Set B

Set B
Use the following information for questions 1 and 2

Ramos, Inc. began work in 2007 on contract #3814, which provided for a contract price of 7,200,000.
Other details follow:
2007 2008
Costs incurred during the year 1,200,000 3,675,000
Estimated costs to complete, as of December 31 3,600,000 0
Billings during the year 1,350,000 5,400,000
Collections during the year 900,000 5,850,000
1. Assume that Ramos uses the percentage-of-completion method of accounting. The portion of the
total gross profit to be recognized as income in 2007 is
a. 450,000;
b. 600,000;
c. 1,800,000;
d. 2,400,000.
2. Assume that Ramos uses the completed-contract method of accounting. The portion of the total
gross profit to be recognized as income in 2008 is
a. 900,000;
b. 1,350,000;
c. 2,325,000;
d. 7,200,000.
Use the following information for questions 3 and 4.
Miley, Inc. began work in 2007 on a contract for 8,400,000. Other data are as follows:
2007 2008
Costs incurred to date 3,600,000 5,600,000
Estimated costs to complete 2,400,000 —
Billings to date 2,800,000 8,400,000
Collections to date 2,000,000 7,200,000
3. If Miley uses the percentage-of-completion method, the gross profit to be recognized in 2007 is
a. 1,440,000;
b. 1,600,000;
c. 2,160,000;
d. 2,400,000.
4. If Miley uses the completed-contract method, the gross profit to be recognized in 2008 is
a. 1,360,000;
b. 2,800,000;
c. 1,400,000;
d. 5,600,000
5. Parker Construction Co. uses the percentage-of-completion method. In 2007, Parker began work
on a contract for 5,500,000; it was completed in 2008. The following cost data pertain to this
contract:
Year Ended December 31
2007 2008
Cost incurred during the year 1,950,000 1,400,000
Estimated costs to complete at the end of year 1,300,000 —
The amount of gross profit to be recognized on the income statement for the year ended
December 31, 2008 is
a. 800,000;
b. 860,000;
c. 900,000;
d. 2,150,000.
6. In a statement of financial affairs, assets are classified
A. According to whether they are pledged as collateral in favor of particular creditors;

B. As current or non-current;
C. As direct or indirect;
D. None of the above
7. The Star Company has the following:

Unsecured creditors P230,000
Liabilities with priority 110,000
Secured Liabilities:
Debt one, P210,000; value of pledged asset 180,000
Debt two, P170,000; value of pledged asset 100,000
Debt three, P120,000; value of pledged asset 140,000
The company also has a number of other assets that are not pledged in any way. The creditors
holding debt two want to receive at least P142,000. For how much do these free assets have to be
sold so that debt two would receive exactly P142,000?
A. P340,000;
B. P330,000;
C. P308,000;
D. P198,000
8. Corpuz Company has had severe financial difficulties and is considering the possibility of
liquidation. At this time, the company has the following asset (stated at net realizable value) and
liabilities.
Asset (pledged against debts of P70,000) P116,000
Asset (pledged against debts of P130,000) 50,000
Other assets 80,000
Liabilities with priority 42,000
Unsecured creditors 200,000
In liquidation, how much would be paid to the partially secured creditors?
A. P200,000;
B. P 130,000;
C. P 74,000;
D. P 50,000
9. The statement of affairs for Echin Corporation shows that approximately P0.78 on the peso
probably will be paid to unsecured creditors without priority. The corporation owes Tercino
Company P23,000 on a promissory note, plus accrued interest of P940. Inventories with a current
fair value of P19,200 collateralize the note payable.
Compute the amount that Tercino should receive from Echin assuming that the actual payments to
unsecured creditors without priority consist of 78% of total claims. Round all amounts to the nearest
peso.
A. P52,200;
B. P33,987;
C. P22,897;
D. P19,200
10. The following data were taken from statement of affairs of Rosales Company:
Unsecured liabilities with priority P 122,500

Stockholders’ Equity 441,000
Estimated liquidation expenses 55,125
Unsecured liabilities without priority 1,102,500
Loss on realization of assets 551,250
How much is the total free assets?
A. P1,059,625;
B. P 992,250;
C. P 953,575;
D. P 937,125
11. .In a quasi-reorganization, which of the following may occur?
a. Excess plant capacity may be sold.;

b. Assets may be revalued to reflect impaired values.;
c. Retained Earnings deficits are eliminated by changes made to the capital structure.;
d. All of the above may occur.
12. .In a troubled debt restructuring involving only the modification of terms of a loan receivable, how
should the loan receivable be measured on the creditor’s balance sheet?
a. The loan’s observable market price.;

b. The fair value of the collateral if the loan is collateral dependent.;
c. The present value of expected future cash flows at the original contractual rate.;
d. All of the above.
13. After eliminating the deficit in a reorganization plan, a balance may remain in Reorganization
Capital. On the balance sheet, where would this account appear?
a. Part of the Paid-In Capital;

b. Part of the dated balance in Retained Earnings;
c. An Intangible Asset if the balance is a debit;
d. A deferred credit amortized over a period not to exceed 40 years
14. What is the general form of the trustee's opening entry, accepting the assets of the debtor company?
a. Option A;
b. Option B;
c. Option C;
d. Option D
Orville Company recently petitioned for bankruptcy and is now in the process of preparing a
statement of affairs. The carrying values and estimated fair values of the assets of Orville
Company are as follows:
15. Based on the preceding information, what is the total amount of unsecured claims?
a. P113,000;
b. P126,000;
c. P93,000;
d. P121,000
16. It is the allotment by the Central office to its Regional office.
a. Regular allotment ;
b. Ordinary Allotment;
c. Suballotment;
d. Secondary Allotment
17. It refers to the commitment by a government agency arising from an act of a duly
authorized official that binds the government to the immediate or eventual payments of a
sum of money.
a. Allotment;
b. Appropriation;
c. Obligation;
d. Malversation
18. It is an authorization issued by the DBM to government agencies to withdraw cash from
the National Treasury through the issuance of Modified Disbursement System Checks.
a. Allotment;
b. c. Appropriation;
c. Obligation ;
d. Notice of Cash Allocation
19. Which is not a basic feature of NGAS?

a. One-fund concept;
b. Three-digit account number system;
c. Two-column trial balance ;
d. Four-digit responsibility account coding structure
20. Which is not a basic feature of NGAS?

a. Straight-line depreciation;
c. Corollary and negative (red) entries;
b. Allowance for doubtful accounts;
d. Perpetual inventory system

Set B

Uploaded by

Copyright:

Available Formats

Set B

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Set B

Uploaded by

Copyright:

Available Formats

Set B

Use the following information for questions 1 and 2

Costs incurred during the year 1,200,000 3,675,000

Estimated costs to complete, as of December 31 3,600,000 0

Billings during the year 1,350,000 5,400,000

Collections during the year 900,000 5,850,000

Estimated costs to complete 2,400,000 —

Billings to date 2,800,000 8,400,000

Collections to date 2,000,000 7,200,000

Year Ended December 31

Cost incurred during the year 1,950,000 1,400,000

Estimated costs to complete at the end of year 1,300,000 —

6. In a statement of financial affairs, assets are classified

A. According to whether they are pledged as collateral in favor of particular creditors;

7. The Star Company has the following:

In liquidation, how much would be paid to the partially secured creditors?

Unsecured liabilities with priority P 122,500

How much is the total free assets?

11. .In a quasi-reorganization, which of the following may occur?

a. Excess plant capacity may be sold.;

a. The loan’s observable market price.;

a. Part of the Paid-In Capital;

19. Which is not a basic feature of NGAS?

20. Which is not a basic feature of NGAS?

You might also like