eas = INSTRUCTIONS: Select the correct answer for each of the following questions. Mark only one answer for each stem by writing a VERTICAL LINE corresponding to the letter of your choice on the answer shect pruvided. STRICTLY NO ERASURES ALLOWED, Use Pencil No. 1 or No. 2 only. PROBLEM1 Dunng your audit of the records of the BSY Corporation for the year ended December 31, 2015, the followang facts were disclosed; Raw materials inventory, 1/1/2015 P 720,200 Raw materials purchases 5,232,800 Direct labor 6,300,000 Manufacturing overhead applied (150% of direct labor) 9,450,000 Kinished poods inventory, 1/1/2015 1,240,000 Selling expenses, 8,112,800 Administrative expenses 7,377,200 ‘Your examination disclosed the following additional information: a. Purchases of raw materials Month Units Unit Price Amount Januar; ~ February 55,000 P1776 P 976,800 March - April 45,000 20.00 900,000 May ~ June 25,000 19.60 490,000 July — August 35,000 20.00 700,000 September - October 45,000 20.40 918,000 November—December 60,000 20.80 —1.248,000 265,000 B5,232.800 b. Data with respect to quantities are as follows: . Laits Explanation Lass 1231s Raw materials = 35,000 2 Work in process (80% completed) : 25,000 Finushed goods 15,000 40,000 ¥ Sales, 205,000 units <. Raw materials are issued at the beginning of the manufacturing process. During the yest, no‘ returns, spoilage, or wastage occurred. Each unit of finished goods contains one unit of raw materials. Inventories are stated at cost as follows: © Raw materials — according to the FIFO method production during the period Direct labor — at an average rate determined by correlating total direct labor cost with effective * Masufacturing ovechead — at an applied rate of 150% of direct labor cost Based on the above und the result of your audit, answer the following: 1. The ra¥ materals inventory as of December 31, 2015 is a P1976,000 +b, P1,352,000 ya P936,000 2. The work in process inventory as of December 31, 2015 is a. 1,780,000 b. PL751,294 c. P1,885,565 3. The finshed poods inventory as of December 31, 2015 is a 3,352,000 b. P3,334,000 cc. P3,553,130 A. The cost of goods sold for the year ended December 31, 2015 is ‘a. 16,897,000 be °P 16,568,304 . ‘P15,857,000 f a. P897,800 Y P1,776,000 PS2e4se8 4. P16,875,000ERO ACE SAPS Durst Pre-board Examinauons ~ October 2014 batch Page 2 5. Toascertain whether inv a cera wh ‘ inventories included in the balance sheet aves cents shipping cutoff procedures, brain confirmauon of pledged inventories, © Observe physical inventory counts, 4. Perform an an: Physically exist, a CPA will ordinanly: aly e review of the relationship of the inv tory balance to recent sales PROBLEM 2 The management of PLDT C reese dimen’ of PLDT Compary ha engage yout ai in the rpm of yr end December Units During the month og pout told that on November 30, the correct inventory level was 1514000 consignment to Metalee Co gsc oembes sales totalled 50,000 units including 25,000 units shipped on Sold 12,000 vunrte neal ee anPanrs A letter received from Meralco indicates that as of December 31, had was still tryin A review of the December purchase orders, to to sell the remainde various suppliers, shows the followinge iro Date of "7 =f Purchase | Invoice Date Date = Order afm Date | ___ Shipped Received 12/02/2014 "01/03/2013 T 01/02/2015 61/03/2015 12/11/2014 0170373015” 12/13/2014 01/02/2015 12/33/301 13/26/2014 2/24/2014 77 01/02/2015 , Shipping | | Desunanon K 1 Desamanee a j (12/38/2019 01/20/3015" 12/31/2014 710/205 | Determine the number of units which should be included in the inventory as of December 31, 2014. a. 133,000 b. 126,000 . 20153,000 Came Which of the following audit procedures probably would provide the most reliable evidence concerning the entity tion of yaluation related to mventories? a. Confirm inventones held by consignees as of the balance sheet date. Perform inventory cut-off procedures. Recompute the unit cost assigned to the year-end inventory. Inspect the open purchase order file for significant commitments that should be considered for disclosure. PROBLEM 3 Your audit of trading debt secu ‘ended June 30, 2015: ies of JJS CORP. disclosed the following entries during the Bscal year Date Particulars: Debit Giedit Nov 01 ‘Acquired 10 shares of P10,000 face value bonds at 102 plus accrued interest _ P108,000 Jan OL Interest received o.000 Mar 31 Proceeds from. sale of P30,000 par value bonds including accrued interest. 31,000 REQUIRED: : ‘ 8, The nominal rate for this bond is e i a. 18% b.9% ep 4. 16.67% 9, How much is the gain ot loss on sale of investment on March 31, 20157 1, PAO gain b.P275 toss. Gs PI.8SD loss (Br770 tom 10. The correct amount of intexest income for the fiscal year ended June 30, 201518; a. P12,000 eA 9,000 ‘e, P10,650 gi P7500PROBLEM 4 The following information pertains to PRESTIGE, CORPORATION PRESTIGE CORPORATION BANK RECONCILIATION Sa NOVEMBER 30, 2015 lance per bank statement Less: Outstanding checks shee: No. 7645 9,000 7688 12,000 7654 8,800 761 325 33,023) . 338,475 ‘Add: Deposit in transi 20,600 Bank service charge «1400 __22, Balance per books - 300.875 CHECK REGISTER December Vouchers 31, 2015 Payee No. Payable Discount Cash. Date Asia Corp, 7662 720,000 1,000 19,000 Dec. 1 Promil Trading 7663 2,400 2,400 3 Ariel Enterprises 7664 1,875 1,875 7 Masapana Corp. 7665 9,000 9,000 12. Payroll 7666 73,000 73,000, 15. Enfagrow Co. 7667 8,000 160 7,840 16 Tide Corp. 7668 13,700 274 13,426 18 Lactomil, Ine. 7669 6,000 6,000 21 Petty cash fund 7670 7,000 7,000 22. Payroll 7671 84,034 84,034 28 224,975 TT RA55TS Bene Ott, Banco De Oro Petiod: November 50, 2015 ~ December 31, 2015 Date Description Chk.No. Debit Credit Balance last statement 371,500 Dec. 1 Cash deposit 20,600 1 Check issued 7648 12,0007 $23,575 4 Check issued 7662 19,000, 0 ait 4 Check issued 7661 3,225 / oO! F3,cas 5 Check deposit 2,000 F sph je 6 Cheek issued 7663 2,400 8 Check deposit 23,000 10 Check issued 7664 1,875 15. Encashment 7666 73,000 22. Eneashment 1670 7,000 28 Fneashment 7671 84,034 29 Debit memo - service charge 1,000 29 Credit memo - interest neste 1,850 Te A physical count ofcsh conducted on December 31,2015 showed a blance of 52,000 se Required: 11. What is the adjusted cash balance as of November 30, 2015? ee te a. P359,075 , P371,500, (ce P0075 a P374,600 52,078 12, What is the unadjusted book balance of December 31, 2015? Ve ‘a P273,900, b. P 200,500 e. P.221,900 ¢ ‘a. 272,500 . 13, What is the correct amount of checks outstanding as of December 31, 20157 ‘a. P 54,500 ‘b, 236,700, €. P36,266 { d. 954,066