QUIZ 1 - CASH AND CASH EQUIVALENTS

ABC Company
Partial Balance Sheet
As of December 31, 2019
Current Assets:
CASH AND CASH EQUIVALENTS
CASH HELD AT COMPENSATING BALANCE
SHORT-TERM INVESTMENTS
TRADE AND OTHER RECEIVABLES
Noncurrent Assets:
LONG-TERM INVESTMENT
OTHER NON-CURRENT ASSET
Current Liability:
TRADE AND OTHER PAYABLES

Notes to Financial Statements:

Note 1: Cash and Cash Equivalents
CASH ON HAND
CASH IN BANK-BPI
CASH IN BANK-BDO
INVESTMENT IN COMMERCIAL PAPERS
PETTY CASH FUND
TOTAL
Note 2: Trade and Other Receivables:
ACCOUNTS RECEIVABLE
ADVANCES TO EMPLOYEES
RECEIVABLE FROM PETTY CASHIER
TOTAL
Note 3: Trade and Other Payables:
CASH IN BANK-RCBC (OVERDRAFT)
ACCOUNTS PAYABLE
TOTAL

Additional Information:

1) Accounts Receivable 50,000

Cash on Hand

2) Cash at Compensating Balance amounting to 100,000

Cash in Bank - BPI 200,000

Accounts Payable
 (700k - 100k = 600k + 200k = 800k)

3) Cash in Bank - RCBC (Overdraft) amounting to 150,000

4) Cash in Bank - BDO amounting to 1,000,000

5) Cash in Bank - PNB amounting to 1,200,000

6) Cash in Bank - Rural Bank in Florida

Loss on Writedown Bank Deposit 280,000

Cash in Bank - Rural Bank in Florida
#
Cash Enclosed Bank - Rural Bank in Florida 500,000
Cash in Bank - Rural Bank in Florida

7) Investment in Commerical Papers amounting to 500,000

8) Investment in SMC Ordinary Shares 27,000

Unrealized Gain - OCI

9) Currencies and Coins 3,300

Gasoline - Service Vehicle 600
Change Oil-Service Vehicle 1,500
Total 5,400 (Petty Cash Fund)

Petty Cash Fund 10,000

Currencies and Coins 3,300
Unreplenished Vouchers 4,500
Employee Check 2,000 9,800
Receivable from Petty Cashier 200
2,380,400
100,000
1,200,000
52,200

327,000
500,000

350,000

75,000
800,000
1,000,000
500,000
5,400
2,380,400

50,000
2,000
200
52,200

150,000
200,000
350,000

Note 2: Trade and Other Receivables

50,000 Note 1: Cash and Cash Equivalents

Under Current Assets

Note 1: Cash and Cash Equivalents

200,000 Note 3: Trade and Other Payables
 Note 3: Trade and Other Payables

Note 1: Cash and Cash Equivalents

Under Current Assets (Short-Term Investments)

780,000 - 500,000
280,000 (appears as other expense)

Under Noncurrent Assets:

500,000 Other Noncurrent Asset

Note 1: Cash and Cash Equivalent

Under Noncurrent Assets:

27,000 part of Long-Term Investments worth 327,000

Note 1: Cash and Cash Equivalents

Under Petty Cash Fund

Note 2: Trade and Other Receivables

Under Receivable from Petty Cashier
 QUIZ 2 - CASH AND CASH EQUIVALENTS

ABC Company
Partial Balance Sheet
As of December 31, 2019
Current Assets:
CASH AND CASH EQUIVALENTS
TRADE AND OTHER RECEIVABLES
Noncurrent Assets:
LONG-TERM INVESTMENT
OTHER NON-CURRENT ASSET
Current Liability:
TRADE AND OTHER PAYABLES

Note 1: Cash and Cash Equivalents

CASH IN BANK-PNB (SAVINGS ACCOUNT)
CASH IN BANK-UCPB (PAYROLL ACCOUNT)
MONEY MARKET PLACEMENTS
TOTAL
Note 2: Trade and Other Receivables
ACCOUNTS RECEIVABLE
NOTES RECEIVABLE
ADVANCES TO EMPLOYEES
TOTAL
Note 3: Long-Term Investment
CASH IN BANK-PNB (TIME DEPOSIT)
CASH IN BANK-RCBC (TIME DEPOSIT)
TOTAL
Note 4: Trade and Other Payables
ACCOUNTS PAYABLE
ADVANCES FROM CUSTOMERS
TOTAL

Additional Information:
1)
A Cash in Bank - PNB (Checking Account) 50,000
Accounts Payable
#
B Accounts Receivable
Cash in Bank - PNB (Checking Account) 20,000
#
C Sales 150,000
Cash in Bank - PNB (Checking Account)
#
 Cash in Bank - PNB (Savings Account) amounting to 340,000 (to offset 60,000 from checking account)
(400k - 60k)
D Sales 80,000
Advances from Customers
#

2) Cash in Bank - PNB (Time Deposit) amounting to 700,000

3) Cash in Bank - RCBC (Time Deposit) amounting to 1,500,000

4) Cash in Bank - Bank of America (Foreign Bank) amounting to 2,000,0000

5) Money Market Placements amounting to 300,000

6) Promissory Note amounting to 100,000 (notes receivable)

7) Advances to Employees amounting to 20,000

TS

990,000
140,000

2,200,000
2,000,000

130,000

340,000
350,000
300,000
990,000

20,000
100,000
20,000
140,000

700,000
1,500,000
2,200,000

50,000
80,000
130,000

50,000 Note 4: Trade and Other Payables

Note 2: Trade and Other Receivables

20,000

150,000
0,000 from checking account) Note 1: Cash and Cash Equivalents

Note 4: Trade and Other Payables

80,000

Under Noncurrent Assets: Long-Term Investment

Under Noncurrent Assets: Long-Term Investment

Under Noncurrent Assets: Other Noncurrent Asset

Note 1: Cash and Cash Equivalents

Note 2: Trade and Other Receivables

Note 2: Trade and Other Receivablees

 QUIZ - BANK RECONCILIATION
1A Adjusting Entries
#2761 1) CASH IN BANK 1,800 Solutions
SALES 1,800
8,600 - 6800
#
#090 2) CASH IN BANK 14,000
ACCOUNTS PAYABLE 14,000
#
#174 3) NO ADJUSTMENT
#
#176 4) CASH IN BANK 9,000
OFFICE EQUIPMENT 9,000
32,000 - 23,000
#
CM - LOAN 5) CASH IN BANK 470,000
BANK SERVICE CHARGE 30,000
LOAN PAYABLE 500,000
#
DM - NSF 6) NO ADJUSTMENT
#
PETTY CASH 7) PETTY CASH FUND 4,400
EXPENSES 5,600
CASH IN BANK 10,000
#
TRAVEL FUND 8) TRAVEL FUND 8,000
ADVANCES TO EMPLOYEES 12,000
CASH IN BANK 20,000
#
UNRECORDED 9) CASH IN BANK 35,000
CHECK SALES 35,000
#
 1B
Solutions 10) Deposit in Transit 95,100
11) Outstanding Checks 69,000
8,600 - 6800
12) Adjusted Book/Bank Balance 576,100
13) Unadjusted Book Balance 76,300

1B SOLUTIONS
10) Deposit in Transit
Currencies and Coins 45,000
32,000 - 23,000
#2761 8,600
#77531 6,500
Unrecorded 35,000
Total 95,100
11) Outstanding Checks
#174 17,000
#176 23,000
#178 29,000
Total 69,000
*12) Adjusted Book/Bank Balance
Bank Balance 550,000
Add: Deposit in Transit 95,100
645,100
Less: Outstanding Checks 69,000
Adjusted Bank 576,100

*13) Unadjusted Book Balance

Book Balance 76,300 (work back)
Add: Credit Memo - Loan 470,000
Understated Receipt 1,800
Overstated Disbursemen 9,000
Stop Payment 14,000
Unrecorded Check 35,000 529,800
Total 606,100
Less: Petty Cash Fund 10,000
Travel Fund 20,000 30,000
Adjusted Book 576,100
 QUIZ 1 - PROOF OF CASH
2A Beginning Balance Receipts Disbursements
A Increase (+) Decrease (-)
B Decrease (-) Increase (+)
C Increase (+) Increase (+)
D Decrease (-) Decrease (-)
E Increase (+)
F Decrease (-)
G Increase (+)
H Decrease (-)
I Increase (+)
J Decrease (-)
K Increase (+) Increase (+)
L Decrease (-) Decrease (-)
M NO EFFECT
Answers: Answers:
E 1) July Credit Memo - Note Collected A 6)
D 2) June Debit Memo - Service Charge E 7)
G 3) July Debit Memo - Service Charge D 8)
G 4) July Debit Memo - NSF Check G 9)
H 5) Book Error H 10)

SOLUTIONS
2B PUT DECIMALS! Deposit in Transit
11) 20,857.00 Beginning 515.4
12) 20,713.90 Add: Cash Receipts
13) 658.50 Book Debits 20,857
14) 23, 886.83 Less: CM - June 0 20,857
15) 23,993.50 21,372.40
16) 703.83 Total Checks Credited by Bank
17) 5,600.32 Bank Receipts 21,212.40
18) 21,355.50 Credit Memo -498.50
19) 24,008.93 12) 20,713.90
20) 2,946.89 Outstanding Checks
Beginning
Add: Book Debit (Receipts) 23,909.83
Less: Debit Memos
Bank Service Charge -5.00
Overstatement Disb. -18.00
23,886.83

Total Checks Paid by Bank

Bank Credits 24,128.10
Less: Debit Memos
Bank Service Charge
July -4.00
NSF Checks - July -118.10
Overstated Debit -12.50
15) 23,993.50
 SOL
Disbursements Ending Balance 2B June
Balance per Book 5,605.32
Add: Credit Memo
Increase (+) Note Collected (Jul
Decrease (-) Less: Debit Memo
Increase (+) Service Charge
Decrease(-) June -5.00
Increase (+) Decrease(-) July
Decrease (-) Increase (+) NSF Check
Increase (+) June
Decrease(-) July
Increase (+) Less: Book Error
Decrease (-) Overstatement Dis
Adjusted Book Balance 5,600.32

Deposit in Transit - June 30 June

Deposit in Transit - July 31 Balance per Bank 5,895.42
Outstanding Check - June 30 Add: Deposit in Transit
Outstanding Check - July 31 June 515.40
Bank Error July
Less: Outstanding Checks
June -810.50
LUTIONS July
Less: Bank Error
Overstated Debit
Adjusted Bank Balance 5,600.32

11)

810.50

23,886.83 14)
24,697.33
 SOLUTIONS
June Receipts Disbursements July
5,605.32 20,857.00 23,909.83 2,552.49
498.50 498.50

-5.00 -5.00
4.00 -4.00

118.10 -118.10

-18.00 18.00
5,600.32 21,355.50 24,008.93 2,946.89

June Receipts Disbursements July

5,895.42 21,212.40 24,128.10 2,552.49
498.50
515.40 -515.40
13) 658.50 658.50

-810.50 -810.50
16) 703.83 -703.83

-12.50 12.50
5,600.32 21,355.50 24,008.93 2,946.89
 QUIZ 2 - PROOF OF CASH
3A Beginning Balance Receipts Disbursements
A Increase (+) Decrease (-)
B Decrease (-) Increase (+)
C Increase (+) Increase (+)
D Decrease (-) Decrease (-)
E Increase (+)
F Decrease (-)
G Increase (+)
H Decrease (-)
I Increase (+)
J Decrease (-)
K Increase (+) Increase (+)
L Decrease (-) Decrease (-)
M NO EFFECT
Answers: Answers:
G. 25 1) August Debit Memo - Service Charge E. 50,830 6)
G. 245 2) August Debit Memo - NSF Check D. 9,470 7)
F. 90 3) Book Error - Receipts G. 25,010 8)
H. 20,000 4) Bank Error - Disbursements A. 260 9)
A. 2,500 5) Deposits in Transit - July 31

SOLUTIONS
3B Deposit in Transit
11) 148,900 Add: Cash Receipts 148,990
12) 100,570 Less: Overstated Receipts -90 148,900
13) 50,830 11) 148,900
14) 115,000 Total Checks Credited by Bank
15) 99,730 Bank Receipts 100,830
16) 25,010 Bank Errors -260
17) 38,020 12) 100,570
18) 148,900
19) 115,270 Outstanding Checks
20) 71,650 Add: Book Credits 135,000
Less: Errors
Undelivered Check -20,000 115,000
14) 115,000
Total Checks Paid by Bank
Bank Credits 100,000
Less: Debit Memos
Bank Service Char -25
NSF Checks -245
15) 99,730
 SOLUTIONS
Ending Balance 3B June
Balance per Book 38,020
Less: Debit Memo
Service Charge
July
Increase (+) August
Decrease(-) NSF Check
Decrease(-) August
Increase (+) Less: Book Error
Increase (+) Overstatement Rec.
Decrease(-) Overstatement Dis
Adjusted Book Balance 38,020

June
Balance per Bank 45,000
Deposit in Transit - August 31 Add: Deposit in Transit
Outstanding Check - July 31 July 2,500
Outstanding Check - August 31 August
Bank Error - Disbursement Less: Outstanding Checks
July -9,740
August
Less: Bank Error
Bank Error - Disb. 260
Adjusted Bank Balance 38,020
SOLUTIONS
Receipts Disbursements July
148,990 135,000 45,830

25 -25

245 -245

-90 -90
-20,000 20,000
148,900 115,270 71,650

Receipts Disbursements July

100,830 100,000 45,830

-2,500
13) 50,830 50,830

-9,740
16) 25,010 -25,010

-260
148,900 115,270 71,650
 QUIZ - ACCOUNTS RECEIVABLE, DOUBTFUL ACCOUNTS
PRE-TEST ANSWERS
6) TRADE AND OTHER RECEIVABLES
7) OTHER NON-CURRENT ASSET
8) TRADE AND OTHER RECEIVABLES
9) NEGATIVE SHAREHOLDERS' EQUITY
10) TRADE AND OTHER RECEIVABLES
11) OTHER NON-CURRENT ASSET
12) TRADE AND OTHER PAYABLES
13) TRADE AND OTHER RECEIVABLES

14) FACE VALUE

15) FACE VALUE
16) FACE VALUE
17) DISCOUNTED VALUE

18) NET REALIZABLE VALUE

19) FACE VALUE
20) AMORTIZED COST

21) Sales Discount 2,000

100,000 x 2%
Allowance for Sales Discount 2,000
#
22) Cash 98,000
Allowance for Sales Discount 2,000
Accounts Receivable 100,000
#
23) Accounts Receivable 1,000,000
Sales 1,000,000
#
24) Cash 980,000
Sales Discount 20,000 1,000,000 x 2%
Accounts Receivable 1,000,000
#
25) Accounts Receivable 1,000,000
Freight Out 20,000
Sales 1,000,000
Allowance for Freight Charge 20,000
#
26) Cash 960,000
Sales Discount 20,000
Allowance for Freight Charge 20,000
Accounts Receivable 1,000,000
#
27) Accounts Receivable 98,000 100,000 x 2%
Sales 98,000 -100,000
#
28) Cash 98,000
Accounts Receivable 98,000
#
29) Cash 100,000
Accounts Receivable 98,000
Sales Discount Forfeited 2,000
#
30) Doubtful Accounts Expense 25,000 400,000 x 5% = 20,000
Allowance for Doubtful Accounts 25,000 20,000 + 5,000 (unadjusted)
#
31) Doubtful Accounts Expense 40,000
2,000,000 x 2%
Allowance for Doubtful Accounts 40,000
#
32) Doubtful Accounts Expense 17,000
12,000 + 5,000
Allowance for Doubtful Accounts 17,000
#
33) Cash 10,000,000
Accounts Receivable 10,000,000
Sales 20,000,000
#
34) Cash 8,820,000
Sales Discount 180,000 9,000,000 x 2%
Accounts Receivable 9,000,000 8,820,000 / 98%
#
35) Allowance for Doubtful Accounts 100,000
Accounts Receivable 100,000
#
36) Accounts Receivables 20,000
Allowance for Doubtful Accounts 20,000
#
37) Cash 20,000
Accounts Receivables 20,000
#
38) Accounts Receivables
5,000,000
10,000,000
9,000,000
100,000
15,000,000 9,100,000
5,900,000

39) Doubtful Accounts

300,000
100,000
20,000
120,000 300,000
220,000 credit
40) Doubtful Accounts Expense 400,000
20,000,000 x 2%
Allowance for Doubtful Accounts 400,000
#
41) Allowance for Doubtful Accounts 420,000 620,000 - 400,000
Miscellaneous Income 20,000
Doubtful Accounts Expense 400,000
NTS

100,000 x 2%

1,000,000 x 2%

100,000 x 2%
-100,000
 400,000 x 5% = 20,000
20,000 + 5,000 (unadjusted)

2,000,000 x 2%

12,000 + 5,000

9,000,000 x 2%
8,820,000 / 98%
20,000,000 x 2%

620,000 - 400,000
 QUIZ - ACCOUNTS RECEIVABLE, DOUBTFUL ACCOUNTS (PROBLEM 1)

PROBLEM 1
1)
A. Accounts Receivables 700,000
Sales 700,000
#
B. Cash 490,000
Sales Discount 10,000
Accounts Receivables 500,000 490,000 / 98%
#
Cash 110,000
600,000 - 490,000
Accounts Receivable 110,000
#
C. Sales Return and Allowances 40,000
Accounts Receivable 40,000
#
D. Allowance for Doubtful Accounts 30,000
Accounts Receivable 30,000
#
E. Accounts Receivable 15,000
Allowance for Doubtful Accounts 15,000
#
Cash 15,000
Accounts Receivable 15,000
2) Accounts Receivable
200,000
700,000
500,000
110,000
40,000
30,000
900,000 680,000
220,000

3) 5,000 DEBIT

4) Doubtful Account Expense 15,330

Allowance for Doubtful Accounts 15,330

5) 220,000
-10,330
209,670
EM 1)

Age Group Balance Estimated Percentage

Not yet due 83,000 2% 1,660 220,000 - all balances
1-30 days past due 74,000 3% 2,220
31-60 days past due 27,000 5% 1,350
61-90 days past due 21,000 10% 2,100
More than 90 days past due 15,000 20% 3,000
10,330 required allowance

Doubtful Accounts
10,000 Beginning
30,000
15,000
30,000 25,000
Unadjusted 5,000 15,330 Doubtful Accounts Expense
10,330 Required Allowance
 QUIZ - ACCOUNTS RECEIVABLE, DOUBTFUL ACCOUNTS (PROBLEM 2)

PROBLEM 2
1)
1.1 Cash 294,000
Sales Discount 6,000 300,000 x 2%
Accounts Receivable 300,000 294,000 / 98%
#
Cash 150,000
Accounts Receivable 150,000
#
1.2 Allowance for Doubtful Accounts 50,000
Accounts Receivable 50,000
#
1.3 Accounts Receivables 10,000
Allowance fo Doubtful Accounts 10,000
#
4-D Accounts Receivables 400,000
Sales 400,000
#
Freight Out 20,000
Cash 20,000
#
4-E Accounts Receivable 200,000
Sales 200,000
#
4-F Accounts Receivable 630,000
Sales 600,000
Cash 30,000
#
4-G Accounts Receivable 800,000
Freight Out 40,000
Sales 800,000
Allowance for Freight Charges 40,000
#
5-D Cash 343,000
Sales Discount 7,000 350,000 x 2%
Accounts Receivable 350,000
#
5-E Cash 147,000
Sales Discount 3,000 150,000 x 3%
Accounts Receivable 150,000
#
5-F Cash 422,000
Sales Discount 8,000 400,000 x 2%
Accounts Receivable 430,000
 #
5-G Cash 186,000
Sales Discount 4,000 200,000 x 2%
Allowance for Freight Charge 10,000
Accounts Receivable 200,000

2)
a. Doubtful Accounts Expense 60,500
45,500 + 15,000
Allowance for Doubtful Accounts 60,500
#
b. Sales Discount 5,460 910,000 x 3%
Allowance for Sales Discount 5,460 = 273,000 x 2%
#
3) 910,000
-45,500
-30,000
-5,460
829,040
EM 2)

SOLUTIONS
% OF AR = 25,000 / 500,000 -> 5%
Accounts Receivable
500,000 300,000
10,000 150,000
400,000 50,000
200,000 350,000
630,000 150,000
800,000 430,000
200,000
2,540,000 1,630,000
910,000

Allowance for Doubtful Accounts

Write Off 50,000 25,000 Beginning
10,000 Recovery
50,000 35,000
Unadjuste 15,000 60,500 Doubtful Accounts Expense
45,500 Required Allowance = 910,000 x 5%

Accounts Receivable 910,000

Less: Allowance for Doubtful Accounts 45,500
Allowance for Freight Charge 30,000
Allowance for Sales Discount 5,460 80,960
829,040
 QUIZ ON RECEIVABLE FINANCING
Problem A
A1 Accounts Receivable 5,200,000
Sales 5,200,000
#

A2 Cash 4,116,000 4,116,000 / 98%

Sales Discount 84,000
4,200,000 - 4,116,000
Accounts Receivable 4,200,000
#

A3 Accounts Receivable - Assigned 400,000

Accounts Receivable 400,000
#

A4 Cash 308,000 320,000 - 12,000

Service Charge 12,000 400,000 x 3%
Note Payable - Bank 320,000 400,000 x 80%
#

A5 Note Payable - Bank 191,200

Sales Discount 4,000
Interest Expense 4,800 320,000 x 1.5%
Accounts Receivable - Assigned 200,000
#

A6 Cash 146,000 Gross Amount

Receivable from Factor 40,000 Less: Sales Discount 2%
Sales Discount 4,000 5% Commission
Commission / Service Charge 10,000 20% Factor's Holdback
Accounts Receivable 200,000
#

A7 Sales Return and Allowances 120,000

Accounts Receivable 110,000
Accounts Receivable - Assigned 10,000
#

A8 Allowance for Doubtful Accounts 50,000

Accounts Receivable 30,000
Receivable from Factor 20,000
#

A9 Doubtful Allowance Expense 72,500

22,500 + 45,000
Allowance for Doubtful Accounts 72,500
#
 Doubtful Accounts Accounts Receivable Acc. Rec. - Assigned
50,000 22,500 450,000 4,200,000 400,000 200,000
27,500 72,500 5,200,000 400,000 10,000
45,000 200,000 400,000 230,000
110,000 190,000
30,000
5,650,000 4,940,000
710,000

A10 to A16: December 31, 2015 Partial Balance Sheet

Current Assets:
Trade and Other Receivables
Accounts Receivable 710,000 [A10]
Accounts Receivable - Assigned 190,000 [A11]
Total 900,000 [A12]
Less: Allowance for Doubtful Accounts [A13] 45,000 855,000 [A14]
Receivable from Factor 20,000 [A15]
Current Liability:
Notes Payable - Bank 128,800 [A16]
 4,116,000 / 98%
4,200,000 - 4,116,000

320,000 - 12,000
400,000 x 3%
400,000 x 80%

320,000 x 1.5%

Gross Amount 200,000

Less: Sales Discount 2% 4,000
5% Commission 10,000
20% Factor's Holdback 40,000 44,000
146,000

22,500 + 45,000
 QUIZ ON RECEIVABLE FINANCING
Problem B
B1 Accounts Receivable 4,000,000
Sales 4,000,000
#

B2 Cash 2,470,000 1,470,000 / 98% = 1.5M

Sales Discount 30,000 1,470,000 + 1,000,000
Accounts Receivable 2,500,000 1,500,000 - 1,470,000
# 1,500,000 + 1,000,000

B3 Notes Receivable 400,000

Accounts Receivable 363,636 400,000 x (1.10) ^ -1
Unearned Interest Income 36,364
#

B4 Notes Receivable 600,000

Accounts Recievable 600,000
#

B5 Cash 604,860
Loss on Discounting 1,140
Notes Receivable - Discounted 600,000
Interest Income 6,000
#

B6 Accounts Receivable - Assigned 500,000

Accounts Receivable 500,000
#

B7 Cash 425,000
Service Charge 25,000
Notes Payable - Bank 450,000
#

B8 Notes Payable - Bank 383,000 400,000 x 2%

Sales Discount 8,000
Interest Expense 9,000
Accounts Receivable - Assigned 400,000
#
B9 Cash 75,000
Receivable from Factor 20,000
Commission / Service Charge 5,000
Accounts Receivable 100,000
#

B10 Cash 20,000

 Receivable from Factor 20,000
#

B11 Allowance for Doubtful Accounts 25,000

Accounts Receivable 25,000
#

B12 Accounts Receivable 12,000

Allowance for Doubtful Accounts 12,000
#

B13 Doubtful Accounts Expense 13,935

Allowance for Doubtful Accounts 13,935
#

B14 Notes Receivable - Discounted 600,000

Notes Receivable 600,000
#

B15 Unearned Interest Income 27,273

Interest Income 27,273
#

Doubtful Accounts Accounts Receivable Acc. Rec. - Assigned

50,000 20,000 500,000 2,500,000 500,000 400,000
12,000 4,000,000 600,000 100,000
7,000 12,000 363,636
500,000
100,000
25,000
4,512,000 4,088,636
423,364

B16 to B24: December 31, 2014 Partial Balance Sheet

Current Assets:
Trade and Other Receivables
Accounts Receivable 423,364 [B16]
Accounts Receivable - Assigned 100,000 [B17]
AR+ARA Total 523,364 [B18]
x 4% Less: Allowance for Doubtful Accounts [B19] 20,935 502,429 [B20]
Notes Receivable 400,000 [B21]
Less: Unearned Interest Income [B22] 9,091 390,909 [B23]
Current Liability:
Notes Payable - Bank 67,000 [B24]
1,470,000 / 98% = 1.5M
1,470,000 + 1,000,000
1,500,000 - 1,470,000
1,500,000 + 1,000,000

400,000 x (1.10) ^ -1

00,000 x 2%
 QUIZ: NOTES RECEIVABLE
DATE
2016
1) May 1 Notes Receivable 1,000,000
Accumulated Depreciation 360,000
Loss on Sale of Machinery 119,045
Machinery 1,200,000
Unearned Interest Income 279,045
#

2016
2) Dec 31Unearned Interest Income 57,677
Interest Income 57,677
#

2017
3) Aug 1 Notes Receivable 150,000
Sales 150,000
#

2017
4) Oct 1 Advances to President 750,000
Cash 750,000
#

2017
5) Unearned Interest Income 77,435
Interest Income 77,435
#

6) Interest Receivable 6,875

Interest Income 6,875
#

7) Interest Receivable 22,500

Interest Income 22,500

8 to 16 Supply missing figures for the partial balance sheet

December 31, 2017
Current Assets:
Trade and Other Receivables
Notes Receivable 8) 350,000
 Less: Unearned Interest Income 9) 62,728 10) 287,272
Advances to President 11) 250,000
Interest Receivable 12) 29,375
Non-current Assest:
Other Non-current Assets:
Notes Receivable 13) 600,000
Less: Unearned Interest Income 14) 81,205 15) 518,795
Advances to President 16) 500,000

17) Interest Income 29,375

Interest Receivable 29,375
#
18) Notes Receivable 800,000
Accounts Receivable 601,052
Unearned Interest Income 198,948
#

19) Cash 200,000

Notes Receivables 200,000
#

20) Cash 166,500

Notes Receivable 150,000
Interest Income 16,500
#

21) Cash 340,000

Notes Receivable / Advances to President 250,000
Interest Income 90,000
#

22) ** Notes Receivable 500,000

Land 350,000
Unearned Interest Income 112,194
Gain on Sale of Land 37,806
#

23) Unearned Interest Income 62,728

Interest Income 62,728
#

24) Interest Receivable 15,000

Interest Income 15,000
#

25) Unearned Interest Income 50,088

Interest Income 50,088
 #

26) Unearned Interest Income 7,110

Interest Income 7,110
#

27 to 35 Supply missing figures for the partial balance sheet

###
Current Assets:
Trade and Other Receivables
Notes Receivable 27) 325,000
Less: Unearned Interest Income 28) 87,405 29) 237,595
Advances to President 30) 250,000
Interest Receivable 31) 15,000
Non-current Assest:
Other Non-current Assets:
Notes Receivable 32) 1,575,000
Less: Unearned Interest Income 33) 247,744 34) 1,327,256
Advances to President 35) 250,000
ABLE

SOLUTIONS
Face Value 1,000,000
Present Value 720,955 = 200,000 [1- (1.12)^ -5] / .12
Unearned Interest Income 279,045

Present Value 720,955

Carry Amount of Machinery 840,000
Loss on Sale of Machinery -119,045

Date Collection Interest

86,515 x 8/12
1-May-16 -
31-Dec-16 200,000 86,515
31-Dec-17 200,000 72,896
31-Dec-18 200,000 57,644
31-Dec-19 200,000 40,561
31-Dec-20 200,000 21,429
Previous PV x .12

Interest Income Per Year

2016 86,515 x 8/12 55,677
86,515 x 4/12 28,838
2017
72,896 x 8/12 48,597
72,896 x 4/12 24,299
2018
57,644 x 8/12 38,429
86,515 x 4/12 + 57,644 x 4/12 19,215
2019
72,896 x 8/12 40,561 x 8/12 27,041
40,561 x 4/12 13,520
2020
21,429 x 8/12 14,286
150,000 2021 21,429 x 4/12 7,143
x .11 x 5/12

750,000
x .12 x 3/12

200,000 + 150,000 (8)

6,875 + 22,500 (12)

57,644 x 4/12 + 40,561 + 21,429 or 279,045 - 57,677 - 77,435 - 62,728 (14)

#12 of Partial Balance Sheet

800,000 x (1.10)^-3

150,000 x .11

Face Value 500,000

Present Value 387,806 = 125,000 [1- (1.11)^ -4] / .11
Unearned Interest Income 112,194

Present Value 387,806

Carry Amount of Land 350,000
Gain on Sale of Land 37,806

#9 of Partial Balance Sheet

500,000 x .12 x 3/12

60,105 x 10/12
42,659 x 2/12

Date Interest Income Unearned Interest Income

1-Mar-18 198,948
1-Mar-19 60,105 138,843
1-Mar-20 66,116 72,727
1-Mar-21 72,727
Previous PV x .10 Previous Unearned Int. Inc.
200,000 + 125,000 (27) -current int. inc.
46,256 + 41,149 (28)
Interest Income Per Year
2018 60,105 x 10/12 50,088 50,088
60,105 x 2/12 10,018
2019
400K 66,116 x 10/12 55,097 65,115
+ 800k +375k 66,116 x 2/12 11,019
2020
34,949 + 148,860 + 63,935 (33) 72,727 x 10/12 60,606 71,625
2021 72,727 x 2/12 12,121 12,121

Date Collection Interest

1-Nov-18 125,000 -
1-Nov-19 125,000 42,659
1-Nov-20 125,000 33,601
1-Nov-21 125,000 23,547
1-Nov-22 125,000 12,387
Previous PV x .11

Interest Income Per Year

2018 42,659 x 2/12 7,110 7,110
42,659 x 10/12 35,549
2019
33,601 x 2/12 5,600 41,149
33,601 x 10/12 28,001
2020
23,547 x 2/12 3,925 31,926
23,547 x 10/12 19,623
2021
12,387 x 2/12 2,065 21,688
2022 12,387 x 10/12 10,323 10,323
0 [1- (1.12)^ -5] / .12

PV = SP

Principal Present Value

- 720,955
113,485 607,470
127,104 480,366
142,356 338,010
159,439 178,571
178,571 -
Collection Previous PV
- current interest - current principal

57,677

77,435

62,728

46,256

27,806
7,143
0 [1- (1.11)^ -4] / .11
 Present Value
601,052
661,157
727,273

Previous PV
+ current int. inc.

50,088

65,115

71,625
12,121

Principal Present Value

- 387,806
82,341 305,465
91,399 214,066
101,453 112,613
112,613 -
Collection Previous PV
- current interest - current principal

7,110

41,149

31,926

21,688
10,323
 QUIZ - INVENTORIES (PROBLEM A)

A1 FIFO - Periodic Method Total Units Available Less: Units Sold

11,000 5,000
DEC Units Unit Cost Total Cost 2,500 -750
20 - Purchase 2,650 100.50 266,325 -1,000 4,500
05 - Purchase 1,500 102.75 154,125 3,000
01 - Beg. 2,250 101.00 227,250 500
6,400 647,700 -850
15,150 8,750
6,400

A2 Weighted Average - Periodic Method Weighted Average Unit Cost

DEC Units Unit Cost Total Cost 1,531,450
= 101.0858
01 - Beg. 11,000 101.00 1,111,000 15,150
05 - Purchase 2,500 102.75 256,875
14 - Purchase R. -1,000 102.75 -102,750 Ending Inventory
20 - Purchase 3,000 100.50 301,500 (6,400 x 101.0858)
25 - Purchase 500 101.25 50,625 = 646,949.1200
30 - Purchase R. -500 101.25 -50,625
30 - Purchase R. -350 100.50 -35,175
15,150 1,531,450

A3 Moving Average - Perpetual Method

DEC Units Unit Cost Total Cost

01 - Balance 11,000 101.0000 1,111,000.0000
05 - Purchase 2,500 102.7500 256,875.0000
Balance 13,500 [A3] 101.3241 1,367,875.0000
11 - Sale -5,000 101.3241 [A4] -506,620.5000
Balance 8,500 101.3241 861,254.5000
14 - Purchase R. -1,000 102.7500 -102,750.0000
Balance 7,500 [A5] 101.1339 758,504.5000
20 - Purchase 3,000 100.5000 301,500.0000
Balance 10,500 [A6] 100.9528 1,060,004.5000
23 - Sale R. 750 100.3241 [A7] 75,993.0750
Balance 11,250 100.9776 1,135,997.5750
25 - Purchase 500 101.2500 50,625.0000
Balance 11,750 [A8] 100.9892 1,186,622.5750
29 - Sale -4,500 100.9892 [A9] -454,451.4000
Balance 7,250 100.9892 732,171.1750
30 - Purchase R. -500 101.2500 -50,625.0000
-350 100.5000 -35,175.0000
Balance 6,400 [A10] 100.9955 [A11] 646,371.1750
 QUIZ - INVENTORIES (PROBLEM B)

B1
Ending Inventory: 132,000 - 90,000 = 42,000
Units Unit Cost Total Cost Merchanise, Inventory Jan 1
Beginning 20,000 21.00 420,000 Allowance for Inventory Writedown
Purchases 30,000 18.00 540,000 Merchanise, Inventory Dec 31 (22,
Purchases 25,000 20.00 500,000 Net Realizable Value (22,000 x 19
Purchases 22,000 21.00 462,000 Net Purchases
Purchases 35,000 19.00 665,000
132,000 2,857,000

Weight Average Unit Cost

2,587,000
= 19.5985
132,000
B2
Ending Inventory
42,000 x 19.5985 = 823,137

B3
Allowance for Inventory Writedown 60,000
Gain on Recovery Inventory Writedown 60,000

B4
Cost of Goods Sold:
Merchandise Inventory Jan 1 420,000
Add: Net Purchases 2,167,000
Total Goods Available For Sale 2,587,000
Less: Merchandise Inventory Dec 31 823,137
Cost of Goods Sold 1,763,863
Less: Allowance for Inventory Writedown 60,000
1,703,863
ise, Inventory Jan 1 420,000
e for Inventory Writedown 60,000 360,000
ise, Inventory Dec 31 (22,000 x 19) 418,000
izable Value (22,000 x 19) 462,000
2,167,000
 QUIZ - INVENTORIES (PROBLEM C)

C1 Inventory, December 31 430,000

Income Summary 430,000
#
C2 Freight In 30,000
Operating Expenses 30,000
#
C3 Sales 600,000
Accounts Receivable 600,000
#
C4 Inventory, December 31 300,000
Income Summary 300,000
#
C5 Sales 450,000
Accounts Receivable 450,000
#
C6 Inventory, December 31 440,000
Income Summary 440,000
#
C7 Freight In 40,000
Accounts Payable 40,000
#
C8 Inventory, December 31 355,000
Income Summary 355,000
#
C9 Purchase 320,000
Accounts Payable 320,000
#
C10 Freight In 35,000
Accounts Payable 35,000
#

C11 to C12. Supply the missing figures in the following income statement for the year 2019

Sales 5,800,000 [C11]

Less: Cost of Goods Sold
Inventory, January 1 [C12] 500,000
Add: Purchases [C13] 5,520,000
Freight In [C14] 305,000
Total [C15] 5,825,000
Total Goods Available [C16] 6,325,000
Less: Inventory, December 31 [C17] 2,565,000 3,760,000 [C18]
Gross Profit 2,040,000 [C19]
Less: Operating Expenses 970,000 [C20]
Net Income 1,070,000 [C18]
 ENDING INVENTORY PURCHASES
BALANCES 650,000 5,500,000
1 100,000
2 430,000
3 300,000
4 250,000
5 -300,000
6 440,000
7 355,000 320,000
8
9 40,000
2,545,000 5,520,000

e year 2019
 SALES FREIGHT IN OPERATING EXPENSES
7,000,000 1,200,000
-150,000
-600,000 30,000 -30,000
-450,000

40,000
35,000
200,000 -200,000

5,800,000 305,000 970,000

 PRE-TEST - INVESTMENT IN SECURITIES

1) Trading Securities 1,100,000

Cash 1,100,000
#
2) Trading Securities 50,000
Unrealized Gain - TS 50,000
#
3) Trading Securities 1,100,000
Cash 1,100,000
#
4) Trading Securities 1,100,000
Cash 1,100,000
#
5) Unrealized Loss - TS 60,000
Trading Securities 60,000
#
6) Financial Assets at Fair Value - OCI 1,250,000
Cash 1,250,000
#
7) Unrealized Loss - OCI 50,000
Financial Assets at Fair Value - OCI 50,000
#
8) Investment in PLDT Ordinary Share 1,250,000
Cash 1,250,000
#

9) Dividend Receivable 5,000

Dividend Income 5,000
#
10) Cash 5,000
Dividend Receivable 5,000
#
11) Cash 102,000
Loss on Sale of Investment 3,000
Investment in Equity Securities 100,000
Dividend Receivable 5,000
#
12) Cash 102,000
Investment in Equity Securities 100,000
Gain on Sale of Investment 2,000
#

13) Cash 60,000

Investment in Equity Securities 55,000
 Gain on Sale of Investment 5,000
#
14) Cash 60,000
Loss on Sale of Investment 4,875
Investment in Equity Securities 64,875
#

15) Investment in Red Corp. Ordinary Shares 45,000

Dividend Income 45,000
#
16) Cash 1,200,000
Loss on Investment 600,000
Investment in Miner Blue Corp. Ordinary Shares 1,800,000
#
17) Investment in Miner Blue Corp. Ordinary Shares 150,000
Cash 150,000
#
18) 18,000 shares

19) Cash 250,000

Loss on Investment 50,000
Investment in Miner Blue Corp. Ordinary Shares 300,000
#
20) Cash 450,000
Investment in Miner Blue Corp. Ordinary Shares 360,000
Gain on Sale of Investment 90,000
#
21) Cash 450,000
Investment in Miner Blue Corp. Ordinary Shares 300,000
Gain on Sale of Investment 150,000
#
22) Investment in Miner Blue Corp. Preference Shares 112,500
Investment in Miner Blue Corp. Ordinary Shares 112,500
#
23) 75,000 shares
24) 7,500 shares

25) Share Rights 6,000

Investment in ABC Corp. 6,000
#
26) Share Rights 4,000
Investment in ABC Corp. 4,000
#
27) Share Rights 5,000
Investment in ABC Corp. 5,000
 #
28) Cash 55,000
Investment in ABC Corp. 51,000
Gain on Sale of Investment 4,000
#
29) Investment in ABC Corp. 33,600
Cash 30,000
Share Rights 3,600
#
30) Cash 2,000
Share Rights 1,500
Gain on Sale of Rights 500
#
31) Loss on Share Rights 900
Share Rights 900
#
32) Cash 55,000
Investment in ABC Corp. 52,500
Gain on Sale of Investment 2,500
#
33) 500 shares
34) Investment in ABC Corp. 30,000
Cash 30,000
#
35) Cash 2,000
Investment in ABC Corp. 2,000
 QUIZ - INVESTMENT IN SECURITIES (A)

2019
A1) July 1 Investment in Investee Corp. 1,400,000
Cash 1,400,000
#
A2) Dec 1 Investment in Investee Corp. 40,000
Cash 40,000
#
2020
A3) June 20 Share Rights 84,000
Investment in Investee Corp. 84,000
#
A4) Aug 1 Investment in Investee Corp. 294,000
Cash 210,000
Share Rights 84,000
#
A5) Sept 15 Dividend Receivable 84,000
Dividend Income 84,000
#
A6) Sept 30 Cash 220,500
Investment in Investee Corp. 169,500
Gain on Sale of Investment 42,600
#
 QUIZ - INVESTMENT IN EQUITY SECURITIES (B)

2019
B1) July 1 Investment in Associate 1,400,000
Cash 1,400,000
#
B2) Dec 1 Investment in Associate 40,000
Cash 40,000
#
B3) Dec 31 Investment in Associate 150,000
Investment Income 150,000
#
B4) Dec 31 Investment Income 20,000
Investment in Associate 20,000
#
2020
B5) Aug 1 Investment in Associate 210,000
Cash 210,000
#
B6) Sept 15 Dividend Receivable 84,000
Investment in Associate 84,000
#
B7) Sept 30 Investment in Associate 315,000
Investment Income 315,000
#
B8) Sept 30 Investment Income 30,000
Investment in Associate 30,000
#
B9) Sept 30 Cash 220,500
Dividend Receivable 8,400
Investment in Associate 198,100
Gain on Sale of Investment 14,000
#
B10) Oct 30 Cash 75,600
Dividend Receivable 75,600
#
B11) Dec 31 Investment in Associate 94,500
Investment Income 94,500
#
B12) Dec 31 Investment Income 9,000
Investment in Associate 9,000
#
B13) Dec 31 1,868,400 (Balance of Investment in Associate)
B14) Dec 31 9,680,000 (Balance of Investee's Shareholders' Equity)
 QUIZ - INVESTMENT IN EQUITY SECURITIES (C)

2019
C1) July 1 Financial Asset - FVOCI 1,400,000
Cash 1,400,000
#
C2) Dec 1 Financial Asset - FVOCI 40,000
Cash 40,000
#
C3) Dec 31 Financial Asset - FVOCI 40,000
Unrealized Gain - OCI 40,000
#
2020
C4) Aug 1 Financial Asset - FVOCI 210,000
Cash 210,000
#
C5) Sept 15 Dividend Receivable 84,000
Dividend Income 84,000
#
C6) Sept 30 Cash 220,500
Dividend Receivable 8,400
Financial Asset - FVOCI 185,000
Retained Earnings 27,100
#
C7) Sept 30 Unrealized Gain - OCI 5,000
Retained Earnings 5,000
#
C8) Oct 31 Cash 75,600
Dividend Receivable 75,600
#
C9) Dec 31 Financial Asset - FVOCI 290,500
Unrealized Gain - OCI 290,500
#
 QUIZ - INVESTMENT IN EQUITY SECURITIES (D)

2019
D1) July 1 Trading Securities 1,400,000
Cash 1,400,000
#
D2) Dec 1 Trading Securities 40,000
Cash 40,000
#
D3) Dec 31 Trading Securities 40,000
Unrealized Gain - TS 40,000
#
2020
D4) Aug 1 Trading Securities 210,000
Cash 210,000
#
D5) Sept 15 Dividend Receivable 84,000
Dividend Income 84,000
#
D6) Sept 30 Cash 220,500
Dividend Receivable 8,400
Trading Securities 185,000
Gain on Sale Investment 27,100
#
D7) Oct 31 Cash 75,600
Dividend Receivable 75,600
#
D8) Dec 31 Trading Securities 290,500
Unrealized Gain - TS 290,500
#