Answer Key:

Part I: TRUE or FALSE

1. F
2. F
3. F
4. T
5. T
6. F
7. T
8. F
9. F
10. T
11. F
12. T
13. F
14. T
15. T
16. F
17. F
18. T
19. T
20. T

Part II: MULTIPLE CHOICE

1. B

2. D

3. A

4. D

5. C
6. D
7. D
8. C
9. A
10. D
11. B
12. C
13. A
14. C
15. C
16. D
17. D
Solution:
Cash 14,000
Equipment 11,000
Supplies on hand 700
Accounts Receivable 5,000
Total Assets P 30,700

18. A
Solution:
Services performed 45,000
Insurance Expenses (3,000)
Miscellaneous Expenses (900)
Rent Expenses (2,500)
Salaries Expenses (19,000)
Supplies Expenses (1,200)
Net Income P 18,400
 19. C
Solution:
EQUITY
P 8,400 (beg bal)
15,000 (net income)
(withdraw) 6,000 2,600 (investment)
20,000 (end bal)
20. B
Solution:
Cash 14,000
Supplies on hand 700
Accounts Receivable 5,000
Total Current Assets P 19,700

Part III: SUPPLY THE ANSWER

1. 500 000

2. 190 000

3. 440 000

4. (140 000) LOSS

5. 140 000

6. 0

7. 925 000

8. 17 800

9. 2 430 000

10. NONE

11. 48,000 Profit

12. 6,000 Loss

13. 123,000 Investment

14. 275,800

15. 207,700

16. 24,000

17. 56,000

18. 29,300

19. 40,700 Profit

20. 185,000

21. 190,000

22. 300,000
 23.
Payment Date March 1 March 31 June 2 October 10
List Price P 140,000 P 110,000 P 240,000 P 300,000
Trade Discount ( 84,000 ) ( 48,400 ) ( 75,840 ) ( 156,000 )
Invoice Price P 56,000 P 61,600 P 164,160 P 144,000
Returns ( 4,500 ) ( 5,600 ) ( 2,500 ) ( 1,200 )
Freight Cost 2,000 - - ( 2,500 )
Amount Due P 53,500 P 56,600 P 158,160 P 139,000
Discount X 99% X 99% X 98% -
Payment P 52,965 P 56,034 P 154,997 P 139,000

24.

BOOK BANK
Unadjusted Balance P 9,650,000 P 12,000,000
Debit memo for June ( 25,000 ) -
Deposit in Transit - 500,000
Outstanding Checks - ( 1,000,000 )
Proceeds of bank loan 1,500,000 -
Proceeds from collections 500,000 -
Collection fee ( 20,000 ) -
Bank error - ( 45,000 )
DAUD ( 150,000 ) -
Adjusted Balance P 11,455,000 P 11,455,000

25. 30,000

26. 25,000

27. 15,000

28. 50,000

29. 80,000

30. 70,000

31. 120,000

Raw Materials, beginning P 10,000

Net Purchases of raw materials 20,000
Raw Materials Available for use xxx P 30,000
Raw materials, ending ( 5,000 )
Raw Materials Used xxx P 25,000
Direct Labor Costs xxx 15,000
Factory Overhead Cost 10,000
Total Manufacturing Cost xxx P 50,000
Work in process, beginning 30,000
Total Goods put into process xxx P 80,000
Work in process, ending ( 10,000 )
Cost of Goods Manufactured xxx P 70,000
Finished Goods, beginning 50,000
Total Goods Available for Sale xxx P 120,000
Finished Goods, ending ( 20,000 )
Cost of Goods Sold P 100,000
32.
Accounts receivable, 12/31/2012 P 200,000
Sales for 2013 (60% credit sales) 150,000
Collections from customers for 2013 excluding recoveries ( 85,000 )
Accounts written off, 10/21/2013 ( 10,000 )
Collection of accounts written off in prior years -
Estimated uncollectible receivables per aging of receivables at
12/31/2013 ( 20,000 )
Accounts Receivable, 12/31/2013 P 235,000
 33.
TANG (60%) TENG (40%)
Capital Account after Contributions P 300,000 P 200,000
Asset Contributions:
Accounts Receivable 50,000 60,000
Inventory 35,000 40,000
Equipment 40,000 -
Land 120,000 180,000
Liabilities Assumed:
Accounts Payable 50,000 70,000
Bonds Payable 30,000 40,000
CASH TO BE CONTRIBUTED P 135,000 P 30,000
34.

Cash P 165,000
Accounts Receivable 110,000
Inventory 75,000
Equipment 40,000
Land 300,000
TOTAL ASSETS P 690,000

35.
TIU ARANA CRUZ
Capital before liquidation 350,000 200,000 100,000
Gain on Realization
75,000 50,000 25,000
(P150,000 X ratio)
Cash Distribution to Partner 425,000 250,000 125,000
36.
Capital of ARANA before liquidation 200,000
Cash distribution to ARANA 50,000
Share in loss on realization 150,000
÷ 2/6
Total loss on realization 450,000
Book value of Non-cash assets 800,000
Cash from realization 350,000
Cash balance before liquidation 200,000
Payment of liabilities ( 150,000 )
Cash available for distribution to partners P 400,000

SHARE RETAINED TREASURY

APIC
CAPITAL EARNINGS SHARES
December 31, 2011 (beg) xxx xxx xxx xxx
Sale of 1,000 Treasury shares
- P 3,000 - ( P 12,000 )
at P15
Sale of 1,000 Treasury shares
- P 6,000 - ( P 12,000 )
at P18
Net Profit for 2012 - - P 80,000 -
Net Profit for 2013 - - P 98,000 -
Issuance of Shares at P18 P 15,000 P 12,000 - -
Dividends for 2012 - - ( P 22,000 ) -
Dividends for 2013 - - ( P 35,000 ) -
December 31, 2013 (end) P 215,000 P 101,000 P 221,000 P0
37. SHARE CAPITAL = P 200,000
38. APIC = P 80,000
39. RETAINED EARNINGS = P 100,000

40. TREASURY SHARES = P 24,000

41.
YENG GUIAO ALMAZAN NUYLES
Capital after retirement 23,400 37,600 39,000
Capital before retirement 25,000 40,000 35,000
Share in bonus to NUYLES ( 1,600 ) ( 2,400 ) 4,000
÷ 4,000 ÷ 4,000
Ratio of remaining partners 40% 60%
 40/60 = 2/3

2:3:5
42. P15,000

43. P20,000

44. P100,000

45. P82,500

46. P17,640

47. P164,640

48. 0

49. P288,000

50. P144,500