Beruflich Dokumente
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__ 1 Chess Top uses the periodic inventory system. For the current month, the beginning inventory consisted of 200 units
_ that cost P65 each. During the month, the company made two purchases: 300 units at P68 each and 150 units at P70
each. Chess Top also sold 500 units during the month. Using the FIFO method, what is the amount of cost of goods sold
for the month?
a. P33,770. b. P32,500. c. P34,150. d. P33,400.
__ 2 Dakak Company issued bonds with a face value of P4,000,000 and with a stated interest rate of 10% on Jan. 01, 2008.
_ The interest is payable semi-annually on June 30 and December 31. The bonds mature on every December 31 at a rate
of P2, 000,000 per year for 2 years. The prevailing rate for the bonds is 8%. The present value of 1 at 4% is as follows:
__ 3 On December 31, 2010, Harris Co. leased a machine from Catt, Inc. for a five-year period. Equal annual payments under
_ the lease are P630,000 (including P30,000 annual executory costs) and are due on December 31 of each year. The first
payment was made on December 31, 2010, and the second payment was made on December 31, 2011. The five lease
payments are discounted at 10% over the lease term. The present value of minimum lease payments at the inception of
the lease and before the first annual payment was P2,502,000. The lease is appropriately accounted for as a capital
lease by Harris. In its December 31, 2011 balance sheet, Harris should report a lease liability of
a. P1,902,000. b. P1,872,000. c. P1,711,800. d. P1,492,200.
__ 4 The Puncher Co. launched a sales promotional campaign on June 30, 2006. For every ten empty packs returned to
_ Puncher, customers will receive an attractive food container. The company estimates that only 30% of the packs
reaching the market will be redeemed. Additional information are as follows:
Units Amount
Sales of food packs 3,000,000 P9,000,000
Food containers purchased 60,000 180,000
Prizes distributed to customers 37,000
At the end of the year, Puncher recognized a liability equal to the estimated cost of potential prizes outstanding. What is
the amount of this estimated liability?
a. 69,000 c. 159,000
b. 90,000 d. 180,000
__ 5 Felton Co. sells major household appliance service contracts for cash. The service contracts are for a one-year, two-year,
_ or three-year period. Cash receipts from contracts are credited to unearned service contract revenues. This account had
a balance of P480,000 at December 31, 2009 before year-end adjustment. Service contract costs are charged as
incurred to the service contract expense account, which had a balance of P120,000 at December 31, 2009. Outstanding
service contracts at December 31, 2009 expire as follows:
What amount should be reported as unearned service contract revenues in Felton's December 31, 2009 balance sheet?
a. P360,000. b. P330,000. c. P240,000. d. P220,000.
__ 6 Logan Corp., a company whose stock is publicly traded, provides a non-contributory defined-benefit pension plan for its
_ employees. The company's actuary has provided the following information for the year ended December 31, 2011:
The market-related asset value equals the fair value of plan assets. No contributions have been made for 2011 pension
cost. In its December 31, 2011 balance sheet, Logan should report a pension asset / liability of
a. Pension liability of P600,000 b. Pension asset of P824,000
c. Pension asset of P241,500 d. Pension liability of P525,000
__ 7 The following information is available for October for Norton Company.
_
Beginning inventory P100,000
Net purchases 300,000
Net sales 600,000
Percentage mark-up on cost 66.67%
A fire destroyed Norton’s October 31 inventory, leaving undamaged inventory with a cost of P6,000. Using the gross
profit method, the estimated ending inventory destroyed by fire is
a. P34,000. b. P154,000. c. P160,000. d. P200,000.
__ 8 Farmer Corp. owned 20,000 shares of Eaton Corp. purchased in 2007 for P240,000. On December 15, 2010, Farmer
_ declared a property dividend of all of its Eaton Corp. shares on the basis of one share of Eaton for every 10 shares of
Farmer common stock held by its stockholders. The property dividend was distributed on January 15, 2011. On the
declaration date, the aggregate market price of the Eaton shares held by Farmer was P400,000. The entry to record the
declaration of the dividend would include a debit to Retained Earnings of
a. P0. b. P160,000. c. P240,000. d. P400,000.
__ 9 The following information pertains to Hopson Co.'s pension plan:
_
Actuarial estimate of projected benefit obligation at 1/1/11 P72,000
Assumed discount rate 10%
Service costs for 2011 P18,000
Pension benefits paid during 2011 P15,000
If no change in actuarial estimates occurred during 2011, Hopson's projected benefit obligation at December 31, 2011
was
a. P64,200. b. P75,000. c. P79,200. d. P82,200.
__ 1 Hahn Co. takes a full year's depreciation expense in the year of an asset's acquisition and no depreciation expense in the
_ 0 year of disposition. Data relating to one of Hahn's depreciable assets at December 31, 2011 are as follows:
Using the same depreciation method as used in 2009, 2010, and 2011, how much depreciation expense should Hahn
record in 2012 for this asset?
a. P16,000 b. P24,000 c. P28,000 d. P32,000
__ 1 On April 1, 2009, Verlin Co. purchased new machinery for P240,000. The machinery has an estimated useful life of five
_ 1 years, and depreciation is computed by the sum-of-the-years'-digits method. The accumulated depreciation on this
machinery at March 31, 2011, should be
a. P160,000. b. P144,000. c. P96,000. d. P80,000.
__ 1 On December 31, 2007 Colt Company is experiencing extreme financial pressure and is in default in meeting interest
_ 2 payment on its long term note of P6, 000,000 due on December 31, 2009. The interest rate is 12% payable every
December 31.
In an agreement with the creditor, Colt obtained the following changes in the terms of note:
a. The accrued interest on December 31, 2007 is forgiven.
b. The principal is reduced by 500,000.
c. The new interest rate is 8%.
d. The new date of maturity is December 31, 2011.
The present value of 1 at12% for four periods is 0.6355 and the present value of an ordinary annuity of 1 at 12% for four
periods is 3.0373. How much is the gain or loss on extinguishment?
a. 2,504,750 c. 1,168,338
b. 1,888,338 d. 0
__ 1 On October 1, 2010, Wenn Co. purchased 600 of the P1,000 face value, 8% bonds of Loy, Inc., for P702,000, including
_ 3 accrued interest of P12,000. The bonds, which mature on January 1, 2017, pay interest semi-annually on January 1 and
July 1. Wenn used the straight-line method of amortization and appropriately recorded the bonds as available-for-sale.
On Wenn's December 31, 2011 balance sheet, the carrying value of the bonds is
a. P690,000. b. P684,000. c. P681,600. d. P672,000.
__ 1 PRC Company began selling a new calculator that carried a two year warranty against defects in 2007.
_ 4 PRC projected the estimated warranty cost (as a percent of sales) as follows:
First year warranty 4%
Second year warranty 10%
Sales and actual warranty repairs were:
2007 2008
Sales 5,000,000 9,000,000
Actual warranty repairs 390,000 900,000
The net income for the years December 31, 2006 and December 31, 2007 were P2, 000,000 and 3,000,000, respectively.
No dividends were declared. What is the December 31, 2007 book value per ordinary share?
a.256 b.260
c.291 d.285
__ 1 On July 1, 2010, Spear Co. issued 1,000 of its 10%, P1,000 bonds at 99 plus accrued interest. The bonds are dated April
_ 7 1, 2010 and mature on April 1, 2020. Interest is payable semi-annually on April 1 and October 1. What amount did Spear
receive from the bond issuance?
a. P1,015,000 b. P1,000,000 c. P990,000 d. P965,000
__ 1 Zee Company provided the following information concerning its defined benefit plan in its memorandum records on
_ 8 January 1, 2007.
What is the balance of prepaid/ accrue benefit cost account on December 31, 2007?
a. 1,530,000 c. 1,770,000
b. 1,560,000 d. 1,689,000
__ 1 Drake Corporation had the following amounts, all at retail:
_ 9 Beginning inventory P 3,600 Purchases P120,000
Purchase returns 6,000 Net markups 18,000
Abnormal shortage 4,000 Net markdowns 2,800
Sales 72,000 Sales returns 1,800
Employee discounts 1,600 Normal shortage 2,600
What is Drake’s ending inventory at retail?
a. P54,400. b. P56,000. c. P57,600. d. P58,400
__ 2 On January 1, 2004, Loyal Company purchased an equipment for P8, 000,000. The equipment is depreciated using
_ 0 straight line method based on a useful life of 8 years with no residual value. On January 1, 2007, after 3 years, the
equipment was revalued at a replacement cost of 12,000,000 with no change in residual value. On June 30, 2007, the
equipment was sold for 10,000,000. What is the effect of the June 30,2007 transactions to the retained earnings?
a.2, 500,000 increase c. 5,000,000 increase
b.3,250,000 increase d. 5,750,000 increase
__ 2 Finley, Inc.’s checkbook balance on December 31, 2010 was P21,200. In addition, Finley held the following items in its
_ 1 safe on December 31.
(1) A check for P450 from Peters, Inc. received December 30, 2010, which was not included in the checkbook balance.
(2) An NSF check from Garner Company in the amount of P900 that had been deposited at the bank, but was returned
for lack of sufficient funds on December 29. The check was to be redeposited on January 3, 2011. The original deposit
has been included in the December 31 checkbook balance.
(3) Coin and currency on hand amounted to P1,450.
The proper amount to be reported on Finley's balance sheet for cash at December 31, 2010 is
a. P21,300. b. P20,400. c. P22,200. d. P21,750.
__ 2 Tarzana Company reported total purchases of P3,200,000 in its accrual basis financial statement on December 31,2006.
_ 2 Additional information revealed the following:
Accounts Payable, December 31,2005 P 900,000
Accounts Payable, December 31,2006 1,250,000
What is the amount of purchases under the cash basis on December 31,2006?
a. 2,850,000 c. 4,100,000
b. 3,550,000 d. 4,450,000
__ 2 Tresh, Inc. had the following bank reconciliation at March 31, 2010:
_ 3 Balance per bank statement, 3/31/10 P37,200
Add: Deposit in transit 10,300
47,500
Less: Outstanding checks 12,600
Balance per books, 3/31/10 P34,900
Data per bank for the month of April 2010 follow:
Deposits P46,700
Disbursements 49,700
All reconciling items at March 31, 2010 cleared the bank in April. Outstanding checks at April 30, 2010 totaled P6,000.
There were no deposits in transit at April 30, 2010. What is the cash balance per books at April 30, 2010?
a. P28,200 b. P31,900 c. P34,200 d. P38,500
__ 2 Under the effective interest method, bond issue cots must be lumped with the discount on bonds payable and netted
_ 4 against the
a. selling price of the bond b. present value of the bond
c. market value of the bond d. premium on bonds payable
__ 2 On January 1, 2010, Reston Co. purchased 25% of Ace Corp.'s common stock; no goodwill resulted from the purchase.
_ 5 Reston appropriately carries this investment at equity and the balance in Reston’s investment account was P720,000 at
December 31, 2010. Ace reported net income of P450,000 for the year ended December 31, 2010, and paid common
stock dividends totaling P180,000 during 2010. How much did Reston pay for its 25% interest in Ace?
a. P607,500. b. P765,000. c. P787,500. d. P877,500.
__ 2 Lopez Corp. incurred P420,000 of research and development costs to develop a product for which a patent was granted
_ 6 on January 2, 2006. Legal fees and other costs associated with registration of the patent totaled P80,000. On March 31,
2011, Lopez paid P150,000 for legal fees in a successful defense of the patent. The total amount capitalized for the
patent through March 31, 2011 should be
a. P230,000. b. P500,000. c. P570,000. d. P650,000.
__ 2 Dole Corp.'s accounts payable at December 31, 2010, totaled P800,000 before any necessary year-end adjustments
_ 7 relating to the following transactions:
• On December 27, 2010, Dole wrote and recorded checks to creditors totaling P350,000 causing an overdraft of
P100,000 in Dole's bank account at December 31, 2010. The checks were mailed out on January 10, 2011.
• On December 28, 2010, Dole purchased and received goods for P150,000, terms 2/10, n/30. Dole records purchases
and accounts payable at net amounts. The invoice was recorded and paid January 3, 2011.
• Goods shipped f.o.b. destination on December 20, 2010 from a vendor to Dole were received January 2, 2011. The
invoice cost was P65,000.
At December 31, 2010, what amount should Dole report as total accounts payable?
a. P1,362,000. b. P1,297,000. c. P1,050,000. d. P950,000.
__ 2 Green Company has 2,000,000 shares of ordinary shares outstanding on December 31, 2005. An additional 100,000
_ 8 shares are issued on April 1, 2006 and 240,000 more on September 1. On October 1, Green issued P3,000,000 of 9%
convertible bonds. Each bond is convertible into 40 shares of ordinary shares. At the time of issue of the convertible
bonds, the market rate of the bonds without conversion option is equal to its nominal rate. No bonds have been
converted.
The number of shares to be issued in computing basic earnings per share and diluted earnings per share on December
31, 2006 would be:
In Hogan 's December 31, 2010 balance sheet, what amount should be reported as land?
a. P826,000. b. P862,000. c. P888,000. d. P896,000.
__ 3 On July 1, 2010, Nall Co. issued 2,500 shares of its P10 par common stock and 5,000 shares of its P10 par convertible
_ 0 preferred stock for a lump sum of P125,000. At this date Nall's common stock was selling for P24 per share and the
convertible preferred stock for P18 per share. The amount of the proceeds allocated to Nall's preferred stock should be
a. P62,500. b. P75,000. c. P90,000. d. P68,750.
__ 3 Didde Co. had 300,000 shares of common stock issued and outstanding at December 31, 2010. No common stock was
_ 1 issued during 2011. On January 1, 2011, Didde issued 200,000 shares of nonconvertible preferred stock. During 2011,
Didde declared and paid P100,000 cash dividends on the common stock and P80,000 on the preferred stock. Net
income for the year ended December 31, 2011 was P620,000. What should be Didde's 2011 earnings per common
share?
a. P2.07 b. P1.80 c. P1.73 d. P1.47
__ 3 On January 1, 2011, Gore, Inc. purchased a machine for P720,000 which will be depreciated P72,000 per year for
_ 2 financial statement reporting purposes. For income tax reporting, Gore elected to expense P80,000 and to use straight-
line depreciation which will allow a cost recovery deduction of P64,000 for 2011. Assume a present and future enacted
income tax rate of 30%. What amount should be added to Gore's deferred income tax liability for this temporary
difference at December 31, 2011?
a. P43,200 b. P24,000 c. P21,600 d. P19,200
__ 3 Francisco Company was organized on January 2, 2006 with 300,000 ordinary shares with a P6 par value authorized.
_ 3 During 2006, Francisco had the following stock transactions:
If Francisco uses the cost method to record treasury stock transactions, how much would be the Share Premium at
December 31,2006?
a. 445,000 c. 465,000
b. 455,000 d. 485,000
__ 3 Marie Company sells gift certificates redeemable only when merchandise is purchased. These gift certificates have an
_ 4 expiration date of two years after issuance date. Upon redemption or expiration, Marie recognizes the unearned
revenue as realized. Information for 2007 as follows:
Gift certificate payable 12/31/2006 520,000
Gift certificate payable 12/31/2007 680,000
Gift certificate redeemed 1,560,000
Expired gift certificates 80,000
Cost of goods sold 80%
Financial Accounting
Answer Sheet
1 11 21 31
2 12 22 32
3 13 23 33
4 14 24 34
5 15 25 35
6 16 26 36
7 17 27 37
8 18 28 38
9 19 29 39
10 20 30 40
Cost Accounting
Answer Sheet
1 D 11 B 21 C 31 B
2 A 12 B 22 A 32 C
3 D 13 D 23 A 33 B
4 C 14 A 24 D 34 A
5 B 15 B 25 A 35 A
6 C 16 B 26 A 36 B
7 A 17 A 27 B 37 C
8 D 18 D 28 B 38 D
9 D 19 A 29 C 39 D
10 A 20 B 30 B 40 B
Financial Accounting Answer Key
1 B 11 A 21 A 31 C
2 C 12 C 22 C 32 D
3 B 13 A 23 C 33 B
4 D 14 C 24 A 34 D
5 B 15 D 25 B 35 A
6 A 16 B 26 B 36 C
7 D 17 B 27 A 37 A
8 C 18 C 28 C 38 B
9 A 19 C 29 A 39 A
10 C 20 D 30 A 40 A
Cost Accounting Answer Key