hool of Accountancy First Pre-Board Examination nee ene 11:45 AM - 2:45 PM Aecouering Financial Occomting & Reporting INSTRI one HONS: Select the conect answer for each of the following questions. Mark only one answer shen cnitem by shading the box corresponding to the letter of your choice on the sheet provided. STRICTLY NO ERASURES ALLOWED. Use pencii no. 2 only. AID Cor ese 7 MPEAY tecognizes construction revenue ond expenses using the percentage of F008 1ettoh Method. During 20x4, a single tong-term project wos begun which continued through 2005. Information on the project were os follows: 1 Account Rocawabie rar constuction contact Consiniction expensos.....sscosa Consttucton in progress :| Partial btings on contioct 700,000 _-_|_840.000 The profit recognize from ihe long-term construction contract should amount to: 20x4 205, D4 2 2. P-44,000 456,000 ©, 34,000 256,000 b. 44,000, 200,000 34.000 100.000 2. Remington Construction Company uses the percentage-of-completion mettied. During 20x4, the ‘company entered into a fixed-price contract to construct a building for Sherman Company for 30,000,000. the 1etails pertoin 10 the contract: _ ____| At December 3i, 20x4 To 25%. Estate toll con of conic L 22500000 Gross profit recognized to date 1.875) The omount of construction costs incurred during 20x5 wos 2. P15,000.000 c. P5.625,000 b. 9,375,000 2,500,000 3. Karen ond Andrea are currenily changing their partnership profit and loss rotios from 75/25 to 40/40. They have created a list of assets that have morket and book valve differences. One of the assets is a building with a P300,000 market value and P200,000 book value. Two years after changing the profit and loss ratios, the building is sold for P380,000. How much of the profit is allocated to Karen? ‘a. ~ P108,000 cc. P135,000 b.._P123,000 d.P183,000 4, The JPB partnership reported net income of P160.000 for the year ended December 31, 20x4, ‘According to the porinership agreement, partnership profits and losses are to be distiouted os follows: SOIONES secs ecesveseseeeee ‘ 50,000” |"P60,000 | P30,000 Bonus on net income . : a 10% Sh 10% Remainder fi positive) .... 5 60% 30% | 10% Remainder {if negative) ........ ---| 30% | 40% | 30% How should partnership net income for 20x4 be allocated to J, P, and B? i eg B i P B ©. 96,000 P48,000 P16,000 —c.-—P60,000 P60,000P40,000 b. P58,000 P64.000 P3800 d._——P46,000 8,000 44,000 5. william desis fo purchase a one-fourth capital and profit and loss interest in the partnership of Hi, George, and Dick. The three poriners agree to sell Wiliam one-fourth of their respective capital and profit and loss interests in exchange for a total payment of P40,000. The capital gecounls and the respective percentage interests in profits and losses immediately before the sole 10 Wiliam ore as follows:2 Page 2 Pe 40; foe) 2,008 opital { 4. i Coe i jo perocordes prot 0 he tr 3g goo! should J, and implies ion, what st See Lee OBC ewe aan 052 a f mesg a 2 46,000. P22. enetaaony ee GpeamP ‘waiom's acauisiti Use the following Information for questions 6 and 7: A partnership has the folowing copital balances: Boriness.— ‘Wikcain (40% of Guirnw ond iosses) Jennings (40%) LOR). nip interest. The 6. Darrow invests P270,000 in cash for a 30 percent ownership. ea Should ofiginol pariners. Goodwill is 1o be recorded. How much goo what is Darrow’s beginning capital balance? 2. 410,000 and P270,000 ©. P140,000 ond P189,000 'b.P140,000 and P270,000 ._ P410,000 and P189.000 money goes to the be recognized. and Darrow invests P250,000 in cash for a 30 percent ownership interest. The money goes to the business. No goodwit or other revaluation is 10 be recorded. After the transaction. wt Jennings's copital balance? a. P160,000 ©. 170,200 b. 168,000 a. P171,200 jsburied. and no additional 419 partnership has onty non-cosh attets. oil fabilties have been propery disbursed. ant liquidation expenses Oe eapectod, Ine marimum Dolenicl hss to ine parnonsia mn Ine maven process 4. the for motke! value of the non-cash assets B. the Book valve of the non-cosh aseels C. the esiimates proceeds from the #010 of the assets less the book valve of the non cosh ostels d. none of ine above 9. On January 1, 20x4, Orton Co. sold 4 used machine to King, Inc. for P350,000, On this doe, he machine had a depreciated cost of P245,000. King paid PS0.000 cosh on January 1 Sone cng signe @ P300,000 note bearing interest at 10% the note was payable in three annual insicimnene of P100,000 beginning January 1, 20x5. Orton appropriately accounted for the sale onder the instolment method. King made a timely payment of the fist instalment on January 1 does et P'130,000, which included interest of 30.000 to date of payment. At December 31, 20x8 crlon has detered gross profit of a. 70,000 cc. P60,000 b. 66,000 . P51,000 10. Cost estimates on a long-term contract may indicate that a loss will result the entire contract. in this case, the entire expected loss should be- A. Amortized over the total construction period 8, Recognized in the current period &: Geteres and recognizes when the contract is 50% complete ©. Celened and recognized when the contract is completed. ‘on the completion of 11. When A retired trom the partnership of A, . 8 and C, the final settlement of A’ s interest is less han his copitalbolance, Under the bonus method, the excess woul A. Reduce the capital balances of B and © 8. Increase the capital balances of Band © C. Be tecorded as an expense 0. Had no effect on the capital of 8 and CAdvanced Fi Hirst Pre. 4 Febru onc counting ss Sours omncice pee Sears vary 2018 * 11:45 AM lo 2:45 PM paos > 12. Which of the fol A. An income towing statements is true? pau = Branch, he elimination entries on the books of either the nome office of the Branch are made only for feported by the branch i: recorded by the home office cs a debit fo Income 8. the purpose of The tronster of entry. es reporing financiat stotements for externa! users. " branch net income fo the Home Otfice account represents @ Brench cl0sng ©. Upon instruction by the home office, Palawan branch sends cash to Bone! branch. The entry 10 record this transfer in the home otfice books is o debit fo Investment in Palawan Bronch ‘nd a credil 10 Investment in Bohol Branch Use the following information for question 13 to 14: ©0 and PP are portners sharing) profil in this proportion - 60:40. A borance sheet prepored {or INS ertners on April 1, 20x4 shows the following: Con 48,900“ Accounis paysbe ‘Accounts Receivable y2000 00. copta Inventiones... 165000 PP, capital Equipment <2 70.000 Lass Accumulated Depreciation ....... 45,900, 75,000 Total Assets 7320,000__ otal Lobillies & Corto cyeernent ore On this date, Ine pariners ogres to adil RR as a Partner. the lees of summarized below. : Assets and liabitties are to be restated as follows: = An allowance tor possible uncollectible of F°4.500is to be estabished, 1 inventones ore fo be restated ot their present replacement value of P170,000. 2 Accrued expenses of P4000 are to be Recognized. 00, PP and RR wil divide profits in the tatio of 5:3:2. Copitat bolonces of ine Dattners otter the formation of the new parinetship are to be in the aforementioned ratio, with OO and PP making cash seitiement between them outside of the partnership to adjust their capitals. and RR investing cosh in the partnership for his interest. 19, The cash to be invested by RR is 2. 60,250 <. P$0,000 b. P47,500 a 759.375 14, The totat capital of the partnership after the admission of RR is: a. P296875 cc. — P237.500 b, P301,250 6. P286,850 15. Cash seltiement between OO ond PP is: 0. OO will pay PP P17.537.50 c. QOwill invest P17.537.50 b. PP will pay OO P17.537.50 Gd. PP wilt withdraw P17.537 50 16. 00 is admitled into the partnership of RE and MI by investing cash equivalent to ' Which of the following is true atter the admission of DO? a. Assets of the partnership will increase b. Total partners’ equity remain the some . cc. RE ond MI capital decreased by "% G. Assels of the partnership wil remain the same Use the folowing information for question 17 ond 18: CC admits OD for partnership interest in his business. The-bolance sheet accounts of CC on November 30,20x4 priot to the admission of DD are as follows: of their copitel = = petits Grecits recs! ae isomte, Son. pega Seraue oe Seeger, iain wnogoeat feteseeieceecteniics _ ® ogreed that fr purposes of exfabishing CC's interes. the folowing adjsiments should be made: nN e 3, At.slowance for doubtlel accounts of 2% of accounts receivable is to be estabshed. randise inventory is to be valued at P160,000. ' Prepaid e: of -xPenses of 75,200 and accrued expenses of P3,200 are to be recognized.Page * orting fing & REPORT) yonciol ACCOUNT aang Bate! (ay 2018 erostin the fT. r third (1/3) i jve hi @ One ppb reinvest cohol Pisdore gem 17, the botance of the copital of CC before he OFT Ny “To. P227,280 ae ib. P230.120 eae 18, the toto axes tthe partnership ater the Fomor a. P373.720 Pai 19. Aperinership begs its fist yoor of operations wath the 5 oS | Winston. Copital | Oumam., Capital Solem, Coptoh se pvsszseeszse . . «as follows: soviclesol porneship, olpofiswalbe assigned @s 1OHOWS fe Rie ea os canton on anne solar of 20.000 with P10,000 ass¥aned 10, SSH 2 the perinon wil be attibvted inerest eee! To 10 percent of the copite the fst coy of the yer , + the remornder wi be asianed on @ 5:2: bonis. respectively. 2 Coch portner i olowed fo withdraw up 40 P10,000 per yest income for the ar of operations is #20.000 ond that net inc oe the maximum amount £80,000 | Assume thatthe net fs forthe fist yo Hon #20000 ond subseauen yer Ssume Oso tol each postr whos ttom the business Gach petiad, Who! ihe balance m Wrsvon's copuG cecount oF Hhe end tthe second yeor® o Pi02c08 ©. P0800 8. Plo«so0 Pion 00 20. A branch journel entry debiting Home Ofice ond credting Cath may be prepored tor ©. Ahome office's ronsmlfal of cosh tothe branch, DB. Aome office's cokection of branch's aecounls receivabie. A branch's aequiiion for cath of plan! aries 1 be caried in the home office accounting records. &. Ahome office's payment of branch expenses 21. Partner A firs! contributed 20.000 of capital into an existing partnership on February 1, 20x4 On June 1, 20x4, the partner contributed onother P20,000. On September 1. 20x4, the poriner withdrew P15.000 from the: partnership, Withdrawals in excess of 5.000 cre charged to the Partner's capital account. The partnership's fiscal yeor end is December 31 The annual weighted-cverage capital balance is @. 25,000 c P2834 b. P26,667 30,000 Use the following information for questions 22 and 23: 88 and CCC share profits ahd losses in a ratio of 2:3, respectively. BB and CC receive solary allowances ot P10,000 and P20,000, also respectively. and both partners receive 10% interest Losey upon the balance in their capital accounts on January |. Partners’ Grawings ate no! used am Getermining the average capital bolances. Total net income tor 20x4 is P6000. lt net income after Geducting the interest and sclary allocations is greater than P20.000, CC receives & bors of oi of the original amount of net income. Bs cc. Janvary | capital balances Pp 200.000 oP 300,000, Yearly drawings (P1,500 a month 18,000 18,000 22. What are the total amounts for the allocation of interest, salary, and bonus, ond, how much overs allocation is present? ©. 60,000 and PO ©. P83,000 and PO. b. _P80,000 and P20,000 G._ PB3,000 and P23,000 23. It the partnership experiences a net loss of P20,000 for the yeor, what will be the final amount of Profil oF (loss) closed to each partner's capital account @. _ (P30,000) to BB and F10,000 to CC €. {P8,000) to BB and {P 12,000} to CC ©. (P10,000) to BB and (P10,000) fo CC d._P10,000 to BB and {P20,000) 10 CC 24, Under the cost-recovery method @. revenue, cost, and gross profit are recognized during production. is r nition is defered . revenue and cost are recognized during production, but gross profit recognitionid Examination (May 2018 Batch} 4 February 2018 6 11:45 AMIO D459 = until all costs are incun incuned, ©. revenue, cost, and on 8. none of these, MON Prof ave reco} ‘grized at the time the contract is compicted. aay following Information tor question 25 and 26: a in. Jett and Jane Decided to engage in a real estate venture os @ parinership. John invested 00.000 cash ond Jelf provided office equioment thal is comed on his books al P2000. the Teme ogee that the equipment has a fair valve of P110,000. There is a 30,000 not payable ORIN On tty 1 to be assumed by the partnership. Although Jane hos no physical assets both John and Jelf beleve thot her experience os 2 real estole appratier by the partnership ond is @ basis for gronting her @ capital interest « Porinesship. Assuming that each poriner is to receive an equal capitol interest in the porinerstup, 25. Under the bonus method, what amounts should be recorded as capitol for John, Jeff, and Jone ‘21 the formation of the partnership? Jgho dell Jong. Joba. ett Jone &. P60,000 P4000 P6000. b. —_P100,000 90,000 PF 90,000 P-90,000 P80.000 PF 0 d. P1000 =F B0.000 eae 26. Under the revaivation (goodwill approach, what amounts should be recorded as capitol for John, Jett, ond Jone at the formation of the partnership? John r Jon °. F 60.000 John. Jott Jone P 40.000 P 60,000 ¢. P 90,000 PF 90.000 90,000 . 100.000 __ F-80000 P 0 d. P100000 80.000 ° 27. A parinenship agreement calls tor allocotion of profits and losses by salary allocations. @ bonus i r reset ratios. Ia parinessmip hos Gllocation. interest on capital, with any remainder to be ollocoted by preset rati Goss to allocate, generally which of the following procedures would be eppiied? 1. Any loss would be allocated equally to all partners. b. Any salary allocation criteria would not be used. ¢. The bonus ciiterio would nol be used. d._ The loss would be allocated using the profit ond loss ratios, only, 28. On June 30, 20x4, the bolance sheet for the partnership of Willams, Brown, cnd Lowe, together Willoms has decided fo relire from the assets are to ‘pay Williams P 102,000 cosh for his partnership interest exclusive of his loan, which is to be repaid in be adjusted to their fair value of P360,000 at June 30, 20x4. Its agreed that the partnership will full. Goodwil is to be recorded in this transaction, as implied (total) by the excess payment to Wiliams, After Williams's retirement, what are the capital account balances of Brown and Lowe, respectively? ‘a. P65,000 and P150,000 <. —P73,000 and 174,000 b. 97,000 and P246,000 d. 77,000 and 186,000 29. James Dixon, a partner in an accounting firm, decided to withdraw from the partnership. Dixon's share of the porinership profits and losses was 20%. Upon withdrawing from the parinership, he ‘was paid P74,000 in final settlement for his partnership interest. The total of the portners' copitol accounts before recognition cf partnership goodwill prior to Dixon's withdrawal was P210,000. Atter his withdrawal, the remaining partners’ capital accounts, excluding their share of goodwill, totaled P160,000. The total agreed-upon goodwill (revaluation of asset) of the firm was: ‘9. P120,000 c.. P160,000 b. P140,000 d. 250,000 30. A locat partnership was consideti > ing the possibilty of liquidation since one of the partners (Ding) “SE MOvent. Copital balances al that time were os lollows, Profils and losses were divided on O 42°22 basis, respectively. Bing. capital, Laurel, capital P 60,000, Exar, capital P 67,000 - Taman, capital P 17.000in orting Page 6 inonciol Aceountieg 6 Reps ‘Advanced ‘ay atch) te uta imi jartnership 1e, the p ‘ossets, Al that fi . portnesstun's 8 for P228,000, Jam against Ihe PONE zols could De SOIC fo bg cress 0725000 clo 9ST 79,00. Ne OFS held ossets reported at P360,000 bs red what is ym omounl i" tors would Nave nount thal Ding’s creditors what i the minimum an outcas dg. 38,250 ‘ei von ‘ond reported tr o 1 eee Stone? Sgyne MET eT 000) Mi contnbution. aati ‘a forihcoming be covered By 0 fwas then available. How nies roperties of other compar 32. A business combination whereby the company loking over the See eens ore tetoins its identity ond continues operations os a larger Unit and the: isoIved is known as @ ‘a. Consoidation Stock acquisition b. Merger d. Quastreorganization 33. Which of the folowing statements is false? rin tsoooes Br Sty. the home office can debit or credit the Branch Current account in its book . & When 9 fronsaction oifecis a reciprocal account, entries ore required on bath home office ‘and branch books, 5 IRE SCOPE of activity of an agency is essentially he some as that of the branch. D- TPe onsactions of the agency may be merged with the kansochons of Ine home office or they may be accounted for separately, Use the following information for questions 340 36 Owille Compony recently petitioned for borkiey statement of affairs. The & are 2s follows: Cam a Accounts Receivabig Inventory long. Buicsng (net) Equipment (nei) Total... DebIs of Orvile are as fotlows:* ‘Accounls payable = ea Wages Payable(ait have priority). . Toxes payable... Intoren oye (secured by receivable and inversion, tnterest on Notes Payable. freee Payable (secured by land and building) Interest on bonds Payable Toto! d. — P121,000, 36. What's the estimated divigona Percentage? om . c. 77% 68%(@ seers ee x on (May 2018 Batch) 7 4 February 2018 « 11:45 AM to 245 PIM » nee a ‘available: Jo tquidote their business. The foowing infomm a * 100.000 Accounts Payobe rena Inventory . 200,000 Dennis, Capital veo tity, Copto! aft Total... imum wt “Peon. Dennis and tity share iisits'G ws of quidolion, holt the it 1a'e Profits and losses in @ 32 folio. Duing the fist month of Ns ‘ mento 0 ras oe a pentle pace tng he secere Pe, the Fes! of the inventory i sold for P45,000. ond the remaining accounts PAYEEIe Ae, paid. Cosh striouled af the end of each month, ond ine bquidation i completed at the end of he Secon month, 7 37. Ung & sate payments scneduis, how much cosh Wal be ciskzuted to Deon at fhe enc of Te fisst onthe a. 64900 c.#24000 60,000 3. P3600 * 28, Assume instead thot the romcining aventory wos #018 for P10.000 in the second month. Whe Payments wil be made fo Dennis and tilly al the end of the second montné Dennis Lily Dennis lity a PO PO c. P5000 P5,000 b. P1000 PO a P6000 P4000 39. An entity acquited 0 30% interest in another entity on year I. In yeor 2 it acqured ont ‘Cavity interest in he same entity, Which ol the following slatements is Wwe? Pe eee Neceaiing 3% equity interest should be remeasured at foir valve at Ihe cqusttion date. UL. The enlity’s net assets should be remeosured at fair valve ot acauisition date, a. tonly . Bothland it b. tonty & Neither inor it 40. The Noples Company uses the percentage of-compietion method and Ine cost-to-cost method Tor its long.iern eonstietion contracts, On one such controci, Naples expects tolcl revenues of £2601000 nd Tofal costs of P200.000. During the fist yeor, Naples incurted costs of PS0,000 and ital the customer P30,000 under the contract. At what net amount shovid Nepies Construction in Progress or this contract be reported at the nd of the fst year? 2. 30,000 <. P50,000 b, P35,000 3d. 765.000 41, Lork Corp. has @ contract to construct 015,000,000 cruise ship ot on estimated cost of P4.000,000. To Cor ony wil begin construction of ihe cruise ship in early January 2x4 and expects 10 Weekes ine. project sometime in lole 20x7. Lark Corp. hos never constructed, a cruise ship Serer Gad the customer has never operated o cruse ship. Due to this ond other ciscumstances. Tek Comp. bekeves there ore inherent hozords in the contract beyond the nowmal, recurring busines sks. Lark Coip. expects 10 recover allits costs under the contract. During 20x4 and 20x5. the company has the folowing activity: 20%4 2x5 Costs to date P_ 980,000 P 2,040,000 Estimated costs to complejo 3,020,000 1,960,000 Progress bilings during the yeor 1,000,000 1,000,000 Cash collected during the year 648,000 1,220,000 On its sictement of financial position at December 31, 20x5, what amount wil be reported related to the Construction in Process account? a. P40,000 costs in excess of billings. 'b. _ P1,020,000 costs in excess of billings. ©. PAO,000 billings in excess of costs. 4. 20,000 tings in excess of costs. Use the following information for questions 42 and 43: ae Construction is constructing an office building under contract for Cannon Cate. The contract Galt fox frogtess ings nd payments of F620.000 each quartet. the total contract price is #7.440.000 ond Secsons estimates total cotls of P7,100000, Seasons estimates tnal the bucing wil ‘years 1o complete, and commences construction on January 2, 20x4.7 Page 8 Jot Accounting & REPOHND h) regenination May 2018 Bate! ® evanced Fine “it ft ra pogove Ts AM 10245 tebe suction. based on ons ized for wilh the corscis recognize % complete Contrac ‘ate has 3s tna tis 30 Oe ag. term ing Cannon Ci 1, go, Seosons estimates all SA ‘count assuming er noun ple 42, at Decombs sarees costs incured. Wha! eval ig the bolance in the Accounts Rec 20x4 and what is the 1 yet made its ‘ast quartedy Payment? Accounts wale Accounts we Recensee, coivapie aes? 000 Revenue Recive! cc. P2283; 12,480,000 < Faamno radenuto 2130.00 P. B72 ding: with the bul thot itis 75% complete Will Cipated Construction estimates that ti 75% compe entcpoted ever, the eslimate of toa! cor c pean face nereotes ncn ott ornnt of Contac Mover enseaDecombersl. 287 5 paisoece &.Pazv0%00 : ie rcentage-ot- Use the folowing information for questions 44 and in dolaminng the pa 7 iders. Inc. employs the ‘cost'o-cost_method i g the percontage-< ion erovericrenrch eeeseceh ated, deter the, pet teen +d Project Fok @ contract price of P,000,00 | Seirincuned o date 2,300,000 b. 1.700000 o. P2,550,000 45. The actual costs incurred during the yeor 20x5, ©. 2.580.000 <. P2,200,000 : . P2:300.000 &.P2:050,000 Use the following intormation for Pasig Garment GECOUNt in the Books of the nome orf information are ascertained: * 7 jhe Rome office hos bled the branch the amount of 37,500 for in Wonsit on December 31 A nome olfice accounls rec \Wa5 Not reported to the hi Supplies of P4500 Nee ot Monda shows a balance of P150,000. The folowing the merchongise, which was collected by the branch. Said cotection ‘ome office by the branch, records th othe BIANCh to the home office but the home office has not Tre eat nls ecards the receipt of he supose * fhe branch mace profit of 10,100 tor ine ‘month of December bul the home office SrToneousty recorded it as P1189, * Re branch has not received the cash December 31 46. ember 31, 9°. P2190 & PN7.420 . P123:000 &. Pi08.920 47, What is the a P 96.47 a P179,920 ntinuing franchise fe "8s should be recorded by the franchisor caevenue when eamned and receives from the franchisee, 8 revenue when received, C. in accordance with Ss revenue only ath 48. Cor A 49, y SIO Profi recognized to date under which Of the following ion methods? - completed contract “C. costrecovery Instatment method Percentage of completion‘Advanced Financtai Accountin 19 & Reporting Rist Pre-Boord Examination (May 2018 Bote) : Page 9 February 2018 © 11:45 AM o 2.45 Pm Use the tottowin, 19 Information for questions $0 and 51: Selected balances trom the ¢ ebu Company's Branch 4 and ‘Accounts Inventory, 1/1/20x4 . imprest Branch Fund Inventory. 12/31/20x4 eee ead ee AlRecewable, 1/1/7014... oan Merchandise trom Home Office Accounts Receivable, 12/31/20*4 Soles... 1__Cosn Bxpe stesues All soles, collections, and expenses o \ | ceeeree 21,000 janaled at the bronch, A cash received from sales ane, olections ore sen! rectly Yo the Home Olive, Expenses ore pawd by the bronch trom Me imprest fund and immediately fembused by the Home Oice and credited 10 th Sccount, All expenses paid by the branch orerecorced in Ihe books of the branch. 50. Compute the balance of th Home Otfce account in the books of Branch on January 1, 2x4: 4 8 A 8 ©. P163.000 P67 000 <.P13%.000P111.000 b. 64000 P78,000 dP 78.000 P 64000 51. Compute Ihe balance of the Home Otice account on December 31. 204 4 8B A 8 ©. P119.000 P1570 <. P6400 678.000 b. P9100 _P 67.000 d.— P76.000P64,000 52. tf a partnership requires the odjustinent of assets when & portner retires from the partnership, the ‘appropriate joumot entry for the partner's retirement 2. Debit assets for the entire amount computed. b. Debit assets for the retiing partners’ share only c. Debit retirement expense for the retiing partners' share of computed adjustment . Debit the capita! accounts of the :emaining portners for a bonus to the retiring partner 53. Selected information from the Iria! balances for the home office and the branch of Gerly Compony at December 31. 20x4 is provided. These trict balances cover the period tom December 1 to December 31, 20x4. The bronch acquires some of its merchandise from the home office [the branch is billed a 20% above the cost to the home office and some ot it trom outsiders. Differences in the shipments accounls result entirely from the home office policy of billing the branch at 20% above coi, Sales. ae Shipments to branch... Shipments 10 branch = toading / Unreaiized | in beanen inventory Purchases (outsicers) Shipments from home office ‘Merchandise inventory, December 1, 20x4. nse. profit Additional information: Merchandise inventory, Decemt oer 31, 20K4: 20,000 ferences 10,000 x4 inventory of the branch represents purchases from outsiders ond how much represents goods acquired from the home office? fo, Duiides. “Home Office Quisicers Home Office ee 15,000 c. P1200 3,000 P5000 P10,000 d. P3000 P12,000 Used the TEES he following information Cogeng ntermation tor question 54 and $6; “ration operates a branch in O il the Ben -agupan Cily, he home office ships merchandise to the meee 125 percent of its ‘Cost. Selected int 7 7 formation rom the December 31, 20x4 trial balance are“ rting Page 10 Financial accountng Sra eat) 45 PM <———aanen | _ —— Home Office | if bod 300,000 » 600) : 200.000 zo 7 Shipments to bronch = a a Purcroses..- ao 0 0000 Stipmastembome oiee vosc00 0 entry, JomuSrY ORG os eeev esc | ontinte or orenatuoton oftranch | Sivertory |_sspeness. Inventory ot December 31, 20x4: Home office . 30,000; Branc! ers 54, The realized profit on soles made by the branch or overvaluation of Co! Pa cc. P46,000 ee eee 55. The combined net income of the home office and the branch after adjustment is: a, 226,000, ©. +P 496,000, wes ee Se The Brooke Corporation hos two branches, Branch F ond Branch @. The home office shipped F80.000 in merchandise to Branch F and prepaid the treight chorges of F500. A shor! time therealter, ranch P wos insicted lo ship his merchondise fo Branch @ at a prepaid freight cost Ot P700. Freight charges tor this merchandise normally Cost "800 when shipped from the otlice directly to Branch @. Compute the excess freight on transfers of merchandise: ©. P700 c. P50 b. peo PaO Use the tottowing information for 57 and 58: . Porpoise Corporation acquired Sims Company through an exchange of common shares. All of Sims assets ond liabilities were immediately transteted to Porpoise. Porpoise Company's common stock was trading ot P20 per share at the time of exchange. The folowing selected informe! tion for Porpoise Corporation is also available: Betore Alter Acquisition Asavisition Par valve of shores outstanding 200,000 250,000, Additional Paid in Capital 350,000 550,000 57. What is the par value of Porpoise's common stock? a. PIO cc PA b PS a Pd $8. What is the fair volue of Sim's net assets, it Goodwill of P56,000 is recorded? a. P194,000 TNED n 12. 13, 14, 45. 16. 17. 18. 19. 20. O>parrrgoe 21 22. 23, 2a, 25, 26. 27, 28 29. 30. 20 22 23. 2a 25, pagaggnoro wWPeOOracea 2 32 33. 34, 35. 36. 37. 38, 39, 40. pnenergoo0 uu 32. 33. 34. 35, 36. 37. 38, 39, 40. @PpogNZoneS 42 43. a4 45, 46, a7 48, 49, 50. So2200 poo pangsca> REGULATORY FRAMEWORK FOR BUSINESS TRANSACTION & O>o>erongo Nowsune e See SSE >oo 14. A 15. D 16. B 17.0 18. D 19. A 20. 0 21. 22. B 23. D 24. B 25. A 26. D 27. C 28. B 29. C 30. A 31, A 32. 33.C 34.8 35.C 36. B 37. A 38. D 39. D 40. A a1. A 42. C 43.8 44, BONUS 45. 46. 47. 43, 49, 50. 51. 52. 53. 54. 55. 56. 57. 58. 59. 60. DOPOAAAASSIGAB>O® 61. A 62.8 63.0 64. D 65.8 66.8 67.8 68. B 69. A 70. ¢ nc 72.€ 73. 74. B 75. C 76.8 77. 78. B 79.8 80. B 5.8 52.8 S38 54.8 55.4 56. B 57.8 58.0 59.D pogeacre MAY2018. 6A 62.8 BA 6a. D 65.8 66. B 67.A 6a. C 69.8 70.8 ac 62.8 63.0 64.8 65.0 66.8 . 67.8 68. D 69.0 70.0 81.8 82.4 83. B 84.0 85.8 86. A 87. 88. A 89. B 90. D 91.8 92. A 93. A 94. A 95. A 96. C 97. 98. D 99. 100. A