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B-ACTG317 BSA31 1st Sem ( 2021-2022 ) - Child

Accounting for Home Office, Branch and Sales Agency (Special Procedures)
Summative Assessment 2
Submissions
Here are your latest answers:
Question 1
Durable Textile Company has a single branch in Bohol. On March 1, 2012, the home office accounting records included an Allowance for Overvaluation of
Inventories – Bohol Branch ledger account with a credit balance of P32,000. During March, merchandise costing P36,000 was shipped to the Bohol Branch and
billed at a price representing a 40% markup on the billed price. On March 31, 2012, the branch prepared an income statement indicating a net loss of P11,500 for
March and ending inventories at billed prices of P25,000. What is the amount of adjustment for allowance for Overvaluation of Inventories to reflect the true
branch net income?
Response: P46,000 debit
Correct answer: P46,000 debit
Score:
1 out of 1
Yes
Question 2
Under the acquisition method, if the fair values of the identifiable net assets exceed the value implied by the purchase price of the acquired company, the excess should be
Response: allocated to reduce any previously recorded goodwill on the seller’s books and classify any remainder as an ordinary gain
Correct answer: allocated to reduce any previously recorded goodwill on the seller’s books and classify any remainder as an ordinary gain
Score:
1 out of 1
Yes
Question 3
The investment in branch account is debited in the following cases, except
Response: Payment by branch of home office’s suppliers’ account.
Correct answer: Payment by branch of home office’s suppliers’ account.
Score:
1 out of 1
Yes
Question 4
When billed price is equal to the cost of goods transferred by the home office to branch, reported net income and T branch net income tend to be the same.
Response: True
Correct answer: True
Score:
1 out of 1
Yes
Question 5
When the contingent consideration took effect thirteen months after the acquisition date, the gain on purchase bargain is adjusted.
Response: False
Correct answer: False
Score:
1 out of 1
Yes
Question 6
Auto Supply Company is engaged in merchandising both at its home office in Cebu City and its branch in Toledo City. Selected accounts taken from the trial
balances of the home office and the branch as of December 31, 2012 follow:
Debits Cebu City Toledo Branch

Inventory, January 1, 2012 P 23,000 P 11,550
Toledo Branch 58,300
Purchases 190,000 105,000
Freight in from home office 5,500
Sundry Expenses 52,000 28,000

Credits
Home Office P 53,300
Sales P155,000 140,000
Sales to branch 110,000
Allowance for Overvaluation of branch inventory at January 1, 2012.
1,000
Additional information:
· The Toledo City branch gets all of its merchandise from the home office. The home office bills the goods at cost plus a 10% mark-up. At December 31, 2012,
a shipment with a billed value of P5,000 was still in transit. Freight on this shipment was P250 and is to be treated as part of the inventory.
· Inventories on December 31, 2012, excluding the shipment in transit, follow:
Home office, at cost………………………………….……….. P30,000
Branch, at billed price (excluding freight of P520…… 10,000
What is the net income of the branch in so far as the home office is concerned?
Response: P10,470
Correct answer: P10,470
Score:
1 out of 1
Yes
Question 7
The JJ Company, Inc. opened an agency in Makati in 2016. The following is a summary of the transactions of the agency:
Sales orders sent to home office Php132,000

Sales orders filled by home office in 2016 111,600
Freight on shipment to agency 2,640
Collections, net of 2% discount 95,256
Selling expenses paid from the agency working fund 6,768
Administrative expenses charged to agency 5% of gross sales
Samples shipped to agency
Cost 7,200
Inventory, December 31, 2016 2,640
The company maintains its gross margin on agency gross sales at 30% excluding the freight cosst on shipments to agency.
The agency’s cost of sales including freight and agency’s net income would amount to, respectively:
Response: Php80,760; Php11,988
Correct answer: Php80,760; Php11,988
Score:
1 out of 1
Yes
Question 8
Pool Company issued 120, 000 of its P10 par value common stock with a fair value of P2.55M for the net assets of Spot Company. In addition, Pool incurred the following acquisition-
related costs:
Legal fees to arrange the business combination 25,000.00
Costs of SEC registration, including accounting and legal fees 12,000.00
Cost of issuing stock certificates 3,000.00
Documentary Stamp tax 20,000.00
Immediately after the business combination in which Spot Company was dissolved, Spot’s net assets and equities were as follows:
Book Value Fair Value

Current Assets 2,000,000.00 1,100,000.00
Plant Assets 1,500,000.00 2,200,000.00
Liabilities 300,000.00 300,000.00
Common Stock 2,000,000.00
Retained Earnings 200,000.00
What is the amount of goodwill (income from acquisition) and APIC to be recognized by Pool Company?
Response: P450,000; P1.350M
Correct answer: (P450,000); P1.315M
Score:
0 out of 1
No
Question 9
Man Inc. purchased all of the net assets of Woman Company on January 2, 2014 by issuing 3,200 shares of its 10parcommonshares. Atthetime, thestockwassellingf or 30 per share.
Direct costs associated with consummating the combination totaled
1, 600.U nderI F RS3, whattotalamountshouldthenetassetsacquiredberecordedbyM anI nc. , assumingthatcontingentconsiderationof 2,000 is determined?
Response: $98,000
Correct answer: $98,000
Score:
1 out of 1
Yes
Question 10
When a branch returns goods to home office, a debit of home office account is adjusted on the home office books.
Response: False
Score:
1 out of 1
Yes
Question 11
If there is a difference between the reported branch net income and T branch net income, it is commonly attributed to the over-allowance in the cost of goods available for sale.
Response: False
Score:
1 out of 1
Yes
Question 12
Statement of Financial Position reflecting uniform accounting procedures, as well as fair values that are to be used as basis of the combination are prepared on September 1, 2018 as
follows:
Z Company Y Company X Company
Assets 5,250,000.00 6,800,000.00 900,000.00
Liabilities 3,950,000.00 2,650,000.00 530,000.00
Capital Stock, all P10 par 1,700,000.00 1,200,000.00 275,000.00
Additional Paid in Capital 500,000.00 140,000.00
Retained Earnings (Deficit) ( 400,000.00 ) 2,450,000.00 ( 45,000.00 )
Z Company shares have a market value of P22 per share. Market values is not available for shares of Y Co. and X Co.
On September 1, 2018, Z Co. acquires all of the assets and assume the liabilities of Y Co. and X Co. by issuing 200, 000 shares of its stocks to Y Co. and 29, 000 shares of its stocks to X
Co. Z Co. also pays P10, 000 for registering and issuing securities and P20, 000 for other acquisition costs of combination.
What is the total assets of Z Co. after the combination?
Response: P13.438M
Correct answer: P13.438M
Score:
1 out of 1
Yes
Question 13
Goodwill is the same with negative goodwill.
Response: False
Score:
1 out of 1
Yes
Question 14
Selected information from the trial balances for the home office and the branch of Lalay Company at December 31, 2012 is provided. The branch acquires
merchandise from the home office and outside suppliers.
Home Office Branch
Sales P60,000 P30,000
Shipments to branch 8,000
Allowance for overvaluation of branch inventory 3,600
Shipments from home office 10,000
Purchase (outsiders) 35,000 5,500
Merchandise inventory 12.01.12 20,000 15,000
Expenses 14,000 6,000
Merchandise inventory, December 31, 2012:
Home office P20,000
Branch (P7,500 from home office and P2,500 from outsiders) 10,000
The net income reported by the branch is
Response: P3,500
Score:
1 out of 1
Yes
Question 15
When the contingent consideration took effect eight months after the acquisition date, the gain on purchase bargain is adjusted.
Response: True
Score:
1 out of 1
Yes
Question 16
When the contingent consideration took effect fifteen months after the acquisition date, the other expense account is adjusted.
Response: True
Score:
1 out of 1
Yes
Question 17
Selected information from the trial balances for the home office and the branch of Lalay Company at December 31, 2012 is provided. The branch acquires
merchandise from the home office and outside suppliers.
Home Office Branch
Sales P60,000 P30,000
Expenses 14,000 6,000
Home office P20,000
The billing rate of home office to branch for merchandise shipments is
Response: 125% of cost
Correct answer: 125% of cost
Score:
1 out of 1
Yes
Question 18
The following costs were incurred in completing a business combination:
Direct acquisition costs $120,000
Indirect acquisition costs 60,000
Cost to issue and register stocks 20,000
The amount charged to expenses of business combination should be:
Response: $180,000
Score:
0 out of 1
No
Question 19
In recording depreciation expense for a branch fixed asset, the home office debited depreciation expense and credited accumulated depreciation, while the entry made in the branch’s book is
correct. Which of the following is incorrect?
Response: Investment in branch account is overstated.
Correct answer: Investment in branch account is understateed.
Score:
0 out of 1
No
Question 20
A credit to investment in branch account means a debit in the home office account.
Response: True
Score:
1 out of 1
Yes
Question 21
Which statement about home office account is correct?
Response: The home office account should not appear in the combined financial statement.
Correct answer: The home office account should not appear in the combined financial statement.
Score:
1 out of 1
Yes
Question 22
Under full PFRS business combination, direct and indirect expenses are classified as expenses chargeable to retained earnings.
Response: False
Score:
0 out of 1
No
Question 23
Ivon Co. issued common stock with a par value of P450, 000 and a market value of P700, 000 to acquire the net assets of Bill Inc., in a business combination. Ivon reported net assets of
P2M and liabilities of P542, 000 immediately before the business combination. Bill Inc.’s assets and liabilities had a book values of P460, 000 and P187, 000, respectively. The fair values
of Bill’s assets and liabilities were P600, 000 and P188, 000, respectively. What amount should be reported as total assets of the combined entity immediately following the business
combination?
Response: P2.888M
Score:
1 out of 1
Yes
Question 24
The income statement submitted by Loon Branch to the Home Office for the month of December 31, 2013 follows:
Sales P600,000
Cost of Sales:
Inventory, December 31, 2013 P80,000
Shipments from Home office 350,000
Purchased locally by branch 30,000
Total P460,000
Inventory, December 31, 2013 100,000 360,000
Gross Margin P240,000
Operating Expenses 180,000
Net Income for the month P 60,000
The Branch inventories consisted of:
12/1/2012 12/31/2012
Merchandise purchased from home P70,000 P84,000
Local purchases P10,000 P16,000
Total P80,000 P100,000
After effecting the necessary adjustments, the Home Office ascertained the true net income of the Branch to be P156,000.
What is the balance of the Allowance for Overvaluation in the branch inventory at December 31, 2013?
Response: P24,000
Score:
1 out of 1
Yes
Question 25
PTT Corporation retails merchandise through its home office store and through a branch store in a distant city. Separate ledgers are maintained by the home
office and the branch. The branch store purchases merchandise from the home office (at 120% of home office cost), as well as from outside supplies. Selected
information from the December 31, 2012 trial balances of the home office and branch is as follows:
Home Office Branch

Sales P120,000 P50,000
Shipments to branch 16,000 ----
Purchases 70,000 11,000
Inventory, January 1, 2012 40,000 30,000
Shipments from home office ----- 19,200
Expenses 28,000 2,000
Unrealized profit in branch inventory 7,200 -----
· The entire difference between the shipment accounts is due to the practice of billing the branch at cost plus 20%.
· The December 31, 2012 inventories are P40,000 and P20,000 for the home office and the branch, respectively. (The branch purchased 16% of its ending
inventory from outside supplies.)
· Branch beginning and ending inventories include merchandise acquired from home office is inventoried at 120% of home office cost.
What is the net income of the branch as far the home office is concern?
Response: 12,200
Correct answer: 12,200
Score:
1 out of 1
Yes
Question 26
Plata Corporation paid cash for the net assets of Oro Company which consisted of the following:
Book value Fair value
Current assets 12,000 16,800
Property and equipment 48,000 66,000
Liabilities assumed 12,000 10,800
The property and equipment acquired in this business combination should be recorded at–
Response: 66,000
Score:
1 out of 1
Yes
Question 27
On June 1, 2018, Jony Co. purchased all the outstanding shares of Iwa Co. for P4M. at that time, Iwa’s statement of financial position shows net assets of P2.5M. Iwa’s net assets and
liabilities had fair market values different from their book values, as follows:
PPE (net) 5,000,000.00 5,750,000.00
Other Assets 500,000.00 350,000.00
Long-term debt 3,000,000.00 2,800,000.00
As a result of the combination, what amount, if any, will be shown as goodwill in the June 1, 2018 consolidated statement of financial position of Jony Co. and its wholly owned subsidiary,
Iwa Company?
Response: P700,000
Score:
1 out of 1
Yes
Question 28
The home office reported total assets and liabilities of Php200,000, and Php40,000, respectively. The branch reported as well assets and liabilities of Php80,000, and
Php50,000, respectively. How much is the combined total assets?
Response: Php280,000
Correct answer: Php250,000
Score:
0 out of 1
No
Question 29
Which of the following is not included in the price paid (by the acquirer) in an acquisition type business combination?
Response: Investment banker’s finder’s fee for the combination
Correct answer: Investment banker’s finder’s fee for the combination
Score:
1 out of 1
Yes
Question 30
The net assets of Suman Co. have a book value of P150, 000 and a fair value of P180, 000. Puma Co. paid P250, 000 cash for all the net assets of Suman Co. Puma also paid P50, 00 to an
investment house as finder’s fee. At what amount should goodwill be recorded on Puma Company’s books?
Response: P70,000
Score:
1 out of 1
Yes
Question 31
If the investment in branch account is less than the home office account, the home office failed to
Response: record the branch’s net income.
Correct answer: record the branch’s net income.
Score:
1 out of 1
Yes
Question 32
Shipments to branch may be billed at other than cost. When billing prices are above cost, the unrealized mark-up is initially recorded by the home office
Response: in an allowance account.
Correct answer: in an allowance account.

Score:
1 out of 1
Yes
Question 33
When a branch received the payment for the accounts receivable of the home office and such collection is not yet remitted, the home office account on the books of the branch will be
debited.
Response: False
Score:
1 out of 1
Yes
Question 34
PFRS 3 requires that the acquirer disclose each of the following for each material business combination except the
Response: each of the choices is a required disclosure.
Correct answer: each of the choices is a required disclosure.
Score:
1 out of 1
Yes
Question 35
Clang-clang Corporation’s home office ships merchandise to its Toledo branch at a billing price of 125% of cost. During 2012 the home office makes the following
entry:
Shipments to Toledo branch 75,000
At year-end 2012, P12,000 of this merchandise remains at Toledo branch inventory.
The entry to adjust the branch income in the books of the home office will include
Response: Debit to Allowance for overvaluation of branch inventory, P12,600
Correct answer: Debit to Shipments to Toledo branch, P12,600
Score:
0 out of 1
No
Question 36
When a home office transfers goods to the branch, a debit to investment in branch is adjusted on the home office books.
Response: True
Score:
1 out of 1
Yes
Question 37
The home office and its branch reported the following amounts:
Home Office Branch

Total assets, net Php500,000 Php150,000
Total liabilities 30,000 30,000
Revenues 120,000 60,000
Cost and expenses 80,000 40,000
The realized mark-up on branch inventory amounted to Php14,000, while ending balance of unrealized mark-up on branch inventory amounted to Php1,500.
How much is the combined net income?
Response: Php74,000
Feedback:
Score:
1 out of 1
Yes
Question 38
On December 31, 2018, Papi Corporation acquired all the assets and assumed all liabilities of Papu Corporation for a consideration of Php1,680,000 which consists of the following:
Cash Php700,000
Equipment, with book value of Php290,000 300,000
Loans payable 200,000
Papi's own ordinary shares 400,000
Contingent consideration 80,000

The fair value of Papu's asset and liability accounts are as follow:
Current Noncurrent
Assets Php200,000 Php1,500,000
Liabilities 24,800 186,000
Answer the following independent assumptions:
If Papi and Papu has a precombination balances of noncurrent assets for Php2,500,000, and Php1,288,000, respectively, how much is the combined balance of noncurrent assets?
Response: Php3,710,000
Feedback:
Correct answer: Php3,710,000
Score:
1 out of 1
Yes
Question 39
Home Office Branch

Sales Php200,000 Php80,000
Cost of sales 60,000 34,500
Expenses 80,000 32,000
Ending inventory 12,000 1,650
1/3 of the cost of ending branch inventory, in the point of view of home office, is acquired from home office. The ending inventory in the combined financial statement
showed Php13,500. Half of the branch's cost of goods sold per GAAP were acquired from home office.
How much is the cost of goods sold in the combined income statement?
Response: 94,350
Score:
0 out of 1
No
Question 40
Gain on acquisition bargain is determined when the fair value of the net assets acquired is greater than its acquisition cost.
Response: True
Score:
1 out of 1
Yes
Question 41
Cash Php700,000


Current Noncurrent
Assume Papi has a total assets prior to business combination of Php2,500,000, and Papu's building has a provisional value of Php500,000, and was discovered that on June 1, 2019, its fair
value as of acquisition date is Php480,000. How much is adjustd total assets of the combined entity?
Feedback:
Score:
0 out of 1
No
Question 42
Jojo Inc. purchased all of the assets of Momo Inc. on January 2, 2018 by issuing 8, 000 shares of its P10 par common stock. At the time, the stock was selling for P30 per share. Direct costs
associated with consummating the combination totaled P4, 000. Under IFRS 3, what total amount should the net assets acquired be recorded by Jojo Inc. Assuming that contingent
consideration is P5, 000.?
Response: P245,000
Score:
1 out of 1
Yes
Question 43
On December 31, 2012, the home office account on the branch books shows a balance of P9,735. The following reconciling data are determined in accounting for
the difference.
a. Merchandise billed at P615 shipped by the home office to the branch on December 28 is still in transit.
b. The branch collected a home office accounts receivable of P2,500, but failed to notify the home office of this collection.
c. The home office recorded the branch net income for November at P1,125. This was in error, as the branch reported net income was P1,215.
d. The home office was charged P640 when the branch returned merchandise to the home office on December 31. The merchandise is in transit.
The adjusting entry to correct branch net income for November is
Response: Debit, Branch account P90 and Credit, Branch profit and loss P90
Correct answer: Debit, Branch account P90 and Credit, Branch profit and loss P90
Score:
1 out of 1
Yes
Question 44
If the acquisition resulted to neither goodwill nor bargain purchase gain,
Response: The fair value of net assets acquired is equal to the consideration paid by the acquirer.
Correct answer: The fair value of net assets acquired is equal to the consideration paid by the acquirer.
Score:
1 out of 1
Yes
Question 45
If the investment in branch account is less than home office account, the branch failed to do the following, except;
Response: recorded cash transfer received from home office.
Correct answer: allocate a home office expense paid by branch.
Score:
0 out of 1
No
Question 46
Sales P600,000
Cost of Sales:
Total P460,000
12/1/2012 12/31/2012
Total P80,000 P100,000
At what percentage of cost did the home office bill the branch for merchandise shipped to it?
Response: 140%
Correct answer: 140%
Score:
1 out of 1
Yes
Question 47
In acquiring the net assets of another entity, the acquirer usually manages the day-to-day operations of the acquiree.
Response: True
Score:
1 out of 1
Yes
Question 48
The Boy George Company acquired the net assets of the Girl Conrad Company on January 1, 2015, and made the following entry to record the purchase:
Current assets 100,000
Equipment 150,000
Land 50,000
Buildings 300,000
Goodwill 100,000
Liabilities 80,000
Common stock, $1 par 100,000
Paid-in capital in excess of par 520,000
Assuming that additional shares on January 1, 2017 would be issued on that date to compensate for any fall in the value of Boy George common stock below
16pershare. T hesettlementwouldbetocurethedef iciencybyissuingaddedsharesbasedontheirf airvalueonJ anuary1, 2017.T hef airpriceof thesharesonJ anuary1, 2017was 10
What is the additional number of shares issued on January 1, 2017 to compensate for any fall in the value of the stock?
Response: 60,000
Score:
1 out of 1
Yes
Question 49
Shares issued as consideration in an acquisition are recorded at –
Response: their fair value as at the date when the acquirer obtains control over the assets and operations of the acquiree.
Correct answer: their fair value as at the date when the acquirer obtains control over the assets and operations of the acquiree.
Score:
1 out of 1
Yes
Question 50
If the investment in branch account is greater than the home office account, the branch fails to record a
Response: branch expense paid by home office.
Correct answer: branch expense paid by home office.
Score:
1 out of 1
Yes
11/4/21, 11:42 PM B-ACTG317 BSA31 1st Sem ( 2021-2022 ) - https://dlsud.edu20.org/student_quiz_assignment/submissions/28196695
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B-ACTG317 BSA31 1st Sem ( 2021-2022 )

Submissions
Question 1
Ivon Co. issued common stock with a par value of P450, 000 and a market value of P700, 000 to acquire the net assets of Bill Inc., in a business combination. Ivon reported net assets of
P2M and liabilities of P542, 000 immediately before the business combination. Bill Inc.’s assets and liabilities had a book values of P460, 000 and P187, 000, respectively. The fair values
of Bill’s assets and liabilities were P600, 000 and P188, 000, respectively. What amount should be reported as total assets of the combined entity immediately following the business
combination?
Response: P2.888M
Score:
1 out of 1
Yes
Question 2
Home Office Branch Combined

Cost of goods available for sale Php245,000 Php34,300 Php272,500
Purchases 250,000 10,000 260,000
Beginning inventory, acquired from outside supplier 10,000 500 12,500
How much is the mark-up on branch's beginning inventory?
Response: Php2,000
Correct answer: Php800
Score:
0 out of 1
No
Question 3
The Boy George Company acquired the net assets of the Girl Conrad Company on January 1, 2015, and made the following entry to record the purchase:
Current assets 100,000
Equipment 150,000
Land 50,000
Buildings 300,000
Goodwill 100,000
Liabilities 80,000
Paid-in capital in excess of par 520,000
Assuming that additional shares on January 1, 2017 would be issued on that date to compensate for any fall in the value of Boy George common stock below
16pershare. T hesettlementwouldbetocurethedef iciencybyissuingaddedsharesbasedontheirf airvalueonJ anuary1, 2017.T hef airpriceof thesharesonJ anuary1, 2017was 10
What is the additional number of shares issued on January 1, 2017 to compensate for any fall in the value of the stock?
Response: 60,000
Score:
1 out of 1
Yes
https://dlsud.edu20.org/student_quiz_assignment/submissions/28196695 1/12
Question 4
Score:
1 out of 1
Yes
Question 5
The Ventures Corporation decided to open a branch store in Manila. Shipments of merchandise to the branch totaled Php32,400 which included a 20% mark-up on cost. All
accounting records are to be kept at the home office. The branch submitted the following report summarizing its operations for the period ended December 31, 20x4.
Sales on account Php44,400

Sales on cash basis 13,200
Collections of accounts 36,000
Expenses paid 22,800
Expenses unpaid 7,200
Purchase of merchandise for cash 15,600
Inventory on hand, December 31 (80% from home office) 18,000
Remittances to home office 33,000
What is the adjusted balance of the allowance for overvaluation of branch inventory account?
Response: Php2,400
Score:
1 out of 1
Yes
Question 6

Cost 7,200
Score:
1 out of 1
Yes
Question 7
Kulas Corporation has one branch operation located 500 miles away from the home office. The branch office sales merchandise which is shipped to it from the
home office. The merchandise is transferred at cost but the branch pays reasonable freight charges. The branch office makes sales and incurs and pays operating
expenses. At the end of the current accounting period the true adjusted balance for the home office account on the branch’s books and the branch office account
on the home office’s books is P500,000.
The following items may or may not be reconciling items. The current year is 2012.
1) The home office has shipped merchandise to the branch office which cost P10,000 and which incurs P500 freight charges paid by the home office but charged
to the branch. This merchandise is received by the branch on January 5, 2012.
2) The branch has transmitted P17,000 in cash back to the home office as a partial payment on such purchased merchandise. This cash is received by the home
office on January 6, 2012.
3) The branch office returns some defective merchandise to the home office. The cost of the returned merchandise is P750. The branch office pays P25 of freight
costs which will be charged back to the home office.
4) On December 1, 2012, the home office sends a check for P25,000 to replenish the branch’s charged back to the home office.
5) The branch pays an advertising expense of P800 that should have been paid by the home office since it applied to advertising fees incurred by the home office
of its own benefit.
6) The home office allocated P12,000 of general and administrative expenses to the branch. The branch had not entered the allocation as of the end of the year.
7) The home office pays insurance premiums on the branch store. The amount paid by the home office is P1,000 but the branch erroneously records it as
P776.00
What is the unadjusted balance of the Branch account?
Response: 452,276
Score:
0 out of 1
No
Question 8
Abakada Incorporated acquired all the assets and liabilities of Egaha Company on January 1, 2018. The consideration are as follows:
Cash 2,000,000
Equipment 500,000
Cash contingency 30,000
Stock contingency 50,000
Bank loan, at face value 1,000,000
The cash payments are distributed to the following payees:
Former owners of Egaha Company 1,800,000

Lawyers for legal services 80,000
Actuarial for valuation of Egaha's net assets 50,000
Bank, transaction costs for the bank loan 70,000
Answer the following independent questions:
If bargain purchase gain on the acquisition amounted to Php40,000, how much could be the fair value of net assets acquired?
Feedback:
Score:
0 out of 1
No
Question 9
When a branch returns goods to home office, a debit of home office account is adjusted on the home office books.
Response: False
Score:
1 out of 1
Yes
Question 10
Cash Php700,000

Current Noncurrent
If Papi and Papu has a precombination balances of noncurrent assets for Php2,500,000, and Php1,288,000, respectively, how much is the combined balance of noncurrent assets?
Feedback:
Score:
0 out of 1
No
Question 11
In an asset acquisition, the company transferring cash or other assets and/or assuming liabilities is the –
I - acquiring company
II - acquired company
III - investing company
Response: I only
Correct answer: I and III only
Score:
0 out of 1
No
Question 12
If the home office transferred a 2-year old equipment to the branch, with a freight on the transfer paid by the home office, the investment in branch shall be
Response: credited at cost plus freight.
Correct answer: debited at book value plus freight.
Score:
0 out of 1
No
Question 13
Score:
1 out of 1
Yes
Question 14
Billed price includes the cost of acquiring the goods from another party other than the home office.
Response: False
Score:
1 out of 1
Yes
Question 15
Negative goodwill arise when
Response: consideration transferred is less than the fair value of net assets acquired.
Correct answer: consideration transferred is less than the fair value of net assets acquired.
Score:
1 out of 1
Yes
Question 16
If the investment in branch account is less than the home office account, the home office failed to
Response: recognized the realized mark-up on branch inventory.
Correct answer: record the branch’s net income.
Score:
0 out of 1
No
Question 17
Under business combination for SMEs, direct and indirect expenses are classified as expenses chargeable to retained earnings.
Response: True
Score:
0 out of 1
No
Question 18
When a branch received the payment for the accounts receivable of the home office and such collection is not yet remitted, the home office account on the books of the branch will be
debited.
Response: False
Score:
1 out of 1
Yes
Question 19
Shipments from home office is debited in the following cases, except
Response: when a branch receives merchandise from outside supplier.
Correct answer: when a branch receives merchandise from outside supplier.
Score:
1 out of 1
Yes
Question 20
Keena Limutan Company was acquired by Pheona Alala Incorporated for the following consideration at fair value: Cash - 200, 000; Land−500,000; and 10,000 Pheona ordinary shares at
10pershare. T heparvalueof P heona sordinaryshareis 5. Stock issuance cost resulted from the combination amounted to
′
10, 000.I f thelandincludedasaconsiderationhasacarryingvalueof 400,000, the total shareholders’equity of Pheona will increase by
Response: $40,000.
Correct answer: $90,000.
Score:
0 out of 1
No
Question 21
Auto Supply Company is engaged in merchandising both at its home office in Cebu City and its branch in Toledo City. Selected accounts taken from the trial
balances of the home office and the branch as of December 31, 2012 follow:

Purchases 190,000 105,000
Freight in from home office 5,500

Credits
Home Office P 53,300
Sales P155,000 140,000
1,000
· The Toledo City branch gets all of its merchandise from the home office. The home office bills the goods at cost plus a 10% mark-up. At December 31, 2012,
a shipment with a billed value of P5,000 was still in transit. Freight on this shipment was P250 and is to be treated as part of the inventory.
· Inventories on December 31, 2012, excluding the shipment in transit, follow:
Home office, at cost………………………………….……….. P30,000
What is the net income of the branch in so far as the home office is concerned?
Response: P10,470
Score:
1 out of 1
Yes
Question 22
follows:
Assets 5,250,000.00 6,800,000.00 900,000.00
Liabilities 3,950,000.00 2,650,000.00 530,000.00
What is the total stockholder’s equity in the combined statement of financial position after combination on September 1, 2018?
Response: P6.200M
Score:
0 out of 1
No
Question 23
If the home office transferred a 2-year old equipment to the branch, with a freight on the transfer, the equipment account in the branch’s book shall be
Response: debited at book value plus freight.
Feedback:
Correct answer: debited at cost plus freight.
Score:
0 out of 1
No
Question 24
Goodwill is:
Response: Reported when the fair value of the acquiree is greater than the fair value of the net identifiable assets acquired.
Correct answer: Reported when the fair value of the acquiree is greater than the fair value of the net identifiable assets acquired.
Score:
1 out of 1
Yes
Question 25
If the freight on the shipments of merchandise to a branch is paid by the home office. Freight is
Response: credited in home office books.
Correct answer: debited in branch books.
Score:
0 out of 1
No
Question 26
On December 31, 2012, the home office account on the branch books shows a balance of P9,735. The following reconciling data are determined in accounting for
the difference.
a. Merchandise billed at P615 shipped by the home office to the branch on December 28 is still in transit.
b. The branch collected a home office accounts receivable of P2,500, but failed to notify the home office of this collection.
c. The home office recorded the branch net income for November at P1,125. This was in error, as the branch reported net income was P1,215.
d. The home office was charged P640 when the branch returned merchandise to the home office on December 31. The merchandise is in transit.
The unadjusted balance of Branch account is
Response: P10,990
Score:
0 out of 1
No
Question 27
Just after a business combination, the combined balance sheet at date of acquisition would have an assets equal to __________
Response: acquirer’s assets at fair value and acquiree’s assets at book value.
Correct answer: acquirer’s assets at book value and acquiree’s assets at fair value.
Score:
0 out of 1
No
Question 28
Cash Php700,000

Current Noncurrent
Assume Papi has a total assets prior to business combination of Php2,500,000, and Papu's building has a provisional value of Php500,000, and was discovered that on June 1, 2019, its fair
value as of acquisition date is Php480,000. How much is adjustd total assets of the combined entity?
Feedback:
Score:
1 out of 1
Yes
Question 29
Kulas Corporation has one branch operation located 500 miles away from the home office. The branch office sales merchandise which is shipped to it from the
home office. The merchandise is transferred at cost but the branch pays reasonable freight charges. The branch office makes sales and incurs and pays operating
expenses. At the end of the current accounting period the true adjusted balance for the home office account on the branch’s books and the branch office account
on the home office’s books is P500,000.
1) The home office has shipped merchandise to the branch office which cost P10,000 and which incurs P500 freight charges paid by the home office but charged
2) The branch has transmitted P17,000 in cash back to the home office as a partial payment on such purchased merchandise. This cash is received by the home
office on January 6, 2012.
3) The branch office returns some defective merchandise to the home office. The cost of the returned merchandise is P750. The branch office pays P25 of freight
costs which will be charged back to the home office.
5) The branch pays an advertising expense of P800 that should have been paid by the home office since it applied to advertising fees incurred by the home office
of its own benefit.
7) The home office pays insurance premiums on the branch store. The amount paid by the home office is P1,000 but the branch erroneously records it as
P776.00
What is the unadjusted balance of the Home Office account?
Response: P481,425
Score:
0 out of 1
No
Question 30
A branch’s ending inventory of merchandise shipped by the home office and purchased from outside vendors amounts to P 50,000. The post-closing trial balance
in the Unrealized Gross Profit in Branch Inventory account is P 6,000 due to the home office practice of shipping merchandise at 20% above cost. The
merchandise purchased from outside vendors contained in the ending inventory of the branch amounts to:
Response: P 18,000
Correct answer: P 14,000
Score:
0 out of 1
No
Question 31
Control over an acquiree can be attained through which of the following?
Response: acquisition of the acquiree stock
Correct answer: either acquisition of the acquiree assets or stock
Score:
0 out of 1
No
Question 32
Branch is created by the home office, while sales agency is being acquired by the home office.
Response: False
Score:
1 out of 1
Yes
Question 33
Under full PFRS business combination, direct and indirect expenses are classified as expenses chargeable to retained earnings.
Response: True
Score:
1 out of 1
Yes
Question 34
follows:
Assets 5,250,000.00 6,800,000.00 900,000.00
Liabilities 3,950,000.00 2,650,000.00 530,000.00
What is the goodwill to be recorded by Z Co. on its September 1, 2018?
NARREND
Response: P480,000
Score:
0 out of 1
No
Question 35
Yul Trading Corp. operates a branch in Talisay City. At the close of business on December 31, 2012, Talisay Branch account in the home office books showed a
debit balance of P225,770. The interoffice accounts were in agreement at the beginning of the year. For purposes of reconciling the interoffice accounts, the
following facts were ascertained:
1. An office equipment costing the home office P3,5000 was picked up by the branch as P350.
2. Insurance premium of P675 charged by the home office was taken up twice by the branch.
3. Freight charges on merchandise made by the home office for P1,125 were recorded in the branch book as P1,215.
4. Home office credit memo representing a discount on merchandise for P800 was not recorded by the branch.
5. The branch failed to take up a P700 debt memo from the home office representing the share of the branch in the advertising.
6. The home office inadvertently recorded a remittance for P3,000 from the Cebu branch as a remittance from its Talisay branch.
What is the balance of the Home Office account before adjustment as of December 31, 2012?
Response: 225,770
Score:
0 out of 1
No
Question 36
In some instances, a debit or credit in the investment in branch account does not necessarily mean a debit or credit in the home office account.
Response: False
Score:
1 out of 1
Yes
Question 37
On June 30, 2018 White Co. issued 100, 000 shares of its P20 par value common stock for the net assets of Black Co. in a business combination accounted for by acquisition method. The
market value of White’s shares on June 30 was P36 per share. White paid a fee of P100, 000 to the broker who arranged this acquisition. Costs of SEC registration and issuance of the equity
securities to P50, 000. Contingent consideration determined to be paid to Black Co. after acquisition amounts to P120, 000. What amount should White capitalize as the cost of Acquiring
Black’s net assets?
Response: P3.22M
Score:
0 out of 1
No
Question 38
The acquirer records the shareholders’ equity of the acquiree after the acquisition.
Response: True
Score:
0 out of 1
No
Question 39
If a delivery truck is to be recorded by the branch, depreciation expense should be recorded by the home office.
Response: False
Score:
1 out of 1
Yes
Question 40
On June 1, 2018, Jony Co. purchased all the outstanding shares of Iwa Co. for P4M. at that time, Iwa’s statement of financial position shows net assets of P2.5M. Iwa’s net assets and
liabilities had fair market values different from their book values, as follows:
PPE (net) 5,000,000.00 5,750,000.00
Other Assets 500,000.00 350,000.00
Long-term debt 3,000,000.00 2,800,000.00
As a result of the combination, what amount, if any, will be shown as goodwill in the June 1, 2018 consolidated statement of financial position of Jony Co. and its wholly owned subsidiary,
Iwa Company?
Response: P500,000
Score:
0 out of 1
No
Question 41
A furniture was purchased by the home office and subsequently transferred to the branch. The freight was paid by the branch. The home office maintains all fixed asset account. The home
office account shall be
Response: credited for the cash price plus freight.
Correct answer: debited for the freight.
Score:
0 out of 1
No
Question 42
The net assets of BB Company have a book value of 180, 000andaf airmarketvalueof 252,000. Among the undervalued assets are the plant and equipment which have a book value of
120, 000andaf airvalueof 135,000. AA Company issues stock with a par value of 150, 000andamarketvalueof 360,000 for the net assets of BB Company. Shortly after the stock issue
BB merges with AA Company. At what amount should BB’s plant and equipment be recorded on AA Company’s books.
Response: $135,000
Score:
1 out of 1
Yes
Question 43
Durable Textile Company has a single branch in Bohol. On March 1, 2012, the home office accounting records included an Allowance for Overvaluation of
Inventories – Bohol Branch ledger account with a credit balance of P32,000. During March, merchandise costing P36,000 was shipped to the Bohol Branch and
billed at a price representing a 40% markup on the billed price. On March 31, 2012, the branch prepared an income statement indicating a net loss of P11,500 for
March and ending inventories at billed prices of P25,000. What is the amount of adjustment for allowance for Overvaluation of Inventories to reflect the true
branch net income?
Response: P39,257 debit
Correct answer: P46,000 debit
Score:
0 out of 1
No
Question 44
The allowance for branch inventory overvaluation has a beginning and ending balance of Php20,000 and Php18,000. Current shipments during the year amounted to
Php144,000 at billed price. If shipments are billed with a mark-up of 20%. The realized gross profit from the sale of branch inventory will be debited to allowance for
branch inventory overvaluation at
Response: Php22,000.
Feedback:
Correct answer: Php26,000.
Score:
0 out of 1
No
Question 45
In an acquisition where there is an exchange of assets for assets, how does the value of the acquiree change?
Response: the net assets may increase, decrease or remain the same
Correct answer: the net assets may increase, decrease or remain the same
Score:
1 out of 1
Yes
Question 46
Astro Corporation purchased the net assets of Bistro Corporation in exchange of its own shares of stocks with a fair value of
96, 000.Onthedateof purchase, BistroC orporationhadnolong − terminvestmentsinmarketablesecurities. T heliabilitiesof thecorporationamountedto 12,000. The market
values of its assets were:
Current assets $48,000
Noncurrent assets 72,000
Total $120,000
The noncurrent assets acquired by Astro should be recorded at:
Response: $84,000
Score:
0 out of 1
No
Question 47
Assignment of portion of operating expense by the home office to the branch tends to increase the home office account on the books of the branch.
Response: False
Score:
0 out of 1
No
Question 48
The following information is extracted from the books and records of Elaine Company and its branch. The balances are at December 31, 2012 of the company’s
operations.
Home Office Branch

Sales P260,000
Shipments to branch P 78,000
Purchases 39,000
Expenses 78,000
Inventory, January 1, 2012 26,000
However, no shipments in transit between home office and the branch were made. Both shipments accounts are properly recorded. The ending inventory includes
merchandise acquired from the home office in the amount of P26,000 and P7,800 acquired from outsiders acquired from the home office in the amount of P26,000
and P7,800 acquired from outsiders for a total of P33,800.
What is the realized profit in branch inventory?
Response: P24,700
Score:
1 out of 1
Yes
Question 49
Home Office Branch

Expenses 80,000 32,000
1/3 of the cost of ending branch inventory, in the point of view of home office, is acquired from home office. The ending inventory in the combined financial statement
showed Php13,500. Half of the branch's cost of goods sold per GAAP were acquired from home office.
How much is the cost of goods sold in the combined income statement?
Response: 92,850
Score:
0 out of 1
No
Question 50
Contingent consideration is the amount added by the acquirer in the acquisition cost of the net assets of another entity provided a certain consideration has been met.
Response: True
Score:
1 out of 1
Yes
11/4/21, 11:54 PM B-ACTG317 BSA31 1st Sem ( 2021-2022 ) - Child - Period AY2021-2022 - 1st - https://dlsud.edu20.org/student_quiz_assignment/submissions/28200271
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B-ACTG317 BSA31 1st Sem ( 2021-2022 ) - Child - Period AY2021-2022 - 1st

Submissions
Question 1
A credit to investment in branch account means a debit in the home office account.
Response: True
Score:
1 out of 1
Yes
Question 2
Which statement about home office account is correct?
Response: The home office account is added to retained earnings in the combined financial statement.
Correct answer: The home office account should not appear in the combined financial statement.
Score:
0 out of 1
No
Question 3
Cash Php700,000

Current Noncurrent
Assume that Papu's land has a provisional value of Php500,000, and was discovered that on June 1, 2019, the fair value of the land as of acquisition date is Php520,000, how much is the goodwil or bargain purchase gain?
Score:
0 out of 1
No
Question 4
Statutory merger is a(n)
Response: business combination in which only one of the two companies continues to exist as a legal corporation
Correct answer: business combination in which only one of the two companies continues to exist as a legal corporation
Score:
1 out of 1
Yes
Question 5
In recording depreciation expense for a branch fixed asset, the home office debited depreciation expense and credited accumulated depreciation, while the entry made in the branch’s book is correct. Which of the following is incorrect?
Response: Home office net income will understate.
Correct answer: Investment in branch account is understateed.
Score:
0 out of 1
No
Question 6
Score:
1 out of 1
Yes
Question 7
Sales P600,000
Cost of Sales:
Total P460,000
12/1/2012 12/31/2012
Total P80,000 P100,000
At what percentage of cost did the home office bill the branch for merchandise shipped to it?
Response: 120%
Correct answer: 140%
Score:
0 out of 1
No
Question 8
Kulas Corporation has one branch operation located 500 miles away from the home office. The branch office sales merchandise which is shipped to it from the home office. The merchandise is transferred at cost but
the branch pays reasonable freight charges. The branch office makes sales and incurs and pays operating expenses. At the end of the current accounting period the true adjusted balance for the home office account on
the branch’s books and the branch office account on the home office’s books is P500,000.
1) The home office has shipped merchandise to the branch office which cost P10,000 and which incurs P500 freight charges paid by the home office but charged to the branch. This merchandise is received by the
branch on January 5, 2012.
2) The branch has transmitted P17,000 in cash back to the home office as a partial payment on such purchased merchandise. This cash is received by the home office on January 6, 2012.
3) The branch office returns some defective merchandise to the home office. The cost of the returned merchandise is P750. The branch office pays P25 of freight costs which will be charged back to the home office.
5) The branch pays an advertising expense of P800 that should have been paid by the home office since it applied to advertising fees incurred by the home office of its own benefit.
7) The home office pays insurance premiums on the branch store. The amount paid by the home office is P1,000 but the branch erroneously records it as P776.00
What is the unadjusted balance of the Home Office account?
Response: 452,276
Score:
1 out of 1
Yes
Question 9
Reported branch net income is always understated as compared to the T branch net income.
Response: True
Score:
0 out of 1
No
Question 10
Man Inc. purchased all of the net assets of Woman Company on January 2, 2014 by issuing 3,200 shares of its 10𝑝𝑎𝑟𝑐𝑜𝑚𝑚𝑜𝑛𝑠ℎ𝑎𝑟𝑒𝑠. 𝐴𝑡𝑡ℎ𝑒𝑡𝑖𝑚𝑒, 𝑡ℎ𝑒𝑠𝑡𝑜𝑐𝑘𝑤𝑎𝑠𝑠𝑒𝑙𝑙𝑖𝑛𝑔𝑓 𝑜𝑟 30 per share. Direct costs associated with consummating the combination
totaled 1, 600.𝑈 𝑛𝑑𝑒𝑟𝐼 𝐹 𝑅𝑆3, 𝑤ℎ𝑎𝑡𝑡𝑜𝑡𝑎𝑙𝑎𝑚𝑜𝑢𝑛𝑡𝑠ℎ𝑜𝑢𝑙𝑑𝑡ℎ𝑒𝑛𝑒𝑡𝑎𝑠𝑠𝑒𝑡𝑠𝑎𝑐𝑞𝑢𝑖𝑟𝑒𝑑𝑏𝑒𝑟𝑒𝑐𝑜𝑟𝑑𝑒𝑑𝑏𝑦𝑀 𝑎𝑛𝐼 𝑛𝑐. , 𝑎𝑠𝑠𝑢𝑚𝑖𝑛𝑔𝑡ℎ𝑎𝑡𝑐𝑜𝑛𝑡𝑖𝑛𝑔𝑒𝑛𝑡𝑐𝑜𝑛𝑠𝑖𝑑𝑒𝑟𝑎𝑡𝑖𝑜𝑛𝑜𝑓 2,000 is determined?
Response: $98,000
Score:
1 out of 1
Yes
Question 11
Gain on acquisition bargain is determined when the fair value of the net assets acquired is greater than its acquisition cost.
Response: True
Score:
1 out of 1
Yes
Question 12
When a branch received the payment for the accounts receivable of the home office and such collection is not yet remitted, the home office account on the books of the branch will be debited.
Response: True
Score:
0 out of 1
No
Question 13
If the acquisition resulted to neither goodwill nor bargain purchase gain,
Response: The book value of net assets acquired is equal to the fair value of net assets acquired by the acquirer.
Correct answer: The fair value of net assets acquired is equal to the consideration paid by the acquirer.
Score:
0 out of 1
No
Question 14
If the home office transferred a 2-year old equipment to the branch, with a freight on the transfer paid by the home office, the investment in branch shall be
Response: debited at book value plus freight.
Correct answer: debited at book value plus freight.
Score:
1 out of 1
Yes
Question 15
Home Office Branch

Expenses 80,000 32,000
1/3 of the cost of ending branch inventory, in the point of view of home office, is acquired from home office. The ending inventory in the combined financial statement showed Php13,500. Half of the branch's cost of goods sold
per GAAP were acquired from home office.
The combined cost of goods available for sale amounted to
Response: 108,000
Score:
0 out of 1
No
Question 16
Assignment of portion of operating expense by the home office to the branch tends to increase the home office account on the books of the branch.
Response: False
Score:
0 out of 1
No
Question 17
Selected information from the trial balances for the home office and the branch of Lalay Company at December 31, 2012 is provided. The branch acquires merchandise from the home office and outside suppliers.
Home Office Branch
Sales P60,000 P30,000
Expenses 14,000 6,000
Home office P20,000
The billing rate of home office to branch for merchandise shipments is
Response: 125% of cost
Correct answer: 125% of cost
Score:
1 out of 1
Yes
Question 18
Contingent consideration is the amount added by the acquirer in the acquisition cost of the net assets of another entity provided a certain consideration has been met.
Response: True
Score:
1 out of 1
Yes
Question 19
Selected information from the trial balances for the home office and the branch of Lalay Company at December 31, 2012 is provided. The branch acquires merchandise from the home office and outside suppliers.
Home Office Branch
Sales P60,000 P30,000
Expenses 14,000 6,000
Home office P20,000
How much of the December 1 inventory of the branch represent purchases from outsiders and goods shipped from home office
Response: Home office, P8,000 and Outsiders, P7,000
Correct answer: Home office, P8,000 and Outsiders, P7,000
Score:
1 out of 1
Yes
Question 20
The investment in branch account is debited in the following cases, except
Response: Collection by branch of home office’s customer’s account.
Correct answer: Payment by branch of home office’s suppliers’ account.
Score:
0 out of 1
No
Question 21
When the contingent consideration took effect thirteen months after the acquisition date, the gain on purchase bargain is adjusted.
Response: False
Score:
1 out of 1
Yes
Question 22
The following are the transactions that occurred during the year:
* Home office shipped Php100,000 cost of merchandise to the branch.
* The branch returned to home office merchandise with a billed price of Php13,200.
* The branch has cash sales of Php75,000 during the year, and credit sales of Php80,000.
* Total expenses of the branch amounted to Php20,000.
* The branch reported a cost of sales of Php99,000.
* Expenses include Php2,000 depreciation expense of fixed asset maintained in the home office's books.
All inventories of the branch are acquired from home office at 110% billed price. The investment in branch and home office accounts have an opening balance of Php100,000 each. How much is the ending balance of investment
in branch account?
Score:
1 out of 1
Yes
Question 23

Cost 7,200
Score:
0 out of 1
No
Question 24
A journal entry includes the investment in branch account in the following cases, except
Response: Collection by branch of home office’s customer’s account.
Correct answer: Shipments of equipment for the branch use, with the fixed asset account being maintained in the home office books.
Score:
0 out of 1
No
Question 25
Roxette Corporation regulary ships merchandise to its Boracay branch with a mark-up on cost of 20%. During the current year, the head office of Roxette ships merchandise to Boracay branch with a cost of Php20,000. The entry
in the books of Boracay branch would include a
Response: debit to shipments from home office account for Php24,000.
Correct answer: debit to shipments from home office account for Php24,000.
Score:
1 out of 1
Yes
Question 26
Home Office Branch

Revenues 120,000 60,000
How much is the equity in the combined financial statements?
Feedback:
Score:
0 out of 1
No
Question 27
Ivon Co. issued common stock with a par value of P450, 000 and a market value of P700, 000 to acquire the net assets of Bill Inc., in a business combination. Ivon reported net assets of P2M and liabilities of P542, 000 immediately before the business
combination. Bill Inc.’s assets and liabilities had a book values of P460, 000 and P187, 000, respectively. The fair values of Bill’s assets and liabilities were P600, 000 and P188, 000, respectively. What amount should be reported as total assets of the
combined entity immediately following the business combination?
Response: P2.888M
Score:
1 out of 1
Yes
Question 28
Sales P600,000
Cost of Sales:
Total P460,000
12/1/2012 12/31/2012
Total P80,000 P100,000
What is the balance of the Allowance for Overvaluation in the branch inventory at December 31, 2013?
Response: P24,000
Score:
1 out of 1
Yes
Question 29
On June 30, 2018 White Co. issued 100, 000 shares of its P20 par value common stock for the net assets of Black Co. in a business combination accounted for by acquisition method. The market value of White’s shares on June 30 was P36 per share.
White paid a fee of P100, 000 to the broker who arranged this acquisition. Costs of SEC registration and issuance of the equity securities to P50, 000. Contingent consideration determined to be paid to Black Co. after acquisition amounts to P120,
000. What amount should White capitalize as the cost of Acquiring Black’s net assets?
Response: P3.72M
Score:
1 out of 1
Yes
Question 30
Just after a business combination, the combined balance sheet at date of acquisition would have an assets equal to __________
Response: acquirer’s assets at book value and acquiree’s assets at fair value.
Correct answer: acquirer’s assets at book value and acquiree’s assets at fair value.
Score:
1 out of 1
Yes
Question 31
The net assets of Suman Co. have a book value of P150, 000 and a fair value of P180, 000. Puma Co. paid P250, 000 cash for all the net assets of Suman Co. Puma also paid P50, 00 to an investment house as finder’s fee. At what amount should
goodwill be recorded on Puma Company’s books?
Response: P70,000
Score:
1 out of 1
Yes
Question 32
The home office reported total assets and liabilities of Php200,000, and Php40,000, respectively. The branch reported as well assets and liabilities of Php80,000, and Php50,000, respectively. How much is the combined total
assets?
Score:
0 out of 1
No
Question 33
Stock issuance cost is a reduction of which of the following accounts?
Response: All of the above
Correct answer: All of the above
Score:
1 out of 1
Yes
Question 34
On June 1, 2018, Jony Co. purchased all the outstanding shares of Iwa Co. for P4M. at that time, Iwa’s statement of financial position shows net assets of P2.5M. Iwa’s net assets and liabilities had fair market values different from their book values, as
follows:
PPE (net) 5,000,000.00 5,750,000.00
Other Assets 500,000.00 350,000.00
Long-term debt 3,000,000.00 2,800,000.00
As a result of the combination, what amount, if any, will be shown as goodwill in the June 1, 2018 consolidated statement of financial position of Jony Co. and its wholly owned subsidiary, Iwa Company?
Response: P700,000
Score:
1 out of 1
Yes
Question 35
If additional payment is to be made but subject to a condition, such amount is presented as
Response: liability at an amount equal to the present value of the additional cash payment after considering the likelihood of the happening of the condition.
Correct answer: liability at an amount equal to the present value of the additional cash payment after considering the likelihood of the happening of the condition.
Score:
1 out of 1
Yes
Question 36
Merger is the same with statutory consolidation.
Response: False
Score:
1 out of 1
Yes
Question 37
Score:
1 out of 1
Yes
Question 38
Statement of Financial Position reflecting uniform accounting procedures, as well as fair values that are to be used as basis of the combination are prepared on September 1, 2018 as follows:
Assets 5,250,000.00 6,800,000.00 900,000.00
Liabilities 3,950,000.00 2,650,000.00 530,000.00
On September 1, 2018, Z Co. acquires all of the assets and assume the liabilities of Y Co. and X Co. by issuing 200, 000 shares of its stocks to Y Co. and 29, 000 shares of its stocks to X Co. Z Co. also pays P10, 000 for registering and issuing
securities and P20, 000 for other acquisition costs of combination.
What is the goodwill to be recorded by Z Co. on its September 1, 2018?
NARREND
Response: P518,000
Score:
1 out of 1
Yes
Question 39
Statement of Financial Position reflecting uniform accounting procedures, as well as fair values that are to be used as basis of the combination are prepared on September 1, 2018 as follows:
Assets 5,250,000.00 6,800,000.00 900,000.00
Liabilities 3,950,000.00 2,650,000.00 530,000.00
On September 1, 2018, Z Co. acquires all of the assets and assume the liabilities of Y Co. and X Co. by issuing 200, 000 shares of its stocks to Y Co. and 29, 000 shares of its stocks to X Co. Z Co. also pays P10, 000 for registering and issuing
securities and P20, 000 for other acquisition costs of combination.
Response: P13.438M
Score:
1 out of 1
Yes
Question 40
′
Keena Limutan Company was acquired by Pheona Alala Incorporated for the following consideration at fair value: Cash - 200, 000; 𝐿𝑎𝑛𝑑−500,000; and 10,000 Pheona ordinary shares at 10𝑝𝑒𝑟𝑠ℎ𝑎𝑟𝑒. 𝑇 ℎ𝑒𝑝𝑎𝑟𝑣𝑎𝑙𝑢𝑒𝑜𝑓 𝑃 ℎ𝑒𝑜𝑛𝑎 𝑠𝑜𝑟𝑑𝑖𝑛𝑎𝑟𝑦𝑠ℎ𝑎𝑟𝑒𝑖𝑠 5.
Stock issuance cost resulted from the combination amounted to 10, 000.𝐼 𝑓 𝑡ℎ𝑒𝑙𝑎𝑛𝑑𝑖𝑛𝑐𝑙𝑢𝑑𝑒𝑑𝑎𝑠𝑎𝑐𝑜𝑛𝑠𝑖𝑑𝑒𝑟𝑎𝑡𝑖𝑜𝑛ℎ𝑎𝑠𝑎𝑐𝑎𝑟𝑟𝑦𝑖𝑛𝑔𝑣𝑎𝑙𝑢𝑒𝑜𝑓 400,000, the total shareholders’equity of Pheona will increase by
Response: $90,000.
Correct answer: $90,000.
Score:
1 out of 1
Yes
Question 41
Combined cost of sales of the home office and branch includes the original cost of sales of the home office and cost of sales at billed price of the branch.
Response: True
Score:
0 out of 1
No
Question 42
T branch net income may also be the reported branch net income.
Response: True
Score:
1 out of 1
Yes
Question 43
The allowance for branch profit inventory overvaluation has decreased by Php400. Mark-up on shipments of merchandise to branch is 10% on cost. The branch has cost of goods available for sale amounted to Php360,000, 25%
of which remain unsold at year-end which is 20% higher compared to last year. The branch also acquire merchandise from outside supplier. If the branch’s inventory beginning from outside purchases amounted to Php31,000, the
ending inventory to appear in the consolidated financial statement would amount to -
Response: Php75,000.
Feedback:
Score:
0 out of 1
No
Question 44
If the investment in branch account is greater than the home office account, the branch fails to record a
Response: cash remittance to home office.
Correct answer: branch expense paid by home office.
Score:
0 out of 1
No
Question 45
When Brawl Co. acquired Crawl Co.’s net assets by issuing its own capital stock, it had the following acquisition - related costs:
Broker's fee 50,000.00
Pre-acquisition audit fee 40,000.00
General administrative fee costs 15,000.00
Legal fees for the combination 32,000.00
Audit fee for SEC registration of stock issue 46,000.00

SEC registration fee for stock issue 5,000.00
Other acquisition costs 6,000.00
7. How much should be treated as direct expense and deduction from APIC respectively?
Response: P143,000; P51,000
Correct answer: P140,000; P51,000
Score:
0 out of 1
No
Question 46
Jojo Inc. purchased all of the assets of Momo Inc. on January 2, 2018 by issuing 8, 000 shares of its P10 par common stock. At the time, the stock was selling for P30 per share. Direct costs associated with consummating the combination totaled P4,
000. Under IFRS 3, what total amount should the net assets acquired be recorded by Jojo Inc. Assuming that contingent consideration is P5, 000.?
Response: P245,000
Score:
1 out of 1
Yes
Question 47
Negative goodwill arise when
Response: consideration transferred is less than the fair value of net assets acquired.
Correct answer: consideration transferred is less than the fair value of net assets acquired.
Score:
1 out of 1
Yes
Question 48
If the home office transferred a 2-year old equipment to the branch, the home office account shall be
Response: debited at book value.
Correct answer: credited at book value.
Score:
0 out of 1
No
Question 49
The branch reported the following:
Beginning inventory - home office Php10,000

Purchases 80,000
Purchase discount 2,000
Freight in - home to branch 1,000
Freight in - supplier to branch 500
If 20% and 10% of the merchandise available for sale that is acquired from home office and from outside supplier, respectively, remain unsold as of year end, how much is the cost of goods sold per branch book?
Score:
0 out of 1
No
Question 50
Pool Company issued 120, 000 of its P10 par value common stock with a fair value of P2.55M for the net assets of Spot Company. In addition, Pool incurred the following acquisition-related costs:
Legal fees to arrange the business combination 25,000.00
Costs of SEC registration, including accounting and legal fees 12,000.00
Cost of issuing stock certificates 3,000.00
Documentary Stamp tax 20,000.00
Immediately after the business combination in which Spot Company was dissolved, Spot’s net assets and equities were as follows:
Current Assets 2,000,000.00 1,100,000.00
Plant Assets 1,500,000.00 2,200,000.00
Liabilities 300,000.00 300,000.00
Common Stock 2,000,000.00
Retained Earnings 200,000.00
What is the amount of goodwill (income from acquisition) and APIC to be recognized by Pool Company?
Response: P450,000; P1.350M
Correct answer: (P450,000); P1.315M
Score:
0 out of 1
No
11/5/21, 2:45 PM B-ACTG317 BSA31 1 Se ( 2021-2022 ) - C d - Pe d AY2021-2022 - 1 - ://d d.ed 20. / de _ _a e / b /
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B-ACTG317 BSA31 1 Sem ( 2021-2022 ) - Child

Acco n ing fo Home Of ce, B anch and Sale Agenc (Special P oced e )
S a A 2
S b
Q 1
The following information is extracted from the books and records of Elaine Company and its branch. The balances are at December 31, 2012 of the company s
operations.
Home Of ce Branch

Sales P260,000
Shipments to branch P 78,000
Shipments from home of ce 104,000
Purchases 39,000
Expenses 78,000
Inventory, January 1, 2012 26,000
However, no shipments in transit between home of ce and the branch were made. Both shipments accounts are properly recorded. The ending inventory includes
merchandise acquired from the home of ce in the amount of P26,000 and P7,800 acquired from outsiders acquired from the home of ce in the amount of P26,000
and P7,800 acquired from outsiders for a total of P33,800.
What is the amount of branch merchandise beginning inventory that was acquired from the home of ce?
Response: P20,800
Score: 1 out of 1 Yes
Q 2
When a branch recei ed the pa ment for the acco nts recei able of the home of ce and s ch collection is not et remitted, the home of ce acco nt on the books of the branch ill be
debited.
Response: False
Q 3
In an ac i i ion he e he e i an e change of a e fo a e , ho doe he al e of he ac i ee change?
Response: he ne a e ma inc ea e, dec ea e o emain he ame
Correct answer: he ne a e ma inc ea e, dec ea e o emain he ame
Q 4
Statement of Financial Position re ecting niform acco nting proced res, as ell as fair al es that are to be sed as basis of the combination are prepared on September 1, 2018 as follo s:
Z Compan Y Compan X Compan
Assets 5,250,000.00 6,800,000.00 900,000.00
Liabilities 3,950,000.00 2,650,000.00 530,000.00
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Retained Earnings (De cit) ( 400,000.00 ) 2,450,000.00 ( 45,000.00 )
Z Compan shares ha e a market al e of P22 per share. Market al es is not a ailable for shares of Y Co. and X Co.
On September 1, 2018, Z Co. acq ires all of the assets and ass me the liabilities of Y Co. and X Co. b iss ing 200, 000 shares of its stocks to Y Co. and 29, 000 shares of its stocks to X
Co. Z Co. also pa s P10, 000 for registering and iss ing sec rities and P20, 000 for other acq isition costs of combination.
Response: P14.348M
Score: 0 out of 1 No
Q 5
If he ac i i ion e l ed o nei he good ill no ba gain p cha e gain,
Response: The fai al e of ne a e ac i ed i e al o he con ide a ion paid b he ac i e .
Correct answer: The fai al e of ne a e ac i ed i e al o he con ide a ion paid b he ac i e .
Q 6
On Jan ar 2, 2018, CJ Corp. acq ired the net assets of JC Corp. b iss ing 600, 000 shares of its P10 par al e common stock. S bseq entl , JC as liq idated and its assets and liabilities
merged into CJ Corp. CJ s stock as selling for P50 per share on Jan ar 2, 2018. The amo nt of good ill recorded b CJ in connection ith the combination as P6.12M. CJ inc rred
P300, 000 of legal and brokers fees ith the combination and P30, 000 of stock iss ance costs. What is the FV of JC s net assets and the amo nt of the increase in CJ s stockholder s eq it
as a res lt of the combination, respecti el ?
Response: P23.88M; P29.67M
Correct answer: P23.88M; P29.67M
Q 7
On J ne 30, 2018 White Co. iss ed 100, 000 shares of its P20 par al e common stock for the net assets of Black Co. in a b siness combination acco nted for b acq isition method. The
market al e of White s shares on J ne 30 as P36 per share. White paid a fee of P100, 000 to the broker ho arranged this acq isition. Costs of SEC registration and iss ance of the eq it
sec rities to P50, 000. Contingent consideration determined to be paid to Black Co. after acq isition amo nts to P120, 000. What amo nt sho ld White capitali e as the cost of Acq iring
Black s net assets?
Response: P3.72M
Q 8
The home of ce book has a total assets and liabilities of Php180,000, and Php40,000, respectively. The branch reported as well assets and liabilities of Php80,000, and
Php50,000, respectively. The ending balance of allowance for branch inventory mark-up amounted to Php3,000. How much is the combined total assets?
Q 9
Kulas Corporation has one branch operation located 500 miles away from the home of ce. The branch of ce sales merchandise which is shipped to it from the
home of ce. The merchandise is transferred at cost but the branch pays reasonable freight charges. The branch of ce makes sales and incurs and pays operating
expenses. At the end of the current accounting period the true adjusted balance for the home of ce account on the branch s books and the branch of ce account on
the home of ce s books is P500,000.
1) The home of ce has shipped merchandise to the branch of ce which cost P10,000 and which incurs P500 freight charges paid by the home of ce but charged
2) The branch has transmitted P17,000 in cash back to the home of ce as a partial payment on such purchased merchandise. This cash is received by the home
of ce on January 6, 2012.
3) The branch of ce returns some defective merchandise to the home of ce. The cost of the returned merchandise is P750. The branch of ce pays P25 of freight
costs which will be charged back to the home of ce.
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4) On December 1, 2012, the home of ce sends a check for P25,000 to replenish the branch s charged back to the home of ce.
5) The branch pays an advertising expense of P800 that should have been paid by the home of ce since it applied to advertising fees incurred by the home of ce
of its own bene t.
6) The home of ce allocated P12,000 of general and administrative expenses to the branch. The branch had not entered the allocation as of the end of the year.
7) The home of ce pays insurance premiums on the branch store. The amount paid by the home of ce is P1,000 but the branch erroneously records it as
P776.00
What is the unadjusted balance of the Branch account?
Response: 452,276
Q 10
Assignment of portion of operating e pense b the home of ce to the branch tends to increase the home of ce acco nt on the books of the branch.
Response: True
Q 11
Statement of Financial Position re ecting niform acco nting proced res, as ell as fair al es that are to be sed as basis of the combination are prepared on September 1, 2018 as follo s:
Z Compan Y Compan X Compan
Assets 5,250,000.00 6,800,000.00 900,000.00
Liabilities 3,950,000.00 2,650,000.00 530,000.00
Retained Earnings (De cit) ( 400,000.00 ) 2,450,000.00 ( 45,000.00 )
Z Compan shares ha e a market al e of P22 per share. Market al es is not a ailable for shares of Y Co. and X Co.
On September 1, 2018, Z Co. acq ires all of the assets and ass me the liabilities of Y Co. and X Co. b iss ing 200, 000 shares of its stocks to Y Co. and 29, 000 shares of its stocks to X
Co. Z Co. also pa s P10, 000 for registering and iss ing sec rities and P20, 000 for other acq isition costs of combination.
What is the total stockholder s eq it in the combined statement of nancial position after combination on September 1, 2018?
Response: P6.432M
Q 12
Selected information from the trial balances for the home of ce and the branch of Lalay Company at December 31, 2012 is provided. The branch acquires
merchandise from the home of ce and outside suppliers.
Home Of ce Branch
Sales P60,000 P30,000
Shipments from home of ce 10,000
Expenses 14,000 6,000
Home of ce P20,000
Branch (P7,500 from home of ce and P2,500 from outsiders) 10,000
The combined net income for Home of ce and branch operations is
Response: P24,600
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Q 13
On December 31, 2018, Papi Corporation acq ired all the assets and ass med all liabilities of Pap Corporation for a consideration of Php1,680,000 hich consists of the follo ing:
Cash Php700,000
Eq ipment, ith book al e of Php290,000 300,000
Loans pa able 200,000
Papi's o n ordinar shares 400,000
The fair al e of Pap 's asset and liabilit acco nts are as follo :
C rrent Nonc rrent
Ans er the follo ing independent ass mptions:
If Papi and Pap has a precombination balances of nonc rrent assets for Php2,500,000, and Php1,288,000, respecti el , ho m ch is the combined balance of nonc rrent assets?
Feedback:
Q 14
Reported branch net income is al a s nderstated as compared to the T branch net income.
Response: False
Q 15
On December 31, 2018, Papi Corporation acq ired all the assets and ass med all liabilities of Pap Corporation for a consideration of Php1,680,000 hich consists of the follo ing:
Cash Php700,000
Eq ipment, ith book al e of Php290,000 300,000
Loans pa able 200,000
Papi's o n ordinar shares 400,000
The fair al e of Pap 's asset and liabilit acco nts are as follo :
C rrent Nonc rrent
Ans er the follo ing independent ass mptions:
Ass me Papi has a total assets prior to b siness combination of Php2,500,000, and Pap 's b ilding has a pro isional al e of Php500,000, and as disco ered that on J ne 1, 2019, its fair
al e as of acq isition date is Php480,000. Ho m ch is adj std total assets of the combined entit ?
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Feedback:
Q 16
The allowance for branch pro t inventory overvaluation has decreased by Php400. Mark-up on shipments of merchandise to branch is 10% on cost. The branch has cost of
goods available for sale amounted to Php360,000, 25% of which remain unsold at year-end which is 20% higher compared to last year. The branch also acquire merchandise
from outside supplier. If the branch s inventory beginning from outside purchases amounted to Php31,000, the ending inventory to appear in the consolidated nancial
statement would amount to -
Response: Php90,000
Feedback:
Q 17
At the end of the acco nting period, the nancial statement of both the home of ce and branch are being consolidated.
Response: False
Q 18
The in e men in b anch acco n i debi ed in he follo ing ca e , e cep
Response: Collec ion b b anch of home office c ome acco n .
Correct answer: Pa men b b anch of home office pplie acco n .
Q 19
When Bra l Co. acq ired Cra l Co. s net assets b iss ing its o n capital stock, it had the follo ing acq isition - related costs:
Broker's fee 50,000.00
Pre-acq isition a dit fee 40,000.00
General administrati e fee costs 15,000.00
Legal fees for the combination 32,000.00
A dit fee for SEC registration of stock iss e 46,000.00
SEC registration fee for stock iss e 5,000.00
Other acq isition costs 6,000.00
7. Ho m ch sho ld be treated as direct e pense and ded ction from APIC respecti el ?
Response: P143,000; P51,000
Correct answer: P140,000; P51,000
Q 20
The acq irer records the shareholders eq it of the acq iree after the acq isition.
Response: True
Q 21
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The following are the transactions that occurred during the year:
* Home of ce shipped Php100,000 cost of merchandise to the branch.

* The branch returned to home of ce merchandise with a billed price of Php13,200.
* The branch has cash sales of Php75,000 during the year, and credit sales of Php80,000.
* Total expenses of the branch amounted to Php20,000.
* The branch reported a cost of sales of Php99,000.
* Expenses include Php2,000 depreciation expense of xed asset maintained in the home of ce's books.
All inventories of the branch are acquired from home of ce at 110% billed price. The investment in branch and home of ce accounts have an opening balance of
Php100,000 each. How much is the ending balance of investment in branch account?
Q 22
Which of he follo ing i no incl ded in he p ice paid (b he ac i e ) in an ac i i ion pe b ine combina ion?
Response: In e men banke finde fee fo he combina ion
Correct answer: In e men banke finde fee fo he combina ion
Q 23
Reali ed mark- p is the main difference bet een the branch cost of goods sold at billed price and branch cost of goods sold at cost.
Response: True
Q 24
Unde he ac i i ion me hod, if he fai al e of he iden ifiable ne a e e ceed he al e implied b he p cha e p ice of he ac i ed compan , he e ce ho ld be
Response: alloca ed o ed ce an p e io l eco ded good ill on he elle book and cla if an emainde a an o dina gain
Correct answer: alloca ed o ed ce an p e io l eco ded good ill on he elle book and cla if an emainde a an o dina gain
Q 25
I on Co. iss ed common stock ith a par al e of P450, 000 and a market al e of P700, 000 to acq ire the net assets of Bill Inc., in a b siness combination. I on reported net assets of
P2M and liabilities of P542, 000 immediatel before the b siness combination. Bill Inc. s assets and liabilities had a book al es of P460, 000 and P187, 000, respecti el . The fair al es of
Bill s assets and liabilities ere P600, 000 and P188, 000, respecti el . What amo nt sho ld be reported as total assets of the combined entit immediatel follo ing the b siness
combination?
Response: P2.888M
Q 26
The home of ce and its branch reported the following amounts:
Home Of ce Branch
Revenues 120,000 60,000
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How much is the opening balance of the investment in branch account in the following year?
Response: Php98,500
Feedback:
Q 27
Abakada Incorporated acquired all the assets and liabilities of Egaha Company on January 1, 2018. The consideration are as follows:
Cash 2,000,000
Equipment 500,000
Cash contingency 30,000
Stock contingency 50,000
Bank loan, at face value 1,000,000
The cash payments are distributed to the following payees:
Former owners of Egaha Company 1,800,000

Lawyers for legal services 80,000
Actuarial for valuation of Egaha's net assets 50,000
Bank, transaction costs for the bank loan 70,000
Answer the following independent questions:
If bargain purchase gain on the acquisition amounted to Php40,000, how much could be the fair value of net assets acquired?
Feedback:
Q 28
Clang-clang Corporation s home of ce ships merchandise to its Toledo branch at a billing price of 125% of cost. During 2012 the home of ce makes the following
entry:
Shipments to Toledo branch 75,000
At year-end 2012, P12,000 of this merchandise remains at Toledo branch inventory.
The entry to adjust the branch income in the books of the home of ce will include
Response: Debit to Shipments to Toledo branch, P12,600
Correct answer: Debit to Shipments to Toledo branch, P12,600
Q 29
When the contingent consideration took effect thirteen months after the acq isition date, the gain on p rchase bargain is adj sted.
Response: False
Q 30
If addi ional pa men i o be made b bjec o a condi ion, ch amo n i p e en ed a
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Response: liabili a an amo n e al o he p e en al e of he addi ional ca h pa men .
Correct answer: liabili a an amo n e al o he p e en al e of he addi ional ca h pa men af e con ide ing he likelihood of he happening of he condi ion.
Q 31
Branch is created b the home of ce, hile sales agenc is being acq ired b the home of ce.
Response: False
Q 32
Sales agenc is created b the home of ce, hile branch is being acq ired b the home of ce.
Response: False
Q 33
If a deli er tr ck is to be recorded b the branch, depreciation e pense sho ld be recorded b the home of ce.
Response: False
Q 34
Unrealized mark-up on branch inventory before adjustment amounted to Php17,000. The branch reported a cost of goods sold amounting to Php330,000. Half of the goods
sold were acquired from outside suppliers. If mark-up rate is 10% above cost, how much is the adjusted unrealized mark-up on branch inventory?
Response: Php2,000
Q 35
The Bo George Compan acq ired the net assets of the Girl Conrad Compan on Jan ar 1, 2015, and made the follo ing entr to record the p rchase:
C rrent assets 100,000
Eq ipment 150,000
Land 50,000
B ildings 300,000
Good ill 100,000
Liabilities 80,000
Paid-in capital in e cess of par 520,000
Ass ming that additional shares on Jan ar 1, 2017 o ld be iss ed on that date to compensate for an fall in the al e of Bo George common stock belo
10.
What is the additional n mber of shares iss ed on Jan ar 1, 2017 to compensate for an fall in the al e of the stock?
Response: 60,000
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Q 36
Gain on acq isition bargain is determined hen the fair al e of the net assets acq ired is greater than its acq isition cost.
Response: True
Q 37
On J ne 1, 2018, Jon Co. p rchased all the o tstanding shares of I a Co. for P4M. at that time, I a s statement of nancial position sho s net assets of P2.5M. I a s net assets and
liabilities had fair market al es different from their book al es, as follo s:
Book Val e Fair Val e
PPE (net) 5,000,000.00 5,750,000.00
Other Assets 500,000.00 350,000.00
Long-term debt 3,000,000.00 2,800,000.00
As a res lt of the combination, hat amo nt, if an , ill be sho n as good ill in the J ne 1, 2018 consolidated statement of nancial position of Jon Co. and its holl o ned s bsidiar ,
I a Compan ?
Response: P700,000
Q 38
The e ce of he p ice paid o e he fai al e of ne iden ifiable a e ac i ed ho ld be ecogni ed a
Response: Good ill no bjec o amo i a ion b bjec o impai men .
Correct answer: Good ill no bjec o amo i a ion b bjec o impai men .
Q 39
If he book al e of ne a e ac i ed i g ea e han he con ide a ion an fe ed, he e can be good ill if
Response: The book al e of he iden ifiable ne a e of he b idia i o e al ed.
Correct answer: The book al e of he iden ifiable ne a e of he b idia i o e al ed.
Q 40
The home of ce and its branch reported the following amounts:
Home Of ce Branch
Revenues 120,000 60,000
How much is the combined net income?
Response: Php75,500
Feedback:

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Q 41
Jojo Inc. p rchased all of the assets of Momo Inc. on Jan ar 2, 2018 b iss ing 8, 000 shares of its P10 par common stock. At the time, the stock as selling for P30 per share. Direct costs
associated ith cons mmating the combination totaled P4, 000. Under IFRS 3, hat total amo nt sho ld the net assets acq ired be recorded b Jojo Inc. Ass ming that contingent
consideration is P5, 000.?
Response: P245,000
Q 42
If he home office hip me chandi e o he b anch abo e co , he ending in en o ha ill appea in he combined financial a emen i e al o
Response: home office ending in en o pl b anch ending in en o le he ending balance of n eali ed ma k- p on b anch in en o
Correct answer: home office ending in en o pl b anch ending in en o le he ending balance of n eali ed ma k- p on b anch in en o
Q 43
Under f ll PFRS b siness combination, direct and indirect e penses are classi ed as e penses chargeable to retained earnings.
Response: False
Q 44
Roxette Corporation regulary ships merchandise to its Boracay branch with a mark-up on cost of 20%. During the current year, the head of ce of Roxette ships merchandise
to Boracay branch with a cost of Php20,000. The entry in the books of Boracay branch would include a
Response: debit to shipments from home of ce account for Php24,000.
Correct answer: debit to shipments from home of ce account for Php24,000.
Q 45
If he in e men in b anch acco n i le han home office acco n , he b anch failed o do he follo ing, e cep ;
Response: adj he o e a emen of ca h collec ion b home office f om a b anch c ome .
Correct answer: alloca e a home office e pen e paid b b anch.
Q 46
The en o ecogni ed he eali ed ma k- p on b anch in en o incl de
Response: a debi o Home office acco n .
Correct answer: a debi o Un eali ed ma k- p on b anch in en o acco n .
Q 47
Auto Supply Company is engaged in merchandising both at its home of ce in Cebu City and its branch in Toledo City. Selected accounts taken from the trial
balances of the home of ce and the branch as of December 31, 2012 follow:

Purchases 190,000 105,000
Freight in from home of ce 5,500
://d d.ed 20. / de _ _a e / b /28200271 10/11

Credits
Home Of ce P 53,300
Sales P155,000 140,000
1,000
The Toledo City branch gets all of its merchandise from the home of ce. The home of ce bills the goods at cost plus a 10% mark-up. At December 31, 2012, a
shipment with a billed value of P5,000 was still in transit. Freight on this shipment was P250 and is to be treated as part of the inventory.
Inventories on December 31, 2012, excluding the shipment in transit, follow:
Home of ce, at cost………………………………….……….. P30,000
What is the net income of the branch in so far as the home of ce is concerned?
Response: P10,470
Q 48
May Corporation operate two stores: the Head Of ce store and Rose branch. On December 31, 2012, the Rose Branch account in the home of ce books has a
balance of P340,000. Both stores use a standard 120% markup on cost. However May s home of ce ships merchandise to the branches at cost. Rose s ending
inventory includes P20,000 of merchandise received from home of ce
Rose branch remitted P15,000 to home of ce on December 30, 2012. The Home of ce will not receive the remittance until January 4, 2013. The Home of ce
allocated P5,000 general expenses to each of the branches but Rose branch have not yet recorded the expenses at year-end)
Rose branch paid P2,000 for advertising after Christmas sales that were to be allocated equally between the two stores. The Home of ce has not recorded its
share in the expenses.
The unadjusted balance of the Home of ce account in the books of Rose branch is
Response: P319,000
Q 49
When the contingent consideration took effect fteen months after the acq isition date, the other e pense acco nt is adj sted.
Response: False
Q 50
Combined cost of sales of the home of ce and branch incl des the original cost of sales of the home of ce and cost of sales at billed price of the branch.
Response: False
://d d.ed 20. / de _ _a e / b /28200271 11/11

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B-ACTG317 BSA31 1st Sem ( 2021-2022 ) - Child

Response: P46,000 debit

Correct answer: P46,000 debit

Response: Payment by branch of home office’s suppliers’ account.

Correct answer: Payment by branch of home office’s suppliers’ account.

Correct answer: True

Correct answer: False

Debits Cebu City Toledo Branch

Home office, at cost………………………………….……….. P30,000

Correct answer: P10,470

Sales orders sent to home office Php132,000

Response: Php80,760; Php11,988

Correct answer: Php80,760; Php11,988

Legal fees to arrange the business combination 25,000.00

Costs of SEC registration, including accounting and legal fees 12,000.00

Cost of issuing stock certificates 3,000.00

Documentary Stamp tax 20,000.00

Book Value Fair Value

Plant Assets 1,500,000.00 2,200,000.00

Liabilities 300,000.00 300,000.00

Common Stock 2,000,000.00

Retained Earnings 200,000.00

Response: P450,000; P1.350M

Correct answer: (P450,000); P1.315M

Correct answer: $98,000

Correct answer: False

Correct answer: False

Z Company Y Company X Company

Assets 5,250,000.00 6,800,000.00 900,000.00

Liabilities 3,950,000.00 2,650,000.00 530,000.00

Capital Stock, all P10 par 1,700,000.00 1,200,000.00 275,000.00

Additional Paid in Capital 500,000.00 140,000.00

Retained Earnings (Deficit) ( 400,000.00 ) 2,450,000.00 ( 45,000.00 )

What is the total assets of Z Co. after the combination?

Correct answer: P13.438M

Correct answer: False

Merchandise inventory, December 31, 2012:

The net income reported by the branch is

Correct answer: P3,500

Correct answer: True

Correct answer: True

Merchandise inventory, December 31, 2012:

The billing rate of home office to branch for merchandise shipments is

Response: 125% of cost

Correct answer: 125% of cost

Direct acquisition costs $120,000

Indirect acquisition costs 60,000

Cost to issue and register stocks 20,000

The amount charged to expenses of business combination should be:

Correct answer: $60,000

Response: Investment in branch account is overstated.

Correct answer: Investment in branch account is understateed.

Correct answer: True

Correct answer: True

Correct answer: P2.888M

Inventory, December 31, 2013 P80,000