Q2 – FINANCIAL ACCOUNTING AND REPORTING (PARTNERSHIP ACCOUNTING) ALL ABOUT PARTNERSHIP FORMATION & OPERATION

NAME: ________________________________________ YEAR/COURSE: _______________________________ SCORE: _________________ RATING: _____________

PROBLEM 1 Income before partners’ salaries for the year ended December 31, 2011, was P 92,080. Pa
Savvy and Dani decided to form a partnership on October 1, 2014. Their Statement of invested an additional P 24,000 in the partnership on July 1; Ko withdrew P 36,000 from the
Financial Position on this date were: partnership on October 1; and as authorized by the partnership contract, Pa, Milya and Ko
Savvy Dani each withdrew P 750 monthly against their shares of net income for the year.
Cash P 65,625 P 164,062.50
Accounts Receivable 1,487,500 896,875 Required:
Merchandise Inventory 875,000 885,937.50 6. Income distribution of Pa, Milya and Ko
Office Equipment 656,250 1,268,750 7. The share of partner Pa in the net income is:
TOTAL ASSETS P 3,084,375 P 3,084,375 8. The share of partner Ko in the net income is:
9. The capital balance of partner Ko on December 31, 2011
Accounts Payable 459,375 1,159,375 10. If the salaries to partners’ are to be recognized as operating expenses by the partnership,
Savvy, Capital 2,625,000 the share of Milya in the net income is:
Dani, Capital 2,056,250 11. Income distribution of Pa, Milya and Ko using the information in No. 10
TOTAL LIABILITIES & EQUITY P 3,084,375 P 3,084,375 12. Using the same information in No. 10, the capital balance of Ko on December 31, 2011 is:
They agreed the following adjustments shall be made:
 Office equipment of Savvy is underdepreciated by P 87,500 and that Dani is PROBLEM 3
overdepreciated by P 131,250. Vic Sotto and Vice Ganda’s partnership named “Eat’s Showtime Partnership” was organized
 Allowance for doubtful accounts is to be set up amounting to P 297,500 for Savvy and began operations on March 1, 2011. On that date, Vic Sotto invested P 150,000 and Vice
and P 196,875 for Dani. Ganda invested land and building with current fair value of P 80,000 and P 100,000,
 Inventories of P 21,875 and P 15,312.50 are worthless in the books of Savvy and respectively. Vice also invested P 60,000 in the partnership on November 1, 2011 because of
Dani, respectively. its shortage of cash. The partnership contract includes the following remuneration plan:
 The partnership provides for a profit and loss ratio of 70% of Savvy and 30% of Dani. Vic Sotto Vice Ganda
Annual salary………………………….. P 18,000 24,000
Required: Annual interest on average capital
1. Adjusting entries for Savvy and Dani’s books account balances……………………. 10% 10%
2. Savvy’s adjusted capital Remainder…………………………… 60% 40%
3. Dani’s adjusted capital The annual salary was to be withdrawn by each partner in 12 monthly installments. During the
4. Agreed capital of Savvy to bring the capital balance proportionate to their profit and loss ratio fiscal year ended, February 28, 2012, Vic and Vice had net sales of P 500,000, cost of goods
5. Agreed capital of Dani to bring the capital balance proportionate to their profit and loss ratio sold of P 280,000 and total operating expenses of P 100,000 (excluding partners’ salaries and
6. Net adjustments of Dani interest on average capital balances). Each partner made monthly cash drawings in
accordance with partnership contract.
PROBLEM 2
The Pamilya Ko Partnership was formed on January 2, 2011. The original cash investments Required:
were as follows: 12. Income distribution of Vic Sotto and Vice Ganda
Pa, Capital……………………………….. P 96,000 13. The share of partner Vic Sotto in the net income is:
Milya, Capital…………………………… 144,000 14. The share of partner Vice Ganda in the net income is:
Ko, Capital……………………………… 216,000 15. The capital balance of Vic Sotto on March 1, 2012 should be:
According to the general partnership contract, the partners were to be remunerated as follows: 16. The capital balance of Vice Ganda on March 1, 2012 should be:
 Salaries of P 14,400 for Pa, P 12,000 for Milya and P 13,600 for Ko. 17. Interest on average capital of Vice Ganda as part of the allocation of net income:
 Interest of 12% on the average capital account balances during the year.
 Remainder divided 40% to Pa, 30% to Milya and 30% to Ko. PROBLEM 4
Define PARTNERSHIP. (5 points)
GOOD LUCK!!!
Q1 – STRATEGIC COST MANAGEMENT (MANAGEMENT ACCOUNTING 1) ALL ABOUT COST-VOLUME-PROFIT ANALYSIS

NAME: ________________________________________ YEAR/COURSE: _______________________________ SCORE: _________________ RATING: _____________

PROBLEM 1
DaHec Manufacturing Corportation estimates sales of 500,000 units at $5 per unit. Variable The fixed costs for the company amounted to $1,000,000.
costs generally equal to $1 per unit. Fixed expenses for this planned sales level would equal to
$2 per unit. Required:
11-14. Compute the break-even point in units and in dollars for Downyela and Romina-eh-eh.
Required:
1. Estimated profit for the planned level of sales PROBLEM 4
2. Break-even point in units and dollars A traditional break-even chart is illustrated below.
3. Margin of safety ratio (M/S)
4. Increase in profit that would result from a 10% increase in sales Required: Identify each letter on the chart, using the proper terminology.
5. Profit as a percentage of the planned level of sales

PROBLEM 2
The management of Marupokpoksxz Co. is presented with the following data:

Sales $ 500,000
Direct materials $ 60,000
Direct labor 90,000
Factory overhead 100,000 250,000
Gross profit $ 250,000
Marketing expenses $ 70,000
General expenses 100,000 170,000
Net income $ 80,000

Fifty percent of factory overhead is fixed, while 40% of marketing expenses and all general
expenses are fixed.

Required:
6. The contribution margin ratio:
7. The break-even point in sales dollars:
8. New factory equipment may be purchased that will not affect total costs at this sales level
but will increase fixed factory overhead costs to 75% of factory overhead. Assuming that this A- _________________________ F- ___________________________
purchase is made, show its effect by recomputing the answer to (1): B- _________________________ G- ___________________________
9. Assuming that the new factory equipment is purchased, show its effect by recomputing the C- _________________________ H- ___________________________
answer to (2). D- _________________________ I- ____________________________
E - _________________________ J - ___________________________
PROBLEM 3
You Do Note Products Inc. manufactures two products—Downyela and Romina-eh-eh. PROBLEM 5
Relevant budgeted sales and cost data for the coming year are: Formula for computing degree of operating leverage (1 pt)
Product Unit Sales Unit Price Variable Cost per Unit
Downyela 100,000 $15 $6
Romina-eh-eh 150,000 10 7 GOOD LUCK!!!
Q1 – CONCEPTUAL FRAMEWORK AND ACCOUNTING STANDARDS
NAME: ________________________________________ YEAR/COURSE: _______________________________
IDENTIFICATION
1. Assigning of peso amounts to the accountable economic transactions and events
2. Most common measure of financial transactions
3. RA 9298 is also known as ___________.
4-5. The approved statements of FRSC are known as ________ and __________.
6. Summary of terms and concepts that underlie the preparation and presentation of financial
statements for external users
7-8. In a case where there is a conflict, the requirements of the _____________ shall prevail
over __________________.
9. The capacity of the information to influence a decision
10-11. Materiality of an item depends on __________ size rather than __________ size.
12. Pervasive constraint on the information that can be provided by financial reporting
13. Change in equity during a period resulting from transactions and other events, other than
changes resulting from transactions with owners in their capacity as owners
14. Financial statements shall be presented at least __________.
15. Formal statement showing three elements comprising financial position, namely, assets
liabilities and equity
16. Standard medium of exchange in business transactions
17. Cash is measured at _______ value.
18. Generally takes the form of minimum checking or demand deposit account balance that
must be maintained in connection with a borrowing arrangement with a bank
19. Practice of opening the books of accounts beyond the close of reporting period for the
purpose of showing better financial position and performance
20. Expanded reconciliation in that includes proof of receipts and disbursements
TRUE OR FALSE
21. The bank reconciliation is so-called ‘four-date’.
22. Bank debits include deposits acknowledged by bank and credit memos.
23. Outstanding checks are checks already recorded by the depositor as cash disbursements
but not yet reflected on the bank statement.
24. NSF and DAIF is different from each other.
25. Demand deposit is noninterest bearing.
26. IOUs is included in cash equivalent category.
27. The system is called “fluctuating fund system” because the checks drawn to replenish the
fund do not necessarily equal the petty cash disbursements.
28. Where the cash count shows cash which is more than the balance per book, there is a
cash overage.
29. Kiting is any deliberate misstatement of assets, liabilities, equity, income and expenses.
30. A check becomes stale if not encashed within six months from the time of issuance.
31. Bank overdraft is a noncurrent liability.
32. Equity securities cannot qualify as cash equivalents because shares do not have a
maturity date.
SCORE: _________________ RATING: _____________
33. Generally, revenue from sale of goods shall be recognized at a point when the entire
amount receivable has been collected from the customer.
34. Present value is also known as ‘future exchange price’.
35. According to matching principle, “There is no gain if there is no pain”.
36. To be a faithful representation, information must be predictive and confirmatory.
37. The Conceptual Framework focuses primarily on the needs of internal users of financial
information.
38. Entities consider only quantitative factors in determining whether an item is material.
39. The overall objective of financial reporting is to provide information for making economic
decisions.
40. Once an accounting method is adopted, it should never be changed.
CLASSIFICATION (2 POINTS EACH)
Identify the underlying assumption involved for each situation.
41. The operations of a saving bank are being evaluated by the Bangko Sentral ng Pilipinas.
During the investigation, the BSP has determined that numerous loans made by top
management were unwise and have seriously endangered the future of the saving bank.
42. The parent entity in Manila has a subsidiary in Japan. The financial statements of the
subsidiary are translated to pesos for consolidation with the financial statements of the parent
entity at year end.
43. A machinery was imported from Canada at a certain cost five years ago. Because of
extraordinary inflation, the machinery has now a current replacement cost which is very much
higher than the historical cost. Management would like to report the machinery at current
replacement cost.
44. An entity has experienced a drastic reduction in revenue by reason of a long dry spell in the
area where the entity grows its tobacco. The management decided to wait until next year and
present financial statements for a two-year period rather than prepare now the traditional
twelve-month financial statements.
45. A subsidiary was exhibiting poor financial performance for the current year. In an effort to
increase the subsidiary’s reported income, the parent entity purchased goods from the
subsidiary at twice the normal markup.
DEFINITION
Define ‘Accounting’ according to American Institute of Certified Public Accountants (10 pts)
GOOD LUCK!!!