Our Lady of the Pillar College-Cauayan

Cauayan City, Isabela

INTEGRATED ACCOUNTING

Name:__________________________________________ SCORE: _______________________

AUDITING PROBLEMS
QUIZ NO. 2
MULTIPLE CHOICE - On a separate sheet of paper, please choose the best answer (letter of your choice) among the choices
given under each of the following theory questions. Strictly no erasures on your answer sheet; otherwise answers will be
invalidated.

PROBLEM NO. 1

A portion of the SPARK COMPANY’s statement of financial position appears as follows:

December 31, 2017 December 31, 2016

Assets:
Cash P353,300 P100,000
Notes receivable 0 25,000
Inventory ? 199,875
Liabilities:
Accounts payable ? 75,000

Spark Company pays for all operating expenses with cash and purchases all inventory on credit. During
2017, cash totaling P471,700 was paid on accounts payable. Operating expenses for 2017 totaled
P220,000. All sales are cash sales. The inventory was restocked by purchasing 1,500 units per month
and valued by using periodic FIFO. The unit cost of inventory was P32.60 during January 2017 and
increased P0.10 per month during the year. Spark sells only one product. All sales are made for P50 per
unit. The ending inventory for 2016 was valued at P32.50 per unit.

1.Number of units sold during 2017

A. 7,066 B. 18,400 C. 4,268 D. 13,400

2.Accounts payable balance at December 31, 2017

A. P190,100 B. P50,000 C. P199,100 D. P200,000

3.Inventory quantity on December 31, 2017

A. 5,750 B. 2,750 C. 17,084 D. 10,750

4.Cost of inventory on December 31, 2017

A. P187,450 B. P186,875 C. P192,950 D. P189,660

5.Cost of goods sold for the year ended December 31, 2017
A. P609,125 B. P609,700 C. P606,915 D. P603,625

Solution:
PROBLEM 4 – SPARK COMPANY

1. B Cash balance, Dec. 31, 2016 P100,000

Sales (SQUEEZE) 920,000
Cash paid for operating expenses (220,000)
Cash paid on accounts payable (471,700)
Collections on notes receivable 25,000
Cash balance, Dec. 31, 2017 P353,300
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 Units sold (P920,000/P50) 18,400
2. D Accounts payable:
Balance, Dec. 31, 2016 P75,000
Purchases 596,700*
Cash payments on accounts payable (471,700)
Balance, Dec. 31, 2017 P200,000
*Purchases:
Month Unit Cost Units Total Cost
January P32.60 1,500 P48,900
February 32.70 1,500 49,050
March 32.80 1,500 49,200
April 32.90 1,500 49,350
May 33.00 1,500 49,500
June 33.10 1,500 49,650
July 33.20 1,500 49,800
August 33.30 1,500 49,950
September 33.40 1,500 50,100
October 33.50 1,500 50,250
November 33.60 1,500 50,400
December 33.70 1,500 50,550
Total purchases 18,000 P596,700
Or (P32.60 + P33,70)/2 x (1,500 x 12) = P596,700

3. A Inventory, Dec. 31, 2016 (P199,875/P32.50) 6,150

Purchases 18,000
Units sold (18,400)
Inventory, Dec. 31, 2017 5,750
4. C FIFO cost of inventory, Dec. 31, 2017:
December purchases 1,500 x P33.70 P 50,550
November purchase 1,500 x P33.60 50,400
October purchase 1,500 x P33.50 50,250
September purchase 1,250 x P33.40 41,750
5,750 P192,950
5. D Inventory, Jan. 1, 2017 P199,875
Purchases 596,700
Goods available for sale 796,575
Inventory, Dec. 31, 2017 (192,950)
Cost of goods sold P603,625

PROBLEM NO. 2

The following are selected unadjusted account balances and adjusting information of TANYING
CORP. for the year ended December 31, 2017.

Retained earnings, January 1 P 1,322,010

Sales salaries and commissions 75,000
Advertising expense 48,270
Legal services 6,675
Insurance and licenses 23,040
Travel expense – sales representatives 13,680
Depreciation expense – sales/delivery equipment 18,300
Depreciation expense – office equipment 12,600
Interest revenue 1,650
Utilities 19,200
Telephone and postage 4,425
Office supplies inventory 6,540
Miscellaneous selling expenses 8,220
Dividends 99,000
Dividend revenue 15,450
Interest expense 13,560
Allowance for doubtful accounts (credit balance) 480
Officers’ salaries 109,800

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Sales 1,353,000
Sales returns and allowances 11,700
Sales discounts 2,640
Gain on sale of assets 23,460
Inventory, January 1 269,100
Inventory, December 31 61,650
Purchases 424,800
Freight in 16,575
Accounts receivable, December 31 783,000
Income from discontinued operations (before income taxes) 120,000
Loss on sale of equipment 217,800
Ordinary shares outstanding 117,000

Adjusting information:

(a) Cost of inventory in the possession of consignees as of December 31, 2017,

was not included in the ending inventory balance......................................P55,800

(b) After preparing an analysis of aged accounts receivable, a decision was made
to increase the allowance for doubtful accounts to a percentage of the ending
accounts receivable balance............................................................................2%

(c) Purchase returns and allowances were unrecorded. They are computed as a
percentage of purchases (not including freight in)............................................6%

(d) Sales commissions for the last day of the year had not been accrued. Total
sales for the day.......................................................................................P9,180
Average sales commissions as a percent of sales..............................................3%

(e) No accrual had been made for a freight bill received on January 2, 2018, for
goods received on December 29, 2017.......................................................P1,710

(f) An advertising campaign was initiated November 2, 2017. This amount was
recorded as “Prepaid advertising” and should be amortized over a six-month
period. No amortization was recorded........................................................P5,454

Freight charges paid on sold merchandise were netted against sales. Freight
charges on sales during 2017...................................................................P10,500

(g) Interest earned but not accrued.................................................................P1,680

(h) Depreciation expense on a new forklift purchased March 1, 2017, had not
been recognized. (Assume all equipment will have no salvage value and the
straight-line method is used. Depreciation is calculated to the nearest month.)
Purchase price.........................................................................................P23,400
Estimated life in years......................................................................................10

(i) A “real” account is debited upon the receipt of office supplies. Office supplies on hand at
year-end...................................................................................................P3,675

(j) Income tax rate (on all items).......................................................................30%

Compute the adjusted balances of the following:

6.Net sales
A. P1,363,500 B. P1,349,160 C. P1,353,000 D. P1,342,500

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7.Cost of goods available for sale
A. P684,900 B. P824,697 C. P686,697 D. P779,913

8.Inventory, December 31, 2015

A. P61,500 B. P61,350 C. P56,250 D. P117,450

9.Distribution costs
A. P181,649 B. P167,513 C. P178,013 D. P176,453

10.Administrative expenses
A. P207,345 B. P193,785 C. P194,265 D. P194,595

11.Allowance for doubtful accounts

A. P15,660 B. P16,140 C. P15,180 D. P480

12.Total income
A. P817,143 B. P811,653 C. P779,913 D. P822,153

13.Income from continuing operations before taxes

A. P231,360 B. P436,795 C. P218,995 D. P239,695

14.Office supplies inventory

A. P6,540 B. P3,675 C. P2,865 D. P 0

15. Net income

A. P237,296 B. P210,299 C. P250,289 D. P216,296

PROBLEM 1 – TANYING CORP.

6. B Sales (P1,353,000 + P10,500 Freight) P1,363,500

Sales returns and allowances (11,700)
Sales discounts (2,640)
Net sales P1,349,160

7. C Inventory, Jan. 1 P269,100

Purchases P424,800
Purchase returns and allowances (P424,800 x 6%) (25,488)
Freight in (P16,575 + P1,710) 18,285 417,597
Cost of goods available for sale P686,697

8. D Inventory, Dec. 31, 2017

Per books P 61,650
Goods out on consignment 55,800
Per audit P117,450

9. C Distribution costs:
Sales salaries and commissions (P75,000 + [P9,180 x 3%]) P75,275
Advertising expense (P48,270 + [P5,454 x 2/6]) 50,088
Depreciation expense – Sales/delivery equipment (P18,300 + [P23,400 x 10% x 10/12]) 20,250
Freight expense 10,500
Travel expense – sales representatives 13,680
Miscellaneous selling expenses 8,220
Total P178,013

10. B Administrative expenses:

Legal services P 6,675
Insurance and licenses 23,040
Depreciation expense – office equipment 12,600
Utilities 19,200
Telephone and postage 4,425
Office supplies expense (P6,540 – P3,675) 2,865
Officers’ salaries 109,800
Doubtful accounts expense (P783,000 x 2% = P15,660 – P480) 15,180
Total P193,785

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11. A Allowance for doubtful accounts (P783,000 x 2%) P15,660

12. D Net sales P1,349,160

Cost of goods sold (P686,697 – P117,450) (569,247)
Gross income 779,913
Interest revenue (P1,650 + P1,680) 3,330
Dividend revenue 15,450
Gain on sale of assets 23,460
Total income P822,153

13. C Total income P822,153

Distribution costs (178,013)
Administrative expenses (193,785)
Interest expense (13,560)
Loss on sale of equipment (217,800)
Income from continuing operations before tax P218,995

14. B Office supplies inventory P3,675

15. A Income before tax P218,995

Income tax (P218,995 x 30) (65,669)
Income from continuing operations 153,296
Income from discontinued operations, net of tax (P120,000 x 70%) 84,000
Net income P237,296

PROBLEM NO. 3

The following accounts were included in the unadjusted trial balance of BUNCHING COMPANY as of
December 31, 2017:

Cash.............................................................................P 963,200
Accounts receivable........................................................2,254,000
Inventory.......................................................................6,050,000
Accounts payable...........................................................4,201,000
Accrued expenses.............................................................431,000

During your audit, you noted that Bunching Company held its cash books open after year-end. In
addition, your audit revealed the following:

1. Receipts for January 2018 of P654,600 were recorded in the December 2017 cash receipts book. The
receipts of P360,100 represent cash sales and P294,500 represent collections from customers, net of
5% cash discounts.

2. Accounts payable of P372,400 was paid in January 2018. The payments, on which discounts of
P12,400 were taken, were included in the December 2017 check register.

3. Merchandise inventory is valued at P6,050,000 prior to any adjustments. The following information
has been found relating to certain inventory transactions:

a. The invoice for goods costing P175,000 was received and recorded as a purchase on December
31, 2017. The related goods, shipped FOB destination, were received on January 4, 2018, and
thus were not included in the physical inventory.

b. A P182,000 shipment of goods to a customer on December 30, 2017, terms FOB destination, are
not included in the year-end inventory. The goods cost P130,000 and were delivered to the
customer on January 3, 2018. The sale was properly recorded in 2018.

c. Goods costing P637,500 were shipped on December 31, 2017, and were delivered to the customer
on January 3, 2018. The terms of the invoice were FOB shipping point. The goods were included
in the 2017 ending inventory even though the sale was recorded in 2017.

d. Goods costing P217,500 were received from a vendor on January 4, 2018. The related invoice
was received and recorded on January 6, 2018. The goods were shipped on December 31, 2017,
terms FOB shipping point.

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 e. Goods valued at P275,000 are on consignment with a customer. These goods are not included in
the inventory figure.

f. Goods valued at P612,800 are on consignment from a vendor. These goods are not included in
the physical inventory.

Determine the adjusted balances of the following on December 31, 2017:

16. Cash
A. P963,200 B. P681,000 C. P668,600 D. P693,400

17. Accounts receivable

A. P2,908,600 B. P2,564,000 C. P2,254,000 D. P2,548,500

18. Inventory
A. P6,035,000 B. P6,080,000 C. P5,860,000 D. P5,010,000

19.Accounts payable
A. P4,790,900 B. P4,615,900 C. P4,573,000 D. P4,603,500

20.Current ratio
A. 2.00 B. 1.83 C. 1.84 D. 2.01

PROBLEM 2 – BUNCHING COMPANY

Accounts Accounts
Cash Receivable Inventory Payable
Per books P963,200 P2,254,000 P6,050,000 P4,201,000
AJE 1 (654,600) 310,000 --- ---
2 360,000 --- --- 372,400
3 a --- --- --- (175,000)
b --- --- 130,000 ---
c --- --- (637,500) ---
d --- --- 217,500 217,500
e --- --- 275,000 ---
Per audit P668,600 P2,564,000 P6,035,000 P4,615,900

(16 – C) (17 – B) (18 – A) (19 – B)

Current ration 16+17+18/19+431,000

Problem 4 (Retail inventory method)

21.On December 31, 2015, an entity provided the following information:

Cost Retail
Inventory, January 1 735,000 1,015,000
Purchases 4,165,000 5,775,000
Additional markup 210,000
Sales for the year totaled P5,500,000. Markdown amounted to P100,000. Under the approximate
lower of average cost or NRV retail method, what is the inventory on December 31, 2015?
a. 1,050,000
b. 1,400,000
c. 994,000
d. 980,000

Problem 4 (no. 21) Answer D

Cost Retail
Inventory – January 1 735,000 1,015,000
Purchases 4,165,000 5,775,000
Additional markup ________ 210,000
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Goods available for sale 4,900,000 7,000,000
Conservative cost ratio (4,900,000 / 7,000,000) 70%
Sales (5,500,000)
Markdown ( 100,000)
Ending inventory at retail 1,400,000
At cost (70% x 1,400,000) 980,000
The lower of average cost or NRV retail method is the same as the conservative or conventional method. Thus, the
markdown is ignored in computing the cost ratio.

Problem 5 (Gross profit method)

22.An entity budgeted the following sales.

June July August
Sales on account 1,800,000 1,840,000 1,900,000
Cash sales 180,000 200,000 260,000
All merchandise is marked up to sell at invoice cost plus 20%. Merchandise inventory at the beginning of
each month is 30% of that month's projected cost of goods sold. What is the amount of anticipated
purchases for July?
a. 1,632,000
b. 2,076,000
c. 1,700,000
d. 1,730,000

Problem 5 Answer D
e.

Cost of goods sold:

June (1,980,000 / 120%) 1,650,000
July (2, 040,000 / 120%) 1,700,000
August (2,160,000 / 120%) 1,800,000
f.

Inventory – July 1 (30% x 1,700,000) 510,000

Purchases (SQUEEZE) 1,730,000
Goods available for sale 2,240,000
Inventory – July 31 (30% x 1,800,000) ( 540,000)
Cost of goods sold - July 1,700,000
g.

h. The amount of purchases for July is computed by working back from the cost of goods sold.

PROBLEM 6 – GROSS PROFIT METHOD

On December 31, 2015, a fire damaged the warehouse and factory of an entity completely destroying
the goods in process inventory. There was no damage to the raw materials, finished goods and factory
supplies The physical inventory revealed the following.
January 1 December
31
Raw materials 1,700,000 2,000,000
Goods in process 4,300,000 0
Finished goods 6,000.000 4,500,000
Factory supplies 500,000 400,000
The gross profit margin historically approximated 30% of sales. The sales for the year amounted to
P20,000,000. Raw material purchases totaled P4,000,000. Direct labor costs for the year amounted to
P5,000,000, and manufacturing overhead has been applied at 60% of direct labor.
23.What is the cost of raw materials used?
a. 5,700,000
b. 3,700,000
c. 3,800,000
d. 3,600,000
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24.What is the total manufacturing cost?
a. 13,000,000
b. 11,800,000
c. 11,700,000
d. 11,600,000

25.What is the cost of goods sold?

a. 12,000,000
b. 16,000,000
c. 13,000,000
d. 14,000,000

26.What is the cost of goods in process inventory destroyed by fire?

a. 3,500,000
b. 3,800,000
c. 2,500,000
d. 1,500,000

PROBLEM 6

Question 23 Answer B
Raw materials – January 1 1,700,000
Purchases 4,000,000
Raw materials available for use 5,700,000
Raw materials – December 31 ( 2,000,000)
Raw materials used 3,700,000

Question 24 Answer C
Raw materials used 3,700,000
Direct labor 5,000,000
Manufacturing overhead (60% x 5,000,000) 3,000,000
Total manufacturing cost 11,700,000

The change in the factory supplies is no longer considered because it is already part of the manufacturing overhead
applied.

Question 25 Answer D
Cost of goods sold (70% x 20,000,000) 14,000,000

The cost ratio is 70% because the gross profit rate is 30% on sales.

Question 26 Answer A
Total manufacturing cost 11,700,000
Goods in process – January 1 4,300,000
Total goods in process 16,000,000
Goods in process – December 31 (SQUEEZE) ( 3,500,000)
Cost of goods manufactured 12,500,000
Finished goods – January 1 6,000,000
Goods available for sale 18,500,000
Finished goods – December 31 ( 4,500,000)
Cost of goods sold 14,000,000

The cost of ending goods in process is computed by working back from the cost of goods sold.

Page 33

PROBLEM NO. 7 – INVESTMENT IN ASSOCIATE

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 On January 1, 2015, an entity acquired a 10% interest in an investee for P3,000,000. The investment
was accounted for under the cost method. During 2015, the investee reported net income of
P4,000,000 and paid dividend of P1,000,000. On January 1, 2016, the entity acquired a further 15%
interest in the investee for P8,500,000. On such date, the carrying amount of the net assets of the
investee was P36,000,000 and the fair value of the 10% existing interest was P3,500,000. The fair
value of the net assets of the investee is equal to carrying amount except for an equipment whose
fair value was P4,000,000 greater than carrying amount. The equipment had a remaining life of 5
years. The investee reported net income of P8,000,000 for 2016 and paid dividend of P5,000,000 on
December 31, 2016.

27.What amount of investment income should be recognized in 2015?



a. 400,000
b. 100,000
c. 500,000
d. 300,000

28.What is the goodwill arising from the acquisition on January 1, 2016?



a. 3,000,000
b. 2,000,000
c. 2,500,000
d. 0

29.What total amount of income should be recognized by the investor in 2016?



a. 2,000,000
b. 2,500,000
c. 2,300,000
d. 1,800,000

30.What is the carrying amount of the investment in associate on December 31, 2015?


a. 12,550,000
b. 12,350,000
c. 11,950,000
d. 12,750,000

SOLUTION – SITUATION PROBLEM 7

Question 27 Answer B

Dividend income (10% x 1,000,000) 100,000

Under cost method, the investment income is based on dividend declared or paid.

Question 28 Answer B

Existing 10% interest remeasured at fair value 3,500,000

New 15% interest 8,500,000
Total cost – January 1, 2016 12,000,000
Net assets acquired (25% x 36,000,000) ( 9,000,000)
Excess of cost over carrying amount 3,000,000
Excess attributable to equipment whose fair value is greater than carrying amount
(25% x 4,000,000) ( 1,000,000)
Goodwill 2,000,000

Question 29 Answer C

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Share in net income (25% x 8,000,000) 2,000,000
Amortization of excess attributable to equipment (1,000,000 / 5 years) ( 200,000)
Net investment income 1,800,000

Fair value of 10% interest 3,500,000

Historical cost 3,000,000
Remeasurement gain 500,000
Net investment income 1,800,000
Total income in 2016 2,300,000

If the investment in associate is achieved in stages the old interest is remeasured at fair value through profit or loss.

Question 30 Answer A

Total cost 1/1/2016 12,000,000

Net investment income 1,800,000
Share in cash dividend (25% x 5,000,000)
( 1,250,00
0)
Carrying amount – 12/31/2016 12,550,000

Problem 8 (Financial asset at fair value through other comprehensive income)

31.On January 1, 2015, an entity purchased nontrading equity securities which are
irrevocably designated at fair value through other comprehensive income:
Purchase price Transaction cost Market –
12/31/2015
Security A 1,000,000 100,000 1,500,000
Security B 2,000,000 200,000 2,400,000
Security C 4,000,000 400,000 4,700,000
On July 1, 2016, the entity sold Security C for P5,200,000. What amount should be credited
to retained earnings as a result of the sale of the investment in 2016?
a. 800,000
b. 500,000
c. 300,000
d. 0

Problem 8 Answer A
Purchase price of security C 4,000,000
Transaction cost 400,000
Total cost 4,400,000
If the equity investment is measured at fair value through other comprehensive income (FVOCI), the
transaction cost is capitalized
Market value of security C 12/31/2015 4,700,000
Historical cost 4,400,000
Unrealized gain – OCI 12/31/20015 300,000

Journal entry on July 1, 2016

Cash 5,200,000
Unrealized gain – OCI 300,000
Financial asset – FVOCI 4,700,000
Retained earnings 800,000
Under the final version of IFRS 9, any change in fair value of an equity investment measured at

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FVOCI is permanently excluded from profit or loss under all circumstances but may transferred to
equity or retained earnings.
Problem No. 9
On December 31, 2018, data for DINA POTH Co. includes the following:
ACCOUNT TITLE AMOUNT
1 Accounts receivable 100,000
2 Allowance for bad debts 10,000
3 Cash and cash equivalents 70,000
4 Interest receivable 21,000
5 Notes receivable 150,000
6 Prepaid interest (not a valuation account for financial 20,000
liability)
7 Investment in equity series 125,000
8 Investment in associate 45,000
9 Investment in subsidiary 70,000
10 Investments in bonds 170,000
11 Cash surrender value 60,000
12 Sinking fund 40,000
13 Merchandise Inventories 133,000
14 Bilological assets 120,000
15 Building 500,000
16 Accumulated Depreciation 50,000
17 Intangible assets 30,000
18 Prepaid rent 20,000
19 Treasury shares 23,000
20 Claims for tax refund 45,000
21 Deferred tax assets 60,000
22 Accounts payable 150,000
23 Utilities payable 250,000
24 Accrued interest expense 18,000
25 Cash dividends payable 27,000
26 Finance lease liability 45,000
27 Bonds payable 120,000
28 Discount on bonds payable 15,000
29 Security deposit 30,000
30 Advances from customers 16,000
31 Unearned rent 8,000
32 Warranty obligations 13,000
33 Unearned Interest Payable 5,000
34 Income Taxes Payable 9,000
35 SSS Contributions Payable 5,000
36 Philhealth contributions payable 6,0000
37 Share premium 35,000
38 Accumulated profits – appropriated for plant expansion 500,000
39 Accumulated profits - unappropriated 3,200,000
40 Issued redeemable preference shares (with mandatory 100,000
redemptions)
41 Issued preference shares capital 350,000

Based on the above data, determine the following:

32.Financial assets
a. 691,000 c. 476,000
b. 310,000 d. 861,000

33.Nonfinancial assets
a. 858,000 c. 755,000
b. 703,000 d. 100,000

34.Financial Liabilities
a. 755,000 c. 445,000
b. 725,000 d. 610,000

35. Nonfinancial Liabilities

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 a. 62,000 c. 56,000
b. 42,000 d. 51,000

Problem 10.
You noted the following related to the biological assets owned by LUDONG FARMS, INC. in connection
with your audit.
Carrying amount, January 1, 2017 P 800,000
Purchases 230,000
Gain arising from changes in fair value less costs to sell
Attributable to physical change 60,000
Gain arising from changes in fair value less costs to sell
Attributable to price changes 40,000
Sales 110,000

QUESTIONS:
Based on the above and the result of your audit, answer the following:
36.The carrying amount of the biological assets on December 31, 2017 is
a. P1,030,000 c, P1,020,000
b. P1,130,000 d. P 920,000

37.The amount to be recognized in 2017 profit or loss related to these biological assets is
c. P100,000 c. P 20,000
d. P210,000 d. P110,000

SOLUTIONS:
Question No. 1
Carrying amount, January 1, 2014 P 800,000
Purchases 230,000
Gain arising from changes in fair value less costs to sell
Attributable to physical change 60,000
Gain arising from changes in fair value less costs to sell
Attributable to price changes 40,000
Sales (110,000)
Carrying amount, December 31, 2014 P1,020,000

Biological asset is a living animal or plant.

Biological assets should be measured on initial recognition and at subsequent reporting dates at fair value less costs to
sell (formerly known as point-of-sale costs), unless fair value cannot be reliably measured.

The gain on initial recognition of biological asset at fair value, and change in fair value of biological assets during a
period, are reported in profit or loss.

Question no. 2
Gain arising from changes in fair value less costs to sell
Attributable to physical change P60,000
Gain arising from changes in fair value less costs to sell
Attributable to price changes 40,000
Amount to be recognized in 2012 profit or loss P 100,000

Problem 11.
38.Auditors conduct purchases cutoff tests primarily to test whether
a. All purchases made before yearend were properly recorded
b. The inventories were properly measured using the pricing policy adopted by the enterprise
c. All purchases made during the reporting period have been by the client
d. All goods owned by the company were included in the inventory list

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39.Comparison of the result of physical counts with the perpetual inventory records satisfies the audit
objective of establishing
a. Accuracy
b. Existence
c. Correct classification
d. Completeness

40.An auditor testing long-term investments would ordinarily use analytical procedures to ascertain in
the reasonableness of the:
a. Completeness of recorded investment income
b. Classification between current and noncurrent portfolios
c. Valuation of marketable equity securities
d. Existence of urealized gains or losses in the portfolio.

----- end of quiz 2 -----

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