial Asset model); Expensed (Intangible Asset Model)
c. Capitalized (Financial Asset model); Expensed (Intangible Asset Model)
d. Capitalized (Financial Asset model); Capitalize (Intangible Asset Model)
2. Petmalu, Lodi, Werpa and Petmalodi own a publishing company that they
operate as a partnership. Their agreement includes the following:
 Petmalu will receive a salaries of ₱20,000 and a bonus of 3% of income after

all the bonuses  Lodi will receive a salary of ₱10,000 and a bonus of 2% of
income after all the bonuses
 All partners are to receive the following: Petmalu - ₱5,000: Lodi - ₱4,500:
Werpa - ₱2,000: and Petmalodi - ₱4,700 representing 10% interest on their
average capital balances.
 Any remaining profits are to be divided equally among partners
 Partnership reports a profit of ₱40,000.
How much is Lodi’s share in the profit if the profit is distributed in the following
order of priority: interest on invested capital, then bonuses, then salary and then
according to profit and loss percentage?
a. ₱14,117 c. ₱12,560
b. ₱12,830.75 d. ₱13,235.75
3. Banggawan, Millan and Ngina share profits and losses from their partnership in
the ratio of 35%, 45% and 20% respectively. Capital and loan balances related
to each partner are as follows:
NFJPIA-R1CAR 2nd Regional Mock Board Examinations · Nation’s Foremost CPA Review · SGV & Co. | 1
Loan to Partner Loan to

from the Partnership
Partners Partnership from Partner Capital
Banggawan P100,000 P500,000
Millan P70,000 P280,000
Ngina 200,000 250,000
In addition to loan to partner, assets of the partnership includes cash of P110,000,
inventory of P360,000, receivable of P260,000 and plant and equipment of
P710,000. Partnership liabilities to non-partners amount to P180,000.
If Banggawan receives already P450,000, how much Ngina receives at this
point?
a. P364,286 c. P321,155
b. P375,000 d. P450,000
4. Which one of the following would be subject to the acquisition accounting
requirements of PFRS 3, "Business Combinations?"
a. Formation of a joint venture
b. Acquisition of a manufacturing entity by a holding company
c. Acquisition of a for-profit entity by a not-for-profit organization
d. Combination of entities under common control
5. The NCPAR Manufacturing Company uses the RIP Inventory account. At the end
of each month, all inventories are counted, their conversion costs components are
estimated, and inventory account balances are adjusted accordingly. Raw material
is backflushed from RIP account to finished goods account. The following data is
for the month of January:
Beginning balance of RIP account 23,220
Conversion cost incurred 2,880
Raw materials purchased 408,000
Conversion cost allocated 3,180
Ending balance of RIP account 25,140
The amount of direct materials and conversion costs to be backflushed to
finished goods, respectively, are:
a. 408,000 and 2,880

b. 406,080 and 3,180
c. 406,080 and 2,880
d. 406,000 and 3,180
6. Durian Company acquired 65% of the share capital of a foreign entity on August
31, 2013. The fair value of the net assets of the foreign entity at that date was
8.24 million yen. This value was 2.64 million higher than the carrying value of the
net assets of the foreign entity. The excess was due to the increase in value of
non-depreciable land. The functional currency of Durian is Philippine Peso. The
financial year-end of the company is December 31, 2013. The exchange rates at
August 31, 2013 and December 31, 2013 were Yen 2 = Php 1 and Yen 1.25 = Php
1, respectively. What figure for the fair value adjustment should be included in
the group financial statements for the year ended December 31, 2013?
a. P4,284,800 c. P2,678,000
b. P2,112,000 d. P1,320,000
7. When compared with normal spoilage, abnormal spoilage

a. Arises more frequently from factors that are inherent in the manufacturing
process.
b. Is not typically influenced by the "tightness" of production standards.
c. Is generally thought to be more controllable by production management than
normal spoilage.
d. Is given the same accounting treatment as normal spoilage.
8. GX Builders Corp. and JQ Progress Co. are two companies whose businesses are
the construction of many types of public and private construction services. They
set up a contractual arrangement to work together for the purpose of fulfilling a
contract with the government for the construction of a motor way between two
cities for ₱144 million fixed price contract.
The contractual arrangement determines the participation of GX and JQ and
establishes:
  Joint control of the arrangement
 The rights to all the assets needed to undertake the activities of the
arrangement are shared by the parties on the basis of their participation
 shares in the arrangement
 The parties have joint responsibility for all operating and financial obligations
relating to the activities of the arrangement on the basis of their participation
 shares in the arrangement; and
 The profit and loss resulting from the activities of the arrangement is shared
by GX and JQ on the basis of their participation shares in the arrangement.
In 2016, in accordance with the agreement between GX and JQ:
 GX and JQ each used their own equipment and employees in the construction
 activity
 GX constructed three bridges needed to cross rivers on the route at a cost of
 ₱48 million
 JQ constructed all of the other elements of the motorway at a cost of ₱60
 million
 GX and JQ shares equally in the ₱144 million jointly invoiced to and received
from the government
What is the gross profit earned by GX in 2016?
a. ₱36 million c. ₱84 million
b. ₱24 million d. ₱12 million
9. In comparing the FIFO (first-in, first-out) and weighted-average methods for

calculating equivalent units:
a. The FIFO method is better than the weighted-average method for judging the
performance in a period independently from performance in preceding
periods.
The two methods will give similar results even if physical inventory levels and
the production costs (material and conversion costs) fluctuate greatly from
period to period.
b. The weighted-average method is more precise than the FIFO method
because the weighted-average method is based only on the work completed
in the current period.
c. The FIFO method tends to smooth costs out more over time than the
weighted-average method.
10.ESCALA Park, a private not-for-profit zoological society, received contributions
restricted for research totaling ₱175,000 in 2015. None of the contributions was
used on research in 2015. In 2016, ₱122,500 of the contributions were used to
support the research activities of the society. The net effect on the statement of
activities for the year ended December 31, 2015, for Wild Mark Park would be a
a. ₱52,500 increase in temporarily restricted net assets.
b. ₱122,500 decrease in temporarily restricted net assets.
c. ₱175,000 increase in temporarily restricted net assets.
d. ₱122,500 decrease in unrestricted net assets.
11.Banggawan Company presented the following cost data for the manufacture of
2,200 units of its only product during January, 2016; Direct materials, ₱10; Direct
labor ₱9; Factory overhead (including allowance of ₱0.50 for spoiled work), ₱9.
Final inspection of the job disclosed 200 spoiled units which were sold to an
interested customer for ₱3,000. What would be the unit cost of the remaining
good units of the job if spoilage less is charged to (1) all production (2) specific
job
a. (1) ₱28,00; (2) ₱28.75 c. (1) ₱26.50; (2) ₱28.75
b. (1) ₱28.00; (2) ₱28.00 d. (1) ₱26.50; (2) ₱27.50
12.BWIP was 60% complete as to conversion cost and EWIP was 45% complete as
to conversion cost. The peso amount of the conversion cost included in the BWIP
(using average) is determined by multiplying the average unit conversion cost by
what percentage of the total units in BWIP?
a. 100% b. 60% c. 40% d. 45%
13.PFRS 4 applies to
a. Life insurance contracts only
b. Non-life insurance contracts only
c. Both life and non-life insurance contracts
d. Service concession arrangement
14.A contract under which one party (the insurer) accepts significant insurance risk
from another party (the policyholder) by agreeing to compensate the policyholder
if a specified uncertain future event (the insured event) adversely affects the
policyholder.
a. Assurance contract c. Insurance contract
b. Reinsurance contract d. Adversity contract
15. A government non-profit organization should prepare its financial statements in
accordance with
a. PAS 1 b. PFRS 1 c. SFAS 117 d. GAM
16.In a reverse acquisition (takeover), the asset and liabilities of the parent and
subsidiary is measured at
Legal subsidiary Legal parent
a. Fair value Carrying value
b. Fair value Fair value
c. Carrying value Fair value
d. Carrying value Carrying value
17. NCPAR Company has several investments and reported the following dividends
from its affiliates:
Equity Securities Classification Amount
Investment in Mark Associate ₱100,000
Investment in Raymund Joint venture 150,000
Investment in Rex FVTPL 149,500
Investment in Darrell FVTOCI 151,200
Investment in Zeus Subsidiary @ cost method 181,250
Investment in
Renante Joint venture 145,290
Investment in Rhad Subsidiary @ equity method 51,000
What amount will be reported as dividend income in the consolidated financial statement?
a. ₱481,950 b. ₱300,700 c. ₱151,200 d. 532,950
18.If the NCI is measured at fair value, goodwill arising from business combination
is attributable to the
a. Subsidiary and noncontrolling interest.
b. Parent and subsidiary.
c. Parent only.
d. Parent and noncontrolling interest.
19.On January 1, 2016 Mang Inasar, Inc. entered into a franchise agreement with a
company allowing the company to do business under Mang Inasar's name. Mang
Inasar had performed substantially all required services by January 1, 2016, and
the franchisee paid the initial franchise fee of ₱1,050,000 in full on that date. The
franchise agreement specifies that the franchisee must pay a continuing franchise
fee of ₱90,000 annually, of which 20% must be spent on advertising by
Mang Inasar. What entry should Mang Inasar make on January 1, 2016 to
record receipt of the
initial franchise fee and the continuing franchise fee for 2016?
a. Cash 1,140,000
Franchise Fee Revenue 1,050,000
Revenue from Continuing Franchise Fees 90,000
b. Cash 1,140,000
Unearned Franchise Fees 1,140,000
c. Cash 1,140,000
Unearned Franchise Fees 18,000
d. Prepaid Advertising 18,000
Cash 1,140,000
Unearned Franchise Fees 18,000
20.All of the following are characteristics of not-for-profit organizations that
distinguish them from business organizations except:
a. Ability to impose taxes on citizens.
b. Contributions by resource providers who do not expect a return on
investment.
c. Operating purposes other than to earn a profit.
d. Absence of ownership interests.
21.The Potato Society, a nongovernmental not-for-profit organization, receives
numerous contributed hours from volunteers during its busy season. Mark, a clerk
at the local tax collector's office, volunteered ten hours per week for 24 weeks
transferring turtle food from the port to the turtle shelter. His rate of pay at the
tax office is ₱100.00 per hour, and the prevailing wage rate for laborers is ₱65.00
per hour. What amount of contribution revenue should Potato Society record for
this service?
a. Nil b. ₱8,400 c. ₱15,600 d. ₱24,000
22.The Munda Twins manufactures toys for the big boys. One order from Mr. Bern
for 2,000 units showed the following costs per unit:
Direct Materials ₱3.50
Direct Labor ₱1.25
Manufacturing overhead is applied at 140% of direct labor cost if defective work
is charged to the job, 150% if it is not.
Final inspection revealed that 100 of the units were improperly manufactured.
These units were disassembled, and properly manufactured. The per unit cost of
correcting the defective products consists of ₱0.15 for materials, ₱0.25 for direct
labor; and manufacturing overhead at the predetermined rate. What is the cost
per unit produced, assuming that the rework costs is charged to the customer,
Mr. Bern?
a. ₱6.5375 b. ₱6.5385 c. ₱6.6250 d. ₱6.66375
The next two questions are based on the following data:
On December 1, 2013, Geogracia Company paid cash to purchase 90-day “at-the-
money” call option for 500,000 Thailand Baht. The option’s purpose is to protect
an exposed liability of 500,000 Thailand Baht relating to an inventory purchase
receive on December 1, 2013 and to be paid on March 1, 2014.
12/1/2013 12/31/2013 3/1/2014
Spot rate (market price) P1.20 P 1.28 P 1.27
Strike price (exercise price) 1.20 1.20 1.20
Fair value of call option P 3,000 P42,000 P35,000
23. The notional amount of the option should be:
a. 500,000 Thailand Baht c. P35,000
b. P3,000 d. P42,000
24. What is the intrinsic value and time value of the option on March 1,
2014?
Intrinsic
Value Time Value
a. P42,000 P0
b. P40,000 P2,000
c. P35,000 P0
d. P0 P35,000
25.On November 2, 2015, Magsaysay Stairways to Heaven Company entered into a
firm commitment with a Japanese supplier to purchase a machine, delivery and
passage of title on March 31, 2016, at a price of 2,600,000 yen. On the same
date, to hedge against unfavorable changes in the exchange rate of the yen,
Magsaysay Stairways to Heaven Corporation entered into a 150-day forward
contract with Metro Bank for 2,600,000 yen. The relevant exchange rates were as
follows:
11/02/15 12/31/15 03/31/16

Spot rate ₱.4020 ₱.4250 ₱.3840
Forward rate ₱.4325 ₱.4170 ₱.3840
What is net effect of the firm commitment in income statement of 2015 and
2016?
a. ₱40,300 gain b. ₱85,500 loss c. ₱85,500 gain d. Nil

26.Ngork, Inc. placed an order for inventory costing 500,000 foreign currency (FC)
with a foreign vendor on April 15 when the spot rate was 1 FC =P0.683. Ngork
received the goods on May 1 when the spot rate was 1 FC=P0.687. Also on May
1, Ngork entered into a 90-day forward contract to purchase 500,000 FC at a
forward rate of 1 FC=P0.693. Payment was made to the foreign vendor on August
1, when the spot rate was 1 FC=P0.696. Ngork has a June 30 year-end. In that
date, the spot rate was 1 FC=P0.691, and the forward rate on the contract was 1
FC=P0.695. Changes in the current value of the forward contract are measured
as the present value of the changes in the forward rates over time. The relevant
discount rate is 6%.
The net income effect on June 30 amounted to:
a. P2,000 b. P1,000 c. P1,005 d. P505
27.Dawn Company is large multi-national company with many affiliates. During
the year, Dawn
Company acquired 100% of the preferred stock of Zeus Company for ₱913,000.
The following are reported by both companies that is considered in preparing the
financial statement:
ZEUS DAWN
Book value Fair value Book value Fair value
Land ₱ 670,000 ₱ 760,000 ₱1,000,000 ₱1,300,000
Building (net) ₱2,500,000 ₱2,600,000 ₱3,400,000 ₱3,200,000
What amount land and building will be presented in the consolidated financial statement?
d. Some other
a. ₱7,860,000 b. ₱7,760,000 c. ₱7,670,000
answer
28. On July 1, 2015 Magna Company acquired 100% of Koma Company for a
consideration transferred of ₱1,600,000. At the acquisition date the carrying
amount of Koma's net assets was ₱1,000,000. At the acquisition date a provisional
fair value of ₱1,200,000 was attributed to the net assets. An additional valuation
received on May 31, 2016 increased this provisional fair value to ₱1,350,000 and
on July 30, 2016 this fair value was finalized at ₱1,400,000.
What amount should Magna present for goodwill in its statement of financial
position at December
31, 2016, according to PFRS3 Business combinations?
a. ₱200,000 b. ₱400,000 c. ₱250,000 d. ₱600,000
The next two questions are based on the following data:
29.On January 1, 2016, David Corporation paid ₱800,000 and issued 18,000 shares
of ₱50 par ordinary shares with market value of ₱1,320,000 for all the net assets
of Goliath Corporation. In addition, David paid ₱12,000 for registering and issuing
the 18,000 shares and ₱20,000 for indirect costs of the business combination.
Summary statement of financial position information for the companies
immediately before the merger is as follows:
David
Corporation Goliath Corporation
Book Value Book Value Fair Value
Cash ₱1,400,000 ₱160,000 ₱160,000
Inventories 480,000 320,000 400,000
Other current assets 120,000 80,000 80,000
Plant assets – net 1,040,000 720,000 1,120,000
Current liabilities 640,000 120,000 120,000
Other liabilities 320,000 200,000 160,000
Ordinary shares, ₱50
par 1,680,000 800,000
Retained earnings 400,000 160,000
The total assets immediately after the merger is

a. ₱ 4,488,000 b. ₱ 4,608,000 c. ₱ 4,008,000 d. ₱ 5,440,000
30. The total stockholders’ equity after the merger is
a. ₱ 3,368,000 b. ₱ 3,370,000 c. ₱ 3,400,000 d. ₱ 3,460,000
31. What method should be used to account for business combination under the
following?
Full PFRS PFRS for SMEs
a. Acquisition method Acquisition method
b. Purchase method Acquisition method
c. Acquisition method Purchase method
d. Purchase method Purchase method
32. Jeson, a Philippine based corporation, has a number of importing transactions

with companies based in US. Importing activities result in payables. If the
settlement currency is the US dollars, which of the following will happen by
changes in the direct or indirect exchange rates?
Direct Exchange Rate Indirect Exchange Rate

Increases Decreases Increases Decreases
a. N/A N/A N/A N/A
b. Loss Gain Gain Loss
c. Loss Gain N/A N/A
d. Gain Loss Loss Gain
33.IFRIC 12 applies to service concession arrangements in which the grantor
controls the use of the concession asset. Because of this, the operator:
a. Cannot recognize the concession assets as its property, plant and equipment.
b. May recognize the concession assets as property, plant and equipment.
c. May recognize the concession assets as property, plant and equipment if the
grantor is to pay for the residual interest at fair value by the end of the
contract.
d. May recognize property, plant and equipment or may not, at its option.
34.Department II of Charity Manufacturing Company presents the following
production data for the month of May, 2017:
Opening inventory, 3/8 completed 4,000 units

Started in process 13,000 units
Transferred 9,000 units
Closing inventory, ½ completed 4,000 units
¾ completed 4,000 units
What are the equivalent units of production for the month of May, 2017?
FIFO Average FIFO Average
Method Method Method Method
a. 12,500 units 13,000 units c. 12,500 units 14,000 units
b. 17,000 units 12,500 units d. 15,000 units 14,000 units
35.With the following data for a company using the FIFO process cost system,
calculate the equivalent units for materials and conversion cost?
Whole Units Materials Conversion cost
Beginning inventory 10 100% 30%
Transferred in 100
Transferred out 80
Ending inventory 30 100% 40%
a. 89 materials 100 conversion cost
b. 100 materials 89 conversion cost
c. 110 materials 99 conversion cost
d. 130 materials 199 conversion cost
36.Batanes Manufacturing Company uses a raw and in process (RIP) inventory
account and expense all conversion cost to cost of goods sold account. At the end
of each month, all inventories are counted, their conversion cost components are
estimated, and inventory account balances are adjusted accordingly. Raw
materials cost is backflushed from RIP to finished goods. The following information
is for the month of April:
RIP, beg. (exclusive of ₱1,400 conversion cost) ₱ 31,000
Raw materials received on credit 367,000
RIP, ending (exclusive of ₱1,800 conversion
cost) 33,000
Compute the amount to be backflushed from RIP to cost of goods sold:
a. ₱365,000 b. ₱368,600 c. ₱367,000 d. ₱365,400
37. Some units of output failed to pass final inspection at the end of the
manufacturing process. The production and inspection supervisors determined
that the estimated incremental revenue from reworking the units exceeded the
cost of rework. The rework of the defective units was authorized, and the following
costs were incurred in reworking the units: [CIA]
Materials requisitioned from stores:
Direct materials ₱ 5,000
Miscellaneous supplies ₱ 300
Direct labor ₱ 14,000
The manufacturing overhead budget includes an allowance for rework. The
predetermined manufacturing overhead rate is 150% of direct labor cost. The
account(s) to be charged and the appropriate charges for the rework cost would
be
a. Work-in-process inventory control for ₱19,000.
b. Work-in-process inventory control for ₱40,300.
c. Work-in-process inventory control for ₱5,000 and factory overhead control
for ₱35,300.
d. Factory overhead control for ₱40,300.
38.Regarding plant-wide overhead rates, departmental overhead rates, and
activity-based costing (ABC) overhead costing, which of the following is true?
a. ABC overhead rates are the best selection for processes that are very
homogeneous.
b. Cost drivers (allocation base) for all three methods are selected because of
assumed or determined cause-and-effect relationships with costs.
c. Each method uses only one cost driver (allocation base) but multiple cost
pools.
d. Departmental overhead is the most accurate of the methods.
39.Overhead costs usually includes
a. Prime costs.
b. Overtime premiums.
c. Abnormal spoilage.
d. Materials price variances.
40.The operator under a service concession arrangement must account for the
arrangement under
a. IFRIC 12 b. IFRIC 15 c. IFRIC pacboi 69 d. PPSAS 32
41. Jesica Chemical Company manufactures two industrial chemical products in

a joint process. In May, 10,000 gallons of input costing ₱60,000 were processed
at a cost of ₱150,000. The joint process resulted in 8,000 pounds of Resoline
and 2,000 pounds of Krypto. Resoline sells at ₱25 per pound and Krypto sells for
₱50 per pound. Management generally processes each of these chemicals
further in separable processes to produce more refined chemical products.
Resoline is processed separately at a cost of ₱5 per pound. The resulting
product, Resoline, sells for ₱35 per pound. Krypto is processed separately at a
cost of ₱15 per pound. The resulting product, Kryptite, sells for ₱95 per pound.
The joint cost share of product Kryptite using the net realizable value method
must be:
a. ₱126,000 b. ₱84,000 c. ₱140,000 d. ₱90,000
42. Monetary item do not include

a. Cash b. Receivables c. Loans d. Deferred income
43. On October 20, 2017, Alexander Company purchased merchandise worth
¥100,000 payable n/30 under an open account arrangement. Alexander Company
issued a 30-day 12% note payable in Yen. On November 20, 2017, Alexander
Company paid the note in full. The following exchange rates for the yen are
provided:
Buying Selling
October 20, 2017 P0.50 P0.55
November 20, 2017 P0.52 P0.56
How much did Alexander Company paid its supplier on November 20, 2017?
a. P56,560 b. P52,520 c. P50,500 d. P55,550
44.The following “equity” relates to an entity operating in a hyperinflationary

economy (in millions):
Before PAS 29 After restatement
Share capital ₱100 ₱170
Revaluation reserve 20 ?
Retained earnings 30 ?
₱150 ₱270
What would be the balances on the revaluation reserve and retained earnings
after the restatement for PAS 29?
a. Revaluation reserve ₱0, retained earnings ₱100.
b. Revaluation reserve ₱100, retained earnings ₱0.
c. Revaluation reserve ₱20, retained earnings ₱80.
d. Revaluation reserve ₱70, retained earnings ₱30.
45.On October 1, 2017, X, Y, and Z formed a joint venture for the sale of
merchandise. X was designated as the managing venturer. Profits and losses are
to be divided as follows: X, 60%; Y, 15% and Z, 25%. On December 15, 2017,
the venture was terminated, the participants agreed to recognize profit or loss on
the venture to date. The cost of inventory on hand is determined at
₱47,000. The joint venture account has a debit balance of ₱68,000 before
adjustment for venture inventory and profit, no separate set of books is
maintained for the joint venture and the participants record in their individual
books all venture transactions.
Before profit or loss distribution, assuming Y has a credit capital balance of
₱9,450, in the final settlement, what is the amount due to (from) Y?
a. ₱12,600 due to c. ₱6,300 due to
b. ₱6,300 due from d. ₱12,600 due from
46.You were engaged to audit the books of accounts of MMN contractors which had
a 3 year construction contract in 2017 for ₱9,000,000. MMN uses the percentage
of completion method for financial statement purposes. Revenue recognized for
each year is based on the ration of cost incurred to total estimate cost to complete
the contract. Data on this contract follows:
Accounts receivable-construction contract billings ₱ 300,000

Construction in Progress ₱ 937,500
Less: Account Billed 843,750 93,750
Net Income recognized in 2017 (before tax) 150,000
MMN Contractors maintain a separate bank account for each construction
contract. Bank deposits to this contract amounted to ₱500,000.
How much cash collected on the contract was not yet deposited at December 31,
2017?
a. ₱43,750 b. ₱37,500 c. ₱193,750 d. ₱287,500
47. What was the estimated total income before tax on

this contract?
a. ₱450,000 b. ₱840,000 c. ₱1,440,000 d. ₱287,500
48.On November 2, 2016, the home office of the Toby Sports Corporation recorded
a shipment of merchandise to its Bulacan Branch as follows:
Debit Credit
Investment in Branch – Bulacan ₱ 60,000
Shipments to Branch ₱ 50,000
Allowance for Overvaluation 8,000
Cash 2,000
The Bulacan Branch sells 40% of the merchandise to outside customers during
the rest of the period. Books are closed every year-end. On January 10, 2017, the
Bulacan Branch transfers half of the original shipment to Baguio Branch, and the
Bulacan Branch pay ₱1,000 freight for the shipment. If the shipment had been
made by the home office to Baguio Branch, the freight charges would have been
₱1,500. What amount should the 60% of the merchandise remaining unsold at
December 31, 2016 be included in the inventory of Bulacan Branch?
a. ₱31,200 b. ₱36,000 c. ₱36,800 d. ₱34,800
49.Examination of the reciprocal accounts between Pangasinan Home Office and

Ilocos Branch shows the following:
 ₱10,000 advertising expense of another branch was erroneously charged by
 the Home Office to Ilocos Branch.
 Ilocos recorded shipments of merchandise from Home Office amounting to
 ₱75,000 twice.
 Home Office recorded cash transfer of ₱65,700 from Ilocos Branch as
 coming from Abra
 Branch.
 Transfer of equipment from Home Office amounting to ₱53,000 was not
 recorded by the branch.
 Ilocos recorded a debit memo from Home Office of ₱5,540 as ₱5,450.
How much is the net adjustments to Ilocos Branch Current Account and to the
Home Office Current Account?
Ilocos Branch
Home Office
Current Account Account
a. ₱75,700 (₱20,910)
b. (₱75,700) ₱21,910
c. ₱75,700 (₱21,910)
d. (₱75,500) (₱21,910)
50.On October 1, 2015 The Tingling Company acquired 100% of The Greenbank
Company when the fair value of Greenbank's net assets was ₱1,160,000 and their
carrying amount was ₱1,200,000. The consideration transferred comprised
₱2,000,000 in cash transferred at the acquisition date, plus another ₱600,000 in
cash to be transferred 11 months after the acquisition date if a specified profit
target was met by Greenbank. At the acquisition date there was only a low
probability of the profit target being met, so the fair value of the additional
consideration liability was ₱100,000. In the event, the profit target was met and
the ₱600,000 cash was transferred. What amount should Tingling present for
goodwill in its statement of consolidated financial position at December 31, 2016,
according to PFRS3 Business combinations?
a. ₱940,000 b. ₱800,000 c. ₱840,000 d. ₱1,440,000
51.Selected balances from the Taloy Company’s Branch A and B are as follows:
Branch A Branch B
Inventory, Jan. 1, 2016 ₱ 210,000 ₱ 190,000
Imprest Branch Fund 20,000 15,000
Inventory, Dec. 31, 2016 190,000 120,000
A/Receivable, Jan. 1, 2016 550,000 435,000
Merchandise from Home Office 610,000 470,000
A/Receivable, Dec. 31, 2016 700,000 535,000
Cash Collections 850,000 700,000
Sales 1,000,000 800,000
Cash Expenses 210,000 143,000
All sales, collections, and expenses are handled at the branch. All cash received
from sales and collections are sent directly to the Home Office. Expenses are paid
by the branch from the imprest fund and immediately reimbursed by the Home
Office and credited to the Home Office account. All expenses paid by the branch
are recorded in the books of the branch.
Compute the balance of the Home Office account on January 1, 2016.
Branch A Books Branch B Books

a. ₱780,000 ₱670,000
b. 750,000 640,000
c. 640,000 780,000
d. 780,000 640,000
52.As compared to a high-volume product, a low-volume product
a. Usually requires less special handling.
b. Is usually responsible for more overhead costs per unit.
c. Requires relatively fewer machine setups.
d. Requires use of direct labor hours as the primary cost driver to ensure proper
allocation of overhead.
53.A firm wants a simple method to allocate costs from service departments to
production departments but never needs to allocate costs from one service
department to another. Which of the following methods would satisfy these
requirements?
a. Reciprocal method c. Activity-based method
b. Step-down method d. Direct method
54.In the absence of agreement as to distribution of loss, how shall the partnership
loss be distributed to the partners?
a. The loss shall be distributed equally to all partners including the industrial
partner.
b. The industrial partner shall be exempted from partnership loss while the
capitalist shall share equally.
c. The industrial partner shall be exempted from partnership loss while the
capitalist partners shall distributed on the basis of capital contribution ratio.
d. The industrial partner shall be exempted from partnership loss while the
capitalist partners shall be distributed in accordance of profit agreement
ratio.
55.Under PFRS 15, an entity recognizes revenue in accordance with that core
principle by applying five steps.
A. Determine the transaction price
B. Identify the performance obligations in the contract
C. Recognize revenue when (or as) the entity satisfies a performance obligation.
D. Allocate the transaction price to the performance obligations in the contract
E. Identify the contract(s) with a customer
Which of the following is the correct order of the five step model framework of
PFRS 15?
a. E, B, A, D, C b. E, A, D, B, C c. B, A, D, E, C d. B, E, A, D, C
56.Entity A owns a 60 per cent voting interest in Entity B. Entity B owns a 70 per
cent voting interest in Entity C. How should Entity A account for its investment in
Entity C in its consolidated financial statements?
a. Consolidate Entity C.
b. Account for its investment in Entity C using the equity method.
c. Account for its investment in Entity C using the policy it has adopted to
account for associates.
d. Account for its investment in Entity C using fair value.
57.Sherrie Company has a subsidiary that operates in a country where the exchange
rate fluctuates wildly and there are seasonal variations in the income and
expenditure patterns. Which of the following rates of exchange would probably be
used to translate the foreign subsidiary’s income statement?
a. Year-end spot rate
b. Average of the quarter-end rates.
c. Average for the year.
d. Average rates for each individual month of the year.
58.An appreciation of the U.S. dollar against the Japanese yen would:
a. Increase the translated earnings of U.S. subsidiaries domiciled in Japan.
b. Increase the cost of buying supplies for U.S. firms.
c. Make travel in Japan more expensive for U.S. citizens.
d. Make U.S. goods more expensive to Japanese consumers.
59.This government agency that have exclusive authority to define the scope of its
audit and examination, establish the techniques and methods required therefor,
and promulgate accounting and auditing rules and regulations, including those for
the prevention and disallowance of irregular, unnecessary, excessive,
extravagant, or unconscionable expenditures, or uses of
government funds and properties
a. College of Accountancy (COA) c. Department of Budget and
Management (DBM)
b. Commission on Audit (COA) d. Bureau of Treasury (BTr)
60. It contains documents which are intended to assist the Congress in their review
and deliberation of the proposed national budget
a. President’s watch list c. President’s budget
b. Final budget d. President’s narco list
61.PPSAS stands for
a. Philippine Pacboi Sector Accounting Standard
b. Philippine Public Statement of Accounting Standard
c. Philippine Pakopya Sana Ang Sagot
d. Philippine Public Sector Accounting Standard
62.D, E and F formed a joint venture to sell personalized shirts during the campaign
period. Their transactions during the two-month period are summarized below.
The book of F being the manager is used by the joint venture.
June 12 Investment of merchandise by D ₱119,000
14 Investment of cash by E 45,000
17 Investment of cash by F 30,000
19 Investment of merchandise by E 98,000
20 Freight-in 9,000
20 Cash sales 285,000
21 Cash sales 78,000

29 Withdrawal of merchandise by E 18,000
July 5 Purchases 49,000
10 Withdrawal of cash by D 16,000
21 Selling expenses 7,000
31 Unsold merchandise charged to D 10,000
The contractual arrangements include distribution of gains and losses as follows:
D, 25%; E, 35%; and F, 40%. The venture is completed and terminated on July
31, 2017.
In the final settlement, how much would each venturer receive?
D E F
a. ₱93,000 ₱125,000 ₱30,000
b. ₱120,250 ₱163,150 ₱73,600
c. ₱130,250 ₱163,150 ₱43,600
d. ₱120,250 ₱163,150 ₱43,600
63.Pam Company purchased 75% of the capital stock of Sam Company on January
1, 2014 at
₱400,000 more than the 75% of the book value of its net assets. The excess was
allocated to equipment in the amount of ₱150,000 and to goodwill for the rest of
the balance. The equipment has an estimated useful life of 10 years and goodwill
was not impaired. For four years, Sam
Company reported cumulative earnings of ₱1,800,000 and paid ₱520,000 in
dividends. On December 31, 2017, non-controlling interest in net assets of Sam
Company amounts to ₱705,000.
How much is the acquisition cost/ price paid for the investment in Sam
Company?
a. ₱2,500,000 b. ₱1,690,000 c. ₱1,540,000 d. ₱1,600,000
64.On January 1, 2016, P Company purchased 32,000 shares of the 40,000
outstanding shares of S Company at a cost of ₱1,000,000, with an excess of
₱40,000 over the book value of S Company’s net assets. Such excess is
attributed to goodwill.
For the year 2016, P Company reported a net income of ₱500,000 and paid
dividends of ₱200,000. While S Company reported a net income of ₱150,000 and
paid dividends to P Company amounting to ₱40,000. Goodwill was not impaired
in 2016. P Company uses the cost method to account for its investment in S
Company.
Compute for the following for 2016: noncontrolling interest in net income;
noncontrolling interest; consolidated net income
a. ₱30,000; ₱260,000; ₱580,000
b. ₱30,000; ₱220,000; ₱580,000
c. ₱30,000; ₱212,000; ₱580,000
d. ₱30,000; ₱262,000; ₱588,000
65.On December 1, 2017, Batch 75, a Philippine firm estimates or forecasted the
purchase of 5,000 units of inventory from Taiwan. The purchase would probably
occur on January of 2018 and require the payment of 500,000 Nt dollars. The
transaction is probable, and it is to be denominated in Nt dollar. It is anticipated

that the inventory could be further processed and delivered to customers within
six months.
Batch 75 Company enters into a forward contract to purchase 500,000 Nt dollars
on January 31,
2018 for ₱1.01.
Spot and forward rates at the January 31, 2018, settlement were as follows
(pesos per Nt dollar):
Spot Rate Forward Rate
December 1, 2017 ₱1.03 ₱1.01
December 31, 2017 1.00 0.99
January 31, 2018 0.98
The December 31, 2017, foreign exchange loss on forward contract amounted
to:
a. ₱30,000 currently in earnings
b. ₱10,000 currently in earnings
c. ₱10,000 separately component of equity
d. ₱30,000 separately component of equity
66.On September 1, 2016, Bontoc, Inc. entered into a foreign exchange contract for
speculative purposes by purchasing 5,000 European euros for delivery in 60 days.
The rates to exchange Philippine peso for euros is as follows:
On
09/01/2016 09/30/2016
Spot rates ₱75 ₱70
30-day forward rate 73 72
60-day forward rate 74 73
September 30, 2016, income statement, what amount should Bontoc report as
foreign exchange loss?
a. ₱25,000 b. ₱15,000 c. ₱10,000 d. Nil
67.On June 18, Penduko Corporation entered into a firm commitment to purchase
specialized equipment from the Okazaki Trading Company for ¥80,000,000 on
August 20. The exchange rate on June 18 is ¥100= ₱1. To reduce the exchange
rate risk that could increase the cost of the equipment in pesos, Penduko pays
₱12,000 for a call option contract. This contract gives Penduko the option to
purchase ¥80,000,000 at an exchange rate of ¥100= ₱1 on August 20. On August
20, the exchange rate is ¥93= ₱1.
How much did Penduko save by purchasing the call option (answers rounded to
the nearest peso)?
a. ₱12,000
b. ₱48,215
c. ₱60,215
d. Penduko would have been better off not to have purchased the call option.
68.Insurer Insurance Co. offers life insurance. On March 28, 2018, Insurer receives
notification of the death of Marlou, a policyholder. The sum insured is ₱1,500,000.
The beneficiaries submitted the death certificate and other required documents
and the claim is settled on June 29, 2018. The journal entry on June 29, 2018 will
include a
a. Debit to Claims Expense, ₱1,500,000
b. Credit to Claims Expense, ₱1,500,000
c. Debit to Cash, ₱1,500,000
d. Debit to Claims Payable, ₱1,500,000
69.On April 1, 2018, Phil Insurance Company issues a one-year, fire insurance
contract for a total premium of ₱36,000.
Using the 24th method, the earned portion of the premium for the year ended
December 31, 2018
a. ₱36,000 b. ₱27,000 c. ₱25,500 d. ₱24,000
70.Parent Corporation purchased land from S1 Corporation for ₱2,200,000 on
December 26, 2015.
This purchase followed a series of transactions between P-controlled
subsidiaries. On February 15,
2015, S3 Corporation purchased the land from a nonaffiliate for ₱1,600,000. It
sold the land to S2 Company for ₱1,450,000 on October 19, 2015, and S2 sold
the land to S1 for ₱1,970,000 on November 27, 2015. Parent has control of the
following companies:
Subsidiary Level of Ownership 2015 Net Income

S3 80 percent ₱1,000,000
S2 70 percent 700,000
S1 90 percent 950,000
Parent reported income from its separate operations of ₱2,000,000 for 2015.
What amount of gain or loss on sale of land should be reported in the
consolidated income statement for 2015?
a. ₱600,000 c. Nil
d.
b. ₱750,000 ₱230,000
71.Accountancy student ka ba? Naranasan mo na ba ‘yung
a. feeling na binigay mo na ang lahat pero kulang pa rin?;
b. hindi mo pa rin maintindihan kung bakit ang volume variance ay parang love
life mo lang: zero?;
c. sa sobrang antok mo, pati third eye mo ‘eh may eye bags na?;
d. lagi kang bagsak at nangangakong magsisipag na pero hanggang ngayon ay
wala pa ring nangyayari? O
e. All of the above?
-- END -- 

Rmbe Afar For Printing

Încărcat de

Informații document

Titlu original

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

Rmbe Afar For Printing

Încărcat de

Drepturi de autor:

Formate disponibile

Advanced Financial Accounting and Reporting

REGIONAL MOCK BOARD EXAMINATIONS

 Petmalu will receive a salaries of ₱20,000 and a bonus of 3% of income after

Loan to Partner Loan to

a. 408,000 and 2,880

7. When compared with normal spoilage, abnormal spoilage

9. In comparing the FIFO (first-in, first-out) and weighted-average methods for

11/02/15 12/31/15 03/31/16

a. ₱40,300 gain b. ₱85,500 loss c. ₱85,500 gain d. Nil

The total assets immediately after the merger is

32. Jeson, a Philippine based corporation, has a number of importing transactions

Direct Exchange Rate Indirect Exchange Rate

Opening inventory, 3/8 completed 4,000 units

41. Jesica Chemical Company manufactures two industrial chemical products in

a. ₱126,000 b. ₱84,000 c. ₱140,000 d. ₱90,000

42. Monetary item do not include

44.The following “equity” relates to an entity operating in a hyperinflationary

Accounts receivable-construction contract billings ₱ 300,000

a. ₱43,750 b. ₱37,500 c. ₱193,750 d. ₱287,500

47. What was the estimated total income before tax on

49.Examination of the reciprocal accounts between Pangasinan Home Office and

Branch A Books Branch B Books

21 Cash sales 78,000

transaction is probable, and it is to be denominated in Nt dollar. It is anticipated

Subsidiary Level of Ownership 2015 Net Income

S-ar putea să vă placă și