Question 

1  
0 / 1 pts Question 2
On January 1, 2016, Parent Company acquired 1 / 1 pts
90% of Subsidiary Company in exchange for On January 1 , 2015, B Construction Corp.
5,400 shares of P10 par common stock having a began constructing a P2,100,000 contract. The
market value of P 120,600. Parent and following are relevant information provided by
Subsidiary condensed balance sheets were as the corporation. B uses the percentage of
follows: completion method. For the year ended,
Parent Company and Subsidiary Company December 31, 2016, B Corp billed its client an
Balance Sheets of January 1, 2016 additional 55% of the contract price. (PISO)
(before combination)
Year 2015 2016 2017
Subsidiary Construction in 441,000 ? ?
ASSETS Parent Company Progress
Company Estimated costs to ? ? -
Cash 30,900 37,400 complete
Accounts receivable 34,200 9,100 Cost incurred 425,250 969,000 675,750
(net) Excess of billings 84,000 330,750 -
Inventories 22,900 16,100 over construction current current
Equipment, net 179,000 40,000 in progress liability liability
Patents - 10,000
Total Assets 267,000 112,600 How much is the estimated remaining cost in
LIABILITIES & 2015?
SHAREHOLDERS’
EQUITY Correct!
Accounts payable 4,000 6,600   
Bonds payable, 10% 100,000 -
Share capital, P10 par 100,000 50,000 1,599,750
Share premium 15,000 15,000  
Retained earnings 48,000 41,000 Question 3
Total Liabilities & 267,000 112,600 1 / 1 pts
Shareholders’ Equity E Corp. entered in a long-term project begun in
2016 and continued through 2017. E uses the
At the date of acquisition, all assets and percentage of completion method in recognizing
liabilities of Subsidiary Company have book revenue. As of 2017, E billed 40% of the total
value approximately equal to their respective contract price. Some other information about the
market values except the following as project are as follows:
determined by appraisal as follows:
Inventories (FIFO Method P 17,100 2016 2017
Equipment (net-remaining life – 4 years) Construction 85,000 240,000
48,000 cost to date
Patents (remaining life 10 yrs)
Construction in 92,000 280,000
13,000
progress
Goodwill (no impairment)
Compute the amount of partial goodwill on Contract billings 100,000 350,000
January 1, 2016, _____.You Answered Collections from 100,000 250,000
the contract
212,500 Compute the percentage of completion rate as
of 2017:Correct!
Correct Answers   
14,400
 
32%
  Correct Answers
749,650
 
Question 4
0 / 1 pts
Nikita sells automatic weapons costing
 Question 6
P700,000 at a price of P1,200,000. Division,
Corp. buys a dozen of automatic weapons on 1 / 1 pts
installment and trade in six of its old weapons at On December 1, S Company entered into a firm
a trade-in value of P300,000 each. Nikita spends commitment to acquire a machinery from UAE
P25,000 to recondition the old guns and sells Company. Delivery and passage of title would be
them for P315,000. Nikita expects a 10% gross on January 31, 2017 at the price of 37,800
profit from the sale of used guns. dirhams, accounted for as fair value hedge. On
the same date, to hedge against unfavorable
What is the over-allowance granted by Nikita on changes, S entered into a 60-day forward
the trade-in transaction? contract, with a bank for 37,800 dirhams.
Exchange rate were as follows:
You Answered
41,500 Spot Forwar
rate d rate
12/1/2016 P96.5
Correct Answers 0 P94.30
249,000 12/31/201
  6 97.25 96.50
1/31/2017 99.70 99.70
 
Question 5 What is the forex gain (loss) on the hedging
instrument in 2016?
0 / 1 pts
On January 2, 2016, Ivan got the franchise of Correct!
PPP Inc. The franchise agreement provides a 83,160
P500,000 initial franchise fee, payable
P100,000 upon signing of the franchise contract
and the balance in four annual installments Correct Answers
starting December 31, 2016. At present value 83,160
using 12% as discount rate, the four installments  
would approximate P199,650. The fees once
paid are not refundable. The franchise may be  
cancelled subject to the provisions of the Question 7
agreement. Should there be unpaid franchise 0 / 1 pts
fees attributed to the balance of the initial
Ubeng Corp. entered into a construction
franchise fee, it would become due and
agreement in 2015 that called for a contract
demandable upon cancellation. Further, the
price of
franchisor is entitled to a 5% continuing fee on
9, 600,000. At the beginning of 2016, a change
gross sales payable monthly within the first ten
order increased the initial contract price by P
days of the following month. The first year of
480, 000. The company uses the percentage of
operations yielded gross sales of P9million.
completion basis of revenue recognition. In
Assume the collectability of the note is assured.
relation to the project, the following data are
obtained:
What is the earned franchise fee on Dec. 31,
2016?
2015 2016
You Answered Cost incurred to date 4,920,000 8,640,000
773,608 Estimated cost to 4,920,000 2,160,000
complete
Billings made 5,280,000 8,520,000
Collections made 4,380,000 7,500,000 P573,750.Assuming Pink Company acquired
What Gross profit (loss) should Uberita Corp. 90% of the outstanding stock of Gold Company
recognize in 2016? for P911,250 and NCI is measured at fair value,
how much is the total consolidated assets on the
You Answered date of acquisition?
(456,000)
You Answered
6,693,750
Correct Answers
480,000
Correct Answers
Question 8
5,782,500
1 / 1 pts Question 10
D Company opened its Pasig branch on October
31, 2016. Shipments of merchandise to the 0 / 1 pts
branch during the month, billed at 120% of cost, On January 1, 2016, Parent Company acquired
amounted to P375,000. The branch returned 90% of Subsidiary Company in exchange for
P46,860 of defective merchandise to the home 5,400 shares of P10 par common stock having a
office. On October 31, the branch reported a net market value of P 120,600. Parent and
loss from its operation of P6,810 and an Subsidiary condensed balance sheets were as
inventory of P252,000. follows:
The realized inventory profit to be taken up in Parent Company and Subsidiary
the home office books would be:! Company
Balance Sheets of January 1,
   2016
(before combination)
12,960
Subsidiary
Question 9 ASSETS Parent Company
0 / 1 pts Company
On January 2, 2016, the statements of financial Cash 30,900 37,400
position of Pink and Gold Company prior to the Accounts receivable 34,200 9,100
combination are as follows: (net)
Inventories 22,900 16,100
Pink Co. Gold Co. Equipment, net 179,000 40,000
Cash P1,687,500 P56,250 Patents - 10,000
Inventories 1,125,000 112,500 Total Assets 267,000 112,600
Property and LIABILITIES &
equipment SHAREHOLDERS’
(net) 2,812,500 393,750 EQUITY
Total Assets P5,625,000 P562,500 Accounts payable 4,000 6,600
Bonds payable, 10% 100,000 -
Current Share capital, P10 par 100,000 50,000
liabilities P337,500 P56,250
Share premium 15,000 15,000
Ordinary
Retained earnings 48,000 41,000
shares, P100
par 562,500 56,250 Total Liabilities & 267,000 112,600
Shareholders’ Equity
Share premium 1,687,500 112,500
Retained
At the date of acquisition, all assets and
earnings 3,037,500 337,500
liabilities of Subsidiary Company have book
Total Liabilities value approximately equal to their respective
and Equity P5,625,000 P562,500 market values except the following as
determined by appraisal as follows:
The fair value of Gold Company’s equipment is Inventories (FIFO Method) P
17,100 the accountant and project manager concerning
Equipment (net-remaining life – 4 years) the construction for the three years of
48,000 construction: (in PISO)
Patents (remaining life 10 yrs)
13,000 Year 12/31/2014 12/31/2015 12/31/2016
Goodwill (no impairment) Costs ? 1,500,000 3,740,000
Compute the non-controlling interests (in net incurred
assets) on January 1, 2016, ______. during the
year
You Answered Realized 750,000 (250,000) (800,000)
13,400 gross
profit /(loss)
Correct Answers during the
year
11,800
  Percentage 37.5% 50% 80%
of
  completion
as of end of
Question 11
the year
0 / 1 pts
As of December 31, the books of AME
What is the balance of Construction in Progress
Partnership showed capital balances of: A –
on A’s Statement of Financial Position on
P40,000;
December 31, 2016?
M – 25,000; and E– P5,000. The partner’s profit
and loss ratio was 3:2:1, respectively. The Correct!
partners decided to dissolve and liquidate. They
  
sold all the non-cash assets for 37,000 cash.
After settlement of all liabilities amounting to
P28,000 cash left for distribution. 7,940,000
The loss on the realization of the non-cash  
assets was _________.You Answered
Question 14
5,000 1 / 1 pts
ABC Inc., franchisor, entered into a franchise
agreement with B Inc. on July 1, 2016. The initial
Correct Answers franchise fee agreed upon is P330,000, of which
42,000 P30,000 is payable upon signing and the
balance covered by a non-interest bearing note
Question 12 payable in four equal annual installments. It was
1 / 1 pts agreed that the down payment is not refundable,
At the time of partnership liquidation, which notwithstanding the lack of substantial
performance of services by franchisor. The direct
credits shall be settled first?Correct!
franchise cost incurred was P195,000. Indirect
   franchise expense of P18,750 was also incurred.
The management of D estimated that they can
borrow at the rate of 12%. The franchise outlet
Those amount owing to third persons. commenced operations on July 31, 2016.
Question 13 Calculate the net income to be reported by ABC
on July 31, 2016 if interim financial statements
1 / 1 pts are prepared at that date. (Use two decimal
On January 1, 2014, A Inc. started the places for the present value factor)
construction of a building with a fixed contract
price of P10, 000,000. The outcome of the   
construction project can be estimated reliably
and the contractor decided to employ cost to
cost method. The following data are provided by 44,250
Correct! 1 / 1 pts
  R Company acquired machinery for 169,200 lira
Question 15 from a vendor in Turkey on December 1, 2016.
1 / 1 pts Payment on Turkey Lira was due on March 31,
Which of the following transactions will increase 2017. On the same date, to hedge this foreign
the normal balance of branch account in the currency exposure, R entered into a futures
home office separate statement of financial contract to purchase 169,200 lira from a bank for
position? delivery on March 31, 2017. Exchange rates on
different dates are as follows:
  
12/1 12/31 3/31
Strike 41.50
Return of inventory from branch to home office
price 41.50 41.50
   Buying 43.40
spot rate 41.60 42.50
Payment by the branch of home office’s liability Selling 43.70
spot rate 41.40 42.30
Correct! 30-days 43.20
   futures 42.30 41.80
60-days 42.60
Receipt by the home office of credit memo from futures 41.80 42.20
the branch 90-days 43.40
   futures 40.60 42.50
120-days 42.90
futures 42.20 42.80
Collection by the home office of branch’s
receivable What is the forex gain (loss) due to the hedging
instrument in 2016?
 
Correct!
Question 16
50,760
0 / 1 pts
The Home Office sells merchandise to its branch
at 120% of cost. The branch was established Correct Answers
several years ago with the policy 50,760
that all its merchandise would be acquired from  
the home office. The following information is
available from the records of the home office  
and the branch: Allowance for unrealized gross Question 18
margin in branch inventory P46,000; branch 1 / 1 pts
beginning inventory P36,000; branch ending
Which of the following statements is false
inventory P60,000.
concerning the Schedule of Liquidation?!
How much is the total shipments from home
  
office recorded by the branch?

You Answered Frequent reporting by the accountant is rarely

276,000 necessary.
 
Correct Answers Question 19
240,000 1 / 1 pts
  Which of the following recognition of income and
expense accounts related to installment sales is
  incorrect?
Question 17
   Ellen Company Edwin Company
2017 2018 2017 2018
If the collection of the installment receivable is Net P850,00 P875,00 P300,00 P375,00
not reasonably assured, gross profit of income 0 0 0 0
installment sales is recognized proportionately Dividend
on the basis of collection s 600,000 625,000 200,000 225,000
  How much is the NCI as at December 31, 2017?

You Answered
If the long-term installment receivable is non-
418,000
interest bearing, interest revenue shall be
recognized based on passage of time using the
effective interest method. Correct Answers
Correct! 378,500
   

 
The cost of installment sales shall be recognized Question 21
proportionately throughout the term of the
1 / 1 pts
installment contract based on the proportion of
collection. The balance sheet of S Company as of
d.. Loss on repossession shall be recognized December 31, 2016 is as follows:
on the date of default of collection and
repossession loss or gain of the item sold is ASSETS LIABILITIES
computed as the difference between the fair & EQUITY
value of the repossessed item and the Cash 175,000 Current 250,000
unrecovered cost of the installment receivable. liabilities
Accounts 250,000 Loans 450,000
  receivable payable
Question 20 Inventories 725,000 Common 200,000
0 / 1 pts stock
The shareholders’ equity accounts of Ellen Property, Plant 950,000 Share 400,000
Company and Edwin Corporation at & Equipment Premium
December 31, 2016 were as follows: Retained 800,000
Earnings
Ellen Edwin TOTAL 2,100,000 TOTAL 2,100,000
Company Company ASSETS LIABILITIES
Ordinary & EQUITY
shares P3,000,000 P1,250,000 On December 31, 2016, M Company bought all
Retained the outstanding stock of S for P1,800,000 cash.
earnings 1,250,000 250,000 On the date of purchase, the fair market value of
Total P4,250,000 P1,500,000 S inventories was P675,000, while the fair value
of S PPE was P1,100,000. The fair values of all
On January 1, 2017, Ellen acquired 80% of the other assets and liabilities of S were equal to
ordinary shares of Edwin for P1,450,000. The their book values.
excess of cost over book value was due to The consolidated balance sheet of M and S,
Edwin’s equipment which is undervalued by after the acquisition should reflect goodwill in the
P100,000 and the remaining amount, due to amount of
goodwill. The equipment has a remaining useful
life of five years. Correct!
  
Goodwill at the date of acquisition is found to be
impaired by P15,000 for years 2017 and 2018. 300,000
The income and dividend information for Ellen
and Edwin for 2017 and 2018 are as follows:  
Question 22
1 / 1 pts On January 1, 2017, Ellen acquired 80% of the
Since there is no reasonable basis for estimating ordinary shares of Edwin for P1,450,000. The
the degree of collectability, Van Corp. uses the excess of cost over book value was due to
instalment method of revenue recognition for the Edwin’s equipment which is undervalued by
following sales: (PISO) P100,000 and the remaining amount, due to
goodwill. The equipment has a remaining useful
2016 2015 life of five years.
Instalment Sales 5,400,000 3,600,000
Goodwill at the date of acquisition is found to be
Collections from: impaired by P15,000 for years 2017 and 2018.
2015 600,000 1,200,000 The income and dividend information for Ellen
Instalment and Edwin for 2017 and 2018 are as follows:
Sales
2016 Instalment 1,800,000 - Ellen Company Edwin Company
Sales 2017 2018 2017 2018
Accounts Net P850,00 P875,00 P300,00 P375,00
defaulted: income 0 0 0 0
2015 600,000 300,000 Dividend
Instalment s 600,000 625,000 200,000 225,000
Sales
How much is the NCI in the net income of
2016 Instalment 900,000 subsidiary for 2017?
Sales
Value assigned to You Answered
repossessed 53,000
items:
2015 300,000 165,000
Instalment Correct Answers
Sales 56,000
2016 Instalment 450,000  Question 24
Sales
Gross profit rate 40% 30% 0 / 1 pts
P Company owns 70% of S Company’s common
How much is the net realized gross profit in
stocks acquired on January 1, 2016. S regularly
2015?
sells merchandise to P at 150% of its cost. P’s
Correct! December 31, 2016 and 2017 inventories
include goods purchased inter-company of
  
P450,000 and P132,000, respectively. The
separate incomes of the affiliates are
690,000 summarized as follows: (Year 2017)
 
P S
Question 23
Sales 4,800,000 3,200,000
0 / 1 pts
Cost of sales 2,400,000 2,000,000
The shareholders’ equity accounts of Ellen
Operating expenses 1,600,000 400,000
Company and Edwin Corporation at
December 31, 2016 were as follows: Separate Incomes 800,000 800,000
What is the consolidated net income attributable
Ellen Edwin to minority interest for 2017?
Company Company
Ordinary You Answered
shares P3,000,000 P1,250,000   
Retained
earnings 1,250,000 250,000 226,500
Total P4,250,000 P1,500,000
Correct Answer   
  
120,000
271,800
 
   Question 26
0 / 1 pts
208,200 On January 1, 2016, B Company acquired 80%
   of A Company’s common stock for P280,000
cash. At that date, A reported common stock
outstanding of P200,000 and retained earnings
240,000 of P100,000, and the fair value of the non-
controlling interest was P70,000. The book
 
values and fair values of A’s assets and liabilities
Question 25 were equal, except for intangible assets which
1 / 1 pts has a fair value of P50,000 greater than book
ABC Co. established a branch in Lipa City. On value and an 8-year remaining life. A reported
December 31, 2017, the reciprocal accounts are the following data for 2016 and 2017.
balanced. On December 31, 2018, the home
office account has an unadjusted balance of Year Net Income Comprehensiv Dividends
P100,000. The following reconciling items are e Income paid
discovered by the home ABC Co.: 2016 25,000 30,000 5,000
Lipa branch collected the receivables of Ibaan 2017 35,000 45,000 10,000
branch worth P20,000 but failed to inform the
B reported separate net income from own
home office.
operations of P100,000 and paid dividends of
The home office paid Lipa’s payables worth
P30,000 for both years.
P10,000 but failed to inform the branch.
What is the amount of consolidated
Inventory worth P30,000 intended to be
comprehensive income reported for 2016?
delivered to San Jose Branch was delivered to
Lipa branch which was retained by the latter.   
Inventory worth P40,000 intended to be
delivered to Lipa Branch was delivered to Ibaan
branch which was retained by the latter. 125,000
The branch received credit memo from home   
office amounting to P10,000 which was credited
twice by the branch.
The branch’s net loss amounting to P20,000 was 118,750
debited by the Home office to investment in Correct Answer
branch.   
What is the unadjusted balance of Investment in
Branch on December 31, 2018?
123,750
  
You Answered
  
70,000
   130,000
PTS; 1
90,000
 
Correct!
Question 27
  
1 / 1 pts
Upon signing of the franchise contract, the
110,000
franchise is required to pay the
    Jolly Corporation exchanged its common stock,
worth P 350,000 for all of the net assets of Bee
Professional fees Company in a business combination treated as
a purchase. At the date of combination, Jolly’s
   net assets had a book value of P600,000 and a
fair value of P850,000. Bee’s net assets had a
Brokers fee book value of P325,000 and a fair value of
P340,000.
Correct!
   Immediately following the combination, the net
assets of the combined company should have
Initial franchise fee been reported at what amount?

   You Answered
940,000
Continuing franchise fee
PTS; 1 Correct Answers
950,000
   
Question 28
1 / 1 pts  
B Corp. started operations on January 2, 2016 Question 30
selling home appliances and furniture on 0 / 1 pts
installment basis. For 2016 and 2017 the Gross profit rates of Ivonne Corp were 30%,
following date represented operational details: 25% and 20% of cost for 2014, 2015 and 2016,
respectively. The following account balances are
2016 2017 available at the end of 2016.
Installment 1,200,000 1,500,000
sales Deferred
Cost of 720,000 1,050,000 Installment Gross Profit
installment Year of Accounts (before
sales sales Receivable adjustments)
2014 6,000 7,230
Collections:
2015 61,500 60,750
2016 sales 630,000 450,000 2016 195,000 120,150
2017 sales 900,000
On January 2017, an installment sales on What is the total collection to be reported in the
account in 2016 defaulted and the merchandise income statement for the year ended December
with resale price before reconditioning cost of 31, 2016?
P20,000 were repossessed. Reconditioning cost
of repossessed merchandise was P2,000 and a You Answered
25% gross profit was usual from the sale of used 605,350
equipment related installment. The related
installment receivable balance as of the date of
default and repossession was P24,000. Correct Answers
What is the balance of unrealized gross profit as 793,480
of end of 2017?  Question 31

   1 / 1 pts
On October 31, 2016, A, B and C who share
218,400 earnings 5:3:2, respectively, decided to liquidate
their partnership at which time their condensed
Question 29 balance sheet was as follows:
0 / 1 pts
LIABILITIES
ASSETS AMOUNT & AMOUNT 12,500,000
PARTNER’S   
CAPITAL
Cash 50,000 Liabilities 60,000
14,000,000
Other assets 250,000 A, Capital 80,000
B, Capital 90,000   
C, Capital 70,000
The first cash sale of assets booked at 13,000,000
P150,000 resulted in net realization of
Correct!
P120,000. At this time B received P48,000.
What is the amount of cash withheld for the   
expected liquidation expenses?Correct!
13,500,000
  
 
Question 34
10,000
1 / 1 pts
  On January 1 , 2015, B Construction Corp.
Question 32 began constructing a P2,100,000 contract. The
1 / 1 pts following are relevant information provided by
If the sale transaction provides for periodic the corporation. B uses the percentage of
installments over an extended period of time and completion method. For the year ended,
the collectibility of the sales price cannot be December 31, 2016, B Corp billed its client an
reasonably estimated, what method of revenue additional 55% of the contract price. (PISO)
recognition is the most appropriate?Correct!
Year 2015 2016 2017
   Construction in 441,000 ? ?
Progress
Installment method  Estimated costs to ? ? -
complete
Question 33 Cost incurred 425,250 969,000 675,750
1 / 1 pts Excess of billings 84,000 330,750 -
On January 1, 2017, Ayala acquired 90% of over construction current current
outstanding ordinary shares of Globe Inc. The in progress liability liability
following data are provided: How much is the realized gross profit (loss) in
On year 2017, Ayala sold inventory at a price of 2016?
P1,000,000 with gross profit rate of 20% based
on sale to Globe. 40% remained in ending   
inventory of Globe on December 31, 2017.
These inventories are eventually sold on year
2018 to third persons by Globe. (45,000)
During 2018, Globe sold inventory at a price of   
P500,000 with gross profit of 40% based on sale
to Ayala of which 10% remained in ending
15,750
inventory of SM on December 31, 2018.
During 2018, Ayala reported sales of P10M while Correct!
Globe reported sales of P4M. In the same year,   
Ayala reported gross profit of P3M while Globe
reported gross profit of P2M.
What is the amount of Ayala’s consolidated (60,750)
sales for the year ended December 31, 2018?   

  
30,000
  payment. Toyota uses the installment method of
Question 35 accounting. In its December 31, 2016 financial
1 / 1 pts statements, what amount should Toyota report
During the liquidation, the sale of all the assets as deferred gross profit?
of liquidated corporation resulted to net
Correct!
proceeds of P1,000,000. Liquidation expense
amounting to P60,000 has been paid at the start 180,000
of liquidation from the net proceeds of disposal
of all assets. Before the liquidation, the following Correct Answers
data are provided concerning the financial 180,000
position of the said financially distressed  
corporation:
The corporation has total assets with book value  
of P2,000,000 and deficiency amounting to
Question 37
P340,000.
An investment property with book value of 0 / 1 pts
P500,000 and realizable value of P300,000 Which of the following will result to recognition of
secured a loan payable amounting to P100,000. revenue at a point in time under IFRS 15?
Inventory with book value of P1,000,000 and
realizable value of P100,000 secured a note You Answered
payable amounting to P200,000.  
Salaries payable and income tax payable
amounted to P100,000 and 40,000, respectively. The customer simultaneously receives and
what is the amount received by pure unsecured consumes the benefits provided by the entity’s
creditors without priority? performance as the entity performs.

   Correct Answer
 
600,000
The customer obtains absolute control, legal
Correct! right and possession of the promised asset at a
   specific date.
 
570,000
   The entity’s performance enhances or creates
an asset that the customer controls as the asset
700,000 is created or enhanced.
    

800,000 The entity’s performance does not create an

asset with alternative use to the entity and the
  entity has enforceable right to performance
Question 36 completed to date.
1 / 1 pts
 
On January 2, 2015, Toyota sold a car to Irish for
Question 38
P1,050,000. On this date, the car cost
P735,000. Irish paid P150,000 as a down 1 / 1 pts
payment and signed interest bearing note at On December 31, 2017, the capital balance of
10%. The note was payable in three annual partners Cristy, Paula and Ara of CPA
installments of P300,000 beginning January 1, Partnership are P1M, P3M and P6M,
2016. Irish made a timely payment for the first respectively with profit or loss agreement ratio of
installment on January 1, 2016 of P390,000 4:1:5. On January 1, 2018, Cristy decided to
which included interest of P90,000 to date of retire and received P400,000 from the
partnership. If the assets of the partnership are contract to purchase 169,200 lira from a bank for
not properly valued at the time of retirement, delivery on March 31, 2017. Exchange rates on
how much is the capital balance of Paula after different dates are as follows:
the retirement of Cristy?
12/1 12/31 3/31
   Strike 41.50
price 41.50 41.50
2,900,000 Buying 43.40
spot rate 41.60 42.50
Correct!
Selling 43.70
  
spot rate 41.40 42.30
30-days 43.20
2,850,000 futures 42.30 41.80
   60-days 42.60
futures 41.80 42.20
3,100,000 90-days 43.40
futures 40.60 42.50
   120-days 42.90
futures 42.20 42.80
3,150,000
What is the reported value (Turkey Lira) of the
  receivable to the vendor at December 31, 2016?
Question 39
0 / 1 pts You Answered
Solly and Dante are partners who share profits 7,191,000
and losses in the ratio of 7:3, respectively. On
February 1, 2009, their respective capital Correct Answers
accounts were as follows: Solly P140,000 and
169,200
Dante P120,000.
 
On that date they agree to admit Jam as partner
 
with 1/3 interest in the capital and profit and
losses, and upon his investment of P100,000. Question 41
The new partnership will begin with a total 0 / 1 pts
capital of P360,000. Immediately after Jam’s Cellphone, Inc. sells cellphones on an
admission, what are the capital balance of Solly, installment basis. For the year ended
Dante and Jam? December 31, 2016, the following were
reported:
You Answered
126,000, 11 Cost of installment
sales P1,050,000
Loss on
Correct Answers repossessions 27,000
126,000,114,000,120,000
Fair value of
  repossessed
merchandise 225,000
 
Account defaulted 360,000
Question 40
Deferred gross profit,
0 / 1 pts December 31,
R Company acquired machinery for 169,200 lira adjusted 216,000
from a vendor in Turkey on December 1, 2016.
What is the collections during the year?
Payment on Turkey Lira was due on March 31,
2017. On the same date, to hedge this foreign
currency exposure, R entered into a futures
     
Question 43
780,000 0 / 1 pts
On January 1, 2016, Parent Company acquired
Correct Answer
90% of Subsidiary Company in exchange for
   5,400 shares of P10 par common stock having a
market value of P 120,600. Parent and
420,000 Subsidiary condensed balance sheets were as
follows:
  
Parent Company and Subsidiary
Company
720,000 Balance Sheets of January 1,
2016
You Answered
(before combination)
  
Subsidiary
1,429,091 ASSETS Parent Company
Company
  Cash 30,900 37,400
Question 42 Accounts receivable 34,200 9,100
1 / 1 pts (net)
A local partnership was in the process of Inventories 22,900 16,100
liquidating and reported the following capital Equipment, net 179,000 40,000
balances: Patents - 10,000
Total Assets 267,000 112,600
Justice, capital (40%
share of profits and LIABILITIES &
losses) P23,000 SHAREHOLDERS’
EQUITY
Zobart, capital (35%) 22,000
Accounts payable 4,000 6,600
Douglass, capital (25%) (14,000)
Bonds payable, 10% 100,000 -
Douglass indicated that the P14,000 deficit Share capital, P10 par 100,000 50,000
would be covered by a forthcoming contribution. Share premium 15,000 15,000
However, the two remaining partners asked to Retained earnings 48,000 41,000
receive the P31,000 that was then available. Total Liabilities & 267,000 112,600
How much of this money should Justice Shareholders’ Equity
receive?
At the date of acquisition, all assets and
   liabilities of Subsidiary Company have book
value approximately equal to their respective
15,000 market values except the following as
determined by appraisal as follows:
   Inventories (FIFO Method) P
17,100
15,887 Equipment (net-remaining life – 4 years)
48,000
  
Patents (remaining life 10 yrs)
13,000
17,333 Compute the Consolidated Retained Earnings.
January 1, 2016, _______.
Correct!
   You Answered
48,000
16,533
Correct Answers Share
52,100 premium 1,687,500 112,500
  Retained
earnings 3,037,500 337,500
  Total
Question 44 Liabilities
1 / 1 pts and Equity P5,625,000 P562,500
At the date of partnership formation of a
partnership, the amount credited to A’s capital is The fair value of Gold Company’s equipment is
less than the fair value of the property P573,750.
contributed. Which is the most valid reason?
Assuming Pink Company acquired all of the
   outstanding stock of Gold Company resulting to
a goodwill of P247,500, contingent consideration
The property contributed by A is impaired. is P135,000, how much is cash paid to Gold
Company?
  
You Answered
The property contributed by A has been 933,750
subjected to positive asset revaluation.
Correct! Correct Answers
   788,750
 
Bonus has been given by partner A to the other
partners.  
Question 46
   1 / 1 pts
The home office shipped merchandise costing
Goodwill arising from partnership formation has P47,100 to Branch A and paid for the freight
been recognized. charged of P7,500. Branch A was subsequently
instructed to transfer he merchandise to Branch
  B wherein Branch A paid P6,000 freight. If the
Question 45 shipment was made directly from Home Office to
0 / 1 pts branch B, the freight cost would have been
On January 2, 2016, the statements of financial P11,250. Which of the following is incorrect?
position of Pink and Gold Company prior to the
combination are as follows:   

Pink Co. Gold Co. Upon receipt of the merchandise by B from A, B

Cash P1,687,500 P56,250 credits home office accounts by P58,350.
Inventories 1,125,000 112,500 Correct!
Property  
and
equipment
(net) 2,812,500 393,750 Upon transfer of merchandise by A to B, home
office debits investment in Branch A Account by
Total
P58,350.
Assets P5,625,000 P562,500
 
Current
liabilities P337,500 P56,250 Upon transfer of merchandise by home office to
Ordinary A, home office debits Investment in branch A
shares, account by P54,600
P100 par 562,500 56,250
    Question 48
1 / 1 pts
Upon transfer of merchandise by A to B, A debits In installment sales, how should the deferred
home office account by P60,600. gross profit account be presented?

  Correct!
Question 47   
1 / 1 pts
On December 31, 2017, the Statement of Asset valuation allowance or contract-receivable
Financial Position of DEF with profit or loss ratio account
of 4:1:5 is presented below:
  
LIABILTIES
ASSETS AMOUNT AND AMOUNT Unearned revenue account
PARTNER’S
  
EQUITY
Cash 2,000,000 Liability to 4,000,000
third person Equity account
Noncash 8,000,000 D, Capital 3,500,000   
asset
E, Capital 1,500,000 Income account
F, Capital 1,000,000
On January 31, 2018, DEF partnership has been  
subjected to installment liquidation. As of Question 49
January 31, 2018, the following data concerning 0 / 1 pts
liquidation are provided: On January 2, 2016, the statements of financial
Noncash asset with book value of P6M has position of Pink and Gold Company prior to the
been sold at a loss of P2M. combination are as follows:
Liquidation expense amounting to P400,000 has
been incurred for the month of January. Pink Co. Gold Co.
P600,000 cash has been withheld for future
Cash P1,687,500 P56,250
liquidation expense.
P3M liability has been paid. Inventories 1,125,000 112,500
What is the amount received by E on January Property
31, 2018? and
equipment
   (net) 2,812,500 393,750
Total
300,000 Assets P5,625,000 P562,500

Correct! Current
   liabilities P337,500 P56,250
Ordinary
700,000 shares,
P100 par 562,500 56,250
  
Share
premium 1,687,500 112,500
1,000,000 Retained
   earnings 3,037,500 337,500
Total
Liabilities
0
and Equity P5,625,000 P562,500
 
 4,000 loss
The fair value of Gold Company’s equipment is
Correct!
P573,750.
Assuming Pink Company acquired 70% of the   
outstanding stock of Gold Company for
P393,750 and Non-controlling interest (NCI) is 600 gain
measured at fair value of P228,750, how much
is the goodwill (gain on acquisition)?  
Question 51
You Answered 1 / 1 pts
(63,750) On January 2, 2016, the statements of financial
position of Pink and Gold Company prior to the
Correct Answers combination are as follows:
63,750
Pink Co. Gold Co.
 
Cash P1,687,500 P56,250
  Inventories 1,125,000 112,500
Question 50 Property
1 / 1 pts and
B Corp. started operations on January 2, 2016 equipment
selling home appliances and furniture on (net) 2,812,500 393,750
installment basis. For 2016 and 2017 the Total
following date represented operational details: Assets P5,625,000 P562,500

2016 2017 Current

Installment 1,200,000 1,500,000 liabilities P337,500 P56,250
sales Ordinary
Cost of 720,000 1,050,000 shares,
installment P100 par 562,500 56,250
sales Share
Collections: premium 1,687,500 112,500
2016 sales 630,000 450,000 Retained
2017 sales 900,000 earnings 3,037,500 337,500
On January 2017, an installment sales on Total
account in 2016 defaulted and the merchandise Liabilities
with resale price before reconditioning cost of and Equity P5,625,000 P562,500
P20,000 were repossessed. Reconditioning cost
of repossessed merchandise was P2,000 and a The fair value of Gold Company’s equipment is
25% gross profit was usual from the sale of used P573,750.
equipment related installment. The related Assuming Pink Company acquired 80% of the
installment receivable balance as of the date of outstanding stock of Gold Company for
default and repossession was P24,000 P513,000 and NCI is measured at NCI’s
What is the gain or loss on repossession? proportionate share of Gold Company’s
identifiable net assets, how much is the
   consolidated stockholders’ equity on the date of
acquisition?
5,600gain
Correct!
   5,460,750

1,400 loss Correct Answers

   5,460,750
 
  719,231
Question 52
1 / 1 pts Correct Answers
On July 1, 2016, P Inc. granted a franchise to Y 1,700,000
Enterprises to operate as a sales outlet. The  
franchisor is to provide initial and continuing
services for an initial fee of P337,500 and an  
annual fee of 5% based on Y’s sales. On the
Question 54
same date, Y paid cash of P112,500 and agreed
to pay the balance in four equal annual 1 / 1 pts
payments beginning on July 1, 2017. Collection On June 30, 2010, the balance sheet for the
of the notes are not reasonably assured. The partnership of Coco, Mario, and Prince, together
franchise outlet opened on December 1, 2016 with their respective profit and loss ratios, were
and reported sales of P50,000 for 2016. The as follows:
present value of the non-interest bearing note
was P163,687.50 at the time of receipt. The
earned revenue from the franchise fees to be ASSETS LIABILITIES &
recognized by P for 2016 on this franchise is: EQUITY
Assets at cost 180,000 Coco, loan 9,000
   Coco, capital 42,00
(20%)
340,000 Mario, Capital 39,000
(20%)
  
Prince, 90,000
Capital(60%)
278,687.50 Total Assets 180,000 Total Liabilities 180,000
Correct! & Equity
   Coco decided to retire from the partnership. By
mutual agreement, the assets are to be adjusted
to their fair market value of P216,000 at June
115,000 30, 2010. It was agreed that the partnership
   would pay Coco P61,200 cash for Coco’s
partnership interest, including Coco’s loan which
is to be repaid in full. No goodwill is to be
287,678.50
recorded.
  After Coco’s retirement, what is the balance of
Mario’s capital account?
Question 53
0 / 1 pts Correct!
Chicane Builders Inc. employs the cost-to-cost 45,450
method in determining the percentage of
completion fro revenue recognition. The
company’s records show the following Correct Answers
information on a 45,450
recently completed project for a contract price of  
P5, 000,000.
 
2015 2016 Question 55
Cost incurred to date 900,000 2,550,000 1 / 1 pts
Gross profit (loss) 100,000 350,000 During the liquidation, the sale of all the assets
Compute the estimated cost to complete the of liquidated corporation resulted to net
project of December 31, 2016, _________. proceeds of P1,000,000. Liquidation expense
amounting to P60,000 has been paid at the start
You Answered of liquidation from the net proceeds of disposal
of all assets. Before the liquidation, the following
data are provided concerning the financial life of five years.
position of the said financially distressed
corporation: Goodwill at the date of acquisition is found to be
The corporation has total assets with book value impaired by P15,000 for years 2017 and 2018.
of P2,000,000 and deficiency amounting to The income and dividend information for Ellen
P340,000. and Edwin for 2017 and 2018 are as follows:
An investment property with book value of
P500,000 and realizable value of P300,000 Ellen Company Edwin Company
secured a loan payable amounting to P100,000. 2017 2018 2017 2018
Inventory with book value of P1,000,000 and Net P850,00 P875,00 P300,00 P375,00
realizable value of P100,000 secured a note income 0 0 0 0
payable amounting to P200,000. Dividend
Salaries payable and income tax payable s 600,000 625,000 200,000 225,000
amounted to P100,000 and 40,000, respectively.
What is the amount received by partially secured How much is the consolidated retained earnings
creditor? as at December 31, 2018?

   You Answered
1,894,000

100,000
Correct Answers
  
1,888,000
 
120,000
    
Question 57
140,000 1 / 1 pts
On January 1, 2020, San Juan Builders Inc.
Correct! accepted a long term construction project to
   build a bridge. The outcome of the construction
project can be estimated reliably and the
130,000 contractor decided to employ cost to cost
method. The following data are provided by the
  accountant and project manager concerning the
Question 56 contract price and construction costs for the
three years of construction: (PISO)
0 / 1 pts
The shareholders’ equity accounts of Ellen Year 12/31/2011 12/31/2012 12/31/2013
Company and Edwin Corporation at
Contract 10,000,000 15,000,000 20,000,000
December 31, 2016 were as follows:
Price as of
the end of the
Ellen Edwin
year
Company Company
Costs 1,000,000 5,000,000 8,000,000
Ordinary
incurred
shares P3,000,000 P1,250,000
during the
Retained year
earnings 1,250,000 250,000
Estimated 3,000,000 4,000,000 2,000,000
Total P4,250,000 P1,500,000 cost to
complete at
On January 1, 2017, Ellen acquired 80% of the the year end
ordinary shares of Edwin for P1,450,000. The What is San Juan Builders’ realized gross profit/
excess of cost over book value was due to (loss) for the year ended December 31, 2022?
Edwin’s equipment which is undervalued by
P100,000 and the remaining amount, due to
goodwill. The equipment has a remaining useful
      

3,500,000 120,000
    
Question 59
2,000,000, 0 / 1 pts
Correct! Gerald and German are considering forming a
   partnership whereby profits will be allocated
through the use of salaries and bonuses.
Bonuses will be 10% of net income after total
500,000 salaries and bonuses. Gerald will receive a
   salary of 90,000 and a bonus. German has the
option of receiving a salary of 120,000 and a
10% bonus or simply receiving a salary of
(1,500,000) P156,000. Both partners will receive the same
amount of bonus.
 
Question 58 Determine the level of income that would be
1 / 1 pts necessary so that German would be indifferent
A company is to be liquidated and has the to the profit sharing option selected, _________.
following liabilities: (in PISO)
Income taxes 8,000 You Answered
Notes Payable (secured by land) 120,000
Accounts payable 83,000
Salary Payable 6,000
Bonds Payable 70,000 Correct Answers
Administrative expenses for liquidation 1,002,000
20,000  
The company has the following assets:
 
Book Fair Value Question 60
Value 1 / 1 pts
Current Assets 80,000 33,000 Mike Restaurant sold a fast-food restaurant
Land 100,000 90,000 franchise to Irish. The sale agreement, signed
Building 100,000 110,000 on January 2016 called for a P100,000 down
payment plus two P50,000 annual payments
How much will the holders of notes payable representing the value of initial franchise
collect following the liquidation? services rendered by Mike restaurant. In
addition, the agreement required the franchisee
   to pay 8% of its gross revenue to the franchisor.
The restaurant opened early in 2016 and its
sales for the year amounted to P750, 000. The
83,000 prevailing rate for similar notes was 12% (PV
   factor was 1.6901)
How much is the total revenue for 2016?
90,000   
Correct!
   84,505
  
108,000
244,505
Correct! goodwill. The equipment has a remaining useful
   life of five years.

Goodwill at the date of acquisition is found to be

254,646
impaired by P15,000 for years 2017 and 2018.
   The income and dividend information for Ellen
and Edwin for 2017 and 2018 are as follows:
266,646
Ellen Company Edwin Company
  2017 2018 2017 2018
Question 61 Net P850,00 P875,00 P300,00 P375,00
1 / 1 pts income 0 0 0 0
On March 1, 2016, Baboy’s Lechon,Inc. a Dividend
franchisor, entered into franchise agreement s 600,000 625,000 200,000 225,000
with Mr. Chicken. The initial franchise fee is How much is the NCI as at December 31, 2018?
P1,500,000 of which P500,000 is payable in
cash upon signing of the franchise agreement You Answered
and the balance evidence by a 12% promissory 441,000
note. As of December 31, 2016 the franchisor
fails to render substantial services and none
Correct Answers
thus far had been rendered to the franchise.
When Baboy’s Lechon, Inc prepares its financial 404,500
statements on December 31, 2016, the revenue  
from franchise fee to re reported is
___________.  
Question 63
Correct! 1 / 1 pts
0 On January 1, 2017, Toni, Abbie and JM entered
into articles of co-partnership for the operation of
TAJ computer shop. Toni contributed investment
Correct Answers
property with assessed value of P1,700,000
0 subject to mortgage payable of P500,000 to be
  assumed by the partnership. Abbie contributed
computer equipment with cost of P600,000 with
  accumulated depreciation of P200,000. The fair
Question 62 market value of the computer equipment is
0 / 1 pts P300,000.
The shareholders’ equity accounts of Ellen On January 2, 2017, the partnership was able to
Company and Edwin Corporation at sell the investment property for P2,000,000.
December 31, 2016 were as follows: How much cash shall be contributed by JM if the
articles of co-partnership provide that Toni will
Ellen Edwin have 60% interest in the partnership?
Company Company
Ordinary   
shares P3,000,000 P1,250,000
Retained 500,000
earnings 1,250,000 250,000
Correct!
Total P4,250,000 P1,500,000
  

On January 1, 2017, Ellen acquired 80% of the

ordinary shares of Edwin for P1,450,000. The 700,000
excess of cost over book value was due to   
Edwin’s equipment which is undervalued by
P100,000 and the remaining amount, due to
800,000
    Balance Sheets of January 1,
2016
600,000 (before combination)

  Subsidiary
Question 64 ASSETS Parent Company
Company
0 / 1 pts
Cash 30,900 37,400
R Company acquired machinery for 169,200 lira
from a vendor in Turkey on December 1, 2016. Accounts receivable 34,200 9,100
Payment on Turkey Lira was due on March 31, (net)
2017. On the same date, to hedge this foreign Inventories 22,900 16,100
currency exposure, R entered into a futures Equipment, net 179,000 40,000
contract to purchase 169,200 lira from a bank for Patents - 10,000
delivery on March 31, 2017. Exchange rates on Total Assets 267,000 112,600
different dates are as follows: LIABILITIES &
SHAREHOLDERS’
12/1 12/31 3/31 EQUITY
Strike 41.50 Accounts payable 4,000 6,600
price 41.50 41.50 Bonds payable, 10% 100,000 -
Buying 43.40 Share capital, P10 par 100,000 50,000
spot rate 41.60 42.50
Share premium 15,000 15,000
Selling 43.70
Retained earnings 48,000 41,000
spot rate 41.40 42.30
Total Liabilities & 267,000 112,600
30-days 43.20
Shareholders’ Equity
futures 42.30 41.80
60-days 42.60
futures 41.80 42.20 At the date of acquisition, all assets and
liabilities of Subsidiary Company have book
90-days 43.40
value approximately equal to their respective
futures 40.60 42.50
market values except the following as
120-days 42.90 determined by appraisal as follows:
futures 42.20 42.80 Inventories (FIFO Method) P
How much is the net impact in R Co.’s income in 17,100
2016 as a result of hedging activity? Indicate if Equipment (net-remaining life – 4 years)
it’s gain or (loss). 48,000
Patents (remaining life 10 yrs)
You Answered 13,000
(101,340) Compute the Equity Holders of Parent -
Retained Earnings. January 1, 2016, _______.
Correct Answers You Answered
(101,520)
52,400
 

  Correct Answers
Question 65 48,000
0 / 1 pts  
On January 1, 2016, Parent Company acquired
90% of Subsidiary Company in exchange for  
5,400 shares of P10 par common stock having a Question 66
market value of P 120,600. Parent and 0 / 1 pts
Subsidiary condensed balance sheets were as The shareholders’ equity accounts of Ellen
follows: Company and Edwin Corporation at
Parent Company and Subsidiary December 31, 2016 were as follows:
Company
 Ellen Edwin the year ended December 31, 2016 should be
Company Company _______.
Ordinary
shares P3,000,000 P1,250,000 You Answered
Retained 40,000
earnings 1,250,000 250,000
Total P4,250,000 P1,500,000 Correct Answers
60,000
On January 1, 2017, Ellen acquired 80% of the  
ordinary shares of Edwin for P1,450,000. The
excess of cost over book value was due to  
Edwin’s equipment which is undervalued by Question 68
P100,000 and the remaining amount, due to 1 / 1 pts
goodwill. The equipment has a remaining useful Direct costs of franchise incurred by the
life of five years. franchisor that are within the scope of PRFS 15
are recognized as
Goodwill at the date of acquisition is found to be
impaired by P15,000 for years 2017 and 2018.   
The income and dividend information for Ellen
and Edwin for 2017 and 2018 are as follows:
expense using the
Ellen Company Edwin Company Correct!
2017 2018 2017 2018   
Net P850,00 P875,00 P300,00 P375,00
income 0 0 0 0 Matching Principle
Dividend
s 600,000 625,000 200,000 225,000   
How much is the NCI in the net income of
subsidiary for 2018? Immediate Recognition Principle

You Answered   
68,000
Effective interest method

Correct Answers  
71,000 Question 69
  1 / 1 pts
MM Company began operations on January 1,
  2015 and appropriately uses the installment
Question 67 method of accounting. The following data are
0 / 1 pts available for 2015 and 2016
TT Company, which began business on January
1, 2016, appropriately uses he instalment 2015 2016
sales method of accounting. The following data Installment sales 1,200,00 1,500,000
are available for 2016: Cash Collections from
Installment accounts receivable, 12/31/16 2015 sales 400,000 500,000
P 200,000
2016 sales 600,000
Deferred gross profit, 12/31/16 (before
recognition of Gross profit on sales 30% 40%
Realized gross profit) The total realized gross profit for 2016 is
140,000 ___________.
Gross profit on sales
40% Correct!
The realized gross profit on installment sales for
 390,000 1 / 1 pts
On January 1, 2017, Yazzi, Angel and Nadine
organized YAN partnership by investing P5M,
Correct Answers
2M and P3M for capital interest ratio of 4:5:1
390,000 respectively. Nadine has been appointed as
  managing partner. During year 2017, YAN
partnership reported net income of P3,000,000.
  Their profit/loss distribution and drawing
Question 70 agreement are presented below:
0 / 1 pts 20% interest on beginning capital
The shareholders’ equity accounts of Ellen P10,000, P20,000 and P50,000
Company and Edwin Corporation at monthly salary, respectively
December 31, 2016 were as follows: 25% bonus of net income after
interest and salary to managing partner
Ellen Edwin The remainder will be divided equally
Company Company
among the partners.
Ordinary The partners must withdraw at the end of the
shares P3,000,000 P1,250,000 year 50% of their share in net income for the
Retained period.
earnings 1,250,000 250,000 What is the capital balance of Nadine on
Total P4,250,000 P1,500,000 December 31, 2017?

On January 1, 2017, Ellen acquired 80% of the Correct!

ordinary shares of Edwin for P1,450,000. The   
excess of cost over book value was due to
Edwin’s equipment which is undervalued by 1,410,000
P100,000 and the remaining amount, due to
goodwill. The equipment has a remaining useful   
life of five years.
3,410,000
Goodwill at the date of acquisition is found to be
impaired by P15,000 for years 2017 and 2018.   
The income and dividend information for Ellen
and Edwin for 2017 and 2018 are as follows: 1,610,000

Ellen Company Edwin Company   

2017 2018 2017 2018
Net P850,00 P875,00 P300,00 P375,00 3,610,000
income 0 0 0 0
 
Dividend
Question 72
s 600,000 625,000 200,000 225,000
1 / 1 pts
How much is the consolidated retained earnings
as at December 31, 2017? The following data were provided by the
accountants of the Home Office and Branch for
You Answered the year ended December 31, 2017:
1,552,000
Home Office Branch Book
Book
Correct Answers Net sales to outside 1,000,000 800,000
1,549,000 customer
  Beginning Inventory 300,000 140,000
Net purchase from 800,000 250,000
  outside supplier
Question 71 Shipment to branch 400,000
Shipment from 500,000 The branch received credit memo from home
Home Office office amounting to P10,000 which was credited
Ending Inventory 100,000 200,000 twice by the branch.
Operating expense 200,000 100,000 The branch’s net loss amounting to P20,000 was
debited by the Home office to investment in
It is the policy of the whole company to use branch.
FIFO for its inventories. What is the adjusted balance of reciprocal
For the year ended December 31, 2016, the account on December 31, 2018?
Home Office bills its branch with a gross profit
rate of 40% based on cost. Correct!
Half of the beginning inventory of the branch   
was acquired from outside suppliers while ¾ of
the ending inventory of the branch was acquired
from the home office. 80,000
What is the combined net income to be   
presented by the Home Office in its General
Purpose Income Statement for the year ended
December 31, 2017? 90,000
  
  
110,000
270,000
  
Correct!
  
120,000

300,000  
   Question 74
1 / 1 pts
290,000 During the year 2016, goods billed at
P3,250,000 were shipped at 130% of cost. The
   account loading branch in Branch Inventory has
a balance of P1, 225,000 before adjustment.
320,000 The beginning inventory of the branch from the
home office at cost is P2,375,000; the beginning
  inventory of the branch from outsiders is
Question 73 P540,000; purchases from outsiders is
P1,450,000.
1 / 1 pts
How much is the total good available for sale of
ABC Co. established a branch in Lipa City. On the branch from the home office?
December 31, 2017, the reciprocal accounts are
balanced. On December 31, 2018, the home   
office account has an unadjusted balance of
P100,000. The following reconciling items are
discovered by the home ABC Co.: 5,308,335
Lipa branch collected the receivables of Ibaan   
branch worth P20,000 but failed to inform the
home office.
6,337,500
The home office paid Lipa’s payables worth
P10,000 but failed to inform the branch.   
Inventory worth P30,000 intended to be
delivered to San Jose Branch was delivered to
8,090,000
Lipa branch which was retained by the latter.
Inventory worth P40,000 intended to be Correct!
delivered to Lipa Branch was delivered to Ibaan
branch which was retained by the latter.
   
Paul estimated its gross margin on the project at
6,100,000 25%. It used the percentage of completion
method of accounting.
  By the end of the year, Paul presented progress
Question 75 billings corresponding to 50% completion. FEU
accepted all the bills presented except the last
1 / 1 pts one for 10% which was accepted on January 10.
The marshaling of assets doctrine regulates With the exception of the second to the last
claims against an individual's assets. The billing of 8% accepted in 2016 which was due on
following lists groups interested in potential cash January 3, 2017, all accepted billings were
distributions. settled.
(1) Those owed to the creditors of the
partnership; In 2016 what is Paul’s realized gross profit form
(2) Those owed to separate creditors; and FEU project?
(3) Those owed to partners by way of
contribution. You Answered
When a partner is bankrupt, which order do 1,500,000
claims against their property rank?

   Correct Answers
25,000,000
1,2,3  
Correct!  
   Question 77
1 / 1 pts
2,1,3 On December 31, 2017, the Statement of
   Financial Position of DEF with profit or loss ratio
of 4:1:5 is presented below:

1,3,2
   Cash 2,000,000 Liability to 4,000,000
third person
3,2,1 Noncash asset 8,000,000 D, Capital 3,500,000
E, Capital 1,500,000
  F, Capital 1,000,000
Question 76 On January 31, 2018, DEF partnership has been
0 / 1 pts subjected to installment liquidation. As of
In 2016 Paul Corp was contracted to do the January 31, 2018, the following data concerning
private road network of FEU for P200 million. liquidation are provided:
The project was estimated to be completed in Noncash asset with book value of P6M has
two years. been sold at a loss of P2M.
Liquidation expense amounting to P400,000 has
The construction contract provided among other been incurred for the month of January.
things the following: P600,000 cash has been withheld for future
Five percent mobilization fee 9to be liquidation expense.
deducted from the last billings) payable within P3M liability has been paid.
fifteen days after the signing of the contract What is F’s share in the maximum possible loss
Retention provision of 10% on all on January 31, 2018?
billings, payable with the final bill after the
Correct!
acceptance of completed project;
  
Progress billings on construction are
payable within seven days from acceptance.
1,300,000
    P1,000,000 with gross profit rate of 20% based
on sale to Globe. 40% remained in ending
1,000,000 inventory of Globe on December 31, 2017.
These inventories are eventually sold on year
   2018 to third persons by Globe.
During 2018, Globe sold inventory at a price of
1,500,000 P500,000 with gross profit of 40% based on sale
to Ayala of which 10% remained in ending
   inventory of SM on December 31, 2018.
During 2018, Ayala reported sales of P10M while
500,000 Globe reported sales of P4M. In the same year,
Ayala reported gross profit of P3M while Globe
  reported gross profit of P2M.
Question 78 What is Ayala’s consolidated gross profit for the
year ended December 31, 2018?
1 / 1 pts
At December 31, 2015, the following information Correct!
has been collected by Marcos Company’s
  
interoffice and branch for reconciling the branch
and home office accounts.
The branch’ home office account has a balance 5,060,000
at December 31, 2015 is P501,700.   
On December 30, 2015, the branch sent a check
for P40,000 to the home office to settle its
account. The check was not delivered to the 4,940,000
home office until January 3, 2016.   
On December 27, 2015, the branch returned
P20,000 of seasonal merchandise to the home
office for the January clearance sale. The 4,980,000
merchandise was not received by the home   
office until January 6. The home office allocated
general expenses of P28,000 to the branch.
The branch had not entered the allocation as of 5,080,000
year end. Branch store insurance premiums of
 
P900 were paid by the home office. The branch
recorded this at P600. Question 80
1 / 1 pts
The unadjusted balance of the branch account Pekto Corp. acquired an 80% interest in Sisa
in the books of the home office at December 31, Corp. on January 1, 2016 for P700,000. On this
2015 is ____________. date capital stock and retained earnings of
Pekto Corp. were P1,800,000 and P800,000
Correct! respectively; and Sisa’s P500,000 and P100,000
590,000 respectively. The assets and liabilities of Sisa
corp. were stated at their fair value when Pekto
acquired its 80% interest. Pekto uses the cost
Correct Answers method to account for its investment in Sisa. The
590,000 NCI is computed based on the estimated fair
  values.

  The net income and dividends for 2016 for the

Question 79 affiliated companies were as follows: Pekto’s net
1 / 1 pts income – P300,000; Dividend Declared –
On January 1, 2017, Ayala acquired 90% of P180,000; Dividend payable December 31, 2016
outstanding ordinary shares of Globe Inc. The – P90,000. Sisa’s net income – P90,000;
following data are provided: Dividend declared – P50,000 and dividend
On year 2017, Ayala sold inventory at a price of payable December 31, 2016 – P25,000.
 DERMA, Inc. opened its Ayala branch a year
End of the year evaluation indicates P5,500 ago. At the year’s end, the branch summarized
impairment in goodwill. The NCI at December operating data as follows:
31, 2016 is _______________.
Sales P264,000
Correct! Shipments from home 148,500
181,900 office
Purchases 137,500
Expenses 71,500
Correct Answers Ending inventory 82,500
181,900 (P16,500 from purchases)
  The branch remitted P151,250 to the home
office.
 
Question 81 If shipments from the home office are billed at
0 / 1 pts cost plus 20% how much is the branch ending
On January 1, 2016, Mr. Irvin entered into a inventory at cost?
franchise agreement with TOY Inc. to sell their
products. The agreement provides for an initial You Answered
franchise fee of P3,000,000 which is payable as 46,500
follows: P1,000,000 cash to be paid upon
signing the contract, and the balance in four
Correct Answers
equal annual installments every December 31,
71,500
starting December 31, 2016. Mr. Irvin signs a
non interest bearing note for the balance. The  
credit rating of the franchisee indicates that the
 
money can be borrowed at 10%. The present
value factor of an ordinary annuity at 10% for 4 Question 83
periods is 3.1698. the agreement further 1 / 1 pts
provides that the franchisee must pay a On December 31, 2016, the Branch Current in
continuing franchise fee equal to 5% of its the Home Office books shows a balance of
monthly gross sales. TOY incurred direct cost of P50,000. The following facts are ascertained:
P930,564 and indirect costs of P167,400. The a. Merchandise billed at P12,500 is in transit
franchisee started business operations on July on December 31 from the home office to the
1, 2016 and was able to generate sales of branch.
P1,240,000 as of the end 2016. The first b. The branch collected a home office
installment payment was made in due date. accounts receivable for P3, 500. The branch did
not notify the home office of such collection.
Assuming that the collectability of the note is not c. On December 30, the home office sent
reasonably assured, how much is the net cash of P7,500 to the branch, but this was
income of the franchisor for the year end charged to general expense; the branch has not
December 31, 2016? received the cash as of December 31.
d. Branch profit for December was recorded
You Answered by the home office at P2,400 instead of P2,040.
1,707,426 e. The branch returned supplies of P1,500 to
the home office but the home office has not yet
recorded the receipt of the supplies.
Correct Answers
911,656 Assume all other transactions have been
  properly recorded. What is the unadjusted
balance of the Home Office Current account on
  the branch books on December 31, 2016?
Question 82
0 / 1 pts Correct!
39,140
Correct Answers
39,140
 

 
Question 84
1 / 1 pts
This is usually collected at the end of each
month in payment for the continuing services
rendered by the franchisor.

  

Initial franchise fee

Correct!
  

Continuing franchise fee

  

Direct Costs
  

Indirect Costs

 
Question 85
0 / 1 pts
Nicole Company’s Kalibo branch reports a profit
of P15,000 for the year 2016 and a balance in its
Home Office account at the end of the year of
P88,000 after closing. The branch income
currently is unrecorded by the home office.
During the year, the home office had shipped
inventory to the branch at an intracompany profit
of P14,000. Of that amount, P6,000 currently is
unrealized.

Assuming the branch has made all entries to

adjust and close its books for 2016, what is
balance in the home office’s Investment in
Branch account?

You Answered
82,000

Correct Answers
73,000