Reference no: EM132803745

Questions -

Q1. In preparing its May 31, 2020 bank reconciliation, Catt Co. has the following information available:

Balance per bank statement, 5/31/2020 30,000

Deposit in transit, 5/31/2020 5,400

Outstanding checks, 5/31/20202 4,900

Note collected by bank in May 1,250

Find the correct balance of cash at May 31, 2020?

a. P35,400

b. P29,250

c. P30,500

d. P31,750

Q2. If the month-end bank statement shows a balance of P 36,000, outstanding checks are P 12,000, a deposit of P 4,000 was in transit at month end, and a check for P 500 was erroneously charged by the bank against the account, the correct balance in the bank account at month end is

a. P27,500

b. P28,500

c. P20,500

d. P43,500

Q3. Wellington Corp. has outstanding accounts receivable totaling P3 million as of December 31 and sales on credit during the year of P 15 million. There is also a debit balance of P 12,000 in the allowance for doubtful accounts. If the company estimates that 8% of its outstanding receivables will be uncollectible, what will be the balance in the allowance for doubtful accounts after the year-end adjustment to record bad debt expense?

a. P1,200,000

b. P228,000

c. P240,000

d. P252,000

Q4. Sun Inc. factors P 2,000,000 of its accounts receivables without guarantee (recourse) for a finance charge of 5%. The finance company retains an amount equal to 10% of the accounts receivable for possible adjustments. What would be recorded as a gain (loss) on the transfer of receivables?

a. Loss of P100,000

b. Gain of P100,000

c. Loss of P300,000

d. Loss of P200,000

Q5. Nichols Company had 500 units of "Dink" in its inventory at a cost of P 5 each. It purchased, for P 2,400, 300 more units of "Dink". Nichols then sold 600 units at a selling price of $10 each, resulting in a gross profit of P 2,700. The cost flow assumption used by Kingman

a. FIFO

b. LIFO

c. Weighted average

d. Cannot be determined from the information given