REVIEW QUIZ

1. Pig Company had the following account balances on December 31, 2018:
Cash in bank-current account                                             5,000,000
Cash in bank – payroll account                                           1,000,000
Cash on hand                                                                                      500,000
Cash in bank – restricted account for building
construction expected to be disbursed in 2015         3,000,000
Time deposit, purchased December 15, 2014
and due March 15, 2015                                                            2,000,000
 
The cash on hand included a P200,000 check payable to Pig Company dated January 15, 2019.  What
total amount should be reported as “cash and cash equivalents” on December 31, 2018?
a. P8,700,000
b. P6,300,000

c. P8,300,000

d. P6,500,000

2. Tough Company provided the following data on December 31, 2018:

Checkbook balance                                                                             4,000,000
Bank statement balance                                                                  5,000,000
Check drawn on Tough’s account, payable to
supplier, Dated and recorded on December 31,
2014 but Not mailed until January 15, 2015                          500,000
Cash sinking fund                                                                                2,000,000
On December 31, 2018, what amount should be reported as “cash” under current assets?
a. P3,500,000
b. 5,500,000
c. P4,000,000
d. P4,500,000
 3. Joy Company provided the following data relating to accounts receivable for 2014:
Accounts receivable, January 1                                                              650,000
Credit sales                                                                                                     2,700,000
Accounts written off                                                                                       40,000
Sales returns                                                                                                        75,000
Collections from customers                                                                 2,150,000
Estimated future sales returns at December 31                             50,000
Estimated uncollectible accounts at 12/31 per aging              110,000
What amount should be reported as net realizable value of accounts receivable on December 31,
2018?
a. P1,200,000
b. P1,125,000
c. P925,000
d. P1,085,000

4. On December 31, 2018, Honda Company revealed a balance of P8,200,000 in the accounts
receivable control account.  An analysis of the accounts receivable showed the following:
Accounts known to be worthless                                                                  100,000
Advance payments to creditors on purchase orders                         400,000
Advances to affiliated companies                                                              1,000,000
Customers’ accounts reporting credit balances arising
From sales returns                                                                                                (600,000)
Interest receivables on bonds                                                                         400,000
Trade accounts receivable-unassigned                                                  2,000,000
Subscription receivable due in 30 days                                                  2,200,000
Trade accounts receivables-assigned (finance Company’s
Equity in assigned accounts in P500,000                                             1,500,000
Trade installment receivable due 1-18 months,
Including unearned finance charge of P50,000                                   850,000
Trade accounts receivable from officers, due currently                 150,000
Trade accounts on which post dated check are held
(no entries were made on receipt of checks)                                     200,000
Total                                                                                                                       8,200,000
What amount should be reported as trade accounts receivable on December 31, 2018?
Group of answer choices

c. P4,700,000

a. P4,650,000

b. P4,150,000

d. P4,050,000

5. On December 31, 2018, Mimi Company reported that the current receivables consisted of the
following:
Trade accounts receivable                                                                              930,000
Allowance for uncollectible accounts                                                       (20,000)
Claim against shipper for goods lost in transit
(November 2018)                                                                                                  30,000
Selling price of unsold goods sent by Mimi Company on
Consignment at 130% of cost (not included in Mimi’s
Ending inventory)                                                                                               260,000
Security deposit on lease of warehouse used for
storing some Inventories                                                                              300,000
Total                                                                                                                       1,500,000
On December 31, 2018, what total amount should be reported as trade and other receivables under
current assets?
Group of answer choices

b. P940,000

a. P930,000

d. P1,500,000

c. P1,240,000
 6. On January 1, 2018, the statement of financial position of Round Company showed accounts
receivable of P450,000 and allowance for doubtful accounts of P9,000.  During the current
year, the transactions were:
Sales on accounts P4,800,000 
Cash collections of accounts receivable totaled P3,920,000, after discounts of P80,000 were allowed
for prompt payment.
Bad debt accounts previously written off in prior year amounting to P5,000 were recovered.
The entity decided to provide P26,000 for doubtful accounts at the end of the year.
Accounts receivable of P700,000 have been pledged to a local bank on a loan of P400,000. 
Collections of P150,000 were made on such accounts receivable (not included in the collections
previously given).
What is the net realizable value of accounts receivable on December 31, 2019?
Group of answer choices

c. P1,070,000

a. P1,060,000

b. P1,065,000

d. P1,074,000

7. Effective with the year ended December 31, 2018, Hill Company adopted a new accounting
method for estimating the allowance for doubtful accounts at the amount indicated by the year-
end aging of accounts receivable.  The following data are available:
Allowance for doubtful accounts, January 1                                         250,000
Provision for doubtful accounts during the current year
(2% Of credit sales of P10,000,000)                                                           200,000
Accounts written off                                                                                            205,000
Estimated uncollectible accounts per aging on
December 31                                                                                                            220,000
After year-end adjustment, what is the doubtful accounts expense for current year? 
Group of answer choices

b. P205,000

d. P175,000
c. P200,000

a. P220,000

8. Easy Company sells directly to retail customers.  On January 1, 2018, the balance of the
accounts receivable was P2,070,000 while the allowance for doubtful accounts was a credit of
P78,000.  The following data are gathered:
                Credit sales           Write off                   Recoveries
2015        11,100,000              260,000                   22,000
2016        12,250,000              295,000                   37,000
2017        14,650,000              300,000                   36,000
2018        15,000,000              310,000                   42,000
Doubtful accounts are provided for as a percentage of credit sales.  The entity calculated the
percentage annually by using the experience of the three years prior to the current year.
What is the percentage of credit sales to be used in computing doubtful accounts expense for 2018?
Group of answer choices

c. two percent

b. four percent

a. eight percent

d. six percent

9. The cash account of AWOLNATION Corp. on December 31, 2018 has a balance of P127,
600.00 and it consists of the following:
Bills and coins on hand                                                                  P 52,780.00
Petty cash including vouchers of P 650.00                              1, 000.00
Balance on savings account with a bank
 closed by BSP                                                                                         36,000.00
Customer’s check dated January 15 2018                               8,000.00
Credit Memo from suppliers for purchases returns           6,500.00
Postage Stamps                                                                                            120.00
Money Order                                                                                                 800.00
IOU of an employee                                                                                  400.00
Checking account balance in BPI                                             22, 000.00
 
The correct cash balance on December 31, 2018 of AWOLNATION Corp. is
Group of answer choices

d. P 76,330

a. P75,930,000

P 75, 180

b. P75,130,000

10. In preparing the August 31, 2018  bank reconciliation, Abram Company provided the following
information:
Balance per bank statement                                                           1,805,000
Deposit in transit                                                                                       325,000
Return of customer’s check for insufficient fund                      60,000
Outstanding checks                                                                                 275,000
Bank service charge for August                                                          10,000
On August 31, 2018, what is the adjusted cash in bank?
Group of answer choices

a. P 1,785,000

d. P 1,755,000

b. P 1,855,000

c. P 1,795,000

11. Daddy Company prepared the following bank reconciliation on December 31, 2018:
Balance per bank statement                                                      2,800,000
Add: Deposit in transit                                       195,000
         Checkbook printing charge                         5,000
         Error made by Daddy in recording
                Check no. 45 (issued in Dec)              35,000
         NSF Check                                                        110,000              345,000
                                                                                                                        3,145,000
Less:  Outstanding check                                   100,000
          Note collected by bank (includes
                P15,000 interest)                                  215,000               315,000
Balance per book                                                                                2,830,000
The entity had P200,000 cash on hand on December 31, 2018.  What amount should be reported as
cash in the statement of financial position on December 31, 2018?
Group of answer choices

d. P 2,895,000

b. P 2,930,000

a. P 3,130,000

c. P 3,095,000

12. Luz Company had the following bank reconciliation on June 30, 2018:
Balance per bank statement, June 30                                       3,000,000
Deposit in transit                                                                                      400,000
Total                                                                                                              3,400,000
Outstanding check                                                                                (900,000)
Balance per book, June 30                                                              2,500,000
The bank statement for the month of July showed the following:
Deposits (including P200,000 note collected
 for Luz)                                                                                                      9,000,000
Disbursements (including P140,000 NSF check
    And P10,000 service charge)                                                    7,000,000
All reconciling items on June 30 cleared through the bank in July.  The outstanding checks totaled
P600,000 and the deposit in transit amounted to P1,000,000 on July 31.
What is the cash balance per book on July 31?
Group of answer choices

c. P 5, 400,000

d. P 5,550,000

b. P 5,350,000

a. P 4,500,000

THEORY

13. Which of the following measurement attributes is not currently used in practice?

Group of answer choices

c. net realizable value

d. inflation-adjusted cost

b. current replacement cost

a. present value

14. Financial information exhibits the characteristic of consistency when

Group of answer choices

c. accounting entities give similar events the same accounting treatment each period.

b. extraordinary gains and losses are shown separately on the income statement.

d. expenditures are reported as expenses and netted against revenue in the period in which they are
paid.

a. accounting procedures are adopted which smooth net income and make results consistent between
years.

15. Historical cost has been the valuation basis most commonly used in accounting because of its
Group of answer choices

a. conservatism
c. accuracy

b. timeliness

D. reliability

16. When financial reports from two different companies have been prepared and presented in a
similar manner, the information exhibits the characteristic of
Group of answer choices

b. comparability

a. consistency

c. relevance

d. reliability

17. Accounting for inventories by applying the lower-of-cost-or- market is an example of the
application of
Group of answer choices

b. comparability

d. materiality

c. consistency

a. conservatism
 PreviousNext 

18. An item would be considered material and therefore would be disclosed in the financial
statements if
Group of answer choices

d. large enough to make a difference to the users.

b. the impact on earnings is greater than 3 percent

a. the expected benefits of disclosure exceed the additional costs.

c. the FASB definition of materiality is met.

19.  What accounting concept justifies the use of accruals and deferrals?
Group of answer choices

d. arm’s length transactions

b. corporate form of organization

a. going concern assumption

c. consistency characteristics

20. Which of the following is not an implication of the going-concern assumption?

Group of answer choices

a. The historical cost principle is credible.

b. Depreciation and amortization policies are justifiable and appropriate.

c. The current/noncurrent classification of assets and liabilities is justifiable and significant.

d. Amortizing research and development costs over multiple periods is justifiable and appropriate.

21. Recording the purchase price of a chalkboard eraser (with an estimated useful life of 10 years)
as an expense of the current period is justified by the
Group of answer choices

d. going concern assumption

b. comparability principle

c. materiality constraint

a. matching principle

22. Conservatism is best described as selecting an accounting alternative that

Group of answer choices
d. is least likely to mislead users of financial information.

c. overstates, as opposed to understates, liabilities.

b. has the least favorable impact on owners' equity.

a. understates assets and/or net income.

23. The financial statements that are prepared for the business are separate and distinct from the
owners according to the
Group of answer choices

c. matching principle

b. economic entity concept

a. going concern principle

d. full disclosure principle

24. The branch of accounting that is concerned primarily with providing information for internal
users is called
Group of answer choices

a. financial accounting

b. income tax accounting

d. auditing

c. managerial accounting

25. The branch of accounting that is concerned with providing information to present and potential
creditors of an enterprise is
Group of answer choices

a. financial accounting

b. auditing
d. income tax accounting

c. managerial accounting

THEORY AGAIN

26. Inventories are defined by all of the following, except

Group of answer choices

d. Used in the production or supply of goods and services for administrative purposes

a. held for sale in the ordinary course of business

c. In the form of materials or supplies to be consumed in the production process or rendering of

services

b. In the process of production for such sale

27. The cost of purchase of inventory does not include

Group of answer choices

b. Import duties and irrecoverable taxes

a. Purchase price

d. Trade discounts, rebates and other similar items

c. Freight and handling costs

28. The costs of conversion of inventories include all, except

Group of answer choices

c. Systematic allocation of variable production overhead

a. Cost directly related to the units of production, such as direct labor

d. Systematic allocation of administrative overhead

b. Systematic allocation of fixed production overhead

 29. Fixed production overhead include all, except
Group of answer choices

d. Cost of factory management and administrative

a. Indirect materials and indirect labor

b. Depreciation of factory building

c. Maintenance of factory equipment

30. Which of the following costs of conversion cannot be included in cost of inventory?
Group of answer choices

c. Salaries and sales staff

d. Factory overhead based on normal capacity

b. Factory rent and utilities

a. Cost of direct labor

31. Which of the following would not be reported as inventory?

Group of answer choices

c. Partially completed goods

a. Land acquired for resale by a real estate firm

b. Shares and bonds held for resale by brokerage firm

d. Machinery acquired by a manufacturing company for use in the production process

32. Which of the following costs should be included in inventory valuation?

Group of answer choices

c. storage cost relating to finished goods

b. abnormal material usage

a. administrative costs

d. fixed production overhead

SAMPLE QUIZ 4

33. Account of the petty cash fund of Times Company showed its composition as follows:
Coins and currency                                                                                                         3,300
Paid vouchers:
            Transportation                                                                                 600
            Gasoline                                                                                              400
            Office supplies                                                                                500
            Postage stamps                                                                              300
            Due from employees                                                                1, 200            3,300
Manager’s check returned by bank marked
            “NSF”                                                                                                                          1,000
Check drawn by company to the order of
            petty cash custodian                                                                                       2,700
 
What is the correct amount of the petty cash fund for statement presentation purposes?
Group of answer choices

C. 10,000

D. 6,000

B. 7,000

9,000
 
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Question 21 pts
34. On December 31, 2016, Czar Company exchanged ordinary shares of P50 par value for the
following assets:
  A trademark valued at P1,500,000
 A building, including land, valued at P6,500,000 (20% of the value is for the land)
 A franchise right. No estimate of the value is available at the date of exchange.

 
The ordinary share of Czar Company is selling at P90 on the date of exchange. How much should be
recognized as value of the franchise on the date of exchange?
Group of answer choices

d. o

b. 1,500,000

c. 2,000,000

a. 1,000,000
 
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Question 31 pts
35. Alcaraz Company paid P5,000,000 to purchase the following portfolio of intangibles with fair
value as indicated:
Internet domain name                                                                1,500,000
Order backlog                                                                                 1,200,000
In-process research and development                             2,400,000
Operating permit                                                                              900,000
 
In addition, Alcazar spent P2,000,000 to run an advertising campaign to boost its image in the local
community. How much should be recognized as cost of the in-process research and development?
Group of answer choices

a. 0

b. 2,800,000

d. 2,000,000

c. 2,400,000
 
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Question 41 pts
 36. Tobin Company incurred P1,600,000 of research and development costs to develop a product
for which a patent was granted on January 1, 2016. Legal fees and other costs associated with
registration of the patent totaled P300,000. On March 31, 2016, Tobin paid P450,000 for legal
fees in a successful defense of the patent. The total amount capitalized for this patent through
March 31, 2016 should be:
Group of answer choices

a. 2,350,000

b. 3,000,000

d. 750,000

c. 2,050,000
 
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Question 51 pts
37. On January 1, 2010, Lava Company purchased a patent for a new consumer product for
P900,000. At the time of purchase, the patent was valid for 15years. However, the patent’s
useful life was estimated to be only 10years due to the competitive nature of the product. On
December 31, 2016, the product was permanently withdrawn from sale under governmental
order because of a potential health hazard in the product. What amount should Lava charge
against income during 2016, assuming amortization is recorded at the end of each year?
Group of answer choices

d. 90,000

b. 630,000

a. 720,000

c. 540,000
 
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Question 61 pts
38. On January 1, 2015, Bay Company acquired a land lease for 21 years with no option to renew.
The lease required Bay to construct a building in lieu of rent. The building completed on
January 1, 2016, at a cost of P8,400,000, will be depreciated using the straight line method. At
the end of the lease, the building’s estimated fair value will be 4,200,000. What is the building’s
carrying amount in Bay’s December 31, 2016 statement of financial position?
Group of answer choices

d. 8,200,000
a. 7,980,000

c. 8,190,000

b. 8,000,000
 
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Question 71 pts
39. On January 1, 2018, Mendez Company had the following balances related to a defined benefit
plan :       
Fair value of plan assets.                               5,750,000
Projected benefit obligation.                           6,500,000
Current service cost.                                         600,000
Settlement discount rate.                                        10%
Expected return on plan assets                               8%
Actual return on plan assets.                            700,000
Contribution to the plan.                                    900,000
Benefits paid to retirees.                   .               100,000
What is the employee benefit expense ?
Group of answer choices

b. 650,000

d. 675,000

a. 700,000

c. 600,000
 
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Question 81 pts
40. On January 1, 2018, David Company reported the fair value of plan assets at P6,000,000 and
projected benefit obligation at P8,000,000. During the year, the entity made a lump sum
payment to a certain plan participants in exchange for their rights to receive specified
postemployment benefits. The lump sum payment was P800,000 and the present value of the
defined benefit obligation settled was P1,000,000. In addition, the following data are gathered
during the current year:
Current service cost.                                        900,000
Actual return on plan assets.                            800,000
Contribution to the plan.                                   700,000
Discount rate.                                                         12%
What is the employee benefit expense ?
Group of answer choices

d. 1,860,000

c. 1,140,000

b. 900,000

a. 940,000
 
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Question 91 pts
41. At the beginning of the current year, Ignacio Company leased a van with a fair value of
P3,600,000 under a finance lease. The lease term is 6 years and the PV of minimum lease
payments is P3,552,000. The useful life the van was estimated at 8 years with no residual
value. The entity used a straight line depreciation. What is the depreciation charge on the van
for the current year ?
Group of answer choices

d. 444,000

c. 592,000

b. 450,000

a. 600,000
 
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Question 101 pts
42. Balajadia Company leased an equipment for 6 years from another entity on January 1, 2015.
The entity recorded the asset at P4,800,000 which included a bargain purchase option of
P100,000. The equipment had an eight year useful life and a fair value of P300,000 at the end
of the useful life. On January 1, 2021, the entity did not exercise the bargain purchase option.
 
What is the loss on finance lease to be recognized in 2021 ?
Group of answer choices
c. 200,000

a. 1,325,000

b. 1,425,000

d. 0
 
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Question 111 pts
43. Nike company paid cash  dividends of P600,000 and reported net income of P1,550,000. The
ordinary shareholders' equity at year-end was P5,000,000 and the entity had 200,000 ordinary
shares outstanding.
 
What is the  book value per ordinary share ?
Group of answer choices

a. 25

c. 7.75

b. 22

d. 3
 
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Question 121 pts
44. Fatima Company provided the following information for 2015 and 2016:
Ordinary shareholders' equity, December 31, 2015                                  4,400,000              
Ordinary shareholders' equity, December 31, 2016                                  5,000,000          
Ordinary shares , December 31, 2016                                                     160,000          
Preference dividends paid for 2016                                                        100,000        
What is the book value per ordinary share for 2016?
Group of answer choices

b. 31.25

c. 30.62
d. 26.88

a. 27.50
 
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Question 131 pts
45. Lames Company had outstanding 50,000 8% preference shares with P100 par value and
125,000 P30 par value ordinary shares. Dividends have been paid every year except last year
and the current year. The reference shares are cumulative and nonparticipating. The entity
distributed P2,500,000 as dividend in the current year.
What is the dividend payable to the ordinary shareholders?
Group of answer choices

d. 0

b. 1,700,000

a. 2,100,000

c. 2,500,000
 
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Question 141 pts
46. On December 31, 2016 and 2015, Cruz Company had 100,000 ordinary shares  and 10,000
cumulative preference shares of 5% , P100 par value. No dividends were declared on either
the preference or ordinary share in 2016 or 2015. Net income for the current year was
P900,000.
 
What amount should be reported as basic earnings per share?
 
Group of answer choices

c. 9.00

a. 8.50

c. 5.00

b. 9.50
 
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Question 151 pts
47. Aris Company computed a pretax accounting income of P5,000,000 for the first year of
operations.
Nondeductible expenses 200,000
Nontaxable revenue 500,000
Gross income on installment sales reported in accounting income but not in taxable income 1,000,000
Provision for doubtful accounts 100,000
Income tax rate 30%
What is the current tax expense?
 
Group of answer choices

a. 1,140,000

d. 1,110,000

b. 1,410,000

c. 1,500,000
 
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Question 161 pts
48. Dunn Company reported in the income statement for the current year P900,000 income before
provision for income tax.
 
Rent received in advanced 150,000
Interest income on time deposit 200,000
Depreciation deducted for income tax purposes in excess of financial depreciation 100,000
Income tax rate 30%
 
What is the current provision for income tax for the current year?
 
Group of answer choices
c. 210,000

d. 255,000

b. 225,000

a. 270,000
 
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Question 171 pts
49. In an effort to increased sales, Mills Company inaugurated a sales promotional campaign on
June 30, 2010. Mills placed a coupon redeemable for a premium in each package of cereal
sold. Each premium cost Mills P20 and five coupons must be presented by a customer to
receive a premium.  Mills estimated that only 60% of the coupons issued will be redeemed. For
the six months ended December 31, 2010, the following information is available:
 
Packages of cereal sold                        160,000
Premiums purchased                               12,000
Coupons redeemed                                 40,000
What is the estimated liability for premiums on December 31, 2010?
Group of answer choices

b. 288,000

a. 160,000

d. 384,000

c. 224,000
 
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Question 181 pts
50. During 2010, Day Company sold 500,000 boxes of cake mix under a new sales promotional
program.  Each box contains one coupon which entitles the customer to a baking pan upon
remittance of P40. Day pays P50 per pan and P5 for handling and shipping. Day estimates that
80% of the coupons will be redeemed, even though only 300,000 coupons had been processed
during 2010.
 
What amount should Day report as a liability for unredeemed coupons on December 31, 2010?
Group of answer choices
c. 3,000,000

d. 1,000,000

c. 1,500,000

d. 5,000,000
 
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Question 191 pts
51. Kemp Company must determine the December 31, 2010 accruals for advertising and rent
expense.  A P50,000 advertising bill was received January 7, 2011, comprising costs of
P35,000 for advertisements in December 2010 issues, and P15,000 for advertisements in
January 2011 issues of the newspaper.
A store lease, effective December 16, 2009, calls for fixed rent of P120,000 per month, payable one
month from the effective date and monthly thereafter. In addition, rent equal to 5% of net sales over
P6,000,000 per calendar year is payable on January 31 of the following year. Net sales for 2010 totaled
P9,000,000.
 
In the December 31, 2010 statement of financial position, what amount should be reported as accrued
liabilities?
Group of answer choices

d. 245,000

a. 260,000

c. 210,000

b. 185,000
 
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Question 201 pts
52. On January 1, 2012, Flax Company purchased a machine for P5,280,000 and depreciated it by
the straight line method using an estimated useful life of eight years with no residual value.
On January 1, 2015, the entity determined that the machine had a useful life of six years from the date
of acquisition and the residual value was P480,000.
An accounting change was made in 2015 to reflect these additional data.
 
What is the accumulated depreciation for the machine on December 31, 2015?
Group of answer choices

b. 3,080,000

a. 2,920,000

d. 3,520,000

c. 3,200,000
 
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Question 211 pts
53. On January 1, 2013, Milan Company purchased an equipment for P6,000,000. The equipment
had been depreciated using the straight line with residual value of P600,000 and useful life of
20 years. On January 1, 2015, the entity determined that the remaining useful life is 10 years
and the residual value is P800,000
What is the depreciation for 2015?
Group of answer choices

c. 466,000

a. 270,000

d. 582,500

b. 546,000
SAMPLE QUIZ 5

54. John Company owned a machine that was bought on January 1, 2015 for P3,760,000. The
machine was estimated to have a useful life of five years and a residual value of P240,000. The
entity used the sum of years' digits method of  depreciation.
On January 1, 2018, the entity determined that the total useful life of the machine should have been
four years and the residual value is P352,000.
 
What amount should be recorded as depreciation expense on the machine for 2018?
 
Group of answer choices

c. 592,000

d. 704,000
a. 192,000

b. 444,000

55. On January 1, 2018, Mat Company was granted by a local government authority 5,000
hectares of land located near the slums outside the city limits. The condition attached to this
grant was that the entity shall clean up this land and lay roads by employing laborers from the
village where the land is located.
The entire operation will take 3 years and is estimated to cost P10,000,000. This amount will be spent
P2,000,000 for 2018, P2,000,000 for 2019, and P6,000,000 for 2020. The fair value of this land is
P12,000,000.
 
What is the grant income that should be recognized for 2018?
 
Group of answer choices

b. 4,500,000

c. 4,000,000

d. 0

a. 40,000,000

56. Reid Company, which began operations on January 1, 2016, has elected to use cash basis
accounting for tax purposes and accrual basis accounting for the financial statements.
The entity reported sales of P1,750,000 and P800,000 in the tax returns for the years ended December
31, 2017 and 2016.
The entity reported accounts receivable of P300,000 and P500,000 on December 31, 2017 and 2016,
respectively.
 
What amount should be reported as sales in the income statement for 2017?
 
Group of answer choices

b. P 1,550,000
c. P 1,950,000

d. P 2,050,000

a. P 1,450,000

57. During the current year, Arianna Grande Company had the following activities related to
financial operations:

Payment for the early retirement of long-term bonds

7,500,000
payable (carrying amount of ₱ 7,400,000)

Distribution in the current year cash dividend declared in

620,000
prior year to preference shareholders

Carrying amount of convertible preference shares

1,200,000
converted into ordinary shares

Proceeds from sale of treasury shares (carrying amount of

950,000
₱ 860,000)

 
In the statement of cash flows for the current year, what amount should be reported as net cash used in
financing activities?
Group of answer choices

a. P 7,170,000

b. P 7,160,000

c. P 5,970,000

d. P 5,350,000

58. Charlie Puth Company provided the following data for the preparation of the statement of cash
flows for the current year:
 

Dividends declares and paid     800,000

Net cash used in investing activities   (2,500,000)

 Net cash used in financing activities   (800,000)

       

    December 31 January 1

Cash   2,100,000 1,200,000

Other assets   21,000,000 22,700,000

Liabilities   10,500,000 11,700,000

Share capital   2,000,000 2,000,000

Retained earnings   10,600,000 10,200,000

 
What is the net cash provided by operating activities?
Group of answer choices

a. P 4,200,000

b. P 2,400,000

c. P 4,500,000

d. P 5,400,00

59. Poseidon Company factored without recourse ₱ 2,000,000 of accounts receivable with a bank.
The finance charge is 3% and 5% was retained to cover sales discount, sales returns and
allowances.
 
What amount of cash was received on the sale of accounts receivable?
 
Group of answer choices
c. P 1,840,000

d. P 2,000,000

a. P 1,940,000

b. P 1,900,000

60. On January 1, 2026, Aphrodite Company reported accounts receivable ₱ 2,070,000 and
allowance for doubtful accounts ₱ 80,000. The entity provided the following data:

  Credit Sales Write offs Recoveries

2013 11,100,000 260,000 22,000

2014 12,250,000 295,000 37,000

2015 14,650,000 300,000 36,000

2016 15,000,000 310,000 40,000

 
The collection from customers during 2026 totaled ₱ 14,000,000, excluding recoveries.
Doubtful accounts are provided for as a percentage of credit sales.
The entity calculated the percentage annually by using the experience of the three years prior to the
current year.
 

1. What amount should be reported as doubtful accounts expense for 2026?

Group of answer choices

b. P 300,000

c. P 222,000

d. P 378,000

a. P 310,000
 61. Brooke Company used a perpetual inventory system. At the end of 2019, the inventory
account was P360,000 and P30,000 of those goods included in ending inventory were
purchased FOB shipping point and did not arrive until 2019. Purchases in 2019 were
P3,000,000. The perpetual inventory records showed an ending inventory of P420,000 for
2019. A physical count at the end of 2019 showed an inventory of P380,000. Inventory
shortages are included in the cost of goods sold.
 
What amount should be reported as cost of goods sold for 2019?
 
Group of answer choices

b. P 2,980,000

c. P 3,000,000

d. P 3,010,000

a. P 2,940,000

62. On December 26, 2019, Branigan Company purchased goods costing P1,000,000 FOB
Shipping point. The goods were received on December 28, 2019. Costs incurred by the entity
in connection with the purchase and delivery of the goods were normal freight charge P30,000,
handling cost P20,000, insurance on shipment P5,000 and abnormal freight charge for express
shipping P12,000.
           
What is the total cost of the inventory?

1. 1,050,000
2. 1,030,000
3. 1,055,000
4. 1,067,000

Group of answer choices

c. P 1,055,000

d. P 1,067,000

a. P 1,050,000

b. P 1,030,000
 63. Ram Company provided the following information at the end of current year.
Finished goods in storeroom, at cost,
            including overhead of P400,000 or 20%                                      2,000,000
Finished goods in transit, including freight charge
            of P20,000, FOB shipping point                                                            250,000
Finished goods held by salesmen, at selling price,
            cost, P100,000                                                                                              140,000
Goods in process, at cost of materials and direct labor                             720,000         
Materials                                                                                                                  1,000,000
Materials in transit, FOB destination                                                             50,000
Defective materials returned to suppliers                                                   100,000
Shipping supplies                                                                                                        20,000
Gasoline and oil for testing finished goods                                                110,000
Machine lubricants                                                                                                    60,000
 
What is the correct amount of inventory?
 
Group of answer choices

b. P 4,170,000

c. P 4,270,000

d. P 4,090,000

a. P 4,000,000

64. Scotch Company took a physical inventory at the end of the year and determined that
P1,900,000 of goods were on hand. In addition, the entity determined that P240,000 of goods
purchased were in transit shipped FOB destination. The goods were actually received three
days after the inventory count. The entity sold P100,000 worth of inventory FOB destination.
Such inventory is in transit at year-end.
 
What amount should be reported as inventory at year-end?
 
 
Group of answer choices

c. P 2,000,000

d. P 2,240,000

a. P 1,900,000

b. P 2,140,000

65. On January 1, 2016, Roma Company purchased equipment for P4,000,000. The equipment
has a useful life of 10 years and a residual value of P400,000.
On January 1, 2020, the entity determined that the useful life of the equipment was 12 years from the
date of acquisition and the residual value was P460,000.
What is the depreciation of the equipment for 2020?
Group of answer choices

b. P 2,62,500

c. P 360,000

d. P 300,000

a. P 175,000

66. Fell Company operates a retail grocery store that is required by law to collect refundable
deposits of P5 on soda cans. Information for the current year follows: 
Liability for refundable deposit - January 1                                 150,000
Cans of soda sold                                                                    100,000
Soda cans returned                                                                   110,000
 
On February 1, Fell subleased space and received a P25,000 deposit to be applied against rent at the
expiration of the lease in 5 years. In the December 31 statement of financial position, what amount
should be reported as current liability for deposit?
 
Group of answer choices
c. P 100,000

d. P 25,000

a. P125,000

b. P 140,000