NEW SOLVED: FAR12-SET-B-1.docx – ST PAUL UNIVERSITY SURIGAO

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INSTRUCTION: Read the questions carefully. Use the bubble sheet and shade the circle that corresponds to

your answer for each question. Avoid erasures.

  1. The cash account in the current section of the December 31, 2018 balance sheet of King Company consists of:

Cash in banks P2,250,000

Cash restricted for additions to plant (expected to be disbursed in 2020) 3,000,000

Petty cash funds (all funds were replenished on December 31, 2018 30,000

Description

FAR12-SET-B-1.docx-FAR12-SET-B-1.docx – ST PAUL UNIVERSITY SURIGAO

INSTRUCTION: Read the questions carefully. Use the bubble sheet and shade the circle that corresponds to

your answer for each question. Avoid erasures.

  1. The cash account in the current section of the December 31, 2018 balance sheet of King Company consists of:

Cash in banks P2,250,000

Cash restricted for additions to plant (expected to be disbursed in 2020) 3,000,000

Petty cash funds (all funds were replenished on December 31, 2018 30,000

Included in the cash in banks is a compensating balance of P750,000 against short term borrowing

arrangements at December 31, 2018. The compensating balance is not legally limited as to withdrawal

by King Company. What is the correct cash balance of King Company at December 31, 2018?

  1. P2,280,000 B. P3,030,000 C. P4,530,000 D. P5,280,000

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NEW SOLVED: FAR12-SET-B-1.docx – ST PAUL UNIVERSITY SURIGAO quantity

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Category: FAR12-SET-B-1 Tags: A draft of Bell Company’s 2018 statement of financial position reported total assets of, BUY PLAGIARISM FREE PAPER FOR ACC 561 COURSE, FAR12-SET-B-1, FAR12-SET-B-1.docx – ST PAUL UNIVERSITY SURIGAO, respectively. All sales and purchases were made on credit. Various operating expenses of P321

Description

NEW SOLVED: FAR12-SET-B-1.docx – ST PAUL UNIVERSITY SURIGAO

  1. PAUL UNIVERSITY SURIGAO

Cor. San Nicolas & Rizal Streets

8400 Surigao City, Philippines

COLLEGE OF BUSINESS & TECHNOLOGY

REMOVAL/QUALIFYING EXAMINATION

Subject: FINANCIAL ACCOUNTING & REPORTING

Name: Date:

FAR12-SET-B-1.docx

 

INSTRUCTION: Read the questions carefully. Use the bubble sheet and shade the circle that corresponds to

your answer for each question. Avoid erasures.

  1. The cash account in the current section of the December 31, 2018 balance sheet of King Company consists of:

Cash in banks P2,250,000

Cash restricted for additions to plant (expected to be disbursed in 2020) 3,000,000

Petty cash funds (all funds were replenished on December 31, 2018 30,000

Included in the cash in banks is a compensating balance of P750,000 against short term borrowing

arrangements at December 31, 2018. The compensating balance is not legally limited as to withdrawal

by King Company. What is the correct cash balance of King Company at December 31, 2018?

  1. P2,280,000 B. P3,030,000 C. P4,530,000 D. P5,280,000

FAR12-SET-B-1.docx

  1. The following information is shown in the accounting records of Container Company:

January 1 December 31

Cash P186,000 P –

Accounts receivable P201,000 P273,000

Merchandise inventory P258,000 P234,000

Accounts payable P159,000 P144,000

Total sales and cost of goods sold for 2018 were P2,394,000 and P1,749,000, respectively. All sales and

purchases were made on credit. Various operating expenses of P321,000 were paid in cash. Assume that

there were no other pertinent transactions.

What is the cash balance on December 31, 2018 of Container Company?

  1. P324,000 B. P447,000 C. P758,000 D. P915,000

FAR12-SET-B-1.docx

  1. In preparing its bank reconciliation for the month of December 31, 2018, Promotion Company has the

following information:

Balance per bank statement, December 31 396,550

Deposit in transit, December 31 68,750

Outstanding checks, December 31 63,250

Promotion’s account erroneously credited by bank on December 19 2,750

Bank service charges for December 550

What should be the balance of cash at December 31?

  1. P387,750 B. P398,750 C. P399,300 D. P402,050

FAR12-SET-B-1.docx

  1. A draft of Bell Company’s 2018 statement of financial position reported total assets of P1,093,750 of

which the following items were included:

Treasury share of Bell Company at cost, which Approximates market value on December 31 P 30,000

Unamortized patents 14,000

Cash surrender value of life insurance on corp. executives 17,125

Translation reserve – Debit 10,500

At what amount should Bell’s total assets be correctly reported in its December 31, 2018 statement of

financial position?

  1. P1,052,125 B. P1,053,250 C. P1,062,625 D. P1,063,750

FAR12-SET-B-1.docx

  1. Perry Company had the following items at December 31, 2018

Accounts payable P500,000

8% Notes payable- First bank, due July 1, 2019 1,000,000

Accrued expenses 600,000

On January 1, 2018, the capital of Mila Company was P2,600,000 and on December 31, 2018, the capital

was P3,600,000. During the current year, Mila, the owner, withdrew merchandise with carrying amount

of P150,000 which were marked to sell for P230,000, and paid a P400,000 note payable of the business

with interest of 10% for six months with a check drawn on a personal checking account.

The net income for 2018 is

  1. 730,000 B. 810,000 C. 1,190,000 D. 1,270,000

FAR12-SET-B-1.docx

Megabank granted an 8%, 3-year P6,000,000 loan to Global Company on January 1, 2018. The interest

on the loan is payable every December 31. Megabank incurred P520,600 of direct origination cost but an

origination fee of P200,000 was charged against Global Company. The effective rate on the loan as a

result of the origination fee and cost is now 6%.

What is the carrying value of the loan on January 1, 2018 in Megabank’s accounting books?

  1. P5,800,000 B. P6,000,000 C. P6,320,000 D. P6,520,600
  2. Josey Company entered into a contract to acquire a new machine for is factory. The machine, which had

a cash price of P2, 000,000 was paid as follows:

Down payment 400, 000

Note payable in 3 equal annual installments 1,200,000

20,000 ordinary shares with a par value of

P25 and fair value of P40 per share 800, 000

2,400,000

FAR12-SET-B-1.docx

Prior to the machine’s use, installation cost of P50, 000 was incurred. The machine has an estimated

residual value of P100, 000. What is the initial cost of the machine?

  1. 2, 000, 000 B. 2, 400, 000 C. 2, 050, 000 D. 2, 450, 000
  2. Lax Company recently acquired two items of equipment. The transactions are described as follows:

vAcquired a press at an invoice price of P3,000,000 subject to a 5% cash discount which was

taken. Costs of freight and insurance during shipment were P50,000 and installation cost

amounted to P200,000.

vAcquired a welding machine at an invoice price of P2,000,000 subject to a 10% cash discount

which was not taken. Additional welding supplies were acquired at a cost of P100,000.

What is the total increase in the equipment account as a result of the transactions?

  1. 4,900,000 B. 5,000,000 C. 5,100,000 D. 5,200,000
  2. Huff Company acquired 20,000 ordinary shares of Post Company on October 1, 2017, at a cost of

P4,400,000. On April 1, 2018, Post distributed a 10% stock dividend when the market price of the share

was P300. On December 30, 2018, Huff sold 2,000 shares for P640,000.

For the year ended December 31, 2018, how much should Huff report as gain on sale?

  1. 240,000 B. 640,000 C. 400,000 D. 40,000

FAR12-SET-B-1.docx

  1. Y’s 2018 income statement reported P90,000 income before provision for income taxes. To compute the

provision for income taxes, the following 2018 data are provided:

Rent received in advance

(included in taxable income when received) P 16,000

Income exempt from government bonds 20,000

Depreciation deducted for income tax purposes in

excess of depreciation reported for final statement

purposes

10,000

Enacted corporate income tax rate 32%

The current income tax liability to be reported in Y’s December 31, 2018 balance sheet is

  1. P19,200 B. P24,320 C. P25,600 D. P27,520

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