Reference no: EM133188352

Questions -

Q1. Earnest Company provided the following information: December 31, 2022: Current Assets - ?, Fixed Assets - P160,000, Current liabilities - P12,000, Non-current liabilities - ?; December 31, 2021: Current assets - P28,000, Fixed assets - P112,000, Current liabilities - ?, Non-current liabilities P40,000;

Additional information: Working capital of P24,000 remained unchanged, Profit for 2022 was P16,000, No dividends were declared during 2022 and there were no other changes in shareholders' equity. Determine the total current assets as of December 31, 2022

a.P36,000

b.P12,000

c.P24,000

d.P18,000

Q2. Earnest Company provided the following information: December 31, 2022: Current Assets - ?, Fixed Assets - P160,000, Current liabilities - P12,000, Non-current liabilities - ?; December 31, 2021: Current assets - P28,000, Fixed assets - P112,000, Current liabilities - ?, Non-current liabilities P40,000;

Additional informations: Working capital of P24,000 remained unchanged, Profit for 2022 was P16,000, No dividends were declared during 2022 and there were no other changes in shareholders' equity. Determine the total shareholder's equity as of December 31, 2022

a.P100,000

b.P96,000

c.P140,000

d.P112,000

Q3. Earnest Company provided the following information: December 31, 2022: Current Assets - ?, Fixed Assets - P160,000, Current liabilities - P12,000, Non-current liabilities - ?; December 31, 2021: Current assets - P28,000, Fixed assets - P112,000, Current liabilities - ?, Non-current liabilities P40,000;

Additional informations: Working capital of P24,000 remained unchanged, Profit for 2022 was P16,000, No dividends were declared during 2022 and there were no other changes in shareholders equity. Determine the total non-current liabilities as of December 31, 2022

a.P72,000

b.P96,000

c.P84,000

d.P52,000

Q4. Ey, Bee and Zee are the three segment of ABC Company. Segment Zee is regarded to be incompatible with the entity's long-term goals. Segment Zee has been decided to be disposed of. The entity's management voted to approve the disposal on November 15, 2022, and an announcement was made. Segment Zee's net assets had a carrying amount of P36,000,000 on that date, whereas the fair value less cost to sell was P28,000,000. Segment Zee's income and expenses for 2022 were P20,000,000 and P12,800,000, respectively, including a P2,000,000 interest attributable to Segment Zee. Between November 15 and December 31, 2022, there was no further asset impairment. Before income tax, what amount of income or loss from discontinued operation should be reported for 2022?

a.P800,000 loss

b.P9,200,000 income

c.P1,200,000 income

d.P7,200,000 income

Q5. Financial records of Honey, Inc., were destroyed by fire at the end of 2021. Fortunately the controller had kept certain statistical data related to the income statement as follows: The beginning merchandise inventory was P92,000 and decreased by 20% during the current year; Sales discounts amount of P17,000; 20,000 ordinary shares were outstanding for the entire year; Interest expense was P20,000; The income tax rate is 35%; Cost of goods sold amounts to P500,000; Administrative expenses are 20% of cost of goods sold but only 8% of gross sales. Four-fifths (4/5) of the operating expenses relate to sales activities. How much is the net profit for the year 2021?

a.P138,450

b.P213,000

c.P113,000

d.P132,400

Q6. For Harem Company, the following informations is available: Cost of goods sold - P600,000; Dividend revenue - P25,000; income tax expense - P60,000; Sales - P1,000,000. Using the natural presentation of income statement, gross profit

a.should be reported at P135,000

b.should be reported at P425,000

c.should be reported at P400,000

d.should not be reported

Q7. Magayon Company is completing the preparation of the draft financial statements for the year ended December 31,2022. The financial statements are authorized for issue on March 31, 2023. On march 15, 2023, a dividend of P3,500,000 was declared and a contractual share payment of P700,000 was made, both based on the profit for the year ended December 31, 2022; On February 1, 2023, a customer went into liquidation having owed the company P680,000 for the past 6 months. No allowance had been made against the debt in the draft financial statements; On March 20, 2023, a manufacturing plant was destroyed by the fire resulting in a financial loss of P5,200,000. What total amount should be recognized in profit or loss for the year ended December 31, 2022 to reflect adjusting events after the end of the reporting period?

a.P5,200,000

b.P1,380,000

c.P3,500,000

d.P6,580,000

Q8. Marabe Company provided the following information for the year 2020: Sales - P5,600,000; Sales returns and allowances - P80,000; Cost of goods sold - P2,240,000; Utilities expense - P800,000; Interest revenue - P120,000; Income tax expenses - P640,000; casualty loss due to earthquake - P40,000; Finance cost - P160,000; Salaries expense - P480,000; Loss on sale of investments - P40,000. What amount should be presented as income from continuing operations?

a.P1,280,000

b.P1,240,000

c.P1,120,000

d.P1,880,000

Q9. Masaya Company provided the following information for the year 2022: Sales - P25,000,000; Cost of sales - P15,000,000; Selling costs - P2,500,000; General and administrative expenses - P2,000,000; Interest expense - P1,000,000; Gain on early retirement of long-term debt - P250,000; Correction of inventory error, net of tax (credit) - p500,000; Share in profit of the investee - P1,500,000; Gain on expropriation of land - P1,000,000; Income tax expenses - P2,500,000; Dividends paid - P1,250,000. What is the income from continuing operations?

a.P4,000,000

b.P3,500,000

c.P4,500,000

d.P4,750,000

Q10. Mini Corp. reports operating expenses in two categories: (1) selling and (2) general and administrative. the adjusted trial balance on December 31, 2019 included the following expense account: Accounting and legal fees - P280,000; Advetising - P240,000; Freight out - P150,000; Interest - P120,000; Loss on sale of long-term investments - P60,000; Officer's salaries - P360,000; Rent for office space - P360,000; Sales salaries and commissions - P220,000. One-half of the rented premises is occupied by the sales department. How much of the foregoing expenses should be included in Mini's (1) selling expenses and (20 general and administrative expenses for 2019?

a.(1)P790,000; (2)P820,000

b.(1)P820,000; (2)P790,000

c.(1)P790,000; (2)P1,000,000

d.(1)P1,000,000; (2)P790,000