CASH AND CASH EQUIVALENTS 1.

Philflex Company shows the following account balances in their financial records as of December 31, 2011 Foreign bank account unristricted 100,000 Postage stamps 20,000 IOU from vice presidents brother 15,000 Cashiers check 11,000 Cash in bank current account 115,000 Petty cash fund (5,000 in currency and Expenses receipts for 45,000) 50,000 What is the correct cash balance to be reported in the statement of financial position? a. 231,000 b. 265,000 c. 260,000 d. 226,000 2. Aleman company had the following account balances at December 31, 2011: Cash in bank 115,000 Cash on hand 20,000 Time deposits 5,400 Treasury bills 100 Cash in bank includes 20,500 of compensating balance against short term borrowing arrangement. The compensating balance is not legally restricted as to withdrawal by Aleman. What should be the total balance of cash and cash equivalents? a. 120,000 b. 135,000 c. 140,500 d. 135,100 3. The cash account in the current asset section of the December 31, 2011 balance sheet of Famarin Company consist of: Cash in banks 2,500,000 Petty cash fund (all funds were not replenished On December 31, 2011) 100,000 What should be the total amount of cash in the companys balance sheet? a. 2,500,000 b. 2,600,000 c. 2,400,000 d. answer not given 4. Zoleta Company had the following cash balance at December 31, 2011 Undeposited coins and currency 50,000 Companys check written (deducted from the Demand deposit but not yet mailed until January 10 of the following year) 25,000 Restricted demand deposit 2,000,000 Time deposit restricted for use until 2012 500,000 What amount should Zoleta report in its December 31, 2011 statement of financial position? a. 50,000 b. 2,075,000 c. 550,000 d. 75,000 5. The cash account in Roldan companys ledger showed a balance of 5,100,000 at December 31, 2011 which consisted of the following: Undeposited receipts including a postdated customer check for 112,000 1,210,000 Cash in bank with a check for 15,000 Still outstanding 115,000 IOUs signed by employees, taken from Collection 45,000 At what amount should cash be reported in the statement of financial position? a. 1,325,000 b. 1,198,000 c. 1,213,000 d. 1,243,000 6. Del Mundo had the following transactions all throughout the year 2011, its first year of operation: Sales (90% collected) 1,000,000 Disbursement for cost and expenses 200,000

Purchased of fixed asset Proceeds from issuance of shares Payments on short term borrowings What is the cash balance at December 31, 2011? a. 780,000 b. 720,000 c. 680,000

10,000 20,000 30,000

d. 670,000

7. In preparing its bank reconciliation at December 31, 2011, Ferran company has the following available data: Balance per bank 2,000,000 Balance per book 2,500,000 Deposit in transit 500,000 Outstanding checks 200,000 Notes collected by bank 50,000 Bank service charge 2,000 What is the adjusted bank balance? a. 2,300,000 b. 2,252,000

c. 2,348,000

d. 2,548,000

8. While checking the cash accounts of Pernia Company on December 31, 2011 you find the following information: Balance per bank 2,100,000 Deposit in transit 115,000 Amount erroneously credited by bank To Pernias account 25,000 Notes collected by bank 30,000 NSF checks 15,000 The adjusted bank balance is? a. 2,175,000 b. 2,240,000 c. 2,205,000 d. 2,190,000 9. Danosos Company keeps all its cash in a checking account. An examination of the companys accounting records and bank statement for the month-ended December 31,2011 revealed the following information: Cash balance per book 2,000,000 Deposit in transit 850,000 Cash balance per bank 1,500,000 Outstanding checks 150,000 Notes collected by bank 300,000 NSF check 250,000 Service charge 15,000 The adjusted book balance to be shown in the statement of position on December 31, 2011? a. 2,035,000 b. 2,200,000 c. 1,335,000 d. 2,165,000 10. Shown below is the bank reconciliation for Divina Company on April 31, 2011 Balance per bank 85,000 Add: Deposit in transit 15,000 Total 100,000 Less: Outstanding check 20,000 Erroneous credit by bank 5,000 25,000 Balance per book 75,000 The bank statement for May 31, 2011 contains the following data: Total deposits 75,000 Total charge, including NSF check of 5,000 And a service charge of 100 50,000 All outstanding checks on April, including the bank credit were cleared by the bank on May. There were outstanding checks of 10,000 and deposit in transit of 20,000 on May 31, 2011. What is the cash balance per bank on May 31, 2011 a. 125, 100 b. 85,000 c. 100,000 d. 110,000

11. Refer to # 10: What is the cash balance per book on May 31, 2011? a. 125,100 b. 85,000 c. 100,000 d. 110,000 12. Catuday Company had the following bank reconciliation at July 31, 2011: Balance per bank 500,000 Add: Deposit on transit 20,000 Total 520,000 Less: Outstanding checks 10,000 Balance per book 510,000 Balance per bank statement for the month of August: Deposits 49,000 Disbursement 45,000 All reconciling items at July were cleared through the bank in August totaled 9,000. What is the amount of cash disbursement per book in August? a. 45,000 b. 44,000 c. 35,000 d. 36,000 13. Refer to # 12: What is the cash balance per book on August 31, 2011? a. 514,000 b. 524,000 c. 495,000 d. 494,000 14. Refer to #12: What is the cash receipt per book? a. 29,000 b. 49,000 d. 40,000

d. 20,000

15. Malalad Company provided the following information about the composition of its cash on December 31, 2011: y A separate cash fund in the amount of 1,200,000 is restricted for the retirement of long term assets y Petty cash fund of 15,000 y Travel advances of 120,000 for executive travel for the first quarter of next year (employee to pay salary deduction) y Money market fund account held by Citibank that permits Malalad to write checks in this balance 1,000,000 y Commercial Savings account of 500,000 and commercial checking account balance of 600,000 are held by BPI What is the correct amount of cash and cash equivalents that Malalad Company should report in its December 31, 2011 statement of financial position? a. 1,100,000 b. 2,100,000 c. 2,115,000 d. 2,235,000 16. Fajardo Corp. has supplied you with the following list of its bank accounts and cash at December 31, 2011: Petty cash fund 10,000 Payroll account 15,000 Certificate of time deposit, 3 months, 20%, due march 30, 2013 3,000 Certificate of deposit, 6 months, 12%, due February 20, 2012 5,000 Savings account 5% 12,000 What should be the balance to be reported as Cash and Cash Equivalents in the December 31, 2011 statement of financial position of Fajardo Corp.? a. 40,000 b. 22,000 c. 37,000 d. 45,000 17. Mallo Company reported a total cash and cash equivalent of 8,000,000 on December 31, 2011 which includes: y Currency and coins on hand amounted to 50,000 y Commercial paper of 1,500,000 due 110 days y Check that is dated January 10, 2012 in the amount of 100,000 y Savings account in BPI (2,000,000), Metrobank (3,000,000), and BDO (1,350,000)

Mallo Company agreed to maintain 150,000 cash balance in one of its banks and is not available for withdrawal to ensure future credit. How much is the correct amount of cash and cash equivalent? a. 7,850,000 b. 6,250,000 c. 6500,000 d. 6,400,000 18. Lauresta Companys checkbook balance on December 31, 2011 was 4,000,000. In addition, Lauresta held the following items in its safe on that date: y Check drawn on Laurestas account, payable to a vendor, dated and recorded on Laurestas books on December 3, 2011 but not mailed until January 15, 2012, 5,000,000 y Check payable to Lauresta, deposited December 12 and included in December 31 checkbook balance, but returned by the bank, stamped NSF, 200,000 The proper amount to be shown as cash on December 31, 2011 should be? a. 8,800,000 b. 4,000,000 c. 9,000,000 d. 9,200,000 19. Mahaguay Company showed its petty cash fund composition as follows: Coins and currency 5,000 Managers check returned by bank marked NSF 2,000 Check drawn by the entity to the order of Petty cash custodian 1,500 Paid vouchers: Gasoline 5,000 Transportation 1,000 Office supplies 500 What is the correct amount of petty cash fund for statement presentation purposes? a. 5,000 b. 7,000 c. 6,500 d. 8,500 20. Mascarinas Company shows its petty cash fund on December 31, 2011, composed of the following: Employees check returned by bank for Insufficiency of funds 5,000 Sheet of paper with contribution for a Birthday gift of co-employee 3,000 Coins and currency 3,000 The petty cash general ledger account has an imprest balance of 40,000. What is the amount of petty cash fund that should be shown in the statement of financial position on December 31, 2011? a. 40,000 b. 11,000 c. 29,000 d. 3,000

RECEIVABLE 1. On the December 31, 2011 balance sheet of Almonte Company, the current receivables consisted of the following: Allowance for doubtful accounts 10,000 Trade receivables 500,200 Security deposit on lease of warehouse Used for storing inventories 65,000 Selling price of unsold goods sent by Almonte to a consignee 10,000 At December 31, 2011, how much should be Almontes total current net receivables? a. 500,200 b. 490,200 c. 555, 200 d. 565, 200 2. Baculado Corp. had the following information relating to its account receivables: Accounts Receivable, December 31, 2010 2,950,000 Credit sales 1,500,000 Accounts written off 3,000,000 Estimated uncollectible accounts per aging

Of receivables What is the amortized cost of the receivable? a. 950,000 b. 3, 950,000 c. 1,450,000

500,000

d. 3,950,000

3. At January 1, 2011, Doliente Company had a receivable from Ege Company of 500,000 that has been outstanding for quite some time. Initial investigation revealed that Ege Company is in deep financial dilemma. At present, Ege Company is unable to settle all outstanding obligations but further investigation revealed that Ege Company is taking over run. However, Linga Company is more than willing to assume only 75% of Ege Companys finanacial obligations. As of December 31, 2011 Doliente expects to collect 250,000 that is due from Ege Company. At the time of receivable it was recognized the prevailing effective rate of interest for a similar financial asset is 14%. What amount should Doliente report in its December 31, 2011 statement of financial position involving its account receivables? a. 219,297.50 b. 375,000 c. 328,946.25 d. 250,000 4. What amount of bad debt/impairment loss should Doliente recognize related to its accounts receivables in 2011? a. 125,000 b. 250,000 c. 280,702.50 d. 171,053.75 5. At the end of its first year of operation, Macdon Company had accounts receivable of 400,000, which were net of related allowance for doubtful accounts. During 2011, Macdon recorded charges to bad debts expense of 20,000 and wrote off uncollectible accounts receivable of 15,000. How much should Macdon Company report in its December 31, 2011 balance sheet as accounts receivable before the allowance for doudtful accounts? a. 420,000 b. 405,000 c. 415,000 d. 435,000 6. Murillo Company showed the following information related to the accounts receivable in order to estimate bad debts through the use of aging. The credit period of the company is 30 days on the average. Age of Receivables Amount Under 30 days 1,000,000 31-60 days 900,000 61-90 days 200,000 91-120 days 50,000 The company based on experience has the following percentage of collectability: Overdue for less than 30 days 75% Overdue 31-60 days 50% Overdue 61-90 days 10% Overdue 91-120 days 5% What is the carrying value of accounts receivable for balance sheet purposes? a. 1,222,500 b. 2,150,000 c. 927,500 d. 1,200,000 7. Natal Corp. sells to wholesaler on terms of 10/20, n/30. Natal has no cash sales but 30% of Natals customers take advantage of the discount. Natal uses the gross method of recording sales and trade receivables. Natals trade receivables balances at December 31, 2011 revealed the following: Age Amount Collectability 0-10 days 100,000 10% 11-20 75,000 75% 21-30 50,000 12% 31-40 25,000 15% Over 40 5,000 5% In its December 31, 2011 statement of financial position, what amount should Natal report for allowance for discounts? a. 10,000 b. 23,750 c. 3,000 d. 0

8. On January 26, 2011 Palma Corp. sold merchandise with a list price of 100,000 to Ramos on account. Palma allowed trade discounts of 25% and 50%. Credit terms were 3/15, n/30 and the sale was made FOB shipping point. Palma prepaid 4,000 of delivery cost for Ramos as an accommodation. What amount should Ramos remit to Palma as full payment on January 28, 2011? a. 37,500 b.41,500 c. 36,375 d.40,375 9. On December 1, 2011, Pastoral Company assigned 200,000 of accounts receivable to Rocha Company as a security for a loan of 105,000. Pastoral charged as 5% commission on the amount of loan, the interest rate on the note was 15%. During December, Pastoral collected 50,000 on assigned accounts, how much cash did Pastoral received from Rocha at the time of transfer? a. 99, 750 b. 84,000 c. 60,000 d. 105,000 10. What is the carrying value of the accounts receivable assigned? a. 180,000 b. 150,000 c. 170,000

d. 160,000

11. On August 31, 2011, Ricamara Company engaged in the following transaction: Obtained a 200,000, three-month loan from a bank, discounted at 3%. The company pledged 200,000 of accounts receivable as a security for the loan. Factored 500,000 of accounts receivable without recourse on a non-notification basis with Sajol Company. Sajol charged a factoring fee of 5% of the amount of receivable. What is the total cash received from the financing of receivables? a. 700,000 b. 669,000 c. 476,500 d. 481,000 12. On December 20, 2011, Yap Company sells a loan portfolio to Zoletas Company for 300,000. The carrying value of the loan portfolio is 450,000 on the date of sale. Immediately Yap purchased a call option to repurchase the loan portfolio. Assuming the call option is deep out the money, what amount of financial asset should Zoleta continue to recognize in its December 31, 2011 balance sheet? a. 300,000 b. 450,000 c. 0 d. answer not given 13. Assuming the call option is deep in the money, what amount of financial asset should Zoleta Company continue to recognize and report in December 31, 2011 balance sheet? a. 300,000 b. 450,000 c. 0 d. answer not given 14. On October 31, 2011, Cruzado Company transferred its financial asset-receivable to Danosos Company for 200,000. The amortized cost of the financial asset at the time of transfer is 500,000. Also on the same date, Cruzado Company writes a put option that obligates it to repurchase the transferred asset at the transferees option. Assuming the put option is deep out the money, what amount of financial asset-receivable should Cruzado continue to recognize and report in its December 31, 2011 balance sheet? a. 200, 000 b. 500,000 c. 300,000 d. 0 15. Assuming the put option is deep in the money, what amount of financial asset-receivable should Cruzado recognize in its December 31, 2011 balance sheet? a. 200,000 b. 500,000 c. 300,000 d. 0 16. On May 5, 2011, Del Mundo Company sells a loan portfolio that has a carrying amount of 350,000 for 100,000 and provides the buyer with a guarantee to compensate the buyer for any impairment losses. What amount of financial asset Del Mundo should continue to recognize in its December 31, 2011 balance sheet? a. 350,000 b. 100,000 c. 250,000 d. 0 17. Exporna received from a customer a one-year 415,000 note bearing annual interest of 2%. After holding the note for four months, Exporna discounted the note at bank at an effective rate of 5%. How much did Exporna received from the bank? a. 415,000 b. 410,704 c. 416,245 d. 417,767 18. If the discounting is treated as a sale, what amount of loss on discounting should Exporna recognized? a. 1,522 b. 2,767 c. 7,063 d. 0

19. On January 1, 2011, Fadriquela Company sold equipment with a carrying value of 250,000 in exchange of 550,000 non-interest bearing note due January 1, 2015, there were no established exchanged price for the equipment. The prevailing interest for a note of this type at January 1, 2011 was 20%. The present value of 1 at 20% for four periods is 0.4823. How much should Fadriquela report as interest income in its profit and loss? a. 110,000 b. 53,053 c. 50,000 d. 24,115 20. How much should Fadriquela Company report as gain or loss on sale of equipment in its 2011 profit or loss? a. 15,265 gain b.15,265 loss c. 37,788 gain d. 37,788 loss

INVENTORIES 1. Toyota Corp. had 9,600 units on November 30, 2011 based on physical count of goods on that date. The following items have been recorded as purchases and sales as of November 30. Transaction Terms No. of units Sale FOB Destination 500 Sale FOB Shipping point 250 Purchase FOB Destination 300 Purchase FOB Shipping point 350 The transactions above are in transit. How many units should be considered as inventory at the end of November 2011? a. 10,000 b. 9,050 c. 9,000 d. 8,500 2. Company A regularly buys t-shirt from B Inc. and is allowed a trade discount of 15% and 10% from the list price. Company A made a purchase and received an invoice with a list price of 105,000, a freight charge of 2, 500 and payment terms of net 30 days. What is the total cost of the inventory? A, 107,500 b. 80,325 c. 80,000 d. 82,825 3. What is the invoice price if purchased at list price of 200,000 under the trade discount of 10%, 20%, 5%, 2/10, n/30? a. 136,800 b. 134,064 c. 200,000 d.180,000 4. How much was the cash payment if settlement was made within the discount period? a. 136,800 b. 134,064 c. 200,000 d. 180,000 5. Transaction Inventory Sales (100/unit) Purchases Purchases Sales (120/unit) Units 3,000 1,000 4,000 2,500 4,800 Unit Cost 40 45 55

What is the cost of ending inventory using weighted average method? a. 170,385 b. 191,500 c. 173,052 d. 0 6. What is the cost of ending inventory using FIFO method? a. 191,500 b. 170,385 c. 173,052

d. 0

7. What is the cost of ending inventory using moving average method? a. 170,385 b. 191,500 c. 173,052 d. 0 8. Cost of goods available for sale as of June 2011 is 2,000,000. Gross profit rate is 30% based on sale. If sale is 2,500,000, what is the cost of ending inventory? a. 2,000,000 b. 76,923.08 c. 250,000 d. 200,000 9. What is the cost of ending inventory if gross profit rate is 30% based on cost of sales? a. 100,000 b. 76,923.08 c. 250,000 d. 200,000

10. Beginning Inventory Purchases Purchase Returns Freight-in Net Mark-ups Sales

Cost 100,000 65,000 10,000 5,000

Retail 200,000 78,000 15,000 13,000 250,000

Determine the estimated cost of ending inventory using the average method. a. 15,080 b. 26,000 c. 276,000 d. 160,000 11. What is the estimated cost of ending inventory using FIFO retail? a. 160,000 b. 20,540 c. 26,000 d. 15, 080 12. What is the cost-to-retail ratio using the FIFO Retail method? a. 50% b. 58% c. 79%

d. 60%

13. On March 1, 2011, A Company suffered a big loss on its merchandise inventory caused by a fire. Beginning inventory was 300,000, purchase of 500,000, purchase returns of 50,000 and sales of 400,000. On 2010 purchases were 700,000, purchase returns was 70,000 and sales was 610,000, undamaged merchandise marked to sell at 40,000. Determine the estimated cost of merchandise inventory lost from fire on March 1, 2011? a. 610,000 b. 550,000 c. 500,000 d. 530,000 14. Inventory of 250,000 was recorded in the books of Coca-cola Company. Included in the inventory are 20,000 cost of goods held on consignment, purchases in transit, terms FOB Shipping point of 30,000 and sale in transit, terms FOB destination 25,000. What is the correct cost of inventory to be included in the records of Coca-cola Company? a. 230,000 b. 285,000 c. 260,000 d. 255,000 15. If there is a sale of 2,000,000, cost of goods sold of 560,000 and expenses of 400,000, determine the profit to be presented. a. 160,000 b. 1,440,000 c. 2,160,000 d. 1,040,000 16. Toyota Corp recorded beginning inventory of 3,000,000 and purchases of 1,500,000 on 2011. At the end of 2011, ending inventory of 500,000 was recorded. Determine the cost of sales during 2011. a. 4,500,000 b. 4,000,000 c. 5,000,000 d. 2,000,000 17. On January 1, 2011, the inventory was 1,080,000. During 2011, purchases of 1,500,000 and sales of 2,000,000 were recorded. Profit is 20% based on sale. What is the estimated cost of ending inventory? a. 2,580,000 b. 4,180,000 c. 980,000 d. 1,600,000 18. What is the estimated cost of ending inventory if profit is at cost? a. 980,000 b. 1,666,667 c. 913,333 d. 1,600,000 19. What is the cost of sales if at cost? a. 980,000 b. 1,666,667

c. 913,333

d. 1,600,000

20. What is the list price of an item if Mr. Gregory paid 20,000 cost of a bike, given the trade discounts of 10%, 5%, 2/10, n/30, if he paid it on the discount period? a. 23,869.20 b. 21,482.28 c. 21,000 d. 20,408.16