Reference no: EM132958871

Problem 1 - During 2014, Jane Company engaged in the following transactions:

Key management personnel compensation 2,000,000

Sales to affiliated entities 3,000,000

1. What total amount should be included as related party disclosures in Jane Company's 2014 consolidated financial statements?

a. 5,000,000

b. 3,000,000

c. 2,000,000

d. 0

2. What total amount should be included as related party disclosures in Jane Company's 2014 separate financial statements?

a. 5,000,000

b. 3,000,000

c. 2,000,000

d. 0

Problem 2 - Digos Company was organized on January 1, 2014. On the same date, 25,000, P100 par value, ordinary shares were issued in exchange for property plant and equipment valued at P3,000,000 and cash of P1,000,000. The following data summarize activities for 2014:

1. Profit for the year ended December 31,2014 was P1,000,000

2. Raw Materials on hand on December 31 were equal to 25% of raw materials purchased.

3. Manufacturing costs were distributed as follows: Materials used 50%, Direct labor 30%, Factory overhead 20%(includes depreciation of building, P100,000)

4. Goods in process remaining in the factory on December 31 were equal to 1/3 of the goods finished and transferred to stock.

5. Finished goods remaining in the stock on December 31 were equal to 25% of cost of goods sold.

6. Operating expenses were 30% of sales

7. Cost of goods sold was 150% of the operating expenses total.

8. Ninety percent of sales were collected during 2014. The balance was considered collectible.

9. Seventy five percent of the raw materials purchased were paid for. There were no expense accruals and prepayments at the end of the year.

1. What is the sales for the year ended December 31, 2014?

a. 4,000,000

b. 5,000,000

c. 2,000,000

d. 3,000,000

2. Total manufacturing cost for the year ended December 31, 2014?

a. 4,166,667

b. 3,000,000

c. 666,667

d. 2,850,000

3. Cash balance as of December 31, 2014?

a. 1,900,000

b. 1,150,000

c. 650,000

d. 500,000

4. Total current assets as of December 31, 2014?

a. 4,000,000

b. 2,600,000

c. 2,575,000

d. 3,861,111

5. Total liabilities and equity as of December 31, 2014?

a. 5,761,111

b. 5,750,000

c. 5,500,000

d. 5,475,000