PSBA Refresher Course November 2021 Batch FAR Problem Quiz # 1

Accounting Process to Inventories Solutions

1. B Under 30 days 150,000

31 - 180 days 90,000
181 - 360 days 180,000
Required allowance 420,000

Allowance - January 1 240,000

Doubtful accounts expense 480,000
Write-off (300,000)
Allowance - December 31 420,000

2. C Allowance - January 1 (debit) (20,000)

Doubtful accounts expense 240,000
Allowance - December 31 220,000

3. D Cash in bank 8,300,000

Cash on hand 2,500,000
Time deposit 1,700,000
Savings deposit 800,000
Cash and cash equivalent 13,300,000

4. B Current account 3,500,000

Tax fund 1,000,000
Cash on hand 350,000
Commercial papers 900,000
Cash and cash equivalent 5,750,000

5. A Carrying amount - January 1, 2022 4,600,000

FVLCOD - January 1, 2022 3,680,000
Impairment loss in 2022 920,000

6. B Revenue 25,000,000
Expense (21,000,000)
Termination cost (3,000,000)
Impairment loss (6,000,000)
Pretax loss (5,000,000)
Tax benefit (5,000,000 x 25%) 1,250,000
Loss from discontinued operation (3,750,000)

7. B Revenue (30,550,000 x 10%) 3,055,000 (A,B,C)

Profit (6,070,000 x 10%) 607,000 (A,B)
Assets (17,050,000 x 10%) 1,705,000 (A,B,C)

8. C Loss on disposal of land 670,000

Property tax (1,200,000 / 4) 300,000
Total expense for the first quarter 970,000

9. B Carrying amount - January 1, 2024 1,080,000

Depreciation for 2024 260,000

10. D Unrealized gain - equity FVOCI 348,000

Revaluation surplus 682,000
Loss on credit risk (239,000)
OCI - may not be recycled to P&L 791,000

11. A Present value - January 1, 2022 1,440,000

Interest income (1,440,000 x 12%) 172,800
Annual payment - December 31, 2022 (400,000)
Carrying amount - December 31, 2022 1,212,800
12.A Loss on lawsuit 1,000,000
Error 340,000
Adjusting events 1,340,000

13. B Increase in RE of (600,000 x 75%) 450,000

14. D Accounts payable 4,500,000

Cash dividends payable 3,500,000
Income tax payable 5,500,000
Note payable 2,000,000
Total current liabilities 15,500,000

15. D Supplies expense 35,000

Supplies 35,000

Supplies expense 400,000

Cash 400,000

Supplies 49,000
Supplies expense 49,000

16. C Cash and CE 1,550,000

Accounts receivable, net 2,550,000
Trading investments 600,000
Inventory 640,000
Prepaid expense 230,000
Land held for sale 850,000
Total current assets 6,420,000

17. A Service charge (6,000,000 x 5%) 300,000

Interest expense (6,000,000 x 8% x 30/365) 39,452
Total loss on factoring 339,452

18. C Maturity value (2,000,000 x 12% x 120/360 = 80,000 + 2,000,000) 2,080,000

Discount (2,080,000 x 15% x 90/360) (78,000)
Proceeds from discounting 2,002,000

19. A Gain is up to loss only 1,000,000

20. D Physical count 7,000,000

Goods not yet shipped 400,000
Goods purchased in transit FOB SP 300,000
Goods held on consignment (680,000)
Goods out on consignment 240,000
Correct inventory 7,260,000

21. B Units Unit cost Total cost

Beginning balance 40,000 30 1,200,000
Purchase 35,000 33 1,155,000
Balance 75,000 31.40 2,355,000
Sale (15,000) 31.40 (471,000)
Sale return 5,000 31.40 157,000
Purchase 12,000 35.25 423,000
Balance 77,000 32.00 2,464,000
Purchase return (2,500) 35.25 (88,125)
Balance 74,500 31.89 2,375,875
22. D Goods available for sale 18,000,000
Cost of goods sold (12,300,000)
Estimated ending inventory 5,700,000
Physical count (4,500,000)
Cost of missing inventory 1,200,000

23. B Gain due to growth 94,000

Decrease due to harvest (11,500)
Total income from biological assets 82,500

24. B Cost Retail

Inventory. January 1 600,000 900,000
Purchase 3,180,000 4,200,000
Net mark up 480,000
Net markdown (180,000)
Balance 3,780,000 5,400,000
Sales (3,600,000)
Normal shoplifting losses (120,000)
Normal shrinkage (180,000)
Ending inventory at retail 1,500,000
Cost ratio (3,780,000 / 5,400,000) 70%
Ending inventory at cost 1,050,000

25. C Required allowance - December 31 300,000

Required allowance - January 1 200,000
Loss 100,000

END