Reference no: EM133132999

Question 1 - The cash account in the current asset section of the December 31, 2022 balance sheet of Nica Company consists of

Cash in banks P2,250,000

Cash restricted for additions to

be disbursed in 2010 3,000,000

Petty cash funds (all funds were replenished on December 31, 2008) 30,000

Included in the cash in banks is a compensating balance of P750,000 against short-term borrowing arrangements at December 31, 2022. The compensating balance is not legally limited as to withdrawal by Nica Company.

What is the correct cash balance of Nica Company at December 31, 2022?

a. P2,280,000

b. P3,030,000

c. P4,530,000

d. P5,280,000

Question 2 - Covid Company had the following transactions all through out the year 2022 which is its first year of operations.

Sales (90% collected in first year) P1,500,000

Bad debt written-off 60,000

Disbursements for cost and expenses 1,200,000

Disbursements for income taxes 90,000

Purchases of fixed assets 400,000

Depreciation on fixed assets 80,000

Proceeds from issuance of ordinary share 500,000

Proceeds from short-term borrowings 100,000

Payments on short-term borrowings 50,000

What is the cash balance at December 31, 2022?

a. P150,000

b. P170,000

c. P210,000

d. P280,000

Question 3 - Shown below is the bank reconciliation for Elias Company for May 2022:

Balance per bank, May 31, 2022 P75,000

Add: Deposit in transit 12,000

Total 87,000

Less: Outstanding checks P14,000

Bank credit recorded in error 5,000 19,000

Cash balance per book, May 31, 2022 P68,000

The bank statement for June 2022 contains the following data:

Total deposits P56,000

Total charges, including an NSF check of P4,000 and a service charge of P200 48,000

All outstanding checks on May 31, 2022, including the bank credit, were cleared in bank in June 2022. There were outstanding checks of P15,000 and deposits in transit of P19,000 on June 30, 2022.

What is the cash balance per bank on June 30, 2022?

a. P75,000

b. P82,000

c. P86,000

d. P86,200

What is the cash balance per books on June 30, 2022?

a. P73,800

b. P88,200

c. P90,200

d. P94,400

Question 4 - On the December 31, 2022 balance sheet of Kobe Company, the current receivables consisted of the following:

Trade accounts receivable P232,500

Allowance for uncollectible accounts (5,000)

Claim against shipper for goods lost in transit (Oct. 2022) 7,500

Selling price of unsold goods sent by Microwave to consignee 65,000

Security deposit on lease of warehouse used for storing inventories 75,000

Total 375,000

At December 31, 2022, how much should be Kobe's total current net receivables?

a. P235,000

b. P300,000

c. P310,000

d. P375,000

Question 5 - On December 31, 2022, the "Receivables" account of Sopie Company shows an amortized cost of P1,950,000. Subsidiary details show the following:

Trade accounts receivable, P775,000;

Trade notes receivable, P100,000;

Installments receivable, normally due one (1) year to two (2) years, P300,000;

Customers accounts reporting credit balances arising from sales returns, P30,000;

Advance payments for purchase of merchandise, P150,000;

Customers accounts reporting credit balances arising from advance payments, P20,000;

Cash advances to subsidiary, P400,000, Claims from insurance company, P15,000;

Subscription receivable due in 60 days, P300,000,

Accrued interest receivable, P10,000

How much should be presented as "trade and other receivables" under current assets?

a. P725,000

b. P1,125,000

c. P1,290,000

d. P1,650,000

Question 6 - The balance of the accounts receivable was extracted from Yna Company's unadjusted trial balance at December 31, 2022

Account receivable P1,000,000

A test of collectability of the receivable showed that P580,000 is currently collectible and not impaired: P300,000 has been outstanding more than the required period for similar transaction and objective evidence showed that only P158,000 is considered realizable but with a current fair value of P141,000: the remaining receivable balance has been outstanding for 2 years and Point Company estimates that none of which will be realized.

What amount should the account receivable is reported in the December 31, 2022 balance sheet?

a. P291,000

b. P458,000

c. P621,000

d. P738,000

Question 7 - At the end of its first year of operations, December 31, 2022, Trisha Company had accounts receivable of P500,000, which were net of the related allowance for doubtful accounts. During 2020, Trisha recorded charges to bad debt expenses of P80,000 and wrote off uncollectible accounts receivable of P20,000.

How much should Trisha Company report in its December 31, 2022 balance sheet as accounts receivable before the allowance for doubtful accounts?

a. P500,000

b. P520,000

c. P560,000

d. P600,000

Question 8 - Sunny Day Company, a wholesaler, uses the aging method to estimate bad debt loss/impairment loss. The following schedule of aged accounts receivable was prepared at December 31, 2022.

Age of Accounts Amount Ave % of Uncollectibles

0-30 days P561,000 .48%

31-60 days 196,000 1.04%

61-90 days 88,400 10.40%

91-120 days 18,500 50.70%

Over 120 days 9,600 78.12%

Total P874,200

What is the amount of impairment loss based on the average loss experience for the last 5 years?

a. P30,490

b. P30,810

c. P60,590

d. P63,286

Question 9 - On May 9, 2021, PJ sold merchandise with a list price of P150,000 to JP account. PJ allowed trade discounts of 30% and 20%. Credit terms were 2/15, n/40 and the sale was made F.O.B shipping point. PJ prepaid P6,000 of delivery costs for JP as an accommodation.

What amount should JP remit to PJ as full payment on May 2021?

a. P82,320

b. P88,200

c. P88,320

d. P94,200

Question 10 - On June 1, 2021 Positive Corp, sold merchandise with a list price of P300,000 to Nega Company on account. Positive was given the following trade discounts of 30% and 20%. Credit terms were 2/15, n/40 and the sale was made F.O.B point of destination. On June 10, 2021 when the merchandise were delivered, Nega Company paid P5,000 of delivery costs for Positive as an accommodation.

What amount should Positive Company remit to Nega Company as full payment on June 14, 2021?

a. P168,000

b. P164,640

c. P159,740

d. P159,640

Question 11 - On May 1, 2022, Pager Corp, bought a parcel of land for P300,000. After seven months, Pager sold this land to a triple-A rated company for P450,000, under the following terms: 25% at closing and a first mortgage note (at the market rate of interest) for the balance. The first payment on the note, plus accrued interest is due December 1, 2023. Pager reported this sales on the installment basis in its 2022 tax return.

How much gain should Pager report from the sale of this land in its 2022 income statement?

a. None

b. P37,500

c. P112,500

d. P150,000

Question 12 - Eternitea Bank granted a loan to a borrower on January 1, 2022. The interest on the loan is 10% payable annually starting December 31, 2022. The loan matures in three years on December 31, 2024.

Principal amount 5,000,000

Direct organization cost incurred 100,000

Indirect origination cost incurred 50,000

Origination fee received from the borrower 340,000

After considering the origination fee received from the borrower and the direct origination cost incurred, the effective rate on the loan is 12%.

What is the carrying amount of the loan receivable on January 1, 2022?

a. 4,760,000

b. 5,000,000

c. 4,810,000

d. 4,660,000

What is the interest income for 2022?

a. 571,200

b. 500,000

c. 476,000

d. 547,200

What is the carrying amount of the loan receivable on December 31, 2022?

a. 5,000,000

b. 4,760,000

c. 4,831,000

d. 4,910,000

Question 13 - On January 1, 2020, Miraflor Company sold an equipment with a carrying amount of P800,000, receiving a noninterest bearing note due in three years with a face amount of P1,000,000. There is no market value for the equipment.

The interest rate on similar obligations is 12%. The present value pf 1 at 12% for three periods is .712.

What amount should be reported as gain or loss on the sale of equipment in 2020?

a. 200,000 gain

b. 200,000 loss

c. 88,000 gain

d. 88,000 loss

What amount should be reported as interest income for 2020?

a. 288,000

b. 120,000

c. 96,000

d. 85,440

What is the carrying amount of note receivable on December 31, 2020?

a. 559,600

b. 712,000

c. 797,440

d. 800,000

What amount should be reported as interest income for 2021?

a. 95,693

b. 96,000

c. 75,000

d. 60,000

Question 14 - Blessed Company reported the following accounts at year0end before adjustments:

Debit Credit

Allowance for doubtful accounts 5,000

Sales 7,200,000

Sales return 200,000

The entity estimated uncollectible accounts receivable at 2% of net sales.

What amount of doubtful accounts expenses should be reported for the current year?

a. 140,000

b. 145,000

c. 141,000

d. 144,000