CPA REVIEW SCI-iTJOL OF
THI PHILII
Manila
FiNES
AUDITING PROBLEMS FINAL PREBOARD EXAMINATION SET
SFFTFMBER 15, 2013
SUNDAY, B:00Al."1
-
11:00AM
A
INSTRUCTIONS:
CHOOSE THE BEST ANSWER FCR EACI-I OF TI.IE , FOLI-C\^IING. FULLY SHADE ONLY ONE BOX FOR EACH ITEM. STRiCTLY NO ERASURES ALLOWED.
PROBLEM NO.1
The TGR Company commencecl operations on Janu,ary 1, 2009. -Ihe company's machinery account is shown below.
Dare Jan.
1,2009
pa:leulals
Deort 2n0
I r0 t)ri a1 t -'l-
Sept. 30,
Balance
!J'-,:di-!
ilt57
Purchase
l
'r.'1 rl .:1.
?409,200
..'2,C,_)i.i
48L,200
2009 Purchase on installment
Payments from Sept. to Dec, Oct 3, 2009 Freight and installation Dec. 31, 2009 Depreciation 2010 Installment paymerrts foi- acgils;'ri:i, June 30, 2010 Dec. 31, 2010 .rune 30, 2011 Dec. 31, 2011 lan. 1, 2012 Dec. 31, 2012 Oct. 1, 2013 Dec. 31, 2013
6,
i,0il
on Sept. 30, 2009
\,1,,a\
!::,\)
Purchase
.f iil,Jt-l'i
Depreciation Acquisition - trade in of oid t'aCiiii-:; i Depreciation
P'3t,4'li: i.5-l
tt: i,i){j
,::j":'
i5-,iiii1 7",).!,1) icii,7il L z4,i.lt)0 8..,')_':,1'
Sale
Depreciailon Sale
Depreciation
497,2A0 389,760
533,760 773,760 619,008 769,008 615,206 543,956 435,165
41i,165 328,932
The details of the ti-ansactions are as follours:
a)
On September 30,2009, a machine was i-1r.rir:lt:tsrtd,.\:r iil ,.1;lttir,rn' r'.,3:;ii, -l-he Iist prrce was P180,0C0. but 12 pay.nents gf P1c1,rlf,)0 tlcir \,1/er"i .r,.tce hv I te r:itr.;any. Only the monthly payments were recoi'ded ir'the m,icl:iner\: aLa(runt sirrii;'g ^.'ith:it:piember 30, 2009' Freigirt and instailation clrai-tc:; ol'i)i:.IC'.1 1^/ere lar(-r a,]r-i il,a;.1_lefl lc ihe machinery account on October"3, 2009,
b)
On June 30, 2010, a machine was purclrasi:"*1 ici. P240,000 when paid for on July 5, 20i0.
c)
Cn June 30,ZALL, ihe machine acquired far Pi57,ZAL.r lrras ira,i€r{J i'cr a j.:ioer one having a list price of P279,000. Ailowance of p129,00C r^,as recei;-ei on the tld rrai.tiine. r:l-re balance of thc'lisi price being paid ln cash and,:hai-gc;r io ilre rra,.l'!lei;/ ijJ(.rLrr:1.
i,).'+:.';,r':')
t,
.':.,,1,J,
,-;,'j:, arrtj recorded at
d) On January 1, 2AL7, the machine acquireci on January i,
20U,1 rvirh cr:si o{' p132,000 was sold fbr P75,000. The cost of removal ancl crating ictaierj t,3,75c.
e) On October 1,7A73, the machine
purchaserj nrr
ianriiri
1,
21,'{-19 !,,,1i1,
s:.)ic i'or p24,000 cash.
Assume a S-year useful life for TGR Company,s nrachrnerT.
1, lVhat is the total amount of gain ,::t the Sul;+',,ii ;:i.if -i:.r Oi tr-e l1lc(,it,:-r?y January 1, 2009?
A. P50,400
B.
FtlA,zAC
(:. F'16,.15r.1
Peae 1 ct .l P).);?
D.
aCqUifed
r)86,850
On
2. 3.
What is the adjusted balance of the Machinery account on December 31, 20L3?
A.
P694,200
B. P705,000
7013?
5.
P700,200
D,
P703,950
What is the adjusted balance of the Accumulaied depreciation account on December 31,
A.
4.
C.
P465,600
B.
P457,L40
C.
P462,74A
D.
P397,740
What is the correct total depreciaticn provisior, it;* the years 2009-20732
A.
P737,40A
B.
P734,04A
L. P728,9/r0
D'
P669,540
The entry to correct the depreciaticn prr:vision for the years 2009-2013 should inciude debit (credit) to Depreciation Bclained_Earntngs P6L,215 ?79,747 (P79,707)
a
Expense P75,807 (P18,492) P18,492
A, B. c.
D
--:]-tr-t:1-------,ocoooooool-]-?'-1::-----
PROBLEM NO.2 You have been engaged to audit the financial stater"nents of HABAGAT, INC. for the fiscal year ended June 30, 20t3. The cost of gor,ds soicj sectjcn of the income statement prepared by your client for the year ended June 30, 201-? anpetars as follows:
201,2 Purchases Goods available for sale inventory, June 30, 2013 Cost of goods sold
P 75,0C0
Inventory, July 1,
540.000 615,000 IO-L.QAQ
P51!*@
Although the books have been closed, your' \!r,ik,irE paper trial balance is prepared showing all accounts with activity during the year. r-hr, -lr;lv' 1 and -lune 30 inventories appearing above were deterr'nined through physical ccrnt anrl no reconciling items were considered, All purchases are FOB shipping point. The company uses the periodic inventory system,
In the course of your examination of the lnvenii:ry r.utoff, both at the beglnning and end of the year, you discovered the following facts:
illlt,"I-.J0,X2
a)
June inrroices total:ng I,19.500 were enlered in the voucher register in June, but the goods were rict received until -lr.ril ,
b) Invoices totaling
P8,100 were enter-ed in the voucher register in July, but the goods were received during June.
luns-S,e 20il:l
a)
Invoices totaling P27,900 were entered ;i-i llre ,;oucher register in July, and the goods were received in July, but the invoices wer:: daieu iune,
b)
June invoices totaling P11,100 were er,terea'in the voucher register in June but the goods were not received until July.
c)
Invoices totaling P16,200 (the corresponding qoods forwhich were received in June) were entered in the voucher register, July.
d)
were made on account on Jr-rne 30 and the goods were delivered at that time, but all entries relating to the sales were made in July. Sales
6.
of
P26,4OO
What is the adjusted inventory on lL,lv L,2012?
A.
P86,400
B,
p94,500
c. p63,600
Page 2 of '14 Pages
D.
p102,600
AUpmNG
7.
8.
L
;r -'-"'-""''
pRoBLEMs
i.lIffiilfff,ilffiil
what is the correct arlount of ourchases fo;- rhe year eniJerl ,iuine 30, ,A. P584,100 , B. P592.2C0 i. i,sl;s-Brjc What is the correct inventory on June 30, g. P132,900 P744,000
A.
2013?1
i;
201-::?
c. Pti6.1C0
D.
i,576,000
D.
P135;900
t
The accounts payable balance on Jrrne 30, 2013,;shoulci lie increased bv A. (.. P:i7,i0c B. PZ7,}AA D, P55,200
P44.10tj
l
10. The correct cost of goo
is
D.
P507,300
PROBLEM I\iO.3 I
In connection with your audit of tlre financial stai,:i-nents of TAi\DEi'4 CO, for the year ended December 31, 2013, you obtained the foilowing inforrrration ,:n rfre che:king acccunt of the company. r
'The
bank statenrent on Nover-ni:er 30, 2{11.3 si:ov.rec a Dsiar,c_: of F3C5,itc:). Among the bank credits in November was a ct-rstonrer's rirjtrJ {oi- P10c,t}r,!: i,--riiectrcl fcr l,ie accolint of Tandern Co' lvliich was recognized in Decentbei ,i irr-'ir{,r jt:;:'e:-.cipis. Iniirrcleti ri-r the bank crebits were cost of checkbooks amounting to p1,2,10 anc a p40,00.i r_heck wri;cn was charqed L:y.ihe bank in error against Tandem Co. accouni. y'rlso in No,rernber, you ascert;;r:e;l ti,;i lhere were depositsintr"ansitamountingtoFBr-1,i.l0-Ce,-r.ial,tsi.a;.o;,.,j.nn.ii.5ilr'3i,.]?ii,,a,6i;n,
The bank statenient on December 31, 201-J r.[tat .re,-rit,- r-i i)zi]6,a){-)c ar:cj total chargls siroinrea-tr.,. of P204,000. 'ofirD,rr,y .),1r1(c rb,' Ds-,-e.,vlp ,f i,,.; tutil et -, pr urf p735,600 and disbursemens of P4a"/,ZOat 'l-he cash ;n hanl.; n;,i;rc; il r l),-c,-,r-rrr €i 3 : is t,/iB5,acp. Bank debit memos for December r,yore: r,,Jo, 1i2 ir:r t".ri.n :"r\r ''' and - :'-'- c*.ir..rr.r "":r'" . i:,i:{,-t, customer's returned check fc:. F2.1,00c. ' * r,,lo, 113 on a Tl're bank error of P40,000
ii
Novembei !va5 correiiec I)l irli, l:n;
ri<
:n )ri--i--r,;r1,r.
On December 29, 10^11 Tal,cetn Co. piaceJ ,otirir i::-t baiii.. a Lii.,,::i-,,e,, :; [, _,.-rti:,liorv 6ote with a face value of P120,000 fori collection. The colnr_.,:_,r.\. t-,i, *.1r,: fi ri.) r:,_rre _is .,art: oi its receipts aithough the bank was abrelt" i,r".tfr, r;;;;,-,..,,,1r,,''.. i-:,,. -. 2,,.,i. A check for P3,960 was recorcled iri the c{)nrrpirn,.r, reqh o:j /i,-:r-jilr:j ,).rgi{ iir [.:,r.-.-..ber a; p_]9,500.
11. Whal is the total outstand:nE iiecks on tl;uie,^itL.,er -i1., .i,r:_i,l
A, P361,960
72. 13.
B, i43*t,:.+i
a.
t)
r136,360
What is the total deposits !n transit cir
A, P.339,600
[..,] . ,! . i[, .".,1"r p17g,C00 U. a . i,,:, ,,.. ,,,
What are the adjusted bank batani.c:;,i
;,r._ ,.r-,,1:1r1;
I'i,r-y_erbct-3-Q
P256,000 B. C.
[\
P259,400 P256,000 Pi76,000
14. What is the adjurstecl Decenrbe;- boc,r l-l i.:r rertit:,l;A. P516,000 t3. P715,60il 15.
ir:i.t7.i)50
l,r;
;,;-,.;.
lJ"L,i, r,-., f .)/ .t +,1
,.,
l.:
1-.,ir
,
pl
19, 600
;:ii iei'i1?
l_
P3,1ii " 6:4tl P3 i fi,,3.!r_'
i,.4)3,j4'
.:.
i-r, ir595,600
?:,
What is the adjusted Decemi-.e,- bank riisf,,.rsemerimJ
A. p395,960
B. p735,gt-0
c.
n4b7
,t,.l,.i
D.
1396.760
PROBLEM NO. 4
for P50,000,000. Mina Mining estimates that the acquired property will yield 150,000 tons of ore with sufficient mineral content to make mining and processing profitable. It further estimates that 7,500 tons of ore will be mined the first and last year and 1"5,000 tons ever/ year in between, (Assurne 1L years of mining operations,) The land will have a residual value of P1,550,000. MINA MINING CO. has acquired a track of minei'al land
Mina Mining builds necessary structures and sheds on the site ai a total cost of P12,000,000' The company estimates that these struc'ures can be used for 15 years but, because they must be dismantled if they are to be movecl, they have nc residual value. Mina Mining does not intend to use the buildings elsewhere.
at the mine was purchased secondhand at a total cost of The machinery cost the former ou;ner p9,000,000 and was 50o/o depreciated when P3,600,000. purchased. Mina Mining estimates that irirout half ol" this machineny' v^rill still be useful when the present mineral resources have been exh;tuste;l b'rl tn,;L dismantiing and removal costs will just ahout offset its value at that time. 1-hc ccmpany ooes not intend to use the machinery elsewhere. The remaining machinery rvi I iasi i;ni:ii abouL one-half the present estimated mineral ore has been removed and yvill tl:r:n be rrvorthless. Cost is to be allocated equally between these two classes of machinery, Mining machinery installed
charges for the 1't year? Depreciation P870,000 P780,000 P870,000 P780,000
16. What are the estimated depletion and depreciation A. B"
C.
n
e"
Depletion P4,845,000 P4,845,000 P2,422,504 P2,422,544
17. What are the estimated depletion arid depreciation charges for the A. B, C.
D,
18.
Depletion P2,422,540 P2,422,500 P4,845,000 P4,845,000
5th
yearr
.D-egeelalra! P1,740,000 P1,560,000 P1,560,000 P1,740,000
What are the estimated depletion and deprer-iaticn charges for the 6th year? Depreciation Depletion P1,560,000 P2,422,500 A. P1,740,000 B. P2,422,500 []1,560,000 P4,845,000 C, P1,740,000 D. P4,845,000
19, What are the estimated depletion and Ceprecietion charges for the 7'n year? A. B.
C, U,
20.
Depletion P2,422,50A P2,472,500 P4,845,000 P4,845,000
Depreciation P1,380,000 P1,560,000 P1,380,000 P1,560,000
What are the estimated depletior, and depreciation charges for the 1lth year? Depreciation Depletion P1,380,000 P4,845,000 A. P690,000 P4,845,000 B. P1,380,000 C, P2,427,500 P690,000 D. P2,472,540
ooo000ooo-------PROBLEM NO.5 SANTOL CORP. invested its excess cash ia r,on-t.ading'equity securities during 2013. On initial recognition, the entity rnade an irrevocabie erecr':ion to present its securities at fair value Paqe 4 of '14 Paqes
7
- -* - -- '-
;'*;iiri'".i;;i*n .
_--_
sEpTEMBER 1s, 2013
-
/ suNpAy / 8:00AM
11:00AM
I
tlrrough other comprehensive incor"ne' portfolio consisted of the following;
A.s
of December 3L, 2O!3, the company's
I
Investee Cdmpany Kelly, Inc. Eloy Corp. Yogi Enterprises Totais
securities
Shares
Cost
Fair Value
30,000 60,000 60,000
P 450,000
P 425,000
1,500,000 2.160.000 P4-UA.&La
1,610,00c 2.300,000 P4.335.000
purchased r.fl, santor sord 60,c:0?jli:.^'?1.:]:y:.!,?:1^lrj:^,:1t:3t0 and 60,006 additional sh{res of Kelly, Inc. and 30,0Ct0 shai-es of Kongga Company'
On December
31,
2014, Santol's porffoiic cif tton-irading equiby securities comprised the
following: Investee ComPanY Kelly, Inc. Kelly, Inc. Kongga Company Yogi Enterprises Totals
30,000 60,000 30,000
I
Fair Value
Cost 450,00t) P 1,3oo,ooo 520,000 2,160,00Q
Shares
6L),000
P
500,000 1,450,000 480,000
700p80 P3.130.000
P4 43_0-L00
and 15,000 shares of During the year 2015, Santol sold ali the Keliy, ir;r:. si:ares for P2,3rJ0,000 porrfolio oi ironsantol's Kongga Company at a loss of P90,00c on L,ecelrnber 31,2015, trading equity securities consisted of the r>lii;winq:
Yogi Enterprises Kongga Company Totals
?t.
tau-Valrc
Cost
;t1:tles sc,000 15,000
Investee ComPanY
P2,
P4,200,000 ___ 130,000 P4.380.000
i60,000
_loQ.-0!!PL,i;ii,00g
What are tl-re balances of the iollc,ving a:ccuints as of December 31, 7013? Ui"ire.llized Non-tradirtg Gairi on Ncn-trading Equily F-cruLly-$-sc-u-nllcs
SecuritieS
PO
P4,335,000 4,110,000 4,085,000 4,335,000
A. B. C. D.
0 0 22-5,000
27. What are the balances of the following accrtlnts as of December 31, 20L4-) lJi.i'eaiized Non-trading Equifry Gaii'r on Non-trading
^l A,
B.
i I
D.
Securitiqs P3,130,000 3,13o,ooo 4,430,000 2,450,000
Eqirlg_SeeU![ies
F,0
1,300,0c0 0
1,980,000
23. What are the balances of the following accounts
as
of Decenrber 31, 2015?
Non-trading tlnreal,zed Equity Gaiin c,r i'jon-trading
Securities P4,380,000 7,470,400 4,380,000 2,340,000
A. B. C.
D.
EqurU-Seeunltes F.l-,951J,000 0 0
2,090,0c0
74. What is the realized gain or loss on the
A.
P10,000 loss
B.
P120,000
saie ot Eloy Corp' shares in 2014?
losr
C.
Pi00,000
gain
D.
P90,000 gain
25.
What is the net realized gain r:n the saie cf secirriries in 2015?
A.
B.
P550,000
a.
P460,00{)
n1\[ I n,1/1 r-I )IJ,UJU
L'.
Pl-60,000 l
I I
PROBLEM
NO.6
tl
i
janri;;i';'
I
".i{:iZ.
r Ie r-ompany s Yl,-r rrave b9en
), DONNA MANLIFACTURING COMPA|{Y \^/as incorporate:1 or financial staterlents for its first year of cperalir-rns'/ie,r. irot;r;"ldrre( [,r u Ci]r\ engaged to auciit Donria': financrai l,;iai-e'ne',1: ict 'int: yuai- r:i]c: i ).lCf Presented beiow is Donna's trial L,llance (part,ai) on Dlccen'her 31, 20i ,. Qqbii 330,c00 ', l-i: . rnrl Lr*, JrVU\,
p
Cash
Accounts receivable Allowance for bad debts Inventories Machinery Equipment Accu m ulated depreciation Patents (information 1) Leasehold improvements llnforrnaiicn 5) Prepayments Crganization costs (lnformation 5) Goodwill (Information 4) Licensing Agreerneirt i (infirrmation 2 anrl 3) Licensing Agreement 2 (informaticn 2) Additional information
i
r:r:r 3i,2013. ,]
ers-ql:
P
15,LrCr0
i., :.55,Ci;,: ?, Z5i),;-1r.'!)
ij'j i.: ::;i.t 2
-,'. ,lr-.'r
:
1.
-i':li- 1i' ., ,l'.it ' at a cost Patents ior Donna's man'lfa -turinE fro(ess .',f r ;: ; -i,r'!',r P2,040,000. Donna spent an additional P-c1,j,JLii.in Dr:cci'1b,.'r l-,-)1i :o ii:rr.\io\/e ntachinery -i-,e covered by the patents arrn inclr-ided rn llre Pateni- Ji.,i-,r,r",i i.)ar-rrrft.. Uaterrts had a remaining ieqal life of 17 ,7ea,i-s
2.
Donna purchased two licensing aqreeinents on -l{lriuili-r,,,<, r:i:i,r '. ir.-, ,.,,-- 3 lelierred at that time to have unlimited useful lir.res, The baia;r:ce of l"i.r.r- -':i 'l Ji r,,, .l i,v;:i rerluced by P30,000 for the advance collecticn qlf ;grTsndf) fr-or,: :i,i '.r,1:.:,r ri-r-i
3. In
December 2A12, an explosion causeC a fj0oz; t'r.rCLr:,io,- ,i, t-,e i.'xorcted revenueproducing value of Licensing Agr-i:erne nt .i . I .rr.,l : ,: r'r ,'-' 'cl \ e ;,r 1.,,- Lrt tif [-icensing Agreement l was determinei trL he P(r{10,00i1 ilt [''rr-:.,"l.;l,:i' ,:, --'-. ],
4. The balance in the Goocjwill account inclucle; P7)-Oj:A1113,i6i l-re6grri,er ?'1, 2C72 for an advertising program which it is estir'natecl rrvill arssist i,t !i',r-rra:r;r'ig litrrna's sales over a period of four years followinq the dtsbursernenf
5.
.
The Leasehold Improvement accounl lnci'ides the fc:lir,r'r,r',c' a. P450,000 cost of improvements 'r.rith a tcrtal C-(iiri,ri".iri. ,-.' ,: I ' _,i'iI'l,e,lrs, which Donna, as tenant, made to leaseC fre-rt:se -"i.r -,1;,:.;r.i., ''i ' ,., : t. b. nrovable assembly-line eq ripment ic.;t,i ,.r ,i l -..' -)l , i ri,F ' ,a lr il3ir id in the leased premises in Decembcr 2{i1J, Donna paid its rent in fuil cliriing ;1013, A lrl- .r;:r- ,,:':','i 3, 2017 for lhe leased building thal Donna iis,:r.i j'ir 1,. ;,i.; ii.. :
i -.. ia .r \,.i.-j ;;l(1ler-1 JanUafy
6. The balance in the Organization Cosis acccLinL inclur,J,,,l the orqanizational period.
26.
What is the carrying amount of the Patenis l.rt Decen,b,ri :1- : r r :l; A. P1,920,000 B. ir'2,4'J0,000 L, P.l. i l:il,l"ti '.
tr,
i 2,040,000
cPA REVIE\! SCHOOL OF THE pHILIpptNES (C9AR) - tlA\rLA
27.
28' 29.
FINAL PREBOAT?D EXAMINATION I SUN[U]L'/ I s :-Q0A[1--1 ].QQM
What is the carrying aniount of Licensing -----5EflEryl-EEts-$-?g.13 agreement L on December 31, 2013? P1,500,000 B. P600,000 c. P900,000 D. P2,100,000
A.
What is the cdrrying amount of Licerrsinq agreenient 2 on December 31, 2013? P2,100,000 B. P1,470,000 c. P60c,ilO0 D, P1,500,000
A.
What is the carrying amcunt cf the L"easehokl tffipirl'r3r,1cnts cit De..errlber
A.
ts.
P360,000
C.
P780,000
30. The net adjustment to
to
Retainec! earnings information 1 to 7 wili amount to A. P2,535,000 debit B. P2,580,000 debit C. P2,535,000 credit
D' P2'sB0'0o0-::::1"
-
D,
C00
P,:150,
i'r.fleci: ail
the
li,
2C13?
P624,000
necessa-rrv coi-rect.rr.;ns from
---r:orieoooo,,---.*--
PROBLEM NO. 7
You are examining the financial staternents of SALUYO-T COMPAXT'/ Fcr lhe '7ear ended December 3t,2A13. Your audit cf tire accounts receivanie ancl rlther relatecl accc-.unts cjisclosed the foilowing information
1.
:
The December 31, 2013, balance ln the,Accounts [leceivanls corrtrci aci:,':r.]t-ti is P788,000,
2. The only enLrie:; in the L-laiJ Dei-ts ExJr:i;s: a:r")uitl t',3irt, a. A credit for P1,296 on L)elr.--t!:er ,, ,.3.iJ. l-;e:c"tui.t: -r-,,t- "t -i r ll.,rit..tC b.
account charged off Octobcr" Ji, Zt)t:,. A debiton December 31 fo: ihi. 3nr:r., 1 -r1t i-ri1; .-:.;.,
3. The Allowance for Bad Debts accoun'- rs prg5sn1._,,1 Particulars
Jan Oct.
t,c;e
ir, r'uil for
tl-re
v,,:
-r:q,l _ili;:,jt,,,.*
I
i
1
31
Balance Uncollectible:
Customer
A Pl 290 i) I . )rj
Dec.
31 I
4.
An aging scheduie of the accounts receivabl.r are as shown in the table belcw: ,jr;
Itlel Debit
pi.al_a:ce E mr:nth P37Z,16A months 307,ZBA months 88,720 months 24,AAC
AG
0-1 1-3 3-6 Over 6
t'J
u
r-ri,
lO.i;
uf f)€:crjrrl),..i 'i r,
,il ri the decisions i
r
rt lt;
wh i cl-: if : r)
i
i
i
r.iuv ;i
r.i
c{,:
i, it le a.llusleil a,'le :"t,Jjr;t;'.mttrrt.:;
,jr,; i,"'ii_. lji. l' r' 11,.1 I -:t,;i '', !i,: 1'./.'
2-:tt 3,)/o
Dgfi:tite,), u,l(,-,i1,;: i,;;r.1, '-'' , 1-'j; f E. lCij ig i,911;,,i1r i'i.' :.r,, ;',,,. rl'.. ' r.tnfriie:-r;i:ie ; l.ii,,, , r.;11;,.1it6 f i ;., e:.I-i;rri,i";',-i
to bi '.
:': ., ;'
',,,",
1jr
?792,S6a_
5'
There is a credit balance in one a.c{:i.r"'}r, receivar-,iE (0-1 ;l:rrii:\ advance on a sales contract; also there is a crc*ril f.r,:,irri',tc accoLints receivable of P2,00c ;or rryhich ,-nerrharici:,.r vriii l;. i,.
,_li
I
.r'il; ii represents an re ,if :htt .t-l months *i,,
,"'
b,i -n:: cds[0iner.
cpA REVIEW SCHOOL OF THE PHILIPPINES (CP,\qi -
auprrlNc PROBTEMS
6.
MAr(i:,A
FINAL PREBOARD EXAMINATION
_-----sr-]:TEpiarn is. zot: I s
The Accounts Receivable control account is not in agreement with the subsidiary ledger. The differences cannot be located, and the company's accountant decides to adjust the control to the sum of the subsidiaries after corrections are made'
31.
The adjustment to correct the entry rnade on Deccrnber 1, 20L3, is 1,296 A. Bad debts Accounts 1,296 ts, Bad debts Allowance for bad L,296 C. Accounts Ailowance for bad D. No adjusting entry is necessary.
expense receivable expense debts receivable debts
32. The required allowance balance (per:gi:lu) cn l-iecember 31,2013, is
A. P2g,354
33.
B.
A. P77g,gA2
35.
c. P19,858
L,296
I,296
D.
P3?-,858
The net r"ealizable value nf Saluyot's accr:unLs re.ei','at-rle on Decemher 31, 2013 amounts LU
34.
P19,058
1,296
B. P774,!'.;:.
Saluyot should report bad debt expen$? ii-'i -{;
A. P13,344
B. ?27,34/,
c. P793,200 ii of C P10,296
D.
P788,664
D'
P33,936
What entry is necessary to adjust i,,13 3ii;'-';-i-r,-€ icCouflt at December 31. 2013? 10,296 A, Bad debts expense 1'A,796 debts Allowance for bad 13,8{i0 B. Bad debts expense 13,800 Allowance for bad debts 1A,796 C. Allowance for bad debts 10,796 Bad debts expense 13,800 D. Allowance for bad debts Bad-debts
:ll-:::-----
PR.OBLEM
oo'Gooooo--------
-----11:!-oo
NO.8
sAN FELipE TRADING CCR.PCTIV\TIOr'] was incorporateci 3 years ago as a trading company engaged in the sale and distribution oi i'rardrruare and electrical supplies. Its offlce and store is located in Batangas City. You were given by your client's contrcller a
cr,i,'/cf the unadjusted trial balance
as
of December
31,2013.
The company maintains its Lrank acccr-rnt
,,,vitl. Sr:cr;red
Bank. Your re'riew of the
bank
reconciliation statement disclosed the follr:wii-;i.r i.fi,rma ii.ln : ;
1.
On December 22,2013, the bank erronecusl'i credlted the account of San Felipe Trading for P195,000 representing deposit for the acc,':t-r'ri :rf another company.
?-. Postdated checks tctaiing P40,000'"t,-re ir,:llidcd in the deposits in transit. These represent collections of accounts receivable from c,J:i1.crli'irs. The checks were actually deposited on January 5,2014.
3.
On December 28,2013, the company issueci <-hecks to creditors totaling checks were released on January 5, 2014.
P1i5,0il0
Tirese
4. A chreck clate,l Decernber 12,2013 in p;yment of accounts payable was recorded as P:l2,000. Upon examinatlon of the checks return3d by tire banli, tlre actual amount was P21,000.
LPA RtVltW SLHUOL OF I HE PHiLiPPillES (CPA.R)
AUDITING
PROBLEMS
-
FINAL PREBCARD EXAMINATION
FlANILA
_
SEfltMsr:R t5.2!13.l5UlluAYf_8-Q0AM
-
i1:00AM
5. A check for F4,750 in payment of a n-rinr;r repair ol office eqir;pment was not recorded on the compan'v books.
6. Transfer of fuhd of P59,300 to Secured Bank current account of DBS Securities was not recorded. This pertains to p,:rchase of 5,000 s;hares of Wiiliarn Lines tr: be held .:s trading securitles, Based,:n quoted prlce as of Decemb,3r:r, 2-013, the nrarket va!ue per share is P1 5.
7.
interest earned arnounting ic P5,77-0 was not recorCed.
B.
Deposits in transit and outstanding checks at Decenrber-3i, 20i.3 amilnteC to P89,200 ancj P132,000, respectively.
9. The cash in bank balance per book orr Decerlber
31, 23i3 is P68i,200.
The Petty cash fl;nri .:f P3-,,090 n-raiirtaineo crt dt ini::ell basis lras countert cn )arutary 2, 201"4. Unreplenished erpenses rr,cir,rcle petry, r-ash vr-:uchers i'or '.,arioL:s expenses totaling P19,30C and entplo',,ees'ed'yances for P5,8Ci aii rlatec December 2013, San Feiipe purchased sever;ri it't.trket(lbi€j :,ec,-.ri-i';r:s i1r-.iriirq -,:0i3. ,\t Decernper 3L,2013, the compan,v had the investmeitts rn equii;r secur;li(:s iiste i b,,:lt',r . i.i.; re i,;:l: i";eid at the last reporting dale, aild all secr-rrities are consicr:;-r I ; l:t I'i " 'r,:i;it,q, -i 1 ., co|- oair,y made an ' ir;'evccabie election to present fa,r'.,alue chai-,g:]s in :,,, 'iar r-t -r't-'r :rt,e,r:., te r',rrr;i'1.:'.. San Pliguel "A" Seniorify" Bank
Multivit l-ofal
Na.,oI_9lur€g 2,0c0 1,., ^.,\;r',t.':\
lYi,t,'i,c-;-,,;]-u
:ti-f,
:ia:
r,ci:u
. ir".
Your physical count of stock certificates disr..io:;ec1 1,",;i :,...' ,,, :,,.11r;,p;j wei-e not yet i-ecoided, issue Np,gf-SiatrJ Seniorit'i Bank 50c i4ultir;it rlii "l
The unadlusted trial balance of the compan'/ at
DecerrLre
r
ar
1-1,'
')rll-.
accounts: 'rlr:r
l\.ccounts receivable
pr +l:,1i
:i,-i
ilrl
-";
F
Aliowance for doubifui accounts Sales
i0,:,'00
1r,fr20,C1.)0
Your reriiew of the accounts receivable .
i.
A customer's deposit of P38.C{;L) 'i'or qoods frorn accounts receivahie.
2.,
A,
3.
Goods scid cn account and ileiiriere(l o;_, [);:;r,rrbt: not reci:rded,
4.
Collection of P15,275 on Ociobr:r 31, 21013 1.rcrn Cetl,e,y ':':rr.i,ilii was :r*ditecj lo rhe account of Supreme Mercantile.
tr
;,e i-leii;,rr,,,J
cash advance to an officei- of P75,0C0 w i,.: rncluCerJ ori ,l
2 -)l
.i
was deducted
filrt of accc,ui ts i'eceivable. ?t-'i
3 anr':urr[ing rc P31,810 were
5, A promissory note
was issued by a customei' to San Felipe Trading for goods purchased worth P168,000. The promissory note carries an interest of 12o/o per annum with a term of 60 days, value dated November 15, 2013. -ihis was reflected as part of accounts receivable. No interest was accnled as of ),ear-enci.
6.
Bad debts are provided based on 2o/s oi' outstandinq accounts receivable at the end of the year.
A physical count of merchandise on hand rryes rnade on December 30 and 31, 2013, which ref
1.
2.
iected a balance of P3,873,000. Your re,/ieu/ of lhe inventory list disclosed the following: Goods costing P148,000 sl-iiprpsd FOit shipping point c'n December 30, 2013 by a supplier to San Felipe was received on January':,7C14, The purchase was recorded on December 30, 2013. Goods costing P195,000, shipped FOB destinaticn by the supplrer on December 28, 2013,
were recorded and received on January 5,
?-A1.4.
3.
for P41,700 were returned to the supplier on December 22,2013. These goods were still inc!uded in tht- ip'rqpl6r,, .crl"redule and the refund was received and recorded on January 10, 2014.
4.
Goods consigned
5.
Included in the physical count were qood:; sorci to a customer on FOB shipping point on December 27,2013. These goods witrr a sal!,ng price of P52,830 and a cost of P35,600 r,vere already recorded as sales on acc:rn!: i-:'-ri '3;3 shrpoed only on January 5,2AI4.
Goods purchased In cash
to San Felipe totaling P89,500',vere included in the physical count.
Prepayments consist of: Prepaid advertising Prepaid rent Unusecj office and store supplies Tolal
?'114,040 165,0110 _ 1e9-_Qgg
B3e-080
Prepaid advertising consists of paymeni 'rr :ir ;rir,,er-tisiflg agency for the design of newspaper ad which will run for a period of one year f:onr .uit). 31, 2013. San Felipe renewed its 5-year lease contract cn t:re office building which expired on October 31, 2013. Total advance rental for 3 months yuas rrade amounting to P165,000 was booked as
Prepaid rent.
The cornpany books purchaseo office supplies as irventory, The expense is normally taken up after the physical count is made at year-end. Orr july 9, 7A13, a total of P38,450 worth of suppiies was bought and included in the inv:niory. As of year-end, unused suppiies inventory per physical count amounted to P53,200, l.lo eni:ry lo set up the expense was recorded, San Felipe's propefty, plant and equipment consist
Furniture and equipment Delivery equipment Leasehold im provements Total Accu rn u lated depreciation Net book value
cf lhe following:
Pi,045,000 1,637,000 __ lsJ-aQ0 P3,0.:i5,000
_ (916,s00) P2J_Q&lgA
The building under lease was renovated .r a cos[ of P363,000 which was booked as leasehold improvements on September 30, 2013. -i'hes: irrrprovements will be amortized over 5 years. No amortizatlon was recorded as at December 2013.
ii,
On May 3L, 20L3, the company bought new corrii-.'uters totaling p325,000. In addition to the cost, it paid additional charges which were taken Lip as Repairs expense. These are delivery charges P12,500; installation cost P11,300; ann testing cost P6,5?-0. The computers'
-
-
Paoe 10
-
o1'
'i.ri Paces
LyA Ktrvrtrw >LFIULTL
AUDffiNG
Ur I Ht pHtUpplllL5
PRoBLEMS
useful life is
4 years.
(CPAR) - I\iANI.A
FIN/,.1 PRE BOARD EXAMINATION
IEPIE!1!.E& j5*zll!3
llule4,y I B:00AM -
No ;deprecration was providecl or-i thr,: equiomeni as
11:00AM
of December
31,
20 13,
San Felipe tradin( opened additional stores in nearby localities. To service more deliveries, additional 3 units of deliver:y equipment were bclught on instailment basis on December 29, 2013' The installment price was P1,200,000 i:r-rt the cash price was P1,000,000. The terms are P200,000 down payment and the balance p*yable in four equal quarteriy installments, A noninterest bearing promissory note was issued for the unpaid portion on December 30, 2013. The down payment of P200,000 was recorded as a debit t-o Deliverv equiprnent and a credit to Cash.
Included in the company's unacJjusted trial bralance on Lrecerrber:1,20i3 are Accounts payable and Accrued expenses of P523,100 and P63,1.00, respectively. Upon verification, the foliowinq information was discovei-ed:
1.
On December 26,201"3, the company puirchased on account qoccls wortl'l P215,000, but no entry was r.nade in the books. The goods were ejlready inciurleo in the year-end physical count,
2.
The following items were erronecuslr,r inciuded
. n . 3.
ii-r
accourts pa;,abre:
Accrued expenses totaling p37,4SA A cash advance from lhe president crf San Felipt_. amouniing to p:15C,000 lc be used as working capital. This will be repaici within 6 months',r.ithout interest. A debit balance af PE7,250 represeniing adve nce pavment tbr goods ordered to be shipped by the supplier on January lZ. ?.A1.4.
Your review of subsequent paynignts frorn Ja;ruar5r 2 was made on December 3l, 20i3 for the folioir,rirrc;:
. . . c o
-
15, 2014 revealed that no accrual
I
Light and ,vater for l.;ov. a'rr, Dec. 2J-3 Telepnone bills for Dec. 20.3 Representation expenses for Dec. ?01j Minor repair of a deiivery car on Dec. 25, Transportation expenses fc:r 2At4
i- 2i,:t( L
0
!0 i,990
1c,
1
3.r30
2L)1.3
- 1..1[l
rotal
P-.5i1,|.)&: i
san Felipe Trading was granted a credlt lrmit ci end, availments are as follows: t/alue Date July 1, 2013 Sept, 1, 2013 Dec. 1, 2013
Date July i, 2015 Sept. 1", 2016 Dec. 1, 2017 Due
ui tc i)5 r'r ilro
i-y liercur"t,ii Bank. As of year-
pfl-n_c_,ksl
p S00,fjrl0 _h+UeSl_E:r.tig 1jL,i, 2,3C0,0t10 _1,.!e_Ci$j$
Liro/c
iS%
P4.qAu]g!
The company issued P1,200,000 face vaiue cf 1lolo bonrjs.rr ,-)ili- orr.'r:l'i 1, ,i013 maturing on July 1, 2018 and paying interest seini-ani:uatly or Jar:rijqi 1 find IL;iy 1.
36' 37.
38. 39.
The cash balance per bank staten"rent on Dorernber.iJ,
A. P984,020
B. ?g^6,i"?_0
i"
-
i(ri3 ';
),- n, ,-.ii
i;.
D748,32.0 i
The adjusted Cash in bank baiar"rce at Der_erni.rsr 3.;", jit.L.l
A, P746,22A
R, P7A(],?}"A
c.
:.-7ltr;,.i20
The adjusted Petty cash fund Lralance al [.,ecerrrcr 3.1,
A. P15,700
B. P?9,200
What is the carrying value of the investnrent
A, P75,000
B, p59,300
C.
li
rs
u].r..r._r
P35,00r1
D"
i!
ii
-P702,600
)9,900
\l/illiarn Lin..s oit iiec,':rrrbei 31, 2013? , {-. F. 0 D. pt56,372
_--
SEPTEMBER 15. 2013
/
SUNDAY
/ E:uuAM - 1r:uuAl"r
loss should be shr:wn in the 2013 statement of comprehensive income as component of other comprehensive income? D. P33,300 C. PO B. P32,600 A, P17,600
40. What amount of unrealized
41. The Accounts receivable balance at tlecember'31, 2013 should be
A.
-
B,
P13,987
c.
P1,209,3i0
44.
B,
P3,979,300
31-, 2013?
c.
P3,854,200
P3,889,800
How much Sales should be reporte| in the 2-013 income statement? c" P4,709,484 B. P4,798,984 A. P4,820,000 31., 201"3 shculd be P247,200 P257.,2A4
45. The total Prepayments at December
A.
B.
P153,750
P1,354,990
L,:
43. What is the adjusted Inventory on December
A.
D.
PL,249,334
the A.litwancc ior doubtful accou nts? D, P16,900 c. ?L4,027 PI4,7Bi
42. What is the year-errd acilustment
A.
-
B.
P1,211,330
c.
D.
P4,084,800
D.
P4,816,2L0
D.
P|9Z,2A0
46. The total cost of the company's Proper"ty, plant and equipment at December 31, 2"013 is D' P3,875,320 C. B. A.
P4,238,320
P4,A7532A
P3,868,800
What is the net book value of the cornpeny's Fi'operty, plant and equipment at December 3t,201,3? C. P3,23L,85?- D' P2,938,820 B. A.
47.
P2,868,852
P2,862,332
48,
The adjusted balance of Accounts p;ryable at December 31, 2013 is
A.
c. P395,900
D.
P738,900
P155,070
D.
P57,080
oayable at December 31, 2013 sltould be \-. LJJtwww rP193,000 / ZTUVV B. P72,A0A P230,500
D,
LvJl tP265,000
P437,900
B. P543,900
49. The adjusted balance of Accrued expenses c'n December 31, 2013
A.
P157,630
B.
c.
P54,52i:
50. The Interest
A.
is
c.
ooo0OGooo--------
FROBLEM NO.9 presented below are two independenr sicuar-;on:;. Answer the questions at the end of each sltuation.
you have been assigned to audit the financial statenrents of ZAIDE ended December 31, 2013. You discover the fbilr:wing situations.
COMPANY
1.
Interest income of P45,000 was not ar.i:ruerJ at the end of 201?-. received in February 2013.
Z.
A computer costing P12,000 was expensecj v,rlten purchaseci on
It
for the year
was recorded when
juiy I, 2012. It is expected
resiC:,ai i';,.ltie. The company typicaliy uses straight-line depreciation for all propefi, plant, aild rql;:1'L31i1.
to have a 4-year life with no
3,
of P99,000 were incurrt:ri early in 2072. They were capitalized and were to be amortized over a 3-year periocl. F,nortization of P33,000 was recorded in 2012 and Research costs
P33,000 for 2013,
4.
Cn January 4,2012, Zaide leased a Lrr:iiCing fcr 5 years at a nionthl), renLal of P24,000' On that date, the company paid the fnllor,vinE ar-ncunts, which were expensed when paid, P 60,000
Security deposit First month's rent lf-aa
24,000 l';
:,1
i,1
Dlcae
'" "'""''tt"t'^^'' k-2or: -
ororrrnu o*orarr'J
Last month's
i 5,
i
g:ooeu
- ?:' !-i-ri: ,:LQ!.1":01
The company.received P108,000 from a custonrer aI the beginnii"rg of 2L:12 fcr services that
it is to
a 3-year period beqinniiig in 2012. rlcne of the amounf as urrearned re';enue at il"r:: eild fi'?$:2.
perform evenly over
received was i'eporteo
6.
rent
r suruonv
Merchandise inventory costrng P54 600 was in il-re v,rarehouse art Dacember 31,2012 but was incorrectly omitted fronr the phvsical count ;:t thai dete The cornpany uses the periodic inventory rnethod
Assume all amounts are material and ignore iircorne tax effects
51. 52.
Zaide's net income in 201? is understatecl by
A. P56,100
B. P53,4riC
C P54,iC0
Zaide's net income in 20 j3 is cverstatcd by
A. P32,4Ci0
B. p]3.61,
p102,900
C"
D.
P89,400
D.
p30,900
53, The retaineo earnings reuorted on Zaide's statement ct financial position at December 201-?. is undersia,,:ad L,;'
A. P22,500
B. p28,500
C. p2-4,i100
D.
31,
p58,500
lhe dc,rrudl basis:rt acil'rr,tirq fcr se..,e:'al ycars, A i'eview of the records, however, indicates that sorne experrses ani re'lt:niles haye been handled on a cash basis because of errors made by an inexperienced bookkeep,er.. inccme statements prepared by the bookkeeper reported P870,000 net income for Ztt? and P1,110,000 net income for 2013. Furlher examination of the records re\/eals tlrat tfte foiiowing items were handled LOVEY CORPOMI-ION has used
improperly.
1. Rent was received
from a tenant iri Decenrber
2012
i'he anroil;.t, P30,000, was
as income at that time even though the rental pe:'tairi;:o
2.
recorded -..::
.2.11*,
Wages payable on December 31 ll.ive been c,';nsrstr-.r':tll ilr,iirtr,.i frcm tt:e "ecords of that date and have been enterecj as exljenses i\i:ci: l:ii.j in :r] ,.j,ir,,/iit( ,cti -{-he amounts of accruals recorded in thiis manner \rere: December 31, 2rJ11 December 31, Z0IZ December 31, 201-?
3.
lr:
Ll,."1,''r 3b, LlCi 28,2C4)
Invoices for office supplies pi;rchaseci lr;v,t ,,rtr,;-, i.",;.:,i 1,:r) '.'r €:,. _ Lr-,ri., acccunts when received. Inventories of supplies on hancj ai'.le 1::r f,i i',, r',1r-i1 f i:,:ir l,.i\r(,t reen ignored, and no :ntry has Deen made ior rhe:lt December 31, 2011 December 31,,201-2 December 31, 2013
54.
What is tne corrected net incorne ior the year
A, 55.
PB26,2AA B. PB{J6,200
P39, rj
ilr
28,,iltt,t /").,64C ZC1.Z)
C,
FB3_1,21(;
D.
p901,000
What is the corrected net inccme fcr 2013?
A Pr'162'2a0------:----B---ll:]-']:i!l-oooo**to"l]:-ll:t'l:l --
"- ?--li:113'000i
PROBLEM NO. 10
The following are two (2) unrelated situatioirs. .{nswer :lre question:; at the end of each situation,
.:
CPA REVIEW SCHOOL OF THE PHILIPPINES (CPAR)
AUDmNG pROBLEMS
- r,rAli1l-
r
FINAL PREBOARD EXAMINATION
__-SfptfNgER t5, 2013 /
SUNDAY
/
8:00AM
-
i1:00AM
containers. The customer is charged for each container relurned within refund a receives anci deliverecj a deposit for each container for the containers not returned within the two years after the year of delivery. Omega accounts time iimit as being sold at the deposit amount. Information for 2013 is as follows: OMEGA COMPANY sells its products in expensive, reusable
Containers held by customers at December 3L,20L2, from deliveries in: Containers delivered in 2013 Containers returned in 2013 from deliveries in:
56"
2011
85,000
aAL? 240-!0Q
325,000 430,0C0
2Al7
57,500
2CL2 140,000 2013 152_aq0
3s4,soO
How much revenue frorn container sales shcitid be recognized ior 2013?
A. P127,500
B. P267,5A0
C. P27,500
D.
P85,000
57. What is the total amount of Omega Corrrpairy's liabiliby for retr,rnable containers at Decenrl:er 31, 2C13?
A, P373,000
B, P400,500
c. P267,500
D,
P430,000
DP, iNC., a dealer of household appliances. seiis u,ashing machines at an average price of P8,100" The company also offers to eaci-t custorrer a separate 3-year wart'anty contract for PBl"0 that requires the company to provide pei'iodic maintenance services and to replace defective parts. During 2013, DP sold 300 washing rnachines .rnd 270 warratrty contracts for cash. The company estimates that the rrrarranl'/ r-..,:jts are P1B0 for pats and P360 for labor. Assume sales occurred on December 31,2013. DP's policy is to recognize income from ine warranties on a straight-line basrs. In 20.14, DP rncurred actual costs relative to 2013 warran0z sales of PlB,000 for parts and P36,000 fcr labcr.
58. What liability relative to these tra:rsarcrion,; r./ould appear on statemeni of financial position and
A, B. c. D^
Current P145,800 P72,900 P72,900 P0
l':otr,r
tl^,e December 31,2013,
vitould tt be classified?
NPfqU[si,l P72,900 P72,900 P145,800 P218,700
59. What amount of warranty
expense lvuuld be shown on the incor;ie statenrent for the year December ended 3L, 20t4? D. P54,000 A. P18,000 B. P 0 C. P 36,000
60. What liability relative to the 2013 r,varr';ini:i:,; statement of financial position and
A. B, c. D.
Current P145,800 P72,gO0 P72,900 P145,800
''rov'.' r,'i-:,.rrr-1
rrvculd appear il re ciassifir'd?
Noncurren i P72,9AA P7Z,9O} P145,800 P0
---END CF TXAMINATION---
on the December 31,2014,
CPA REVIEW SCHOOL OF THE PHILIPPINES
Manila
AUDITING PROBTEMS FINAL PRE- BOARD EXAI.{II{ATION PROBLEI*I ,.
1. F
-
September 15,2013
TGR Company
- June 30. 2011 Cost Accum. depreciation , L!1,1W Carrying value Trade-in value
Trade-in
PL57,2oO
- 681fi1(Pl57,200
x20o/o x 2.5 yrs.)
78.600
79,6W 129.000
P50,400
Sale-Jan.f,20i2 P132,000
Cost
,Lfil}g - UUl?
Accum depreciation
(P132,000
x?^Qa/o
J92W
x 3 yrs.)
52,800 7L.Z5A
Carryirig vaiue Net proceecls
SE--Adahei
.
1.20,13
Cost
Accum del:reciation , ULl09
* rcfifi3
(P120,000 x20o/o x 4
9lt2)
Carrying value Proceeds
P120,000 114.000 6,000 24.000
Total gain
2. C 3. C
18,450
18,000
e86.850
(Pi80,000 + P6,000) + (P2 ,0,0C0 x 98%) + P279,000
PZ0020a
(P186,000 x20o/ox43/L2) + (P235,200 x}Aa/ox36/t2) + (P279,000
x}Ctr./ax26/LZ) P462.24O
Date of
1,/U09
Cost P157,200 120,300 132,000 186,0o0
2011 P15,720
24,000
24,000
24,ff)A
24,W0
26,400
26,400 37,200 23,524
26,400
0
37,200
37,200
47,M0
47,M0
0
27,9N PL78,zffi 1s3i02 (P 24.4s8)
rzus24gJ
9,300 0
235,20fi
_0
6130/7i_
279,000 Correct depreciation Depreciation per client
P97,L40
PL42,Sffi
97,440
Ls4.7tl ? 12.152
Over (under)statern:rnl
4.8 B D A A C
E5*04
PO
2013 PO 18,000 0
Totat P 78,600
114,000
79,204 158,10O
55.800
37,200 47,444 __55940
P164,M0
P158,040
P734,A4O
108.791
82.233
597.018
L@,640 139.s00
GJLSOZ) {PJ3ZAZZ)
5.4
PROBLEM 2 6. 7. 8. 9. 10.
20t2
P3l,44A
20@
9l30lm 6l3O/tO
zzu
P3tr,440
AEgurg.!figl
- hlA$A{xAI;
IilC. P94.500 Ps75.000 P1S1.000 P44.100
Inventory, Juiy 1, 20i.2 (1,75,000 + P1.9,500) Purchases (P540,000 - P8,100 +P27,900 + P16,200) Inventory,, June 3O 2013 (P105,000 + P27,9AA +P11,100) Accounts payable, June 30, 2013 (P27,900 + P16,200) P94,500
+ P576,000 =
P67C,500
-
P525-500
P144,000
PROBLEMS-TANDEMCO.
11.
A
Outstanding checks, Nov, 30 Add: Checks issued in December: tsook disbursements Cost of checkhook Error in recording a disbursement (P39,600
P170,000 P4A7,240
-
P3,960)
(1,200) (3s.640)
Total Less: Checks paici
L"y
bank:
Bank ciisbursernents Decerrrl.,er banx seruice charges Custorner': rctt,r ned check Ourtstandlng clr*cks, Dec. 31
12.
C
370.360 540,360
P204,000
(1,600) (24.000)
178.400
P36i360 P 80,000
Deposit in tiafl$,t, Nov. 30
Add: Collecti+ns: tio.lk receipts
P735,600
l'.icte coiiected by barrk in November
(100,000)
CPA REVIEW SCHOOL OFTHE PHIUPPINES (CPAR)
AUpmNG
PROBLEMS I
-
MANILA
"---__--IIUAL
gMeaABD 0(AUJMIISX
I
(12L000) 5ts-609
Note sent to tlrre bank for ctrtlection
Total
595,500
I
Les:
Deposits credited by bank: Bank receipts Correction of erroneous November charge Deposit in transit, Dec. 31
P41S.CI00
l
Nov-30 tsook balances
P157,200 100,000
Note collected by bank in November Cost of checkbook Service charges Customer's returned check Note with bank recorded as receipt Overstatement of d isbu rsement
30
13. A PROBLEM
16.
74.
EeeejBS; -DS[ursements Dec-31
P735,600 P407,200 (1,200)
1,500 24,000 _135,$39)
__35"6t0
"B25S,gl0
P515,e00
e3S5"96!
.e375.64!
Uur-30
ik$e195
D;Strtillelnerils
4C,000
80,u00
,1204,00{)
P'+i5,000 i+i),irCIf)
Aee*
C
jl
P5i8,000
i8!,00u1)
:i19,fio0 :
(1,600) {?-4,400)
(120,000)
(120,000i
F:i(]b,000
219,600
(i70,00(})
(r.7c il?())
E2:f;"ffiq ffl.I,k*"]
.(36L960)] -i,:.l*li.gg P3,?3300 Pl,-',s,ffo
15. A
4- MINA MINING CO.
C
Mineral property (P323 x 7,500) Building (P80 x 7,50CI) Machinery G/2) (PtZx 7,500) Machinery Glz) (P24 x 7,500)
77. D Mineral propety (P323 x 15,000) Building (P80 x 15,000) Machinery (112) (P12 x 15,000) Machinery $12) tP24 x 15,000)
19.
P485,600
(i00,000)
___yeer_L-
Derlcilen
18.
376.000
P219-600
(1.200)
,Adjusted book balances
Bank balances Erroneous bank charge Deposits in transit Novemhr 30 December 31. Outstanding checks November December 31 Adjusted bank balances
($.e00)
-Deeresiatia!
P2"4:11.5U0
P600,000 9C,0fi0 _"r.80"900
,5l;ti?"519
P,SZSSS{}
Va:. g--_ E -----l-se!: Pepieaalim Ile.ne&or p4 s, 5 000
---
r-
-
Pi,200,000 180,000
__ie0$00
P3fi#i,t00
r,l*Z*0,400
C
-- - ".,-YeaL(- ----_-_--."Dspresratlon [:r.:#etLr"U
Mineral property (P323 x 15,000) Building (P80 x 15,000) Machinery Glz) (P72 x 15,000) Machinery {U2) (P24 x 7,500)
I:4,84ii,fr00 P.:,200,000 i.80,000
_.1mgr0 flf,5#.L.000
C
Yeer
pen;ri{bn Mineral propeflry (P323 x 15,000) Building (P80 x 15,000) Machinery G/2) (P12 x 15,000) Machinery (1/2)
24. D Mineral property (P323 x 7,500) Building (P80 x 7,5A0) Machinery Ul?) (P12 x 7,500) Machinery (112)
P*ks8.CI00 7
Deprexratiu
rr4,b45,0{)0 rr1,200,000 I 90,000
P.iJ$0s00 11*ii*i-{$O -------""---Yea:JL-0egie-tr-rfi
.l=)epreciation
P7./t2"?.st-]CI
, i00,CI00
9i,e00
l;;i;,.xin
I rft!,'trr.,c6)H
.,'--
.::
r$D0,0gl
cPA REVIEW SCHOOL OFTHE PHILIPPINES (CPAR) - MANILA
AUDM-
5.sANTOL
PROBLEM
2t. D 24, A
FINAL PREBOARD EXAMINATION
CORP.
?3, A
22. A
P1,600,000 1.610.000
Proceeds from sale of Eloy
Carrying value Loss on sale
25. D
27. 28.
29. 30.
P2,300,000 1.950.000
Proceeds from sale of Kelly Carrying value (P1,450,000 + P500,000) Loss on sale of Kongga Net realized gain on sale
PROBLEM
26.
L10,0@
6-
(e0.000) P260.000
DOFINA MANUFACTURIilG COMPAHY
A Patents (P2,550,000 - P510,000 - PX.20,000) B Licensing agreement 1 (P1,500,000 - P900,000) D Licensing agreement 2 (P1,470,A00 + P30,000) A Leasehoid improvements (P780,000 * P330,000 - P90,000) A Retained earnings - debit (n00,000 + P720,000'+ F45,000 + P870,000)
PROBLEM 7
-
12.
36. A 37. B
P380,960 309,280
7o/o 3o/o
8,000 12.000 P7q8.q60
59o/o
P19 058
a3.ifi
SAN FELIPE TRADING CORPORATIOil P984.020
Cash balance per bank statement
tsoot P681,200
(195,000) 115,000
-
-
(9,000)
P12,000)
(4,750) (59,300) 5,720 (132,000) 49,200
- P40,000)
Adjusted peity cash funrl (P35,000
17.350 P706.224
P19,300
-
P5,800)
TradrnE securities at FV (William Lines) (P15 x 5,000) Unre.liized ioss (P314,60C Cost
-
P7A6.220 P9 900
E25,000
817.600
P297,000 FV)
Pt,452,7ffi
Accounls receivable per books Postdated check Unrecorded collections Customer's deposit Cash advance to an officer Unrecorded sale Prornissory note received from custorner Unshipped goods Adjusted balance Increase in allowance (P7,249,330 x2o/o
Bank P984,020
(40,000)
Unrecorded cailecliens
B
2,662 4,000 2.400
P77q.9O2
Adjusted balances
42.
20o/o
P23,640 -'Pt,296 = ?22,34 + P1,295 * P10,296
Outstanding cnecks Deposit in transit {Pi39,200
38. D 39. A 40. A 4L. C
2o/o
88,720
Allowance P 3,810 6,186
B
Unadjusted balances Erroneous bank credit Postdated checks Unreleased check Understatement of baok disbursement (P21,000 U nrecorded disbu rsernent checks Unrecorded transfer of fund Interest earned
.
Eatilsc
Rate
(P798,960.- P19,058)
-
P360.00! P2.s35.000
Required
Adjusted
Net Debit
Age Ealance AdjustmenE P372,960 P8,000 month 307,280 2,000 1-3 months 88,724 3-6 months 24,0A0 (4,000) Over 5 months
PROBLEM 8
P1.q20.000 P500,000 P1.s00.000
SALIIYOT COMPANY
0-1
31. B 33. A 34. A 3s. c
P350,000
40,000
(17,350) 38,000
(75,000) 31,810
(168,000) (s2.830) P1.249.330
= ?24,987
-
P10,200)
P14.787
cpA REVTEW SCHOOL OFTHE PHIIiPPiNES (CPAR) - MANILA
AUDmNGPRoBLEMS , 43. C 44. B 45. D
-
,
____L],NAL$,EE"EABDEXAUI$ATIQN
Adjusted inventory (P3,873,000 + P148,000- P41,700 Adjusted sales (P4,820,000 + P31,810
-
- Pltil.sCIO)
eL.s8g800 P,1,798-980
P52,ti30)
P438,000
Prepayments per books Adveftising o(pense (P144,000 x SILZ)
(60,000) (110,000)
Rent expense (P165,000 x2l3) ffice supplies expense (P129,000 x P53,200) Prepayments, as adjusted
46. D
47. B
(75.8m) P192.200
Total cost of PPE per books Additional charges to computers bought (P12,500 + Pi.i.,300 + P6,520i Unrecorded cost of delivery equiprnent (Pl,0m,000 * P200,000) Adjusted cost of PPE
P3,045,000 30,320 800.000 P3 875.320
Total cosr of
P3,875,320
PPE
books
Accumulated depreciaticn per Depreciation - Leasehold improvements {P363,000/5 x Depreciation - Computers t?355,320 4 ><7 Adjusted net book value
!i2)
48.
p93o,500
3,112)
18,150
_ttgg6,{68)
-s-t"&l$
PL85&.852
B Accounts payable per books
P523,100 1.15,m0
Unreleased checks Understatement of book disbursemenls iP2L,0C0 - P1i,O(iC.l Unrecorded purchase Accrued expenses Cash advance from the company presiCeni Advance payment for goods ordered erroneoirsiy debiteri tc ntcoLl::fs payable Accounts payable, as acijusted
49. C 50. D
Secured bank loans (P32,500
-
82250 Ps43-900
2012
P(45,000)
1.
2013 P45,000
(12,000)
2.
+ P13E,000 -i P22,500) +
t,uT 3,000
4. 5. 6.
Over
Gtdgrj
P (12,0C0) 1,500 3,000 99,000
(33,0m)
(33,000)
(84,000) 72,400 (s4.600)
(36,000)
saml
54.60q P33-600
Pr22l0o)
Pf56,100)
-
Net incorrre, ;rs rr;raried
{3-
1.
;
leZ
^
:i. Correct{rd "r'1: il'corilF:
30,000 7,800
_1-i-!L80i:) L4.400 i:hr5r$0 P1J5Z.200
(66,0to)
B
53" A
i",
"
55. A
A.
OMEGA COMPAT{Y/DR rNC.
Revenue from container sales (P85,000
-
P57
P27sW
ste)
P325,000
Liability for returnable containers, Dec. 31, 2012 Deliveries in 2013
1l!J00 755,000 P35.4.500
2013 container returns 2013 container sales Liability for returnable containers
59. D 60, B
000)
(.{,1't0fi,\
Total
58. C
2013
p,6.r$,000 P1,110,000
(84,000)
52.
51. A PROBLEM NO. 10
P2$5X40
i)7.:,(.rCS
RE, Dec, 31,2013
99,000
3,
P155.070
ZAIDE COMPANYILOVEY e(ftPCRATIOiU
Net income over (under)
C A
{37,450) (350,000)
Adjusted accrued expenses (P63,100 + ?37,15A + P5'1,520)
PROBLEM NO. 9
56. 57.
(9,000) 215,000
A\"58i
(382.000) P_373-000
Unearned warranty revenue: Current (P810 x 270 x U3) Non-current (P810 x 274 x 43)
8145.S00
+ P36,000 labor)
P54.000
Unearned warranty revenue: Current (P810 x27AxU3) Non-current (P810 x 27C x Ll3)
?77500 PJEgIP
(P18,000 parts
P72-900
---END*-
