1. Jacqueline Jacqueline Company Company install installed ed a production production assembly assembly line. In 2011, 2011, Jacquelin Jacqueline e purchased purchased a new machine and rearranged the assembly line to install this machine. The rearrangement did not increase the life of the assembly line but it did result in significantly more efficient production. The following ependitures ependitures were incurred in connection with the p pro!ect" ro!ect" #achine 1,000,000 $abor to install machine 100,000 %arts added in rearranging the assembly line &00,000 $abor and o'erhead to rearrange the assembly line 1(0,000 )ow much of the ependitures should be capitali*ed in 2011+ a. %1,000,000 b. %1,100,000 c. %1,00,000 d. %1,((0,000 nd -ysas 2 % /1 2. ris Company Company borrowed %1,000,000 %1,000,000 at 10 to finance finance the construction construction of its its building on June 1, 2011. The loan shall be repaid commencing the month following completion of the building. 3penditures for partially completed structure totalled %4,00,000 during the year ended June &0, 2012. 5ssume that these ependitures were incurred e'enly e'ery month throughout the year. ris earned interest of %&20,000 for the year on the unepected portion of the loan. ris Company has a fiscal year ending June &0. 6hat amount shall be shown as cap itali*ed interest on ris7 financial statements at June &0, 2012+ a. %1,00,000 b. %(20,000 c. %10,000 d. % 0 -ysas 2nd % /& C &. -ata has recently recently acquired computer system for its central office office in Cebu Cebu City. City. -etermine -etermine the acquisition cost of the new computer gi'en the following costs" $ist price %1(2,000 Trade discount ta8en (,000 9emo'al of old computer 1,000 Concrete slab poured as a base for the new computer &,200 Insurance in transit 1,420 9epairs incurred while in transit ,:00 Transportation costs ,00 %urchase discount ta8en 2 a. %11,00 b. %1,00 c.%10,:00 d. %1(,00 -ysas 2nd % / . ;n July 1, 2011 2011 %ry %ry Company Company purchased purchased %(,000,0 %(,000,000 00 of 6ry Company Company7s 7s : bonds bonds due on July 1, 2021. 2021. %ry epects to hold the bonds until maturity. The The bonds, which pay interest semiannually on January 1, and July 1, were purchased for %,&<(,000 to yield 1 0. In its profit or loss statement for the year ended -ecember &1, 2011, %ry should report interest income at" a. %1<(,000 b. %200,000 c. %21:,<(0 d. %2(0,000 -ysas /( 2nd % C (. ;n January January 1, 2010, 9ey Corporati Corporations ons paid %1(0,000 %1(0,000 for 10,000 10,000 shares of 9io 9io Corporations Corporations77 ordinary ordinary share share representing a 1( in'estment in 9io. 9io declared and paid a di'idend of %1 a share to its ordinary shareholders during 1440. 9io7s profit was %1&0,000 for the year ended -ecember &1, 2010. 5t what amount should 9ey7s in'estment in 9io appear on 9ey7s statement of financial position as of -ecember &1, 2010+ a. %10,000 b. %1(0,000 c. %1(4,(00 d. %14,(00 -ysas /: 2nd % . ;n January 1, 2004, =tar Company Company paid %1,200,000 for 0,000 shares of Comet Corporation7s ordinary shares shares which represents a 2( in'estment in the net assets of Comet. =tar has the ability to eercise significant influence o'er Comet. =tar recei'ed a di'idend of %& per share from Comet in 2004. Comet reported profit of %0,000 for the year ended -ecember &1, 2004. The balance on =tar7s balance sheet account in'estment in Comet Corporation at -ecember &1, 2004 should be" a. %1,200,000 b. %1,20,000 c. %1,&0,000 d.. %1,:0,000 nd -ysas /4 2 % <. agong agong =i8at had the followi following ng in'estment in'estment transact transactions ions in the share share capital of #asaya,I #asaya,Inc." nc." Jan. ( ought 00 ordinary shares, par %100, at %:: per share June 1( 9ecei'ed 10 share di'idend. 5ug. &1 9ecei'ed % cash di'idend di'idend for each share. share. ;ct. ;c t. 10 9ece 9ecei' i'ed ed stoc stoc8 8 rig right hts s to to buy buy one one new new shar share e at at %1& %1&( ( for for e'er e'ery y ( shar shares es hel held. #ar8et 'alue of right,%> mar8et 'alue of stoc8 e?right, %1(. 5fter the receipt receipt of the stoc8 rights on ;ctober 10, the unit cost per share is" a. <: b. :0.(0 c. :2 d. :1.(0 -ysas /11 2nd % 5 :. Compariso Comparison n of the balance balance sheet of 9each 9each at the end end of 2011 with with its balance balance sheet at the the end of 2010 showed showed a decrease in total assets of %4,000 and owner7s equity by %1(,000, the change in liabilities during the year was" a. Increase of %:,000 c. decrease of %(,000 b. -ecrease of %:,000 d. increase of %(,000 nd -ysas /1< 2 % C 4. The trial balance of =heila Company Company reflected reflected the following account balances on -ecember &1, 2011" 2011" 5ccounts recei'able 00,000 5llowance for doubtful doubtful accounts (0,000 Cash in ban8 (00,000 5ccumulated depreciation depreciation &00,000 %roperty, plant and equipment 2,000,000
In'entory 00,000 -eferred charge 0,000 Cash surrender 'alue 0,000 $and held for future sale 200,000 6hat is the amount of current assets+ a. %1,40,000 b. %1,(0,000 c. %1,(0,000 d. %1,(00,000 nd -ysas /1: 2 % C 10. ;n -ecember &1, 2011,@lat Corporation reported the following information on its accrual?based financial statements" -ecember &1 2011 2010 In'entory %1(,000 %:,000 5ccounts payable Amerchandise creditorsB ,000 12,000 Cost of goods sold (,000 &,000 5ll purchased of merchandise in'entory are made on account @lat7s cash payments for in'entory during the year amounted to" a. %2,000 b. %:,000 c. %1(,000 d. %20,000 -ysas 2nd % /2& 11. 9 Company has epanded rapidly and segment reporting is now required. The entity has no intersegment sales. The following data are for the year ended -ecember &1, 2004" ;perating =egment ;perating Identifiable =egment 9e'enue %rofitAlossB 5ssets 1 20,000 200,000 00,000 2 100,000 20,000 :0,000 & &0,000 <0,000 &00,000 140,000 A&0,000B 10,000 ( 1:0,000 A2(,000B 1:0,000 <0,000 10,000 120,000 < 120,000 A20,000B 10,000 ;thers &:0,000 A2(,000B 10,000 The others category include fi'e operating segments, none of which has re'enue or assets greater than %:0,000 and none with an operating profit. ;perating segments 1 and 2 produce 'ery similar products and use 'ery similar production processes, but ser'e different customer types and use quite difference product distribution system. These differences are due in part to the fact that =egment 2 operates in a regulated en'ironment while =egment 1 does not. ;perating =egments and < ha'e similar products, production processes, product distribution systems, but are organi*ed as separate di'isions since they ser'e substantially different types of customers. either =egments nor < operated in a regulated en 'ironment. 6hat are the reportable segments for the year ended -ecember &1, 2004+ a. =egments 1,&, and ( c. segments 1,2,&,,and ( b. =egments 1,&,,( and < d. segments 1,&,,( and segments and < combined as one segment -ysas 2nd % / 2 12. ;n January 1, 2004, 5ce Company paid a real estate taes on its property for the calendar year 2004 in the amount of %00,000. In the first wee8 of 5pril 2004, 5ce made unanticipated ma!or repairs to its plant equipment at a cost of %2,00,000. It is ascertained that these repairs will benefit operations for the remainder of the calendar year. )ow should these epenses be reflected in 5ce7s quarterly profit or loss statement for 2004+ #arch &1 June &0 =eptember &0 -ecember &1 a. %1(0,000 %4(0,0000 %4(0,000 %4(0,000 b. %<(0,000 %<(0,000 %<(0,000 %<(0,000 c. %1(0,000 %2,1(0,000 %1(0,000 %1(0,000 d. %00,000 %2,00,000 % 0 0 -ysas 2nd % /2( 5 1&. @or the month of July, Cassandra had the following information" ban8 ser'ice charge for July, %1,(00, D=@E chec8, %0,000. Fpon the re'iew of its records, Cassandra determined the following" deposit in transit %1&,000, outstanding chec8s %110,000 and an unrecorded customer chec8 of %&:,(00. If the cash in ban8 balance per ledger is %420,000, how much is the ad!usted balance+ a. :&,(00 b. 4&(,000 c. :4,(00 d.402,000 cpar 1st % /1& 1. 3cel reported %<0,000 of in'entory on -ecember &1, 2011, based on physical count. 5dditional information was gi'en as follows" Included in the physical count were small equipments billed to a customer, @; shipping point, on -ecember &1, 2011. The small equipments had a cost of %&,000 had been billed at %(,000. The shipment shipment is ready for pic8?up by the deli'ery contractor. Goods were in transit from a 'endor. The in'oice cost was %:,000 and goods were shipped @; shipping point on -ecember &1, 2011. 6or8 in progress costing %(00 was sent to an outside processor for finishing on -ecember &1, 2011. Goods out on consignment amounted to %,00 Asales priceB> shipping costs, %120 Amar8up is 1( on costB. •
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The correct amount of in'entory on -ecember &1, 2011 is" a. :(,20 b. :(,(00 c. :2,20 d. :2,(00 st -ysas 1 % /1 C %ine Company prepares monthly income statement. 5 physical in'entory is ta8en only at year?end> hence month? end in'entories must be estimated. 5ll sales are made on account. The rate of mar8 up on cost is (0. The following information relates to the month of o'ember" 5ccounts recei'able, o'ember 1 102,000 5ccounts recei'able, o'ember &0 1(&,000 Collection of accounts recei'able during o'ember 2((,000 In'entory, o'ember 1 1:&,00 %urchases of in'entory during o'ember 1&,200 The estimated cost of the o'ember &0 in'entory is" a. 122,00 b. 12,:00 c. 14&,:00 d. 22,00 -ysas 1st % /1< The following information relates to accounts recei'able of $orina Corporation for the year 2011" 5ccounts recei'able, January 1 1,(00,000 Credit sales (,(00,000 =ales returns 200,000 5ccounts recei'able written off 100,000 Collections from customers ,200,000 3stimated future sales returns on -ecember &1 (0,000 3stimated uncollectible accounts on -ecember &1 1(0,000 6hat amount should $orina report as accounts recei'able, before allowance for sales returns and doubtful accounts on -ecember &1, 2011+ a. 2,(00,000 b. 2,&00,000 c. 2,(0,000 d. 2,&(0,000 -ysas 1st % /2: 5 Hou are to gi'e the debit amount to bad debt epense using the gi'en information. ad debts are estimated to be 1? 12 of ending accounts recei'able. Credit sales, %1<2,000, collections on accounts recei'able during the year, %1<0,000, cash sales, %:10,000. Fnad!usted balance in allowance for bad debts, %(0, credit balance, sales returns and allowances, %,000 and accounts recei'able at the beginning of the year, %1,000. a. 1&0 b. 2&0 c. 140 d. 1:0 -ysas 1st % /&0 5 The following items were included in ;pal Company7s in'entory account at -ecember &1, 2011" #erchandise out on consignment, at sales price, including 0 mar8up on selling price 2:,000 Goods purchased in transit, @; shipping point 2,000 Goods held on consignment by ;pal Company 1,000 Goods out on appro'al Asales price, %10,000> cost, %:,000B 10,000 y what amount should the in'entory at -ecember &1, 2011 be reduced+ a. 24,200 b. (0,000 c. (,000 d. <:,000 st -ysas 1 % /&1 5 The in'entory card of $ane Company as at @ebruary 2:, 2011 is as follows" %urchase Fnits alance Cost Fnits Fsed Fnits January 10 100 2,000 2,000 &1 1,000 1,000 @ebruary : 110 &,000 ,000 4 Areturn from factory, Jan. 10 lotB A100B ,100 2: 1,100 &,000 The weighted a'erage cost of the in'entory as at @ebruary 2:, 2011 is" a. &1:,000 b. &12,000 c. &1(,000 d. &&0,000 -ysas st % /& 5 The physical count of 5nnalisa Company on -ecember &1, 2011 re'ealed merchandise with a total cost of %(,000,000. Goods sold to a customer, which are being held for the customer to call at the customer7s con'enience with a cost of %200,000 were ecluded from the count. 5 pac8aging case containing a product costing %(00,000 was standing in the shipping room when the physical in'entory was ta8en. This was not included in the in'entory because it was mar8ed Dhold for shipping instructionsE. 5n in'estigation re'ealed that the customer7s order was dated -ecember 2:, 2011, but that the case was shipped and the customer billed on January , 2012. 5 special machine costing %2(0,000, fabricated to order for a customer, was finished and specifically segregated at the shipping room on -ecember &1, 2011. The customer was billed on that date and the machine was ecluded from in'entory although it was shipped on January 2, 2012. 6hat is the correct amount of in'entory that should be reported on -ecember &1, 2011+ a. (,4(0,000 b. (,<(0,000 c. (,(00,000 d. (,<00,000 C%59 @inal % / C 6arriors Company pro'ided the following information for the year 2011" %urchased a building for %1,200,000. %aid %00,000 and signed a mortgage with the seller for the remaining %:00,000. 3ecuted a debt?equity swap and replaced a %00,000 loan by gi'ing the lender ordinary shares worth %00,000 on the date the swap was eecuted. %urchased land for %1,000,000. %aid %&(0,000 and ga'e ordinary shares worth %(0,000. •
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orrowed %((0,000 under a long?term loan agreement. Fsed the cash from the loan proceeds as follows" %1(0,000 for purchase of additional in'entory, %&00,000 to pay cash di'idends, and %100,000 to increase the cash balance. 6hat amount should be reported as net cash used in in'esting acti'ities+ a. 1,200,000 b. 2,200,000 c. 00,000 d. <(0,000 C%59 @inal % /1 22. #aroons Company7s income statement for the year ended -ecember &1, 2011 reported income before ta of %(,000,000. The auditor questioned the following amounts that had been included in income before ta" 3quity in earnings of ulldogs Company 1,00,000 -i'idends recei'ed from ulldogs Company &20,000 5d!ustment of profit of prior year for arithmetical error in depreciation A1,00,000B #aroons owned 20 of ulldogs7 share capital. 6hat amount should be reported by #aroons Company as income before ta+ a. &,00,000 b. ,:0,000 c. ,:00,000 d. ,0:0,000 C%59 @inal % /1( 2&. Tamaraws Company accumulated the following quarterly cost data for the current year" 9aw materials ? beginning in'entory 40,000 units K %<.00 &0,000 %urchases <(,000 units K %:.00 00,000 120,000 units K :.(0 1,020,000 The entity transferred 14(,000 units of ra w materials to wor8 in process during the year" 6or8 in process ? beginning in'entory (0,000 units K 1.00 <00,000 -irect labor &,100,000 #anufacturing o'erhead 2,4(0,000 6or8 in process ? ending in'entory :,000 units K 1(.00 <20,000 The entity uses the @I@; method for 'aluing raw materials. 6hat is the cost of goods manufactured for the current year+ a. <,(&(,000 b. :,2&(,000 c. <,(1(,000 d. :,2:0,000 C%59 final % /1< C 2. )opeless Company7s chec8boo8 balance on -ecember &1, 2011 was %212,000. In addition, )opeless held the following items in its safe on -ecember &1. 5 chec8 for %,(00 from %ayless Company recei'ed -ecember &0, 2011, which was not included in the chec8boo8 balance. 5n =@ chec8 from Gamer Company in the amount of %4,000 that had been deposited at the ban8, but was returned for lac8 of sufficient funds on -ecember 24, 2011. The chec8 was redeposited on January &, 2012. Coin and currency on hand amounted to %1,(00. 6hat is the proper amount to b e reported as cash on -ecember &1, 2011+ a. 21&,000 b. 20,000 c. 222,000 d. 20<,(00 C%59 final % /14 C 2(. $ions Company7s petty cash fund is established in the amount of %2,(00. Fpon eamination of the records, the petty cash fund contains currency and coins in the amount of %1,(00 and receipts for disbursements of %4(0. 6hen the fund is replenished under the imprest system, the entry to record the replenishment will include a credit to a. %etty cash fund %<(0 c. Cash in ban8 %4(0 and cash short and o'er %(0 b. %etty cash fund %1,000 d. Cash in ban8 %1,000 C%59 final % /20 2. Lanessa Company uses the allowance method. The following schedule was prepared from an aging of the accounts recei'able outstanding on -ecember &1, 2011" 0 ? &0 days (,000,000 .4: collectible &1 ? 0 days 2,000,000 .40 collectible ;'er 0 days 1,000,000 .:0 collectible •
et credit sales for the year 0,000,000 5llowance for doubtful accounts> alance, January 1, 2011 ? credit balance (0,000 alance before ad!ustment, -ecember &1, 2011 ? debit balance 20,000 6hat amount should be recogni*ed as doubtful accounts epense for 2011+ a. <0,000 b. :0,000 c. (00,000 d. (20,000 C%59 @inal % /21 2<. =tags Company reported the following items in its statement of comprehensi'e income for the year ended -ecember &1, 2011" Fnreali*ed gain on trading securities 1,<(0,000 Fnreali*ed loss on futures contract designated as cash flow hedge A(0,000B 9e'aluation surplus in 2011 2,(00,000 5ctuarial gain fully recogni*ed in other comprehensi'e income 1,:0,000 3change differences in translating foreign operations ? credit <(0,000 =hare in associatesM property re'aluation 2&0,000 6hat net amount of other comprehensi'e income may be subsequently recogni*ed in profit or loss+ a. 1,40,000 b. &,20,000 c. 1,:<0,000 d. 140,000 C%59 @inal % /22 2:. 6ow Company uses the @I@; retail in'entory method. ;n -ecember &1, 2011, the following information relating to the in'entory was gathered"
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In'entory, January 1 1:0,000 (0,000 %urchases 2,440,000 ,&(0,000 %urchase discounts 0,000 @reight in 1(0,000 #ar8up s 1,0(0,000 #ar8downs 00,000 =ales 00,000 =ales discount (0,000 6hat is the estimated cost of the in'entory on -ecember &1, 2011+ a. &,1&1,000 b. &,120,000 c. &,100,000 d. 2,0&1,000 C%59 @inal % /2& ;n #ay 1, 2012, a flash flood caused damage to the merchandise stored in the warehouse of Choo8s Company. The following data were established. et sales for 2011 were %:00,000, matched against cost of %(0,000. #erchandise in'entory, January 1, 2012 was %200,000, 40 of which was in the warehouse and 10 in downtown showrooms. @rom January 1, 2012 to date of flood, the in'oice 'alue of pu rchases Aall stored in the warehouseB is ascertained to be %100,000> freight inward, %,000> and purchase return, %,000. Cost of merchandise transferred from the warehouse to showrooms was %:,000 and net sales from January 1 to #ay 1, 2012 Aall warehouse stoc8B amounted to %&20,000. 6hat is the estimated cost of merchandise destroyed by the flood+ a. ,000 b. (0,000 c. ,000 d. :0,000 C%59 final % /2 5 Niegler Company purchased 2(0,000 ordinary shares of =herman Company for %0 per share on 5pril 2, 2011. =herman Company had 1,000,000 ordinary shares outstanding during 2011,paid cash di'idends of %00,000 during 2011,and reported net income of %2,000,000 for 2011. 6hat amount should Niegler Company as report re'enue from in'estment for 2011+ a. (00,000 b. &<(,000 c. (2(,000 d. 1(0,000 Cpar final % /2 -uring 2011, Gargamel Company made the following ependitures relating to plant machinery and equipment" 9eno'ation of a group of machines at a cost of %(00,000 to secure greater efficiency in production o'er their remaining fi'e?year useful life. The pro!ect was completed on -ecember &1, 2011. Continuing, frequent and low cost repairs at a cost of %&(0,000. 5 bro8en gear on a machine was replaced at a cost of %(0,000. 6hat total amount should be charged to repairs and maintenance in 2011+ a. &(0,000 b. 00,000 c. :(0,000 d. 400,000 Cpar final % /2: ;n -ecember &1, 2011, before the boo8s were closed, the management of @ear Company made the following determination about its machinery. The machinery was purchased on January 1, 200: for %<,200,000. The machinery has a useful life of 10 years with no residual 'alue and was depreciated using the straight line method. In 2011, a decision was made to change the depreciation method from straight line to sum of year7s digit method. 6hat is the depreciation of this machinery for 2011+ a. 1,20,000 b. 1,0,000 c. 41,&0 d. <20,000 Cpar final % /24 5 @arm Company owned 20,000 shares of 3at Company purchased in 200: for %2,00,000. ;n -ecember 1(, 2011, @arm declared a property di'idend of all of its 3at Company shares on the basis of one share of 3at for e'ery 10 ordinary shares of @arm held by its shareholders. The property di'idend was distributed on January 1(, 2012. ;n the declaration date, the aggregate mar8et price of 3at shares held by @arm was %2,200,000 by -ecember &1, 2011. 6hat is the measurement of the in'estment in shares at -ecember &1, 2011+ a. 2,00,000 b. 2,200,000 c. 2,000,000 d. 0 Cpar final % /&2 C =onia Company7s assets decreased by %2,000,000 and its liabilities also decreased by %&,(00,000 in the current year. Fpon re'iew of the accounting records, it was determined that the a'ailable for sale securities increased by %100,000 and trading securities decreased by %200,000 all due to changes in fair 'alue. 5lso, =onia recei'ed equipment 'alued at %100,000 from a nonshareholder as donation with no restrictions attached, and corrected a prior period error resulting from an o'erstatement of ending in'entory for %(00,000. 6hat is the net income for the current year+ a. 1,400,000 b. 1,:00,000 c. 2,100,000 d. 2,000,000 Cpar final % /& 5 %hilly Company made an in'estment for ( years at 10 per annum compounded annually to equal %:,:((,000 on date of maturity. 6hat amount must be deposited now at compounded interest to pro'ide the desired sum+ 9ound off the future 'alue factor to decimal places. a. (,(00,000 b. (,000,000 c. (,002,:2( d. (,&2,(1( Cpar final % / 5 onoy Company reported the following data at the end of the current year" 5ccounts recei'able ,000,000 Credit sales 12,000,000 -oubtful accounts epenseA2 of credit salesB 20,000 5llowance for doubtful accounts?January 1 (0,000 • •
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onoy elected to estimate its doubtful accounts by using percent of accounts recei'able method. onoy determined that would be a good estimate. There were no writeoffs nor reco'eries during the year. 6hat amount should be reported as doubtful accounts epense in the current year as a result of this change+ a. 20,000 b. &0,000 c. :0,000 d. &10,000 Cpar 1st % / ;n January 1, 2004, #ara Company purchased equipment for %&,000,000 with a (?year useful life and no residual 'alue. ;n January 1, 2010, #ara incurred repairs for %(00,000 and inappropriately capitali*ed the entire amount. The error was disco'ered on January 1, 2011 and the asset7s residual 'alue was estimated to be %00,000 also on this date. 6hat amount should be recogni*ed as prior period error in the opening balance of retained earnings on January 1, 2011+ a. (00,000 b. &<(,000 c. 12(,000 d. 0 st C%59 1 % /< #aple Company pro'ides for doubtful accounts epense are the rate of & percent of net credit sales. #aple7s credit terms are 210, n&0. The following data are a'ailable for the current year" 5ccounts written off as uncollectible during the year 0,000 Collection from customers beyond discount period Aincluding reco'ered accounts of %1(,000B 1,(00,000 Credit sales, year?ended -ecember &1 &,&00,000 =ales returns and allowances 200,000 Collection from customers within discount period ::2,000 5llowance for doubtful accounts, January 1 (,000 5ccounts recei'able, January 1 4(0,000 6hat is the net reali*able 'alue of the accounts recei'able at -ecember &1+ a. 1,0(,000 b. 1,(21,000 c. 1,(0&,(0 d. 1,::,(0 st C%59 1 % /1 C Jac8y Company sold accounts recei'able without recourse with a face amount of %,000,000. The factor charged a ser'ice fee of 10 of the accounts factored and withheld ( of the accounts factored as protection against customer returns and other ad!ustments. Jac8y pre'iously established an a llowance for doubtful accounts of : of the accounts factored. )ow much is the gain or loss on factoring+ a. :0,000 loss b. 00,000 loss c. &20,000 gain d. 2:0,000 loss st C%59 1 % /1( 5 ;n January 1, 2004, =oo8ie an8 loaned %<,000,000 to another entity. Interest of 10 is payable annually e'ery -ecember &1 of each year and has a (?year term. =oo8ie was able to collect the 2004 and 2010 interest but failed to collect the 2011 interest from the entity because of f inancial difficulties. The entity did not accrue the interest on -ecember &1, 2011. The entity negotiated with =oo8ie on -ecember &1, 2011 and agreed on the following" The principal amount will be collected on -ecember &1, 201. The new interest rate is :. =oo8ie forga'e the 2011 interest but the remaining interest payments will be collected together with the principal on -ecember &1, 201. )ow much is the impairment loss o n -ecember &1, 2011+Around off %L factor to decimal.B a. 1,&&0,000 b. 1,<(0,000 c. 40,000 d. 0 st C%59 1 % /1< C 5cura #otor =ales echanged a car from its in'entory for a sophisticated copying machine to be used as a long? term asset. The following information relates to the echange" Carrying amount of the car (0,000 @air 'alue of the copying machine 400,000 $ist selling price of the car 1,200,000 Cash difference paid by 5cura 1(0,000 6hat amount of gain or loss should 5cura recogni*ed+ a. ((0,000 gain b. 100,000 gain c. &00,000 loss d. 00,000 gain st C%59 1 % /2 %un8 Company acquired an eisting building in echange for (0,000 ordinary shares. The list price of the building is %:,000,000 and the shares ha'e a fair 'alue of %120 per share. %un8 also incurred the following costs" %ayment to tenants to 'acate the building (,000 Fnpaid property taes assumed by %un8 <:,000 5ssessment by city for sewerage pro!ect <,000 -ri'eways and par8ing bays ((0,000 Cost of grading and le'eling (,000 Cost of new wing attached to the building <(0,000 Cost of new 'entilation system &00,000 9emodeling costs prior to occupancy 200,000 6hat is the total cost of the building+ a. 4,04&,000 b. <,04&,000 c. <,&4&,000 d. 4,&4&,000 st Cpar 1 % /2: 5tom Company installed a production assembly line to manufacture tennis balls. In the current year, 5tom acquired a machine and rearranged the assembly line to install the machine. The rearrangement resulted efficiency in production. The following ependitures were incurred" %urchase price of the machineAL5T inclusi'e, 12B 1,00:,000 $abor cost to install machine 1&0,000 %arts added in rearranging the assembly line 00,000 Cost of testing the machine 1(0,000 %roceeds from sale of samples produced from testing 12,000 Cost of training wor8er who will operate the machine 20,000 6hat total amount of the ependitures should be capitali*ed+ • •
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1,(:,000 b. 1,(:0,000 c. 1,00,000 d. 1,<,000 Cpar 1st % /24 5 ir8land Company acquired a tract of land containing an etractable natural resources. ir8land is required by the purchase contract to restore the land to a condition suitable for recreational use after it has etracted the natural resource. Geological sur'ey indicated that reco'erable reser'es will be 2,(00,000 tons and the etraction will be completed in ( years. 9ele'ant cost information follows" $and 4,000,000 3ploration cost 1,000,000 9estoration cost 1,(00,000 Credit?ad!usted ris8 free interest rate 10 6hat is the depletion charge per ton+Around %L factor to 2 decimalB a. .00 b. .&< c. &.4< d. &.0 Cpar 1st % /&1 ;n June &0, 2011, the statement of financial position of $ourdes Company reported the following balances" #achinery at cost (,000,000 5ccumulated depreciation 1,(00,000 The equipment was measured using the cost model and depreciated on a straight?line basis o'er a 10?year period. ;n -ecember &1, 2011, the directors of $ourdes decided to change the basis for measuring the machinery from the cost model to the re'aluation model. The machinery was re'alued to its fair 'alue of %,((0,000 with an epected remaining life of ( years. The entry to record the re'aluation using the proportional method will include a. 5 debit to machinery of %1,&00,000 b. 5 credit to accumulated depreciation of %2,(0,000 c. 5 debit to accumulated depreciation of %<00,000 d. 5 debit to accumulated depreciation of %1,<(0,000 Cpar 1st % /&2 C arla Company acquired a machine for %&,200,000 on 5ugust &1, 200:. The machine has (? year life, a %(00,000 residual 'alue, and was depreciated using the straight Oline method. ;n #ay & 1, 2011, a test for reco'erability re'eals that the epected net future undiscounted cash inflows related to the continued use and e'entual disposal of the machine total %1,(00,000. The machine7s fair 'alue on the same date is %1,&(0,000 with no residual 'alue. 6hat is the impairment loss to be recogni*ed in 2011+ a. &(,000 b.21(,000 c. 40,000 d. 0 Cpar 1st % /&& 5 )oyt Company started construction on a building on January 1, 2011 and completed construction on -ecember &1, 2011. )oyt had only two interest notes outstanding during the year and both of these notes were outstanding for all 12 months of 2011. The following information is a'ailable" 5'erage accumulated ependitures ,(00,000 3nding balance in construction in progress before capitali*ation of interest (,00,000 < note incurred specifically for the pro!ect 2,00,000 12 long term note ,000,000 6hat is the cost of the building on -ecember & 1, 2011+ a. (,<1(,000 b. (,00,000 c. (,:20,000 d. ,:1(,000 st Cpar 1 % /&0 C The following data were ta8en from the records of atcelynne Company" Cash sales 2,(00,000 =ales on account :(0,000 Cash purchases 1,<00,000 Credit purchases 00,000 3penses paid <(0,000 5ccounts recei'able?January 1 2(0,000 5ccounts recei'able?-ecember &1 &00,000 5ccounts payable?January 1 1(0,000 5ccounts payable ?-ecember &1 200,000 In'entory?January 1 (00,000 In'entory ?-ecember &1 00,000 5ccrued epenses?-ecember &1 20,000 %repaid epenses?-ecember &1 &0,000 3quipment?-ecember &1 1,000,000 Interest recei'ed 0,000 Interest recei'able?January 1 10,000 Interest recei'able?-ecember &1 20,000 ;n July 1, 2010, an equipment was acquired for %200,000. The terms are %(0,000 down and the balance to be paid after one year. The useful life of equipment is 10 years with no residual 'alue. 6hat is the net income under cash basis+ a. ((0,000 b. (<0,000 c. (0,000 d. 0,000 (4?1& p10<2 L ans. 5 =elected accounts, cash receipts and disbursement of 3mmyrelle Company for 2010 are as follows" -ecember &1 January 1 5ccounts recei'able 2(0,000 &00,000 otes recei'able P1(0,000 100,000 5ccounts payable 120,000 10,000
otes payable %repaid insurance
200,000 &0,000
1(0,000 10,000
Cash receipts for 2010 include" Cash sales (00,000 Collections of accounts recei'able, net of discounts of 1,:00,00 %0,000 0 Collections of notes recei'able :0,000 an8 loan?one year, dated -ecember &1, 2010M 100,000 %urchase returns and allowances 0,000 Cash disbursements for 2010 include" Cash purchases 1&0,000 %ayments of accounts payable, net of discounts of %20,000 1,(00,000 %ayments of notes payable 00,000 Insurance 220,000 ;ther epenses (0,000 =ales returns and allowances (0,000 4. Fnder accrual basis, what is amount should be reported as gross sales for 2010+ a. 2,20,000 b. 2,<0,000 c. 2,&<0,000 (0. Fnder accrual basis, what amount should be reported as gross purchases for 2010+ a. 1,40,000 b. 2,00,000 c. 2,10,000 0?( p10<: L ans. 5 a
d. 2,&:0,000 d. 1,:&0,000
