Jaypaul Ocampo Acidera, CPA 2016

CPA REVIEW SCHOOL OF THE PHILIPPINES

Manila

FINANCIAL ACCOUNTING PROBLEM VALIX SIY VALIX FERRER LAW

STATEMENT OF FINANCIAL POSITION AND COMPREHENSIVE INCOME

1.. Allyssa Company reported the following current assets onbecember 31, 2016:
Cash in bank, including P500,000 bank overdraft in another ban. 4,000,000
Accounts receivable 7,000,000
Notes receivable 2,500,000
Note receivable discounted ( 400,000)
Inventory 4,500,000
Financial asset - FVPL 1 ,000,000
Financial asset - FVOCI 1,500,000
Prepaid expenses 200,000
Deferred tax asset 2,500,000
Equipment classified as "held for sale" ' 2,000,000
Total 24 800 000
Customers' accounts, net of customers' credit balances P1,000,000 5,000„000
Allowance for doubtful accounts ' ( 500,000)
Sale price of unsold goods out on consignment at 125% of cost and excluded
from ending inventory 1,500,000
Net accounts receivable ZOOM)
What amount should be reported as total current assets on December 31, 2016?
a. 21,800,000
b. 21,300,000
c. 23,300,000
d. 19,800,000
2. Gerald Company provided the following information on December 31, 2016:
Accounts payable, net of creditors' debit balances P200,000 5 2,000„000
Accrued expenses 800,000
Bonds payable due December 31, 2017 2.500,000
Discount on bonds payable 300,000
Deferred tax liability 500,000
Income tax payable 1,100,000
Cash dividend payable
•
600,000
Stock dividend payable 400,000
Note payable — 6%, due March 1, 2017 1,500,000
Note payable — 8%, due October 1, 2017 1,000,000
The financial statements for 2016 were issued on March 31, 2017. On December 31, 2016,
the 6% note payable was refinanced on a long-term basis. Under the loan agreement for the
8% note payable, the entity has the discretion to refinance the obligation for at least twelve
months after December 31, 2016. What amount should be reported as total current liabilities?
a. 7,500,000
b. 6,900,000
C. 8,400,000
cl. 7,300,000
• On January 1, 2013, Therese Company purchased a machine for P5,280,000 and depreciated it
by the straight line method using an estimated useful life of eight years with no residual value.
On January 1, 2016, the entity determined that the machine had a useful life of six years from
the date of acquisition with a residual value of P480,000. What is the accumulated depreciation
on December 31, 2016?
a. 2,920,000
b. 3,080,000
c. -3,200,000
d. 3,520,000
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4. During 2016, Grachel Company decided to change from the 'TWO method of inventory
valuation to the weighted average method. Inventory balances under each method ere:
FIFO Weigh ed Average
December 31, 2013 4,500,000 5,401,000
December 31, 2014 7,800,000 7,101,000
December 31, 2015 8,300,000 7,801,000
Before income tax, what amount should be reported as the effect of this account ng change in
the statement of retained earnings for 2016?
a. 500,000 decrease
b. 500,000 increase
c. 700,000 decrease
d. 700,000 increase

5. The financial statements of Stephen Company were authorized for issue on Mai -eh 31., 2017
and the end of the reporting period is December 31, 2016.
On December 31, 2016, the entity had an account receivable of P1,000,000 frorti a customer.
On February 1, 2017, the liquidator of the said customer advised the entity ih writing that
the customer was insolvent and that no amount woukthe paid.
The entity had reported a contingent liability on December 31, 2016 related to a court case.
On March 1, 2017, the judge handed down a decision against the entity , for damages
amounting to P1,500,000.
What total amount should be reported as "adjusting events" on December 31, 2016?
a. 1,000,000
b. 1,500,000
c. 2,500,000
d.

6. Maria Company provided the following information for the current year
Income from continuing operations 4,000,000
Income from discontinued operation ,500,000
Unrealized gain on financial 'asset - FVPL 800,000
Unrealized loss on equity investment - FVOCI 1,000,000
Unrealized gain on debt investment - FVOCI 1 200 000
Unrealized gain on futures contract designated as a cash flow hedge 400,000
Translation loss on foreign operation '200,000
Net remeasurement 51- -gam on defined benefit plan cturing_thayear
• • •
600.000,
Loss on credit risk of a financial liability designated at FVPL 300,000
Rkwaluation surplus during the year ^ 2,500,000
I. What amount should be reported as net income for the current year?
a. 4,000,000
b. 4 500 5 000
5

C. 5,300,000
cl. 4,800,000
2. What net amount should be reported as OCI for the current year?
a. 4,000,000
b. 3,500,000
C. 3,200,000
d. 700,000
3. What amount should be reported as comprehensive income for the current year?
a. 5,200,000
b. 7,700,000 J. O. A.
C . 8,500,000
d. 7 20-0 000
EN D
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