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Accounting 2

Here are the answers to Part 1: 1. c 2. a 3. b 4. b 5. c 6. b 7. d

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0% found this document useful (0 votes)
230 views28 pages

Accounting 2

Here are the answers to Part 1: 1. c 2. a 3. b 4. b 5. c 6. b 7. d

Uploaded by

cherryann
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Mansan Distributors and Jagnaan Retailers engaged in the following transactions during the month of April 2018:

April 2 Purchased merchandise for P50,000. Mansan purchased on account, 2/10, n/30, FOB destination

3 Mansan sold merchandise to Jagnaan for P35,000, 2/10, n/30 FOB shipping point

4 Mansan sold merchandise to Jagnaan, P162,000 FOB destination, 2/10, n/30

4 Jagnaan paid rent for the month P7500

5 Mansan sold merchandise to Jagnaan, P710,000, FOB shipping point, 2/10, n/30

7 Mansan bought merchandise for P210,000, 2/10, n/30, FOB shipping point

8 Jagnaan returned merchandise to Mansan worth P12,000 fro m the April 4 sale.

9 Mansan received payment from Jagnaan for the April 4 transaction

10 Mansan received payment from Jagnaan for the April 3 transacton

12 Jagnaan paid Mansan for the April 5 purchase

14 Jagnaan purchased supplies for cash, P8500

16 Mansan paid P20,000 for a one-year insurance

18 Mansan sold merchandise to Jagnaan P30,000 2/10, n/30, FOB shipping point,Trade discount 20%

20 Mansan returned damaged goods costing P20,000 purchased on April 7

23 Mansan received payment from Jagnaan for the amount due from the April 18 transaction

25 Mansan paid the April 2 purchased

26 Jagnaan received P50,000 from a bank loan

29 Cash sales of Mansan to Jagnaan amounting to P49,000, FOB destinantion

Additional Information:

Freight charges is valued at P2000

Required:

1) Journalize the transaction of Mansan Distributors


2) Journalize the transaction of Jagnaan Retailers
The following transactions were completed by HELWA Company during July of the current year. Helwa
Company uses the periodic inventory system. (Freightmis always P1,000)

July 1 Helwa invested cash in the business amounting to P100,000

2 Purchased P24,000 of merchandise on account, FOB shipping point, terms 2/15, n/30. Trade
discount is 20%, 10% and 5%

5 Returned P4,000 of the merchandise purchased on July 2

6 Sold merchandise on account to Qulna Company, P15,000 FOB destination terms 1/10, n/eom

13 Sold 200 units of merchandise on account to Lokoe-lokoe Co. P100 each FOB destination , 1/10, n/30

14 Lokoe-lokoe Company returned ¼ of the merchandise purchased on account on7/13 from Helwa Co.

16 Qulna Company paid Helwa Co. for purchase of July 6 less discount

17 Lokoe-lokoe Co. paid Helwa Co. for purchased of July 13, less returns and discounts.

18 Purchased P30,000 of merchandise on account, FOB destination, terms 2/15, n/30

19 Sold 150 units of merchandise on account to Hanna Co. P100 each, FOB destination, terms 2/10,n/30.

22 Paid for the purchase of July 2 merchandise

23 Paid for the purchased of July 18 merchandise, less discount.

24 Hanna Co. paid Helwa Co. for purchased of July 19, less discount

25 Hanna Co. found found out that 1/3 of the units purchased were defective returned items to Helwa Co.
and asked for cash refund

27 Purchased P10,000 of merchandise in cash, FOB shipping point

28 Sold P20,000 of merchandise in cash, FOB destination

Add’l information:

 Physical count was made at the end and Helwa Co. found P30,000 worth of inventory.
 Operating expenses totalled P20,000 (Freight- out not included)
On January 15, 2018, Marikuno del Loca Forest Products purchased and sold a large amount of
finished goodsfor the business. The following table summarizes selected transaction data:

Transaction Trade Discount Credit Terms DatePaid/ List Price


Received
Sale 30% 2/10, n/30 January 13 250,000
Purchases 20% 2/15, n/30 January 20 420,000
Sale 5% 2/5, n/30 January 8 80,000
Purchases n/a 2/10, n/30 January 11 130,000
Purchases 40% n/30 January 25 330,000

FOB Terms Freight cost Cash Paid/ Recorded Sale of Cash Discount
Received Purchases
Shipping Point 1,000
Seller 2,000
Buyer 3,000
Destination 4,000
Destination 5,000

Test II. Journalizing Merchandising Transactions

Lonore Lopuquque Homewares engaged in the following transactions in October:

Oct. 7 Sold merchandise on credit to Lacson Co., terms 2/10, n/30, FOB shipping point, P30,000

8 Purchased merchandise from Orcajada Co., terms n/30, FOB shipping point, P60,000

9 Paid Mendoza Co. for shipping charges on merchandise purchased on Oct. 8, P2,540

10 Purchased merchandise on cash from Ortiz Co., FOB Seller. Freight paid P6,000

13 Purchased office supplies on credit from Isagan Co., terms n/30, FOB shipping point,
P24,000

14 Sold merchandise on account to Pabelico Co., terms n/20, FOB shipping point, P24,000

17 Returned damaged merchandise received from Orcajada Co., P6,000

18 Received check payment from Lacson Co. for his purchase

21 Paid Orcajada Co. the balance from the transaction on Oct. 8 &14.

24 Accepted from Pebelico Co. a return of merchandise, P2,000


ADRIAN Merchandising had the following transactions for the month of July.

1. Mr. A invested cash in the business amounting to P100,000


2. Purchased P24,000 of merchandising on account, FOB shipping point, terms 2/15, n/30. A note payable
was issued in the amount of P50,000 for a loan from the bank.
3. Sold merchandise on account to Quina Company, P15,000, FOB destination, terms 1/10, n/eom.
Purchased office supplies for cash, 850.
4. Sold 200 units of merchanise on account to Lokoe-lokoe Co. P100 each, FOB destination, 1/10 , n/30
Rebecca Company sold inventory to Adrian Merchandising. Terms: 20%, 10%, 2/15, n/30.
5. Purchased P30,000 of merchandise on account, FOB destination, terms 2/15, n/30.
6. Purchased merchandise from Myco, Inc. on account. Terms: 2/15, n/30.
7. Returned P4,000 of the merchandise purchased on July 2.
8. Quina Company paid Adrian Merchandising for purchase of July 3.
9. Lokoe-lokoe Company returned ¼ of the merchandise purchased on account on July 4 from Adrian
Merchandising.
10. Sold 150 units of merchandise on account to Hanna Co. P100 each, FOB destination, terms 2/10, n/30.
11. Paid for the purchase of July 2 merchandise.
12. Lokoe-lokoe Co. paid Adrian Merchandising for purchase of July 4.
13. Hanna Co. paid Adrian Merchandising for purchase of july 9.
14. Purchased P10,000 of merchandise in cash and paid freight of 300.
15. Sold P20,000 od merchandise in cash and paid freight of 200.
16. Hanna Co. found out that 1/3 of the units purchased were defective, returned then to Adrian
Merchandising, and asked for cash refund.
17. Paid half month salaries amounting P45,000.
18. Adrian Merchandising returnes 20% of the merchandise from july 4 to Rebecca Company.
19. Paid Myco. Company 50% of the purchase in July 6.
20. Paid P2,000 for a one-year insurance policy.
21. Sold merchandise to Monding brothers for P3,500 Terms: 50%, 20%,10%,2/10,2/30
22. Demi Company purchased from Adrian Merchandising P30,000 worth of inventory. Terms: 50%
downpayment 2/10, n/30.
23. Paid Myco Company of the remaining balance in July 6.
24. Paid Rebecca Company in full.
25. Monding brothers paid in full.
26. Demi Company paid Adrian Merchandising.
27. Paid rent for the month amounting to P15,000
28. 70% of the supplies purchased on July 3 was used.
29. Received utility bills for the month amounting to P2,500 but to be paid first day of next month.
30. Paid remaining half month salaries of P45,000.
31. Monding brothers returned 20% of the merchandise which were defective.
Part l

1. These are income derived from onther activitie of the business


a. Revenue c. gains
b. Expense d. losses
2. It is a kind of expense that is related to the primary operations of the business
a. Expense c. prepaid expense
b. Loss d. accrued expense
3. In accrual-basis accounting, revenue is earned upon ___________
a. Delivery of goods and services c. both a and b
b. Collection d. none of the above
4. It is a kind of expense that arises from other activities of the business
a. Expense c. prepaid expense
b. Loss d. accrued expense
5. It is a contra-sales account used to report the selling price of goods returned by customers.
a. Sales c. sales returns and allowance
b. Discount d. net sales
6. It is a contra-sales account used to report the amount of discount taken by customer
a. Sales c. sales return and allowance
b. Sale discount d.net sales
7. It is computed as gross sales less sales return and allowance and sales discount
a. Sales c. sales return and allowance
b. Sales discount d. net sales
8. It refers to the cost of inventories sold
a. Sales discount c. net sales
b. Cost sales d. gross sales
9. It is used to report acquisition of merchandise for sale
a. Purchase c. purchase discount
b. Purchase return and allowanced. freight-in
10. It is a contra-purchase account that reports the amount of discount taken by the company
a. Purchases c. purchase discount
b. Purchase return and allowanced. freight-in
11. It is a contra-purchase account that reports the cost of good returned to suppliers
a. Purchase c. purchase discount
b. Purchase return and allowanced. net purchase
12. It is a gross purchases plus freight in less purchase return and allowances and purchase discount
a. Purchase c. purchase discount
b. Purchase return and allowance d. net purchase
13. Cost of sales also known as
a. Cost of goods available for salec. cost of goods sold
b. Operating expense d.net sales
14. All other expenses related to the operation of the business other than cost of sales
a. Cost of goods available for sale c. cost of goods sold
b. Operating expenses d. net sales
15. It is prepared to help the readers understand the transactions that affected the balances of the equity
accounts
a. Financial statement c. statement of comprehensive income
b. Statement of changes in equity d. statement of financial position

Part ll.

PROBLEM 1

ABM12-5P Company is owned by Mr. Mendoza a single proprietor. The following were the results of the operation
of the year ended December 31 2017
Salaries Expense P50,000 Cost of sales P75,000

Utilities Expense 10,000 Purchases 150,000

Net sales 254,000 Supplies Expense 15,000

Sales Discount 5,000 Sales returns 30,000

Compute the following assuming the income tax rate is 30% of net income

1. Grow Sales 3. Net income before tax 5. Income tax expense


2. Gross Profit 4. Net income after tax

PROBLEM 2
ABM12-2P Company is engaged in the manufacturing of super duper elastic rubber that can kill germs and rats.
The company provided the following balances at the end of the year:

December 21 January 1
Raw Materials 100,000 150,000
Work in Process 200,000 250,000
Finished Goods 300,000 450,000

Additional Information: Raw Material Purchased P 500,000


Direct Labor 100,000
Factory Overhead 150% of direct labor
Compute the following:
6. Raw Material Used 8. Cost of Goods Manufactured
7. Manufacturing Cost 9. Cost of Goods Sold
PROBLEM 3

ABM12-2P Company provided the following information for its operation for the current year.
Net Purchases P100,000 Gross Sales P300,000
Salaries Expense 30,000 Net Income (12.)??
Freight In 10,000 Freight Out 15,000
Advertising Expense 30,000 Gross Purchases 120,000
Sales Return & Allowances 50,000 Sales Discount (13.)??
Net Sales 230,000Purchase Discount 10,000
Purchase Return & Allowances (10.)?? Beginning Inventory 20,000
Ending Inventory 35,000 Cost of Good Sold (14.)??
Gross Profit (11.)?? Utilities Expense 10,000

Determine the following missing amount.

PROBLEM 4
The Accounting Honors’ Class Batch 2012 Company ask for your help to determine its performance for
the year-ended 2016 and 2017. The following information are provided:

Accounts 2016 2017

Sales P 1,000,000 P 1,200,000

Operating Expenses 300,000 210,000

Gross Profit Rate 30% 20%

Based on Sales Cost of sales

Determine the company’s


16. Gross Profit 2016 18. Gross Profit 2017
17. Net Income 2016 19. Net Income 2017

PROBLEM 5
ABM12-4P Company provided the following balances and transaction of its capital for the year-ended 2016 to
2018. Determine the missing amount.

2017 2018 2019


Beginning Capital P 204,000 458,200 22)

Additional Investment 20) 4,800 224,400

Net Income/ Loss 343,000 21) 280,456

Withdrawals 190,800 341,800 23)

Ending Capital 458,200 35,000 325,000

Cash and Cash Equivalents

Bills and Coins

10 pcs P 1,000 50 pcs P 10

5 pcs 500 20 pcs 5

3 pcs 100 100 pcs 1

Cash on Hand/ Cash on Bank

Petty Cash Fund P 200,000

Dividend Fund 100,000

Sinking Fund 530,000

PPE Acquisition Fund 1,000,000

Collections/ Receipts 300,000

20% is undeposited and 10% is post dated.

PNB Account A P 200, 000

PNB Account B (50,000)

BDO Account A 500,000

BPI Account A (300,000)

Bank Drafts 20,000


Money Orders 30,000

Treasury Bills 50,000

5% is compensating balance which is legally restricted for withdrawals

Cash Equivalents

BDO time deposit (2 months) P 25,000


BDO time deposit (4 months) 35,000
BDO time deposit (2 years) 60,000

The above treasury bills are acquired by the entity for the year December 31, 2018

Amount Acquisition Date Maturity Date

P 5,000 Nov 20, 2016 Jan 30, 2017

5,000 Dec 15, 2016 March 15, 2017

10, 000 Dec 1 , 2016 April 1, 2017

10, 000 July 15, 2016 Jan 15, 2017

10, 000 June 30, 2016 June 30, 2018

10, 000 Oct. 25, 2016 Jan 25, 2017

Receivables

A. Customer A P 50, 000


B 35,000
C 25, 000
B.

Acquisition Date Maturity Date Rate Amount

March 1, 2017 March 1, 2019 2% P 500,000

June 31, 2018 June 31, 2022 3% 400,000

Jan 21, 2016 Dec 31, 2023 4% 300,000

C. Accounts Receivable P 500,000


> 5% is estimated to be uncollectible
Inventories
A. Raw Materials P 10,000
Work in Process 15,000
Finished Goods 30,000
Office Supplies 35,000
Factory Supplies 40,000
Goods out on consignment 45,000
Goods held on consignment 50,000

B. The following goods are on transit:

Transaction Shipping Method Amount

Sale FOB shipping point P 20, 000

Sale FOB Destination 30, 000

Purchase FOB shipping point 60,000

Purchase FOB Destination 80,000

Prepaid Expenses
A. Prepaid insurance acquired on June 30, 2018 worth P 120,000 good for 2 years.
B. Supplies at the beginning is P 50 000 during the year, the company purchased additional P 40,000
1) 10% is unused at year-end
2) 80% is used at year-end

Accrued Revenue/ Income


A. The company rendered services amounting to P 50,000 which is still unpaid as of year-end.
B. The company records revenue only when cash is received. The following transactions about
revenue are not yet recorded:

Date of Sale/ Delivery Date received by the Terms Amount


customer

October December 31 FOB Shipping point P 10,000

November December 31 FOB Destination 15,000

November January 5 FOB Shipping point 20,000

December January 5 FOB Destination 30,000

Plant, Property and Equipment


Equipment Truck Fixtures Furnitures

Cost P 400,000 P 350,000 P 500,000 P 480,000

Est. useful life 5 years 10 years 20 years 8 years

Salvage value 1/20 P 50,000 10% -

Acquisition date January 1, 2018 June 31, 2015 July 31, 2016 February 1, 2018

Intangibles

Patent Trademark

Cost P 500,000 P 300,000

Acquisition Date July 1 2014 January 1, 2015

Legal life 15 years 10 years

Payables
1) Supplier A P 20,000
B 30,000
C (40,000)
2) The following are the notes payable of the company:

Acquisition Date Maturity Date Annual Interest Amount

Jan. 1, 2017 Dec. 31, 2018 10% P 300,000

July 1, 2017 July 1, 2019 3% 600,000

Jan. 1, 2017 Jan. 1, 2020 5% 500,000

Accrued Expense
1) Employees are paid every Friday for a five-day work week ending on the prior Friday. Salaries amount to P
240,000 per week. Assume that the accounting period ends on a Wednesday
2) The following billing statements for the month of December:

Electricity P 12, 000


Water 7,000
Telephone 2,500
Unearned Revenue
1) On July 1, 2018, cash of P 480,000 was received from customers for a 36-month delivery of goods
beginning on that date
The receipt was recorded as a credit to unearned revenue
Equity
The capital account had a beginning balance of ________.
a) The owner withdrew P 300,000 for the expenses of the company.
b) The owner withdrew P 50,000 to buy his son a laptop
c) The company ad net income of P 200,000
d) The owner made an investment of an additional P 50,000

PART I. MULTIPLE CHOICE


1. The SFP is based on the accounting equation:______
a. A = L – OE c. OE = L + A
b. A = L +OE d. OE = L – A
2. These are the resources with future benefits that are within the control of the company.
a. Liabilities c. Owner’s Equity
b. Assets d. Cash Equivalents
3. It refers only to funds readily available for use.
a. Cash c. Cash in bank
b. Asset d. Cash Equivalent
4. It refers to the company’s right to collect
a. Consignment c. Receivable
b. Payable d. Collection
5. It is an identifiable non-monetary asset without a physical substance.
a. Receivable c. Intangible asset
b. Inventory d. Prepaid expense
6. Time deposits with a term of 90 days are reported as
a. Receivables c. Long-term investments
b. Short-term investments d. Cash equivalents
7. Time deposits that matures longer than 90 days are reported as
a. Receivables c. Long-term investments
b. Short term investments d. Cash equivalents
8. A post-dated check is treated as
a. Cashc. Receivable
b. Cash equivalent d. Investment
9. Accrued expense is a/n ________
a. Asset account c. Revenue account
b. Liability account d. Expense account
10. All of these are assets EXCEPT
a. Cash c. Patent
b. Prepaid Expense d. Used supplies
11. If refers to obligation to pay documented in a promissory note.
a. Notes receivable c. Notes payable
b. Accounts receivable d. Accounts payable
12. It includes bills, coins, and checks kept in the premises of the company.
a. Cash c. Cash in bank
b. Cash on hand d. Cash equivalent
13. It is a payable arises from the purchase of goods or services.
a. Accounts payable c. Unearned Income
b. Notes payable d. Accrued expense
14. An investment qualifies as cash equivalent only when it has a short maturity of 3 months or less from the _______.
a. Maturity date c. SFP Date
b. Date of acquisitions d. Reporting date
15. Statement of Financial position is dated:
a. For the period ended Dec 31, 20XX c. A or B
b. As of Dec 31, 20XX d. None of the choices
PART II. PROBLEM SOLVING

PROBLEM 1
Albelda Company provided the following balances as of December 31, 2017
BPI – Current Account P 100,000 NSF Check from customer P 15,000
PNB – Savings Account 200,000 Petty Cash Fund 25,000
Traveler’s Check 20,000 Post-dated check 8,000
Time Deposit 85,000 Sinking Fund 4,000
Treasury Bills-120 Days 88,000 Bills and Coins 80,000

1. What amount should be presented as Cash on Hand at year-end?


a. P 99,000 b. P 125,000 c. P 124,000 d. P 112,000
2. What amount should be presented as Cash at year-end
a. P 326,000 b. P 412,000 c. P 425,000 d. P 380,000
3. What amount should be presented as Cash & Cash Equivalents at year-end?
a. P 425,000 b. P 513,000 c. P 510,000 d. P596,000
4. What amount should be presented as Receivables at year-end?
a. P 00.0 b. P 36,000 c. P 15,000 d. P 23,000

PROBLEM 2
Alcaraz Company opened a manufacturing plant on Jan. 1, 2017. As of the year-end the following information are
provided:

Finished Goods P 300,000 Raw Materials P 200,000


Used Supplies 70,000 Goods in Process 100,000
Factory Supplies 50,000 Insurance-Expired 20,000

The finished goods include goods from Anapi Company, a consignor, amounting to P 20,000.
Puno Company, a consignor, exclude goods amounting to P 10,000 from the count.

5. How much is the company’s Good out on Consignment?


a. P 20,000 b. P 10,000 c. P 30,000 d. P 00.00
6. How much is the company’s Goods held on Consignment?
a. P 20,000 b. P 10,000 c. P 30,000 d. P 00.00
7. What amount should the company reported as Inventory at year-end?
a. P 650,000 b. P 720,000 c. 630,000 d. P 670,000
PROBLEM 3
Andrade Company provided the following information for the current year:
a. On may 31 of the current year, the company paid P 56,000 insurance premium for two years in
advance and was originally recorded as Prepaid Insurance.
b. Four-days’ salaries of Averia, Balabbo and Balictar are still unpaid as at Dec. 31. Salaries are P 10,000
each for five-day work week
c. Caringal, a customer, made an advance payment of P 240,000 for a 1 year service from the company.
Caringal paid the company on Dec. 1 of last year
d. The company invested P 400,000 on a bond certificate that paid 4% annual interest.
e. Equipment costing P 588,000 has a useful life of five years with a scrap value of P 80,000.
The equipment was acquired beginning of last year.
8. Determine the amount to be reported as Prepaid Insurance at year-end?
a. P 16,333 b. P 39,667 c. P 32,667 d. P 23,333
9. Determine the amount to be reported as Accrued Expenses at year-end?
a. P 24,000 b. P 30,000 c. P 8,000 d. P 00.00
10. Determine the amount to be reported as Unearned Income at year-end?
a. P 20,000 b. P 220,000 c. P 240,000 d. P 00.00
11. Determine the amount to be reported as Interest Receivable at year-end?
a. P 400,000 b. P 16,000 c. P 4,000 d. P 00.00
12. Determine the amount to be reported as Book Value of Equipment at year-end?
a. P 588,000 b. P 203,200 c. P 486,400 d. P 384,000

PROBLEM 4
The following balances of Caringal Company are presented:

Accounts Payable P 100,000 Cash & Cash Equivalent P 130,000


Capital ? Notes Payable – 2 years 78,000
Brand Name 50,000 Prepaid Expenses 10,000
Equipment, Book Value 70,000 Salaries Expenses 25,000
Accumulated Depreciation 20,000 Accrued 24,000
Accounts Receivable, net 115,000
13. What amount should be presented as current assets?
a. P 217,000 b. P 245,000 c. P 255,000 d. P 342,000
14. What amount should be presented as non-current asset?
a. P 120,000 b. P 100,000 c. P 70,000 d. 50,000
15. How much is the current liabilities of Caringal Company?
a. P 178,000 b. 124,000 c. P 149,000 d. P 227,000
16. What amount should be presented as capital at year-end?
a. P 173,000 b. 197,000 c. 135,000 d. P 210,000

PROBLEM 5
The ABM12-13P Company is owned and managed by Mr. Mendoza. The following information are
provided:

2017 2018 2019

Beginning Capital P 204,000 356,200 19.

Ending Capital 17. 4,800 224,400

Net Income/ Loss 343,000 18. 280,456

Withdrawals 190,800 341,800 20.

Compute the missing amount.

Part I. Identify what is being asked in the statement.

1. SFP is based on the accounting equation ________.


2. These are the resources with future benefits that are within the control of the company.
3. It refers to funds readily available for use.
4. It is company’s right to collect
5. It is an identifiable non-monetary asset without a physical substance.
6. Time deposits for 90 days are reported as _______.
7. Time deposits with maturity of 1 year are _________.
8. A company’s post-dated check is treated as _________.
9. Accrued expense is a/an _________ account
10. Prepaid expense is a/an _________ account
11. It is an obligation to pay documented with a note.
12. It includes bills and coins kept in the premises of the company
13. Depreciation expense of the cash register is classified as _________ expense.
14. Statement of Comprehensive Income has a heading for the period covered that reads ________ year-
ended Dec. 31, 20XX
15. It is liability arising from the purchase of inventory.
Part II. Show your solutions and proper answer for each problem.
A. BPI Current Account P 100,000
PNB Savings Account 200,000
Traveler’s Check 20,000
Time Deposit-40 days 85,000
Treasury Bills – 120 days 88,000
Post dated check of customer 15,000
Petty cash fund 25,000
NSF Check 8,000
Sinking Fund 4,000
Bills and Coins 80,000
1. Cash on Hand 4. Receivables
2. Cash in Bank 5. Current Investments
3. Cash and Cash Equivalents

B. Finished Goods P 300,000 Raw Materials P 200,000


Used Supplies 70,000 Work in Process 100,000
Factory Supplies 50,000 Insurance Expired 20,000

Finished Goods include goods from a consignor worth P 20,000. Puno Company a consignor of our company, Cruz
Company, exclude goods amounting to P 10,000 from the count

6. Goods out on consignment


7. Goods held on consignment
8. Inventory at Year-end

C. a) On May 31 of current year, company paid P 56,000 for two years of insurance
b) Four days’ salaries of three employees are still unpaid at Dec 31. Salaries are P 10,000 each for a five-
day work week.
c) One of the company’s customers made an advance payment of P 240,000 for a 1 year contract. The
payment was made Dec. 1 of last year.
d) An investment of P 400,000 on a bond certificate was made on Sept. 30 of current year and pays 4%
annual interest and matures after 1 year.
e) Equipment costing P 588,000 with scrap value of P 80,000 and useful life of 5 years was acquired
beginning of last year.

9. Prepaid insurance 12. Interest Receivable


10. Accrued Expenses 13. Depreciation Expense
11. Unearned Income 14. Book value of equipment

D. Accounts payable P 100,000 Accounts Receivable P 130,000


Capital ? Notes Payable - 2 years 78,000
Brand Name 50,000 Prepaid Expenses 10,000
Equipment, Book Value 70,000 Salaries Expense 25,000
Accumulated Depreciation 20,000 Accrued Expenses 24,000
Cash and Cash Equivalents 115,000
E. Compute for the missing amount

2018 2019

Beginning Capital P 356,200 20.)

Ending Capital 4,800 224,400

Net Income/ Loss 9,600 280,456

Withdrawals 341,800 21.)

F. Sales Discount P 250,000 Freight-in P 300,000


Purchases 2,500,000 Rent Expense 150,000
Purchase Discount 280,000 Inventory, beg 1,000,000
Sales 5,000,000 Inventory, end 750,000

Sales returns 150,000 Advertising Expense 120,000


Depreciation Expense 100,000 Purchase Return 210,000
Bad Debts Expense 80,000 Utilities Expense 50,000
Salaries Expense 200,000 Income Tax 300%

22) Net Sales


23) Net Purchases
24) Cost of Goods Available for sale
25) Cost of Goods Sold
26) Gross Profit
27) Selling Expenses
28) General and Administrative Expenses
29) Net Income before tax
30) Net Income after tax
PROBLEM 1
CERIOLA COMPANY, A MANUFACTURING COMPANY, PROVIDED THE FOLLOWING INFORMATION:
BILLS AND COINS, INCLUDING A CUSTOMER CHECKS
DATED JAN. 31, 2017 AMOUNTING TO P 34,000 P 234,000
MANAGER’S CHECK 30,000
SUPPLIES ON HAND 15,000
TRAVELER’S CHECK 40,000
COMPANY’S POST-DATED CHECKS 70,000
TREASURY BILL – 30 DAYS 80,000
TIME DEPOSIT – 60 DAYS 60,000
DELA PAZ BANK – CURRENT ACCOUNT 100,000
ESPIRITU BANK – SAVINGS ACCOUNT 120,000
POSTAGE STAMPS 9,000
TREASURY BILLS – 120 DAYS 30,000
MONEY ORDER 45,000

DETERMINE THE AMOUNT TO BE PRESENTED AS:


1. CASH ON HAND 6. RECEIVABLES
2. CASH IN BANK 7 CURRENT INVESTMENTS
3. CASH 8. CURRENT ASSETS
4. CASH & CASH EQUIVALENTS 9. ACCOUNTS PAYABLE
PROBLEM 2
FRONDOZO COMPANY PROVIDED THE FOLLOWING ITEMS:
FINISHED GOODS INVENTORY P 500,000
WORK IN PROCESS – GOODS 300,000
USED FACTORY SUPPLIES 450,000
FINISHED GOODS IN THE HANDS OF
GRATELA (CONSIGNEE) 20,000
GUITERREZ (CONSIGNEE) 30,000
HAFALLA (CONSIGNEE) 60,000
THE FOLLOWING GOODS ARE INCLUDED IN THE
FINISHED GOODS INVENTORY
GOODS OUT ON CONSIGNMENT -JODAI 25,000
-KAUR 10,000
GOODS HELD ON CONSIGNMENT -LATORRE 15,000
-LAZARO 8,000
THE FOLLOWING GOODS ARE EXCLUDED IN FINISHED
GOOD INVENTORY
GOODS OUT ON CONSIGNMENT-LESAGUIS 23,000
GOODS HELD ON CONSIGNMENT-MIGUEL 32,000
DETERMINE THE AMOUNT OF THE FOLLOWING ITEMS:
1. GOODS HELD ON CONSIGNMENT
2. GOODS OUT ON CONSIGNMENT
3. INVENTORY AS OF YEAR-END
PROBLEM 3
THE FOLLOWING INFORMATION ARE PRESENTED BT MUNASQUE COMPANY AS OF THER YEAR-ENDED DECEMBER
31, 2015
A. ON NOVEMBER 1, 2015, THE COMPANY PAID P 36,000 FOR ITS INSURANCE COMPANY FOR 3 YEARS.
B. ALL EMPLOYEES EARN A TOTAL OF P 10,000 PER DAY FOR A FIVE-DAY WORK WEEK BEGINNING ON
MONDAY AND ENDING FRIDAY. THEY WERE PAID FOR A WORKWEEK ENDING DEC 26. THEY WORKED
ON MONDAY, DEC 29, TUESDAY, DEC 30, WEDNESDAY, DEC 31
C. A THREE-YEAR CUSTOMER NOTE WAS RECEIVED LAST SEPT. 31, 2015 AMOUNTING TO P 200,000
WITH A 7% INTEREST
D. RECEIVED A P 18,000 CASH ADVANCE FOR A CONTRACT TO PROVIDE SERVICES IN THE FUTURE. THE
CONTRACT REQUIRED A 1-YEAR COMMITMENT STARTING AUGUST 1.
E. A BUILDING WAS PURCHASED LAST YEAR OF JUNE 30 FOR 270,000. THE EXPECTED USEFUL LIFE IS
THREE YEARS WITH NO SALVAGE VALUE.

WHAT AMOUNT SHOULD THE FOLLOWING BE REPORTED IN YEAR-ENDS FINANCIAL STATEMENT?


1. INSURANCE EXPENSE 6. INTEREST RECEIVABLE
2. PREPAID INSURANCE 7. SERVICE REVENUE
3. SALARIES EXPENSE 8. UNEARNED SERVICE REVENUE
4. SALARIES PAYABLE 9. DEPRECIATION EXPENSE
5. INTEREST INCOME 10. BOOK VALUE OF BUILDING

PROBLEM 4
THE FOLLOWING INFORMATION ARE PROVIDED BY PADILLA COMPANY:
CASH P 210,000 MISCELLANEOUS EXPENSE P 80,000
UNEARNED REVENUE 120,000 SUPPLIES ON HAND 70,000
ACCOUNTS RECEIVABLE 320,000 PREPAID INSURANCE 160,000
ACCOUNTS PAYABLE 350,000 NOTES PAYABLE 2-YRS 230,000
INVENTORY 400,000 EQUIPMENT 450,000
ACCUM. DEPRECIATION 150,000 TRADEMARKS 150,000
NOTES RECEIVABLE 100,000 ALLOW FOR BAD DEBTS 120,000
SALARIES PAYABLE 300,000 PADILLA, CAPITAL ??
DETERMINE THE AMOUNT OF THE FOLLOWING ITEMS:
1. CURRENT ASSETS 5. NON-CURRENT LIABILITIES
2. NON-CURRENT ASSETS 6. TOTAL LIABILITIES
3. TOTAL ASSETS 7. PADILLA, CAPITAL
4. CURRENT LIABILITIES

PROBLEM 5

ABM 12-3M COMPANY


STATEMENT OF COMPEHENSIVE INCOME

FOR THE YEAR ENDED 2011 2013 2015


December 31,

DEPRECIATION EXPENSE 80,000 80,000 80,000

SALES DISCOUNT 250,000 180,000 150,000

PURCHASES 2,400,000 2,300,000 2,100,000

PURCHASE DISCOUNT 270,000 230,000 180,000

SALES 5,300,000 4,100,000 3,400,000

SALES RETURN 170,000 180,000 200,000

BAD DEBTS EXPENSE 85,000 75,000 65,000

FREIGHT IN 150,000 180,000 200,000

RENT EXPENSE 150,000 130,000 60,000

BEGINNING INVENTORY 1,100,000 700,000 600,000

ENDING INVENTORY 750,000 720,000 680,000

ADVERTISING EXPENSE 120,000 120,000 120,000

PURCHASE RETURN 170,000 190,000 180,000

UTILITIES EXPENSE 50,000 45,000 30,000

SALARIES EXPENSE 180,000 175,000 165,000


PROBLEM 1
FILL IN THE BLANKS. COMPUTE AND WRITE THE MISSING AMOUNT ON THE SPACE PROVIDED.

ABM12-3P COMPANY
STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 2011 2013 2015 2017 2019


December 31,

DEPRECIATION INCOME 100,00 80,000 60,000 40,000 30,000

SALES DISCOUNT 250,000 E. 150,000 100,000 50,000

PURCHASES 2,500,000 2,200,000 K. 1,600,000 1,300,000

PURCHASE DISCOUNT 280,000 240,000 200,000 Q. 120,000

SALES 5,000,000 4,000,000 3,000,000 2,000,000 V.

SALES RETURN AND 150,000 120,000 l. 60,000 30,000


ALLOWANCES

NET INCOME BEFORE TAX 1,340,000 1,050,000 M. 310,000 (5,000)

NET PURCHASES 2,310,000 1,920,000 1,730,000 1,440,000 W.

TOTAL EXPENSES 700,000 610,000 490,000 290,000 125,000

NET SALES A. 3,680,000 2,760,000 R. 920,000

BAD DEBTS INCOME 80,000 70,000 60,000 50,000 X.

COST OF GOOD SOLD 2,560,000 2,020,000 1,680,000 1,240,000 Y.

NET INCOME 938,000 735,000 413,000 217,000 Z.


GROSS PROFIT 2,040,000 F. N. 600,000 120,000

FREIGHT IN 300,000 G. 200,000 150,000 100,000

RENT EXPENSE 150,000 130,000 60,000 S. 15,000

BEGINNING INVENTORY 1,000,000 800,000 O. 400,000 200,000

ENDING INVENTORY 750,000 H. 650,000 600,000 550,000

GOODS AVAILABLE FOR B. 2,720,000 2,330,000 T. 1,350,000


SALE

ADVERTISING EXPENSE 120,000 120,000 P. 70,000 20,000

PURCHASE RETURN AND C. 190,000 170,000 150,000 130,000


ALLOWANCES

UTILITIES EXPENSE 50,000 I. 30,000 20,000 10,000

SALARIES EXPENSE D. 170,000 160,000 80,000 40,000

INCOME TAX EXPENSE 402,000 J. 177,000 U.


Fundamental of Accounting, Part II
Statement of Cash Flows

1. The following are various cash and other information of the Nakakainis Company for 2017:
a. Payment of interest, P 82,000
b. Proceeds from sale of land, P 79,000
c. Payment of dividends, P 121,000
d. Depreciation expense, P 24,000
e. Collections from customers, P 983,000
f. Payment of income taxes, P 154,000
g. Proceeds from issuance of ordinary share capital, P 189,000
h. Payments to suppliers and employees, P 675,000
i. Increase of inventories, P 46,000

Required: Prepare the operating activities section of Nakakainis Company’s 2017 Statement of Cash Flows using
the direct method.

2. The Always Absent Company reported the condensed profit or loss for 2016.
Sales P 1,000,000
Less: Cost of Goods Sold 580,000
___________
Gross Profit P 420,000
Less: Operating Expenses
Depreciation Expense P 80,000
Salaries Expense 120,000 200,000
Net income P 220,000

During 2016, the following changes occurred in the company’s current assets and current liabilities:
Increase in Cash P 37,000
Decrease in Accounts Receivables 50,000
Increase in Inventories 89,000
Decrease in Accounts Payable 46,000
Increase in Salaries Payable 24,000
Required: Prepare the operating activities section of the Always Absent Company for the year 2016 using a.)
indirect method and b.) direct method

3. Late Lagi’s Company’s transactions for the year ended December 31, 2016 included the following:
 Purchased real estate for P 550,000 cash which was borrowed from a bank
 Sold investment securities for P 500,000
 Paid dividends of P 600,000
 Issued 500 ordinary shares for P 250,000 cash
 Purchased machinery and equipment for P 125,000
 Paid P 450,000 toward a bank loan
Required: Determine the net cash used in investing activities
Determine the net cash used in financing activities
4. The following was taken from the 2016 financial statements of Pasaway Company:
Accounts Receivable January 1: P 216,000 December 31: P 304,000
Sales, all on credit: P 4,380,000
Bad debts Expense: P 10,000

Required: How much is the amount of cash collected from customers during 2016?

PROBLEM 1
ABM 12-2P Enterprises provided the following information for the year-ended December 31, 2018
Cash Paid to Supplier P 1,530,000
Interest Paid 55,000
Cash Receipt from the Disposal of Equipment 456,000
Additional Investment from Owner 250,000
Cash Receipt from Non-Trade Long-Term Borrowings 355,000
Cash Paid for the Acquisition of Building 650,000
Cash Withdrawals made by Owner 60,000
Cash Payment to Employees 120,000
Cash Paid to Utilities Companies 85,000
Cash Received from Customers 2,450,000
Cash Balance, Beginning 270,000
Requirements:
1. Net Cash Provided by Operating Activities 4. Net Increase/ Decrease in Cash
2. Net Cash Provided by Investing Activities 5. Cash Balance Ending
3. Net Cash Provided by Financing Activities

PROBLEM 2
ABM 12-6P Company provided the following information for the current year:
Cash Paid to Supplier P 500,000
Utilities Expense Paid 50,000
Cash Paid to Employees 150,000
Depreciation Expense 30,000
Accounts Receivable, Beginning 100,000
Accounts Receivable, Ending 200,000
Total Sales 1,750,000
Cash Sales 850,000
Requirements:
1. Credit Sales 3. Net Cash Provided by Operating Activities
2. Cash Collected from Customers

PROBLEM 3
ABM 12 – 4P Company provided the following information for the current year:
Cash Paid to Supplier P 500,000
Utilities Expense Paid 50,000
Cash Paid to Employees 150,000
Depreciation Expense 30,000
Accounts Receivable, Beginning 100,000
Accounts Receivable, Ending 200,000
Gross Profit 550,000
Gross Profit Ratio 25%
Cash Sales 850,000
Compute the following (1) Credit Sales, (2) Cash Collected from Customers, (3) Net Cash Provided by Operating
Activities. Assuming:
1. Gross Profit is based on Sales 2. Gross Profit is Based on Cost of Goods Sold

PROBLEM 4
ABM 12-1P Provided the following information:
Cash Paid to Supplier P 500,000
Utilities Expense Paid 50,000
Cash Paid to Employees 150,000
Depreciation Expense 30,000
Accounts Receivable, Beginning 100,000
Accounts Receivable, Ending 200,000
Total Purchase 1,750,000
Credit Purchases 850,000
Requirements:
1. Cash Purchases 3. Net Cash Provided by Operating Activities
2. Cash Paid to Suppliers

PROBLEM 5
ABM 12-5P Company provided the following information for the current year:
Cash Received from Customers P 500,000
Utilities Expense Paid 50,000
Inventory, Beginning 75,000
Inventory, Ending 110,000
Cash Paid to Employees 120,000
Depreciation Expense 30,000
Accounts Payable, Beginning 100,000
Accounts Payable, Ending 200,000
Gross Profit 550,000
Gross Profit Ratio 25%
Cash Purchases 150,000
Compute the following (1) Credit Purchases, (2) Cash Paid to Suppliers, (3) Net Cash Provided by Operating
Activities.
Assuming:
1. Gross Profit is based on Sales
2. Gross Profit is Based on Cost of Goods Sold

PROBLEM 6
ABM 12-9P Company provided the following information for the current year:
Accounts Payable, Beginning P 100,000
Utilities Expense Paid 50,000
Salaries Payable, Beginning 15,000
Salaries Expense 75,000
Account Receivable, Beginning 160,000
Cash Purchases 120,000
Account Receivable, Ending 140,000
Credit Sales 900,000
Total Purchases 750,000
Cash Sales 130,000
Accounts Payable, Ending 150,000
Salaries Payable, Ending 20,000
Requirements:
1. Cash Received from Customers 3. Cash Paid to Employees
2. Cash Paid to Suppliers 4. Net Cash Provided by Operating Activities

PROBLEM 7
ABM 12-7P Enterprises provided the following balances for the current year:

Beginning Ending
Accounts Payable P 100,000 120,000
Accounts Receivable 150,000 140,000
Allowance for Bad Debts 10,000 15,000
Prepaid Rent 75,000 50,000
Salaries Payable 15,000 60,000
Utilities Payable 75,000 40,000
Inventories 55,000 170,000
Net Income for the current year is P 735,000. What is the net cash from operations?

PROBLEM 8
The profit or loss accounts of ABM 12-1M Corporation for the year 2016 included the following:
Revenues P 8,000,000
Operating Expenses P 7,200,000
The operating expenses included depreciation of P 150,000 and intangible asset amortization of P 20,000
Changes in current asset and current liability account during 2016 were as follows:
 Accounts Receivable` P 60,000 increase
 Merchandise Inventory 50,000 increase
 Accounts Payable 90,000 increase
 Salaries and wages payable 30,000 increase
 Interest Payable 5,000 increase
 Income Tax Payable 25,000 increase
How much should be reported as cash generated from operating activities during 2016?

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