Polytechnic University of the Philippines COLLEGE OF ACCOUNTANCY Sta. Mesa, Manila Special Qualifying Examination for Freshmen Fundamental Accounting, Parts 1 and 2 Multiple Choice Problems. Choose the letter of the correct amount. Each item is credited at 2.5 points each. 31
The accountant was not able to adjust the following: P 200 of service revenue was not accrued; P 300 of unearned
revenue had been earned, but no entry was made. What should be the amount of net income if the incorrect net income was P 19,000? A
P 19,250
C
P 19,500
B
P 19,410
D
P 18,300
32
A trial balance has debit and credit totals of P 7,000. The purchase of P 4,000 of office supplies on account was
omitted from the original journal entries. After recording and posting this transaction, the new debit and credit totals for the trial balance would be A
P 11,000
C
P 9,000
B
P 7,000
D
P 3,000
33
From this list of account balances, calculate the total credit column for the post-closing trial balance: Cash, P 15,000;
Accounts Receivable, P 3,000; Prepaid Rent, P 2,000; Building, P 30,000; Accumulated Depreciation, P 13,000; Accounts Payable, P 6,000; Unearned Revenue, P 1,000; Jiyeon Park, Capital, P 30,000. A
P 69,000
C
P 45,000
B
P 50,000
D
P 20,000
34
The Balance Sheet of You Are My World Company shows that capital is P 540,000 540,000 that is equal to 1/3 of its total
assets. How much are the total liabilities? A
P 180,000
C
P 1,080,000
B
P 720,000
D
P 1,620,000
35
The assets of Sharmaine Company amounted to P 810,000 on December 31, 2008, but increased to P 1,305,000 by
December 31, 2009. During the same period, liabilities increased by P 270,000. Owner’s equity on December 31, 2008 amounted to P 495,000. What was the amount of the Owner’s Equity on December 31, 2009?
A
P 585,000
C
P 1,035,000
B
P 720,000
D
P 1,080,000
36
Hillsong Company has P 60,000 in revenues, P 132,000 in expenses, P 36,000 in owner investment, P 9,000 in owner’s
withdrawals, and P 45,000 in liabilities paid off. Owner’s equity changes by
A
+ P 48,000
C
+ P 36,000
B
- P 45,000
D
- P 3,000
37
LPCA Company purchased P 1,450,000 of land with a P 500,000 cash down payment and the balance taken as a note
payable. How much did the total assets change? A
+ P 1,450,000
C
- P 930,000
B
+ P 950,000
D
+ P 500,000 Special Qualifying Examination for First Year | 1
38
Coleen Garcia joined a partnership by contributing the following: cash, P 20,000; accounts receivable, P 4,000; land, P
240,000 at cost and P 400,000 at fair value; and accounts payable, P 16,000. What will be the initial amount re corded in Coleen’s capital account?
A
P 408,000
C
P 424,000
B
P 248,000
D
P 20,000
39
Troy and Lana are combining their separate businesses to form a partnership. Cash and non-cash assets are to be
contributed for a total capital of P 600,000. The non-cash assets to be contributed and the liabilities to be assumed are as follows. Troy
Lana
Book Value
Fair Market Value
P 40,000
P 40,000
Merchandise Inventory P 60,000 Equipment Accounts Payable
Accounts Receivable
Book Value
Fair Market Value
P 100,000
P 40,000
P 50,000
P 120,000
P 90,000
P 80,000
P 100,000
P 30,000
P 30,000
P 20,000
P 20,000
The partners’ capital accounts are to be equal after all the contributions of assets and the assumption of liabilities. The
amount of cash to be contributed by Troy is A
P 200,000
C
P 100,000
B
P 300,000
D
P 210,000
40
Using the information in item 39, the total assets of the partnership is
A
P 630,000
C
P 360,000
B
P 650,000
D
P 340,000
41
Sunny and Jessica are partners who share profits equally and losses in a 2:1 ratio. If they have beginning capital
balances of P 120,000 and P 118,000 respectively, made no additional investments nor withdrawals, and suffered an unprofitable year with a loss of P 48,000, their capital balances will be Sunny
Jessica
A
P 40,000
P 30,000
B
120,000
118,000
C
88,000
102,000
D
152,000
134,000
42
Bucao, Basco, and Blanco share profits and losses in the ratio of 2:3:5 respectively. Their partnership realized a profit
of P 1,800,000 during the year. Bucao, with a beginning capital balance of P 1,000,000, withdrew P 200,000 during the year. Bucao’s ending capital balance is
A
P 1,000,000
C
P 560,000
B
P 1,160,000
D
P 1,400,000
43
Darlene Zschech’s interest in the partnership is P 110,000. Joel Houston buys Darlene’s interest for P 120,000. How
much is the capital balance of Joel after the purchase? A
P 140,000
C
P 110,000
B
P 120,000
D
P 130,000
44
CM and CB formed a partnership and have capital balances of P 100,000 and P 200,000 respectively. If they agreed to
admit CJ into the partnership, how much will CJ have to invest to have a 1/4 interest? Special Qualifying Examination for First Year | 2
A
P 75,000
C
P 200,000
B
P 50,000
D
P 100,000
45
Daza, Diaz, and Ditas are partners with capital balances of P 80,000, P 120,000, and P 160,000 respectively. They
share profits and losses in the r atio of 30:40:30. Diaz decides to withdraw from the partnership. Diaz receives P 160,000 in the settlement of his interest. If the bonus method is used, what is the capital balance of Ditas immediately after the retirement of Diaz? A
P 140,000
C
P 180,000
B
P 160,000
46
Using the information in item 45, and assuming bonus method is used, what is the total partnership capital
D
P 200,000
immediately after the retirement if Diaz? A
P 280,000
C
P 200,000
B
P 240,000
D
P 320,000
47
A partner retired from a partnership and received an amount which exceeds his capital interest by P 40,000. The
remaining partners have profit and loss ratio of 3:2. Under the bonus method, the excess payment will be shared by the remaining partners as A
P 48,000 and P 32,000
C
P 36,000 and P 24,000
B
P 12,000 and P 8,000
D
P 24,000 and P 16,000
48
Kim, Coleen, and Sue are partners who share profits and losses in the ratio of 2:3:5. The partners have decided to
liquidate the partnership. Their capital accounts show the following balances: Kim, P 60,000 credit; Coleen, P 90,000 credit; and Sue, P 30,000 debit after the sale of non-cash assets a nd the payment of liabilities. What is the amount of cash available for distribution? A
P 120,000
C
P 160,000
B
P 180,000
D
P 150,000
49
Hunger Games Corporation was organized on January 1, 2009 with authorized capital of 100,000 ordinary shares, P 20
par value. During 2009, Hunger Games Corporation had the following transactions affecting the shareholders’ equity: January
10, issued 25,000 shares at P 22 per share; March 25, issued 1,000 shares for legal services when the fair value was P 24 per share; September 30, issued 5,000 shares for an equipment when the value was P 26 per share. How much is the balance of the Ordinary Share Capital account as of September 30? A
P 700,000
C
P 634,000
B
P 620,000
D
P 704,000
50
Using the information in item 49, what amount should be reported as Premium on Ordinary Shares?
A
P 84,000
C
P 50,000
B
P 54,000
D
P 34,000
51
Dream High Corporation has the following classes of share capital outstanding as of December 31, 2009: Ordinary
Share Capital, P 20 par value, 20,000 shares outstanding; 6% Preference Share Capital, P 100 par value, cumulative, 2,000 shares outstanding. No dividends were paid on preference shares for 2007 and 2008. On December 31, 2009, a total cash dividend of P 200,000 was declared. How much dividends would be received by ordinary shareholders? A
P
0
C
P 176,000
B
P 188,000
D
P 164,000 Special Qualifying Examination for First Year | 3
52
Using the information in item 51, how much dividends will be received by preference shareholders?
A
P 200,000
C
P 12,000
B
P 24,000
D
P 36,000
53
On April 8, 2009, Simsimi Corporation declared and issued 25% ordinary share capital dividend. Prior to this date,
Simsimi Corporation had 20,000 shares of P 2 par value ordinary share that were both issued and outstanding. The carrying value of each share of stock is P 20 at the time of declaration of the dividend. As a result of the stock dividend, how much will be debited to Retained Earnings? A
P 40,000
C
P 100,000
B
P 10,000
D
P 75,000
54
Red Corporation and Yellow Corporation have Preference Share Capital outstanding. Red Corporation has issued
3,000 shares of 5% Preference Share Capital, par value P 100. Yellow Corporation has issued 5,000 shares of 10% Preference Share Capital, par value P 120. What is the dividend per share for the Preference Share Capital for the two corporations? A
P 5 for Red, P12 for Yellow
C
P 5 for Red, P 10 for Yellow
B
P 100 for Red, P 120 for Yellow
D
P 5 for Red, P 120 for Yellow
55
White Rock Resort Corporation has 400 shares of 6% preference share capital outstanding, par value is P 50 per share
and market value is P 80 per share. The amount of cash dividends for the year on this share capital would be A
P 1,200
C
P 2,400
B
P
D
P 1,920
56
Club Manila East Corporation has 6,000 shares of P 8 non-cumulative preference shares outstanding and 12,000
12
ordinary shares outstanding. At the end of the year, cash dividends of P 180,000 were declared. How much dividends were paid on both classes of share capital? A
P 48,000 and P 132,000
C
P 90,000 and P 90,000
B
P 60,000 and P 120,000
D
none of the given
57
Using the information in item 56, what is the dividend per share on both classes of share capital?
A
P 10 and P 10
C
P 15 and P 2.50
B
P 8 and P 11
D
none of the given
58
Park Min-Young Corporation was organized on January 1, 2009 with authorized capital of 100,000 shares of P 10 par
value ordinary share capital. During 2009, Park Min-Young Corporation had the following tra nsactions affecting shareholders’ equity: January 7, issued 40,000 shares at 12 per share; December 2, purchased 6,000 treasury shares at P 13 per share. Profit for the year amounted to P 300,000. What is the amount of shareholders’ equity as of December 3 1, 2009?
A
P 702,000
C
P 640,000
B
P 720,000
D
P 708,00
Note: This was the qualifying exam taken by s tudents last April 15, 2011. This was only re-typed and only the names of companies were changed. No amounts were changed in each problem.
Special Qualifying Examination for First Year | 4
