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    ACC-132 Quiz 4 Answer Key

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    G18 Yna Recinto

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    ACC-132 Quiz 4 Answer Key

    Uploaded by

    G18 Yna Recinto
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    101 views3 pages

    ACC-132 Quiz 4 Answer Key

    Uploaded by

    G18 Yna Recinto

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    © All Rights Reserved
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    MIRIAM COLLEGE

    Katipunan Rd, Quezon City

    SCHOOL OF BUSINESS, ENTREPRENEURSHIP AND ACCOUNTANCY


    ACCOUNTANCY DEPARTMENT

    ACC-132 AUDITING AND ASSURANCE: CONCEPTS AND APPLICATIONS 1


    2nd SEMESTER, SY 2023-2024
    QUIZ 4

    ANSWER SHEET

    Name: __________________________________ Year Level and Section:


    __________________

    TEST I – TRUE OR FALSE (40%)

    1 TRUE 11 TRUE
    2 TRUE 12 TRUE
    3 TRUE 13 TRUE
    4 TRUE 14 TRUE
    5 TRUE 15 TRUE
    6 TRUE 16 TRUE
    7 TRUE 17 TRUE
    8 TRUE 18 TRUE
    9 TRUE 19 TRUE
    10 TRUE 20 TRUE

    TEST II. PROBLEM SOLVING (60 points)


    1. 750,000 11. 11,625,000
    2. 2,000,000 12. ZERO
    3. 2,400,000 13. 5,750,000
    4. 20,900,000 14. 4,900,000
    5. 23,900,000 15. 100,000
    6. 3,050,000 16. 100,000
    7. 6,950,000 17. 6,000,000
    8. 1,000,000 18. 72,158 RE
    9. 1,000,000 19. 161,506 UG - OCI
    10 ZERO 20. 43,782 (DECREASE)
    1. SOLUTION:
    Net Income from April 1 to December 31
    (2,500,000 x 9/12 x 40%) P 750,000
    Investment income for 2024 P 750,000

    2. Acquisition Cost P 10,000,000


    Less Book Value of net assets acquired
    (20,000,000 x 40%) 8,000,000
    Goodwill P 2,000,000

    3. ANSWER: P 2,400,000

    SOLUTION:
    Share in 2024 Net Income (30% x 8,000,000) P 2,400,000

    4. ANSWER: P20,900,000

    SOLUTION:
    Acquisition Cost, January 2, 2024 P 20,000,000
    Add: Share in 2024 net Income 2,400,000
    Total 22,400,000
    Less: Share in 2024 dividend (30%x 5,000,000) 1,500,000
    Investment Balance P 20,900,000

    5. SOLUTION:
    Investment Balance, December 31, 2024 P 20,900,000
    Add: Share in Net Income from Jan. 1 to
    June 30, 2025 (30% x 10,000,000) 3,000,000
    Investment Balance P 23,900,000

    6. SOLUTION
    Sales Price P 15,000,000
    Less: Cost of Investment Sold (23,900,000/2) 11,950,000
    Gain P 3,050,000

    7. SOLUTION
    Share in the net income P3,000,000
    Gain on sale 3,050,000
    Dividend income (6,000,000 x 15%) 900,000
    Total amount to be presented in the P&L P6,950,000

    8. SOLUTION

    Original cost P 7,000,000


    Cash Advances 2,000,000
    Total 9,000,000
    Net Loss from 2020 to 2022(40% x 20,000,000) ( 8,000,000)
    Investment Balance, December 31, 2022 1,000,000

    9. SOLUTION
    Net Loss 2023 (40% x 4.000,000) P 1,600,000
    Loss to be reported should be equal to the
    investment balance only P 1,000,000

    10. SOLUTION
    Investment balance as of 12-21-23 is Zero.

    11. SOLUTION:
    FA at FV through OCI 9,645,000
    Add: Unrealized loss 1,980,000
    Investment, acquisition cost 11,625,000

    12. Solution: The answer is Zero (0).


    13. Solution : P5,750,000
    14. Solution: P4,900,000

    15. SOLUTION:
    Cash dividend (20,000 X 5) 100,000

    16. SOLUTION:
    Total Cost of Investment P7,500,000
    Number of shares after the stock dividend 30,000
    Cost per share P 250
    Multiply by 10,000 shares sold 10,000
    Cost of shares sold P2,500,000
    Selling Price P2,600,000
    Gain on sale P 100,000

    17. SOLUTION:
    Remaining shares 20,000
    Multliply by fair value 300.00
    Cost of the Investment P6,000,000

    18. SOLUTION – (34,037 + 38,121) = 72,158


    19. SOLUTION – 161,506 unrealized gain - OCI

    Date Interest Interest Amortization Carrying Fair Value Increase/


    Received Income Amount Decrease
    1-1-2019 2,783,640
    12-31-19 300,000 334,037 34,037 2,817,677 3,030,000 212,323
    12-31-20 300,000 338,121 38,121 2,855,798 2,940,000 84,202
    12-31-21 300,000 342,696 42,696 2,898,494 3,060,000 161,506

    20. SOLUTION – P43,782 net decrease

    Date Interest Interest Amortization Carrying Fair Value Increase/


    Received Income Amount Decrease
    1-1-2020 951,980
    12-31-20 100,000 114,238 14,238 966,218 1,010,000 43,782
    12-31-21 100,000 115,946 15,946 982,164 1,030,000 47,836

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