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Reviewer For Finals
Reviewer For Finals
PROBLEM A. Faith Merchandising Company maintains a 40% gross profit based on cost. Find out the
missing item below:
Sales P910,000
Purchases 566,000
Total selling expense 58,000
Freight out 10,000
Freight in 10,000
Purchase returns 20,000
Purchase discount (Question 1)?
Beginning inventory 180,000
Total administrative expense 45,000
Ending inventory 80,000
Net income (Question 2)?
Total operating expense (Question 3)?
ANSWERS:
1. 6,000
2. 363,000
3. 103,000
PROBLEM B. The goods of Believe Manufacturning Inc. are sold at 20% markup. The gross profit is
computed as P252,800. Total administrative expense is 45% of total selling expense. Raw materials
inventory decreased by 5% during the year. Total cost of raw materials purchased amounted to
P320,000.
Additional information:
Direct materials used 40% of cost of goods sold
Direct labor 40% of direct materials used
Factory Overhead applied at 110% of direct labor
Cost of goods manufactured 680,000
Work in process inventory increased by 10%
Finished goods inventory decreased by 20%
Freight in 22,750
Freight out 18,700
Advertising cost 42,900
Salesmen commissions 24,600
ANSWERS:
4. 38,790
5. 124,990
6. 127,810
7. 1,516,800
8. 379,200
9. RM = 1,184,000
WIP = 177,280
FG = 2,920,000
10. RM = 1,124,800
WIP = 195,008
FG = 2,336,000
11. 875,008
12. 3,600,000
PROBLEM C. The transactions below are related to Trust Advertising Corp. ‘s operations for 2014.
a. January 1. The company received P800,000 for total advertising services to She Company for a
period of 5 years.
c. October 1. Paid a total insurance expense for 2 policies with the following conditions:
Policy 1: P200,000; 1 year term
Policy 2: P180,000; 9 months term
d. December 1. A customer delivered a 90-day note amounting to P40,000. The annual interest
rate for a similar note is 12%.
e. The company has 10 employees, compensated at a weekly rate of P1,000. The employees are
working 5 days per week and paid every Friday. December 31, 2014 falls on a Wednesday.
ANSWERS:
13. 640,000
14. 110,000
15. 5,850 insurance expense
16. 270,400
17. 0
18. 172,250
19. 480,000
PROBLEM D. The petty cash fund of Will Company is maintained at an imprest balance of P30,000.
The following items are found during the petty cash count on January 10, 2015.
Petty cash vouchers (PCV) evidencing expenses:
PCV dated December 5 – December 29, 2014 P18,000
PCV dated January 1 – January 9 , 2015 3,000
IOUs 2,500
Bills 1,500
Coins 700
Check payable in order of petty cash cashier 4,000
PROBLEM E. Bank reconciliation of Roi Co. for the month of November 2014.
Balance per ledger P173,800
Outstanding checks 9,500
Credit memo 14,000
Debit memo 520
Deposit in transit 22,860
ANSWERS:
24. 184,420
25. 180,780
26. 6,980 (REFER TO ADJUSTMENTS ON THE PART OF THE BOOK BALANCE)