MONDRIAAN AURA COLLEGE Refresher I Practical Accounting 1 PA 1 - 00 1!
On "anuar# "anuar# 1$ 00%$ a grou& of stoc'hol(ers stoc'hol(ers set u& Delta$ Delta$ Inc! )he# contri*ute( cash of P 1$+00$000 an( an( *orro,e( P 0$000! 0$000! During the #ear$ #ear$ reenues fro. sales totale( P 1%/$000$ 1%/$000$ ,hile total cost an( e&enses ,ere P 1$000! Delta (eclare( a cash (ii(en( of P %$000 %$000 on Dece.*er 1+ &a#a*le &a#a*le to the stoc'hol(ers on "anuar# 1+$ 002! )here ,ere no a((itional actiities affecting affecting stoc'hol(ers3 e4uit#! e4uit#! 5# Dece.*er Dece.*er 61$ 00%$ lia*ilities increase( to P /0$000! )otal assets shoul( *e re&orte( on Delta3s Dece.*er Dece.*er 61$ 00% 00% *alance she at7 a! P 1$2+0$000!00 *! P 1$2%/$000!00 c! P 1$220$000!00 (! P 1$2+%$000!00
!
Ma*uha# Cor&! has current assets of P10$000 an( current lia*ilities of of P 6%0$000! 8hich of of the follo,ing follo,ing transactions ,oul( i.&roe Ma*uha#3s current ratio9 a! Refinancing a P%0$000 long-ter. long-ter. .ortgage .ortgage ,ith a short-ter. note! *! Collecting P 0$000 of of short-ter. accounts receia*le c! Purchasing P100$000 P100$000 of .erchan(ise .erchan(ise inentor# ,ith a short-ter. short-ter. accounts &a#a*le (! Pa#ing P/0$000 of short-ter. accounts &a#a*le!
6!
:ho,n *elo, *elo, are selecte( (ata fro. the *alance sheet of ;oli(a# Cor&!$ a grocer# store7 Current lia*ilities P 1+0$000$000!00 Non-current lia*ilities Cash Accounts receia*le Inentor# )otal assets )he 4uic' ratio is7 a! 0! to 1 *! 1!+ to 1
/!
10$000$000!00 0$000$000!00 100$000$000!00 1<+$000$000!00 /+0$000$000!00 c! !1 to 1
)he account *alances of =ia Cor&! as of Dece.*er Dece.*er 61$ 00% 00% follo,7 Accounts &a#a*le P Accounts receia*le
(! 0!166 to 1
100$000!00 10$000!00
5uil(ing /00$000!00 Ca&ital stoc' 2%0$000!00 Cash %0$000!00 E4ui&.ent 1%0$000!00 Lan( +0$000!00 Notes &a#a*le &a#a*le 0$000!00 Retaine( earnings 100$000!00 In trial *alance &re&are( on Dece.*er 61$ 00%$ the su. of the (e*it colu.n is7 a! P %0!000!00 *! P 1$//0$000!00 c! P 2<0$000!00 (! P 1$/0$000!00 +!
)he ,or'ing ca&ital of Regala(o Co.&an# Co.&an# is P %00$000 an( its current ratio is 6 to 1! )he a.ount a.ount of current current assets is7
a! P <00$000!00
*! P 1$00$000!00
c! P %00$000!00
(! P 1$00$000!00
a! P <00$000!00
*! P 1$00$000!00
c! P %00$000!00
(! P 1$00$000!00
Nos 6 and 7 are based on the following information:
)he accounts an( *alances sho,n *elo, ,ere gathere( fro. Clo,n Co.&an#3s trial *alance on Dece.*er 61$ 00%! All a(>usting entries hae *een .a(e! 8ages &a#a*le$ P+0$000? Cash an( cash e4uialents$ P12+$000? 5on(s &a#a*le$ P%00$000? Dii(en(s &a#a*le$ P1/0$000? Pre&ai( insurance$ P 16%$000? Inentor#$ P0$000? :in'ing @un( Asset$ P++$000? )ra(ing securities$ P1+6$000? Aaila*le for sale securities$ P600$000? Pre.iu.s on 5on(s Pa#a*le$ P/$000? Inest.ents in :u*si(iar#$ P1$00$000? )aes &a#a*le$ P$000? Accounts &a#a*le$ P/$000? Loans an( Receia*les$ P6%%$000? PPE$ P1$00$000? Patents-net$ P1+0$000? Accu.! De&3n-PPE$ P/00$000? Lan( hel( for future *usiness site$ P<00$000? an( Goo(,ill$ P/+0$000!
Nos 6 and 7 are based on the following information:
)he accounts an( *alances sho,n *elo, ,ere gathere( fro. Clo,n Co.&an#3s trial *alance on Dece.*er 61$ 00%! All a(>usting entries hae *een .a(e! 8ages &a#a*le$ P+0$000? Cash an( cash e4uialents$ P12+$000? 5on(s &a#a*le$ P%00$000? Dii(en(s &a#a*le$ P1/0$000? Pre&ai( insurance$ P 16%$000? Inentor#$ P0$000? :in'ing @un( Asset$ P++$000? )ra(ing securities$ P1+6$000? Aaila*le for sale securities$ P600$000? Pre.iu.s on 5on(s Pa#a*le$ P/$000? Inest.ents in :u*si(iar#$ P1$00$000? )aes &a#a*le$ P$000? Accounts &a#a*le$ P/$000? Loans an( Receia*les$ P6%%$000? PPE$ P1$00$000? Patents-net$ P1+0$000? Accu.! De&3n-PPE$ P/00$000? Lan( hel( for future *usiness site$ P<00$000? an( Goo(,ill$ P/+0$000! %!
;o, .uch shoul( *e the a.ount of current an( non-current assets$ res&ectiel#$ on Clo,n3s Dece.*er 61$ 00% *alance sheet9 a! P 1$%+0$000!00 an( P 6$/+$000!00
c! P 1$<+0$000!00 an( P 6$/+$000!00
*! P 1!%+0$000!00 an( P /$1+0$000!00
(! P 1$<+0$000!00 an( P /$1+0$000!00
2!
;o, .uch shoul( *e the a.ount of current an( non-current lia*ilities$ res&ectiel#$ to *e re&orte( in the Dece.*er 61$ 00% *alance sheet of Clo,n Co.&an#9 a! P 22%$000!00 an( P ++$000!00 c! P <1%$000!00 an( P %/0$000!00 *! P %%$000!00 an( P %/$000!00 (! P <1%$000!00 an( P %/$000!00
!
Leer Co! &re&are( a (raft of its 00% *alance sheet! )he (raft state.ent re&orte( current lia*ilities totaling P$000$000! ;o,eer$ none of the follo,ing ite.s ,ere inclu(e( in this &reli.inar# total at Dece.*er 61$ 00%7 Accounts &a#a*le$ P600$000? *on(s &a#a*le (ue in 002$ P+00$000? (iscount on *on(s &a#a*le$ P%0$000? (ii(en(s &a#a*le (ue 002$ P1%0$000? notes &a#a*le (ue 00$ P/00$000? *on( issue costs$ P0$000? (eferre( ta lia*ilit#$ P%0$000? an( call o&tion lia*ilit#$ P10$000!00! )he (eferre( ta lia*ilit# is ecess ta (e&reciation oer financial that is e&ecte( to reerse in the net three #ears! Leer Co! entere( into a contract that gies the co.&an# to the right to (elier an ite. of co..o(it# on March 60$ 002! At , a.ount shoul( Leer3s current lia*ilities correctl# re&orte( in the Dece.*er 61$ 00% *alance sheet9 a! P$0$000!00 *! P$<00$000!00 c! P6$0<0$000!00 (! P6$110$000!00
On Dece.*er 61$ 00+$ :tar Co! sho,e( the follo,ing infor.ation7 Or(inar# share ca&ital$ no &ar$ +0$000 shares issue( at a &rice of P1 &er share? Preference share ca&ital$ &ar P+$ 10$000 shares issue( an( outstan(ing$ issue( at P1+ &er share? Unrealie( hol(ing gain on aaila*le for securities$ P10$000? Accu.ulate( &rofits an( losses$ P00$000? Preference share su*scri*e( B/$000 shares not #et issue(! :u*scri&tio &rice P0 &er share? :u*scri&tion receia*le on &reference share$ P+0$000 to *e collecte( on "anuar# 00%? Realuation resere$ P+0$000? Resere for treasur# share$ P100$000 an( )reasur# share$ or(inar# share$ 10$000 shares$ P100$000! :tar Co! has a total sharehol(ers3 e4uit# of7 a! P1$1%0$000!00 *! P1$10$000!00 c! P1$/10$000!00 (! P1$/%0$000!00
10!
)he cash account in Rose Co.&an#3s le(ger on Dece.*er 61$ 002 sho,e( a *alance of P++$000 ,hich inclu(e( the follo,ing7 Pett# cash fun( P Un(e&osite( recei&ts$ inclu(ing a PDC chec' of P10$000
Cash in *an' Cash in sin'ing fun( =ouchers &ai( out of collections$ not #et recor(e( IOUs signe( *# e.&lo#ee )otal
P
At ,hat a.ount shoul( Rose Co.&an# re&ort as cash on the Dece.*er 61$ 002 *alance sheet9 a! P62+$000!00 *! P ++$000!00 c! P /2+$000!00 (! P 6+0$000!00
Cash in *an' Cash in sin'ing fun( =ouchers &ai( out of collections$ not #et recor(e( IOUs signe( *# e.&lo#ee )otal
P
At ,hat a.ount shoul( Rose Co.&an# re&ort as cash on the Dece.*er 61$ 002 *alance sheet9 a! P62+$000!00 *! P ++$000!00 c! P /2+$000!00 (! P 6+0$000!00
t
t
at
ale
+$000!00 160$000!00
+0$000!00 100$000!00 +$000!00 1+$000!00 ++$000!00
+0$000!00 100$000!00 +$000!00 1+$000!00 ++$000!00
MONDRIAAN AURA COLLEGE Refresher 1 Practical Accounting I PA I - 006 Inco.e :tate.ent 1!
Merit Cor&! has an arrange.ent ,ith its custo.ers that$ in an# 1-.onth &erio( en(ing .arch 61$ if the# &urchase goo(s for a alue of at least P $000$000$ the# ,ill receie a retros&ectie (iscount of ! At the en( of the #ear Dece.*er 61$ 002$Merit Cor&! has .a(e sales to acusto.er (uring the &erio( A&ril to Dece.*er 61$ 002 of P1$00$000! 8hat a.ount of reenue shoul( Merit Cor&! re&ort in its Dece.*er 61$ 002 inco.e
MONDRIAAN AURA COLLEGE Refresher 1 Practical Accounting I PA I - 006 Inco.e :tate.ent 1!
Merit Cor&! has an arrange.ent ,ith its custo.ers that$ in an# 1-.onth &erio( en(ing .arch 61$ if the# &urchase goo(s for a alue of at least P $000$000$ the# ,ill receie a retros&ectie (iscount of ! At the en( of the #ear Dece.*er 61$ 002$Merit Cor&! has .a(e sales to acusto.er (uring the &erio( A&ril to Dece.*er 61$ 002 of P1$00$000! 8hat a.ount of reenue shoul( Merit Cor&! re&ort in its Dece.*er 61$ 002 inco.e state.ent relate( to the a*oe arrange.ent9 a! P1$66$000!00
!
*! P1$2%/$000!00
c! P1$00$000!00
(! P1$<%0$000!00
Collins Mar'eting Cor&! sells .erchan(ise ,ith a cost of P600$000 to :.ith Cor&! for P/0$000 an( a cre(it &erio( of si .onths! Collins Mar'eting Cor&! nor.al selling &rice ,oul( hae *een P62+$000 ,ith a cre(it &erio( of one .onth an( ,ith a (iscount of P1+$000 for cash on (elier#! 8hat a.ount of reenue fro. sales shoul( Collins Mar'eting Cor&! recognie(9 a! P 6%0$000!00
6!
*! P 62+$000!00
c! P /0+$000!00
(! P /0$000!00
Cli&&ers :erice Co! sells so.e e4ui&.ent$ the cash &rice of the e4ui&.ent is P/00$000 *ut it ,as sol( for P+%0$000 *ut it ,as sol( for P +%0$000 ,ith a co..it.ent to serice the e4ui&.ent for a &erio( of t,o #ears$ ,ith no further charge! 8hat a.ount of reenue shoul( Cli&&ers :erice Co! recognie on the (ate of sale! a! None
/!
*! P /00$000!00
c! P /0$000!00
(! P +%0$000!00
5ulls Mar'eting Co! has .anufacture( a .achine s&ecificall# to the (esign of its custo.er! An# other &art# coul( not use the .achine! 5ulls Mar'eting Co! has neer .anufacture( this t#&e of .achine *efore an( e&ects a nu.*er of faults to .aterialie in its o&eration (uring its first #ear of use$ ,hich 5ulls Mar'eting Co! is contractuall# *oun( to rectif# at no further cost to the custo.er! )he nature of these faults coul( ,ell *e significant! As of Dece.*er 61$ 002$ the .achine ha( *een (eliere( an( installe(! )he custo.e ,as inoice for P+00$000 Bcontract &rice$ an( the cost incurre( u& to the &oint of installation ,as P 6+$000! 8hat a.ount of reenue fro. sales shoul( 5ulls Mar'eting Co! recognie on Dece.*er 61$ 0029 a! None
+!
*! P 12+$000!00
c! P 6+$000!00
(! P +00$000!00
)he follo,ing infor.ation ,as ta'en fro. the accounting recor(s of @ree.an Co! for the #ear en(e( Dece.*er 61$ 00+7 Ra, .aterials &urchase($ P$000$000? increase in ra, .aterials inentor#$ P/00$000? (irect la*or cost$ P+$000$000? factor# oerhea($ P%$000$000? (ecrease in ,or' in &rocess inentor#$ P600$000? an( increase in finishe( goo(s inentor#$ P%00$000! Cost of goo(s sol( in 00+ shoul( *e7 a! P1$600$000
%!
*! P1$+00$000
c! P1<$+00$000
(! P0$600$000
)he follo,ing infor.ation &ertains to :uret# Co!3s 00% cost of sales7
Inentor#$ "anuar#
P
Inentor#$ Dece.*er 61 Purchases Purchases Returns Purchase (iscounts @reight In 8rite-off of o*solete inentor# 8hat a.ount shoul( the co.&an# re&ort as cost of sales9 a! P 10$/0$000 2!
*! P 10$2/0$000
c! P 11$00$000
)he follo,ing infor.ation &ertains to :tar Enter&rise ca&ital an( other relate( accounts7
(! P 1$00!000
Inentor#$ "anuar#
P
Inentor#$ Dece.*er 61 Purchases Purchases Returns Purchase (iscounts @reight In 8rite-off of o*solete inentor# 8hat a.ount shoul( the co.&an# re&ort as cost of sales9 a! P 10$/0$000 2!
*! P 10$2/0$000
c! P 11$00$000
(! P 1$00!000
)he follo,ing infor.ation &ertains to :tar Enter&rise ca&ital an( other relate( accounts7 Initial inest.ent .a(e *# the o,ner on "anuar# $ 00%7 Cash
P
00$000!00
Noncash B.ar'et$ P%00$000
/00$000!00
A((3l inest.ent .a(e (uring the accounting &erio( )otal lia*ilities &ai( (uring the #ear Binclu(ing P600$000 ,Fc ,as &ai( out of &ersonal fun(s *# the o,ner Merchan(ise ta'en *# the o,ner at cost Ca&ital *alance at #ear en( 5ase( on the a*oe li.ite( infor.ation$ ho, .uch (i( :tar Enter&rise earn (uring the #ear9 a! P +0$000!00 !
*! P 6+0$000!00
c! P ++0$000!00
(! P +0$000!00
Presente( *elo, are #ear-en( *alances of the assets an( lia*ilities &ertaining to Goo( Merchan(ising7 00% Cash
P
1+0$000!00
Current .ar'eta*le securities
%0$000!00
Accounts receia*le$ net
6%0$000!00
Inentories
20+$000!00
Pre&ai( e&enses
160$000!00
Accounts &a#a*le
1$000!00
Other current lia*ilities
1/1$000!00
5on(s &a#a*le
00$000!00
A((itional inest.ent .a(e *# O! Goo($ o,ner of Goo( Morning M(sg!$ (uring 00% ,as P 1+0$000 *ut a P%0$000 &ersonal lia*iliti# ,as &ai( out of co.&an#3s fun(s! ;o, .uch net inco.e (i( the co.&an# realie (uring 00%9 a! P 160$000!00
*! P 1/0$000!00
c! P 1<0$000!00
(! P <0$000!00
Monarch Co.&an#3s account *alances (uring 00+ sho,e( the follo,ing changes7 Current assets
P
6$000$000!00
Noncurrent assets
$+00$000!00
Current lia*ilities
1$000$000!00
Noncurrent lia*ilities
1$%00$000!00
:hare ca&ital
1$00$000!00
:hare &re.iu. ca&ital
00$000!00
)here ,as no changes in retaine( earnings for 00% other than a P1$+00$000 (ii(en( &a#.ent an( #ear-en( result of o&erations! ;o, .uch is Monarch3s net loss for 00%9 a! P +00$000!00
*! P %00$000!00
c! P 200$000!00
(! P 00$000!00
10! Presente( *elo, are #ear-en( *alances of the assets an( lia*ilities &ertaining to )u(or Cor&! for the #ears 00+ an( 00%7 00+ Current assets Noncurrent assets
P
6$000$000!00 2$000$000!00
:hare ca&ital
1$00$000!00
:hare &re.iu. ca&ital
00$000!00
)here ,as no changes in retaine( earnings for 00% other than a P1$+00$000 (ii(en( &a#.ent an( #ear-en( result of o&erations! ;o, .uch is Monarch3s net loss for 00%9 a! P +00$000!00
*! P %00$000!00
c! P 200$000!00
(! P 00$000!00
10! Presente( *elo, are #ear-en( *alances of the assets an( lia*ilities &ertaining to )u(or Cor&! for the #ears 00+ an( 00%7 00+ Current assets
P
6$000$000!00
Noncurrent assets
2$000$000!00
Current lia*ilities
$00$000!00
Noncurrent lia*ilities
$00$000!00
During 00%$ )u(or Cor&! issue( a((itional shares for a total &rocee(s of P$000$000 of ,hich P00$000 ,as use( to &a# (ii(en(s accruing to last #ear that has *een (eclare( &reiousl# an( a P1$000$000 current #ear (ii(en(! It ,as also note( that a &iece of lan( ,as receie( as (onation ,ith a fair .ar'et alue of P$000$000$ cost to &rocess the (onation ,as P +0$000! 8hat a.ount of net inco.eFloss the co.&an# earne(F incurre( in 00%9 a! P 00$000!00 net loss
c! P 1$00$000!00 net loss
*! P 1$000$000!00 net loss
(! P $000$000!00 net loss
/$000$000!00 6$000$000!00 10$000$000!00 100$000!00 10$000!00 0$000!00 +00$000!00
/$000$000!00 6$000$000!00 10$000$000!00 100$000!00 10$000!00 0$000!00 +00$000!00
%00$000!00 /00$000!00 1$00$000!00 10$000!00 1$%60$000!00
00+
10$000!00 60$000!00 /00$000!00 %6+$000!00 1$000!00 16%$000!00 1+$000!00 00$000!00
increase (ecrease (ecrease increase
increase increase
00%
+$+00$000!00 +$+00$000!00
increase increase
00%
+$+00$000!00 +$+00$000!00 $000$000!00 $000$000!00
MONDRIAAN AURA COLLEGE Refresher 1 Practical Accounting I PA I - 00/ 1!
Merlin Co.&an#3s inetor# at Octo*er 61$ 00% ,as P1/$000 *ase( on &h#sical count of goo(s &rice( at cost an( *efore an# necessar# a(>ust.ents relating to the follo,ing7 a! An inoice for P10$000$ ter.s @O5 shi&&ing &oint$ ,as receie( an( recor(e( Noe.*er +! )he inoice sho,s that the .aterial ,as shi&&e( Octo*er 61$ *ut the receiing re&ort in(icates recei&t of goo(s on Noe.*er 6! *! An inoice for P+$000$ ter.s @O5 (estination$ ,as receie( an( recor(e( Noe.*er ! )he receiing
MONDRIAAN AURA COLLEGE Refresher 1 Practical Accounting I PA I - 00/ 1!
Merlin Co.&an#3s inetor# at Octo*er 61$ 00% ,as P1/$000 *ase( on &h#sical count of goo(s &rice( at cost an( *efore an# necessar# a(>ust.ents relating to the follo,ing7 a! An inoice for P10$000$ ter.s @O5 shi&&ing &oint$ ,as receie( an( recor(e( Noe.*er +! )he inoice sho,s that the .aterial ,as shi&&e( Octo*er 61$ *ut the receiing re&ort in(icates recei&t of goo(s on Noe.*er 6! *! An inoice for P+$000$ ter.s @O5 (estination$ ,as receie( an( recor(e( Noe.*er ! )he receiing re&ort in(icates that the goo(s ,ere receie( Noe.*er +! c! An inoice for P$000 ,as receie( an( recor(e( Octo*er 2! )he receiing re&ort attache( to the inoice in(icates that the shi&.ent ,as receie( Octo*er 60 in satisfactor# con(ition! )er.s of the shi&.ent7 @O5 shi&&ing &oint on Octo*er 2! (! An inoice for P1+$000$ ter.s @O5 (estination$ ,as receie( an( recor(e( Noe.*er +! )he receiing re&ort in(icates that the .erchan(ising ,as receie( Octo*er 60! 8hat a.ount shoul( Merlin re&ort as inentor# in its Octo*er 61$ 00% *alance sheet9 a! P 1+$000!00
!
*! P 1+2$000!00
c! P 1%+$000!00
(! P 10$000!00
In an annual au(it of 5o,l Co! at Dece.*er 61$ 00%$ #ou fin( the follo,ing transactions near the closing (ate7 a! A P100$000 s&ecial .achine$ fa*ricate( to or(er for a custo.er$ ,as finishe( an( s&ecificall# segregate( in the *ac' &art of the shi&&ing roo. on Dece.*er 61$ 00%! )he custo.er ,as *ille( on that (ate an( the .achine ,as eclu(e( fro. inentor# although it ,as shi&&e( on "anuar# /$ 002! *! Merchan(ise costing P$000 ,as receie( on "anuar# 6$ 002$ an( the relate( &urchase inoice ,as recor(e( on "anuar# +! )he inoice sho,e( the shi&.ent ,as .a(e on Dece.*er <$ 00%$ @O5
(estination!
c! A &ac'ing case containing a &ro(uct costing P 6/$000 ,as stan(ing in the shi&&ing roo. ,hen the &h#sical inentor# ,as ta'en! It ,as not inclu(e( in the inentor# *ecause it ,as .ar'e( ;el( for shi&&ing instructions! our inestigation reeale( that the custo.er3s or(er ,as (ate( Dece.*er 1$ 00%$ *ut that the case ,as shi&&e( an( the custo.er ,as *ille( on "anuar# 10$ 002! )he &ro(uct ,as a stoc' ite. of #our client! (! Merchan(ise receie( on "anuar# %$ 002 costing P0$000$ ,as entere( in the &urchase >ournal on "anuar# 61$ it ,as not inclu(e( in inentor#! )he inoice sho,e( shi&.ent ,as .a(e @O5 su&&lier3s ,arehouse on Dece.*er 61$ 00%! e! Merchan(ise costing P10$000 ,as receie( on Dece.*er $ 00%$ an( the inoice ,as not recor(e(! ou locate( it in the han(s of the &urchasing agent? it ,as .ar'e( on consign.ent an( it ,as inclu(e( in the inentor# count! As a result of the a*oe transaction$ *# ho, .uch shoul( inentor# *e a(>uste( *#7 a! P //$000!00 6!
*! P +/$000!00
c! P 1//$000!00
(! P 12$000!00
On Dece.*er $ 00%$ ;ollan( Manufracturing Co! &urchase( goo(s ,ith a cash &rice of P00$000! :o.e of the costs incurre( in connection ,ith the ac4uisition of the goo(s ,ere as follo,s7 I.&ort (uties$ P0$000? trans&ortation costs$ P10$000? an( han(ling costs$ P+$000! )hese goo(s ,ere receie( on Dece.*er 61$ 00%! In ;ollan(3s Dece.*er 61$ 00% *alance sheet$ at ,hat a.ount shoul( these goo(s *e inclu(e( in inentor#9 a! P 00$000!00
/!
*! P 10$000!00
c! P1+$000!00
(! P 6+$000!00
Mea(o, Manufacturing Co! incurre( the follo,ing costs relate( to its .anufacture an( (istri*ution of its inentor# for the .onth of Dece.*er 00%7 Costs of .aterials use( Binclu(ing the total costs of in(irect .aterial consu.e( in the &ro(uction &rocess of P0$000$ P600$000? Costs of la*or Binclu(ing the total costs in(irect for la*orers ,ho ,ere assigne( in the &ro(uction ares$ 6+$000$ P/00$000? Other in(irect costs that ,ere allocate( on a reasona*le *asis$ P100$00? Costs of trans&ort fro. factor# to co.&an#3s stoc'roo.$ P0$000? :torage cost$ P10$000? A(.inistratie costs$ P/+$000 an( (elier# cost$ P+$000! ,hat a.ount shoul( Mea(o, assigne( to its inentor# &rior to its (istri*ution9 a! P 2%+$000!00
*! P 22+$000!00
c! P 0$000!00
(! P 60$000!00
+!
Mar'er Co! has the follo,ing infor.ation &ertaining to its .erchan(ise inentor# as of Dece! 61$ 00%7 Inentor# on han( Binclu(ing .erchan(ise receie( on consign.ent of P0$000
P
Inentor# &urchase( ,ith a *u#*ac' agree.ent Merchan(ise in transit$ @O5 shi&&ing &oint$ eclu(ing P+$000 freight cost Merchan(ise in transit$ @ree Alongsi(e$ inclu(ing (elier# cost alongsi(e the =essel of P%$000 *ut eclu(ing the cost of shi&.ent of P6$000 Merchan(ise in transit$ CI@ Beclu(ing insurance costs an( freight of P$000 8hat a.ount shoul( Mar'et Co! re&ort as alue ot its inentor# in its 00% *alance sheet9 a! P 2/<$000!00
*! P 2%0$000!00
c! P 220$000!00
(! P 2%$000!00
%!
On Octo*er 1$ 00%$ Act Co! consigne( +0 freeers at a unit cost of P1+$000 to Hing Co! for sale at P0$000 each an( &ai( P0$000 in trans&ortation cost! On Dece.*er 61$ 00%$ Hing re&orte( the sale of the + freeers an( returne( 10 units! Cost &ai( *# the consignor on the returne( units ,as P/$000! A.ount (ue to consignor ,as re.itte( on the sa.e (ate! Co..ission rate as agree( u&on ,as 1+! 8hat a.ount of inentor# on consign.ent an( net inco.e relate( to the sol( units$ res&ectiel#$ shoul( Act re&ort on Dece.*er 61$ 00%9
2!
a! P +$000!00 an( P 6%$000!00
c! P 6+$000!00 an( P /0$000!00
*! P 61$000!00 an( P 6$000!00
(! P 62+$000!00 an( P //$000!00
On Dece.*er 1$ 00%$ Loone# :tore receie( 1$000 units of ,in(*rea'ers on consign.ent fro. )une Co! )une3s cost for the ,in(*rea'ers ,as P1$%00 each$ an( the# ,ere &rice( to sell at P$000! )rans&ortation cost of P$000 ,as &ai( *# Loone#! As of Dece.*er 61$ +0 units ,ere returne( to the consignor an( 00 units are still hel( *# the consignee! Co..ission rate as agree( u&on *et,een contracting &arties ,as 1 on all sales to *e .a(e *# )une Co! In its Dece.*er 61$ 00% *alance sheet$ ,hat a.ount shoul( Loone# re&ort as &a#a*le for consigne( goo(s9 a! P1$61$000!00
!
*! P1$60$000!00
c! P1$+00$000!00
(! P$000$000!00
On "une 1$ 00%$ Conce&t Cor&! sol( .erchan(ise ,ith a list &rice of P00$000 to Ran(all on account! Conce&t allo,e( tra(e (iscounts of 60$ 0 an( 10! Cre(it ter.s ,ere F1+$ nF/0 an( the sale ,as .a(e @O5 shi&&ing &oint! Conce&t &re&ai( P/$000 of (elier# costs for Ran(all as an acco.o(ation! On "une 6$ 00%$ Conce&t receie( fro. Ran(all returne( .erchan(ise ,ith an inoice &rice of P+0$000 (ue to .inor (efects! On "une 1/$ 00%$ Ran(all settle( its account in full to Conce&t! ;o, .uch net cash re.ittance (i( Conce&t receie(9 a! P /<$2/!00
*! P +6$2/!00
c! P %0$2%0!00
(! P 2/$0!00
Leicon Co! s&ecialies in the sale of I5M co.&ati*les an( soft,are &ac'ages! It ha( the follo,ing transactions ,ith one of its su&&liers! Purchase of I5M co.&ati*les
P
Purchases of co..ercial soft,are &ac'ages Purchase return an( allo,ance Purchase (iscount ta'en Purchases ,ere .a(e throughout the #ear on ter.s F10$ nF60! All returns an( allo,ances too' &lace ,Fin + (a#s of &urchase an( &rior to an# &a#.ent on account! Purchase (iscount lost is7 a! P 6$00!00
*! P +%$000!00
c! P +2$/00!00
(! P 2<$00!00
10! @1 Co.&an# ha( 10$000 units of &ro(uct A on han( at "anuar# 1$ 00%$ costing P/0 each! Purchase of &ro(uct A (uring the .onth of "anuar# ,ere as follo,s7 Date
Units
Unit Cost
"anuar# 10
1$000
/!00
"anuar# 1
1+$000
/6!00
"anuar#
$000
//!00
"anuar# 2
+$000
/+!00
"anuar# 61
$000
/%!00
A &h#sical count on "anua# 61$ 00% sho,s 1%$00 0 units of Pro(uct A on han(! 8hat is the cost of the inentor# at "anuar# 61$ 00% un(er @I@O9 a! P %6$+00!00 11!
*! P %<$000!00
c! P 2+$000!00
(! P 26%$000!00
Re# Co! ac4uire( a tra(e.ar' for P 10$000$000 fro. :an "ose Co! on "anuar# 00%! )he tra(e.ar' is carrie( in the accounting recor(s of :an "ose at an una.ortie( cost of P 2$%00$000! Re#3s in(e&en(ent consultant has esti.ate( that the re.aining life of te tra(e.ar' is +0 #ears! )he tra(e.ar' is *eing a.ortie( *# Re# oer the .ai.u. &erio( allo,a*le! 8hat a.ount shoul( Re# re&ort as accu.ulate( a.ortiation in its Dece.*er 1$ 00% *alance sheet9 a! P 1+$000!00
1!
*! P 00$000!00
c! P +0$000!00
(! P 1<0$000!00
Re(for( Co! ha( 600$000 shares of co..on stoc' outstan(ing at Dece.*er 61$ 002! No co..on stoc' issue( (uring 002! On "anuar# 1$ 00$ Re(for( issue( 00$000 shares of non-conerti*le &reference stoc'!
During 00$ Re(for( (eclare( an( &ai( P 2+$000 cash (ii(en( on the co..on stoc' an( P %0$000 on the &referre( stoc'! Net inco.e for the #ear en(e( Dece.*er 61$ 00 ,as P 660$000! 8hat shoul( Re(fore3s 00 earnings &er co..on share9 a! P 0!<0
*! P 0!+
c! P 1!10
(! P 0!%+
00$000!00 10$000!00 1++$000!00 +0$000!00 12+$000!00
$60$000!00 1$%0$000!00 20$000!00 6$00!00
Cost
+0/$000!00 %/+$000!00 //0$000!00 +$000!00 6%$000!00
