Use The Following Information For The Next Two (2) Questions

A. C.
B. D.
A. C.
B. D.
A B. C. D.
.
1) Gary Company had net income of P700,000 for the year ended December 31, 2020 after giving effect to the following events
which occurred during the year:
• The decision was made January 2 to discontinue the travel agency segment.
• The travel agency segment was sold June 30.
• Operating loss from January 1, to June 30 for the travel agency segment amounted to P60,000 before tax benefit.
• Travel agency assets with a book value of P350,000 were sold for P200,000
Gary’s tax rate was 40% for 2020. For the year ended December 31, 2020, Gary’s after-tax income from continuing operations
was
A 574,000 B. 700,000 C. 784,000 D. 826,000
.
1) Princess Company provided the following information for the current year:
Sales 9,500,000
Interest revenue 250,000
Gain sale of equipment 100,000
Revaluation surplus during the year 1,200,000
Share of profit of associate 350,000
Net purchases 6,600,000
Increase in inventory 600,000
Finance cost 150,000
Distribution costs 500,000
Administrative expenses 300,000
Translation loss on foreign operation 200,000
Income tax expense 950,000
What is the net income for the current year?
A 2,300,000 B. 3,300,000 C. 4,200,000 D. 2,100,000
.
1) Lola Company reported the following information for 2023:

Sales revenue 500,000
Cost of goods sold (350,000)
Operating expenses (55,000)
Unrealized holding gain on equity investment 20,000
Cash dividends received on the securities 2,000
Exchange differences on translating foreign operations 30,000
Remeasurement gains on defined benefit pension plans 45,000
Share of other comprehensive income of associate (65,000)
Dividends paid on ordinary share capital (80,000)
Dividends paid on preference share debt security (30,000)
What is the amount of profit or loss of Lola Company for year 2023?
A 87,000 B. 97,000 C. 117,000 D. 162,000
.
w
2) ZIZI Company does not elect the fair value option for recording financial assets and liabilities. What amount of comprehensive
income should ZIZI Company in its statement of comprehensive income given the following net of tax figures that represent
changes during the year?
Pension liability adjustment recognized in OCI (60,000)
Unrealized gain on investment at fair value to other comprehensive income 300,000
Reclassification adjustment for investment at fair value to other comprehensive income disposed off (50,000)
Share warrants outstanding 80,000
Net income 1,400,000
A 1,590,000 B. 1,640,000 C. 1,650,000 D. 1,670,000
.
Use the following information for the next two (2) questions:
Jaybo Co. incurred the following expenses below:
• J.S. CAYETANO ♣• • FAR EASTERN UNIVERSITY • • FINANCIAL ACCOUNTING II • • PAGE 1 OF 21•

Interest expense 12
Cost of inventories sold 300
Insurance expense 50
Advertising expense 10
Freight out 5
Freight in 2
Loss on sale of equipment 1
Legal and other professional fees 6
Rent expense (one half occupied by sales department) 4
Sales commission expense 7
Doubtful accounts expense 8
1) What total amount of expense classified as distribution costs or selling expenses?

A 64 B. 24 C. 26 D. 22
.
2) What total amount of expense classified as administrative expenses?

A 64 B. 16 C. 56 D. 66
.
3) Assuming Jaybo earned sales revenue amounting to P500 during the current year, what is the net income?
A 95 B. 97 C. 200 D. 66.5
.
Vane Co’s trial balance of income statement accounts for the year ending December 31, 2021, included the following:
Debit Credit
Sales 575,000
Costs of sales 240,000
Loss on sale of equipment 10,000
Sales commissions 50,000
Freight out 15,000
Loss on early retirement of long-term debt 20,000
Uncollectible accounts expense 15,000 ---
Total 420,000 600,000
Other information:
Inventory, January 1, 2021 400,000
Inventory, December 31, 2021 360,000
Vane’s income tax rate is 30%. In Vane’s 2021 multiple step income statement.
4) What amount should Vane report as the cost of goods manufactured?

A 200,000 B. 215,000 C. 280,000 D. 295,000
.
5) What amount should Vane report as income after income taxes from continuing operations?
A 126,000 B. 129,500 C. 140,000 D. 147,000
.
6) Brock Corporation reports operating expenses in two categories: (1) selling and (2) general and administrative. The adjusted
trial balance at December 31, 2021, included the following expense and loss accounts:
Accounting and legal fees 120,000
Advertising 150,000
Freight out 80,000
Interest 70,000
Loss on sale of long term investment 30,000
Officers’ salaries 225,000
Rent for office space 220,000
Sales salaries and commissions 140,000
One-half of the rented premises is occupied by the sales department. Brock’s total selling expenses for 2021 are
A 480,000 B. 400,000 C. 370,000 D. 360,000
.
7) The following costs were incurred by Griff Co., a manufacturer, during 2021:
• PAGE 2 OF 21•
Freight in 175,000
Freight out 160,000
Insurance 85,000
What amount of these costs should be reported as general and administrative expense for 2021?
A 260,000 B. 550,000 C. 635,000 D. 810,000
.
Spades Company provided the following information for the year ended December 31, 2022:
Sales 8,000,000
Sales salaries 520,000
Advertising 120,000
Indirect labor 600,000
Delivery expense 160,000
Freight in 80,000
Depreciation – machinery 50,000
Factory taxes 130,000
Purchases 1,600,000
Direct labor 1,480,000
Factory supplies expense 120,000
Office supplies expense 30,000
Office salaries 800,000
Factory superintendence 480,000
Doubtful accounts 100,000
Factory maintenance 150,000
Factory heat, light and power 220,000
Inventory balances at the end of the fiscal period as compared with balances at the beginning of the fiscal period were as follows:
Finished goods 200,000 decrease
Goods in process 90,000 decrease
Raw materials 100,000 increase
8) What is the amount of cost of goods sold for the current period?
A 4,800,000 B. 4,720,000 C. 5,020,000 D. 5,100,000
.
9) What is the amount of general and administrative expense for the current period?
A 930,000 B. 800,000 C. 880,000 D. 830,000
.
10) What is the amount of selling and distribution expense for the current period?
A 900,000 B. 880,000 C. 960,000 D. 800,000
.
11) What is the amount of net profit for the current period?
A 1,170,000 B. 1,380,000 C. 1,300,000 D. 1,000,000
.
ANSWER: D, A, D, D
Net sales 8,000,000
Cost of sales 600,000 + 50,000 + 80,000 + 130,000 + 1,600,000 + 1,480,000 + 120,000 + 480,000 + 150,000
+ 220,000 + 200,000 + 90,000 – 100,000 (5,100,000)
Gross profit 2,900,000
Operating expenses
Administrative expenses 30,000 + 800,000 + 100,000 (930,000)
Selling and distribution expense 520,000 + 120,000 + 160,000 (800,000)
Income before tax 1,170,000
Income tax (170,000)
12) Mayo Company provided the following data for 2022:
• PAGE 3 OF 21•
Sales 9,070,000
Purchases 5,750,000
Transportation in 150,000
Inventory beginning 1,500,000
Inventory ending 1,400,000
Uninsured flood loss 340,000
Depreciation – building 120,000
Office supplies 60,000
Depreciation – store equipment 110,000
Store supplies 80,000
Sales returns and allowances 200,000
Purchases discounts 100,000
What is the net profit for the current period?

A 1,000,000 B. 800,000 C. 1,400,000 D. 1,200,000
.
ANSWER: A
Sales 9,070,000
Purchases (5,750,000)
Transportation in (150,000)
Inventory beginning (1,500,000)
Inventory ending 1,400,000
Uninsured flood loss (340,000)
Officers’ salaries (400,000)
Depreciation – building (120,000)
Office supplies (60,000)
Depreciation – store equipment (110,000)
Store supplies (80,000)
Sales salaries (500,000)
Sales returns and allowances (200,000)
Purchases discounts 100,000
Income tax expense (360,000)
Net profit 1,000,000
13) The adjusted trial balance of Arianna is Engaged Company included the following accounts on December 31, 2022:
Sales 9,500,000
Gain on sale of equipment 100,000
Cost of goods sold 6,000,000
Translation loss on foreign operations 200,000
What is the comprehensive income to be reported by the Arianna is Engaged Company on December 31, 2022?
A 3,500,000 B. 3,300,000 C. 2,300,000 D. 2,100,000
.
ANSWER: B
Sales 9,500,000
Cost of goods sold (6,000,000)
Finance cost (150,000)
Distribution costs (500,000)
Administrative expenses (300,000)
Translation loss on foreign operations (200,000)
Total comprehensive income 3,300,000
• PAGE 4 OF 21•
14) The adjusted trial balance of Lotus Pit Company included the following accounts on December 31, 2022:
Sales 9,750,000
Other income 300,000
Decrease in inventory of finished goods 250,000
Raw materials and consumables used 3,500,000
Employee benefit expense 1,500,000
Translation gain on foreign operations 300,000
Depreciation 450,000
Impairment loss on property 800,000
Other expenses 450,000
Unrealized gain on option contract designated as cash flow hedge 200,000
What is the comprehensive income to be reported by the Arianna is Engaged Company on December 31, 2022?
A 2,000,000 B. 2,500,000 C. 3,000,000 D. 1,500,000
.
ANSWER: B
Sales 9,750,000
Decrease in inventory of finished goods (250,000)
Raw materials and consumables used (3,500,000)
Employee benefit expense (1,500,000)
Translation gain on foreign operations 300,000
Depreciation (450,000)
Impairment loss on property (800,000)
Other expenses (450,000)
Unrealized gain on option contract designated as cash flow hedge 200,000
15) Cattleya Company provided the following account balances at year-end:

Accounts receivable 1,600,000
Financial asset at fair value through profit or loss 500,000
Financial asset at amortized cost 1,300,000
Cash 1,100,000
Inventory 3,000,000
Equipment and furniture 2,500,000
Accumulated depreciation 1,500,000
Patent 400,000
Prepaid expenses 100,000
Equipment held for sale 2,000,000
What total amount should be reported as current assets at year-end?

A 8,300,000 B. 8,200,000 C. 6,300,000 D. 9,600,000
.
Use the following information for the next five (5) questions:
Naturalz Company provided the following information for 2022:
Purchases 5,250,000
Purchase returns and allowances 150,000
Rental income 250,000
Distribution costs:
Freight out 176,000
Salesmen’s commission 650,000
Depreciation – store equipment 125,000
Merchandise inventory, January 1 1,000,000
Merchandise inventory, December 31 1,500,000
Sales 7,850,000
• PAGE 5 OF 21•
Sales discounts 10,000
Administrative expenses:
Depreciation – office equipment 300,000
Freight in 500,000
Income tax 250,000
Purchase discounts 100,000
Dividend revenue 150,000
Loss on sale of investment 50,000
1) What is the amount of gross profit for the current period?

A 2,700,000 B. 2,800,000 C. 2,200,000 D. 2,600,000
.
2) What is the amount of net profit for the current period?

A 1,000,000 B. 1,500,000 C. 2,000,000 D. 1,300,000
.
Merchandise inventory, January 1 (1,000,000)
Sales 7,850,000
Sales discounts (10,000)
Freight in (500,000)
Rental income 250,000
Distribution costs:
Freight out (175,000)
Salesmen’s commission (650,000)
Depreciation – store equipment (125,000)
Merchandise inventory, January 1 (1,000,000)
Sales 7,850,000
Sales discounts (10,000)
Administrative expenses:
Officers’ salaries (500,000)
Depreciation – office equipment (300,000)
Freight in (500,000)
Income tax (250,000)
Loss on sale of equipment (50,000)
Dividend revenue 150,000
Loss on sale of investment (50,000)
Net profit 1,000,000
1) On December 1, 2024, Trident Company has stated its operation retails store for electronic product. It is attracting customer
base by allowing the customer to have the first product free. The customer is under no obligation to take further products. As of
December 31, 2024, Trident Company has distributed 2,000 electronic parts for free and these parts were purchased at P25
each. How should the 2,000 parts distributed be shown in the December 31, 2024 profit or loss of Trident Company?
A. As marketing cost of P50,000 C. Deferred cost of P50,000
B. As cost of sales of P50,000 D. Only a disclosure is required in the notes to FS
ANSWER: A
Marketing expense under selling expense.
1) Kuliglig Company provided the following income statement information relating to the current year:
• PAGE 6 OF 21•
Unrealized gain on available for sale securities 350,000
Debit balance foreign currency translation adjustment 75,000
Surplus on revaluation 1,050,000
The amount of recognized gains and losses for the current year should show net amount at
A 5,250,000 B. 4,475,000 C. 5,525,000 D. 5,675,000
.
2) The following accounts were extracted from the books of Camarines Goods Company for the year ended December 31, 2012:
Legal and audit fees 1,800,000

Rent for office space 1,700,000
Rent for plant operations 2,300,000
Interest on bank loan 2,100,000
Loss on inventory shortages and pilferages 350,000
The Company’s top Operations Managers and Finance department share equally in the use of office space. Likewise, Logistics
and the rest of the Operations departments share in the plant operations space. What is the amount of general and administrative
expenses that should be reflected in the income statement of Camarines Goods?
A 2,650,000 B. 3,500,000 C. 5,800,000 D. 3,800,000
.
1) The accountant for Mapapawi Ltd. Has determined the following information for the year ended June 30, 2022.
Profit or loss 300,000
Share of total comprehensive income (after tax) associates 20,000
Share of profit (after tax) of associates 15,000
Exchange difference gain (net of tax of P3,000) on translation of foreign operation up to the date sold (March
1, 2022) 7,000
Exchange difference gain (net of tax of P9,000) on disposal of foreign operation recognized in profit for
the year 21,000
Increase in asset revaluation surplus (net of tax) 45,000
In accordance with the requirement of PAS 1 Presentation of Financial Statements, what is the total amount of other
comprehensive income for Mapapawi for the year ended June 30, 2022.
A 36,000 B. 51,000 C. 57,000 D. 72,000
.
ANSWER: A
Share in the OCI of associate 20,000 – 15,000 5,000
Exchange difference gain (net of tax of P3,000) on translation of foreign operation up to the date sold (March
1, 2022) 7,000
Exchange difference gain (net of tax of P9,000) on disposal of foreign operation recognized in profit for
the year (21,000)
Increase in asset revaluation surplus (net of tax) 45,000
Total other comprehensive income 36,000
2) The following information for 2022 is provided by Panunumpa Company:

Sales 20,000,000
Selling expenses 1,200,000
General and administrative expenses 1,800,000
Interest expense 1,500,000
Gain on early extinguishment of long-term debt 500,000
Correction of inventory error, net of income tax – credit 800,000
Investment income – equity method 600,000
Gain on sale of investment 2,000,000
Income tax expense 2,100,000
Dividends declared 2,500,000
What was the 2022 income from continuing operations?

A 4,900,000 B. 4,500,000 C. 6,600,000 D. 7,000,000
.
ANSWER: B
Sales 20,000,000
• PAGE 7 OF 21•
Selling expenses (1,200,000)
General and administrative expenses (1,800,000)
Interest expense (1,500,000)
Income tax expense (2,100,000)
Income from continuing operations 4,500,000
Babeul Company reported post-tax profit of P491,400 for the year ended December 31, 2021. Cost of goods sold amounted to
P2,108,000 which is P270,000 greater than the net purchases during the year. Operating expenses amounted three times the peso
amount of income tax expense. Beginning inventory is three times the amount of ending inventory. Income tax rate is 30%
1) How much were the total operating expenses during the year 2021?
A 442,260 B. 552,620 C. 631,800 D. 638,100
.
2) What was the amount of sales for the year 2021?

A 3,441,800 B. 3,416,600 C. 3,418,000 D. 3,041,660
.
1) Blame Company provided the following information for the current year:
Unrealized loss on FVTOCI investments 500,000
Translation reserve – credit 600,000
Revaluation reserve 2,000,000
Accumulated profits adjustment – debit 100,000
Appropriated reserve 200,000
Gain on sale of treasury shares 150,000
What amount of comprehensive income should be reported for the current year?
A 8,200,000 B. 8,300,000 C. 8,100,000 D. 6,000,000
.
ANSWER: C
Unrealized loss on FVTOCI investments (500,000)
Translation reserve – credit 600,000
Revaluation reserve 2,000,000
2) Marjorie Company’s trial balance of income statement accounts for the year ended December 31, 2014 included the following:
Debit Credit
Sales 1,500,000
Cost of sales 600,000
Administrative expense 150,000
Freight out 30,000
Loss on retirement of bonds 100,000
Bad debt expense 30,000 --
1,100,000 1,550,000
Decrease in finished goods inventory during the year is P100,000, while the tax rate is 30%. What was Marjorie Company’s
profit for the year 2014?
A 550,000 B. 450,000 C. 385,000 D. 315,000
.
ANSWER: D
Sales 1,500,000
Cost of sales (600,000)
Gross profit 900,000
General and admin 150,000 + 30,000 (180,000)
• PAGE 8 OF 21•
Selling 30,000 + 100,000 (130,000)
Other expense 90,000 + 100,000 (190,000)
Operating income before tax 450,000
Income tax 70%
Profit 315,000
1) The following information was taken from Sand Wraith Company’s accounting records:
Sales 10,000,000
Decrease in goods in process inventory 200,000
Decrease in raw materials inventory 350,000
Increase in finished goods 500,000
Raw materials purchased 2,100,000
Direct labor payroll 1,000,000
Factory overhead 800,000
Selling expense 300,000
Freight-out 900,000
Sand Wraith Company’s profit before tax is

A 4,250,000 B. 4,150,000 C. 3,550,000 D. 3,250,000
.
ANSWER: D
Sales 10,000,000
Increase in finished goods (500,000)
Raw materials purchased (2,100,000)
Direct labor payroll (1,000,000)
Factory overhead (800,000)
Selling expense (300,000)
Freight-out (900,000)
Profit 3,350,000
2) The net income of Shadowblade Company for the year was P28,000. Selling expense were equal to 18% of sales and 30% of
the cost of sales. All other expenses were 12% of sales. The cost of sales of the company for the year was
A 251,000 B. 168,000 C. 112,000 D. 84,000
.
1) Sher Company reported the following in the statement of comprehensive income for 2020:
Unrealized gain on trading securities 1,750,000
Unrealized loss on futures contract designated as cash flow hedge 560,000
Revaluation surplus in 2020 2,500,000
Actuarial gain on projected benefit obligation 1,680,000
Exchange differences in translating foreign operations – credit 750,000
Unrealized gain on equity investment at FVOCI 1,000,000
Unrealized gain on debt investment at FVOCI 1,500,000
What net amount may be subsequently recognized in profit or loss?

A 3,440,000 B. 3,370,000 C. 2,690,000 D. 1,690,000
.
ANSWER: D
Unrealized gain on debt investment at FVOCI 1,500,000
Exchange differences in translating foreign operations – credit 750,000
Unrealized loss on futures contract designated as cash flow hedge (560,000)
Total 1,690,000
Use the following information for the next three (3) questions:
Telekinetic Control Company and its subsidiary provided the following information for the current year:
Revenue 25,000,000
Other income 2,000,000
Decrease in finished goods 3,000,000
Increase in goods in process 2,000,000
Decrease in raw materials 600,000
• PAGE 9 OF 21•
Raw materials and consumables used 6,000,000
Employee benefit expense 5,000,000
Depreciation and amortization 2,200,000
Impairment of property, plant and equipment 500,000
Finance cost 1,000,000
Share of profit of associate 3,000,000
Loss from discontinued operations 900,000
Gain on property revaluation 1,500,000
Actuarial loss on defined benefit obligation 1,000,000
Share of other comprehensive income of associate – gain on equity investment in OCI 200,000
Exchange gain on translation of foreign operations 2,000,000
Unrealized loss on available-for-sale assets 500,000
Unrealized loss on cash flows hedges 200,000
Income tax expense related to components of other comprehensive income 600,000
1) What is the net income for the current year?

A 8,000,000 B. 9,500,000 C. 8,600,000 D. 8,900,000
.
2) What is the pretax net amount of other comprehensive income that may be reclassified to profit or loss?
A 2,000,000 B. 1,300,000 C. 1,500,000 D. 1,800,000
.
3) What is the total comprehensive income for the current year?

A 10,000,000 B. 10,600,000 C. 9,900,000 D. 9,300,000
.
ANSWER: C, B, A
Revenue 25,000,000
Cost of sale 6,000,000 – 2,000,000 + 3,000,000 + 5,000,000 + 2,200,000 + 500,000 (14,700,000)
Other income 2,000,000
Share in associate 3,000,000
Total income 15,300,000
Finance cost (1,000,000)
Other expense (800,000)
Profit before tax 13,500,000
Income tax (4,000,000)
Profit after tax from continuing operation 9,500,000
Loss from discontinued operations (900,000)
Gain on property revaluationnot recycle 1,500,000
Actuarial loss on defined benefit obligationnot recycle (1,000,000)
SOPA other comprehensive income of associate–gain on equity investment in OCInot recycle 200,000
Exchange gain on translation of foreign operationsrecycle 2,000,000
Unrealized loss on available-for-sale assetsrecycle (500,000)
Unrealized loss on cash flows hedgesrecycle (200,000)
Income tax expense related to components of other comprehensive income (600,000) 1,400,000
4) Compel Company’s records for the year ended December 31, 2016 included the following information:
Raw materials purchases 860,000
Work in progress inventory decrease 10,000
Finished goods inventory increase 70,000
Raw materials inventory decrease 30,000
Manufacturing overhead 600,000
Freight-out 90,000
Direct labor 400,000
Compel Company’s cost of sales for the year 2016 is

A 1,910,000 B. 1,830,000 C. 1,770,000 D. 1,750,000
.
ANSWER: B
Raw materials purchases 860,000
• PAGE 10 OF 21•
Work in progress inventory decrease 10,000
Finished goods inventory increase (70,000)
Total 1,830,000
Use the following information for the next four (4) questions:
The following information were made available to you by Andromeda Corporation.
Sales 53,000,000
Purchases 32,000,000
Sales discount 2,000,000
Purchase discount 1,200,000
Sales returns and allowances 1,000,000
Correction of merchandise inventory, beginning error, net of income tax – credit 400,000
Merchandise inventory – January 1 (adjusted) 3,400,000
Merchandise inventory – December 31 3,500,000
Distribution costs 5,000,000
Foreign translation adjustment, net of income tax – credit 1,250,000
Revaluation surplus for the period 700,000
Unrealized loss on financial assets at fair value through other comprehensive income 550,000
Investment income – equity method 3,000,000
Gain on expropriation of asset 2,000,000
Proceeds from sale of land with a carrying amount of P5,300,000 4,800,000
Accumulated profit – January 1, 2014 4,200,000
5) How much shall be reported as cost of goods sold?

A 30,000,000 B. 29,900,000 C. 29,600,000 D. 29,100,000
.
6) How much shall be reported as net income?

A 10,100,000 B. 9,100,000 C. 9,600,000 D. 8,600,000
.
7) How much shall be reported as total other comprehensive income?

A 2,400,000 B. 1,400,000 C. 1,250,000 D. 150,000
.
8) How much shall be reported as total comprehensive income?

A 11,000,000 B. 10,500,000 C. 10,000,000 D. 9,500,000
.
9) What is the adjusted balance of the accumulated profits, end as of December 31, 2014?
A 12,900,000 B. 12,400,000 C. 12,000,000 D. 10,500,000
.
ANSWER: B, B, B, B, B,
Net sales
Sales 53,000,000
Sales discount (2,000,000)
Sales returns and allowances (1,000,000) 50,000,000
Cost of sale
Beginning inventory 3,400,000
Purchases 32,000,000
Purchase discount (1,200,000)
Purchase returns and allowances (800,000)
Ending inventory (3,500,000) (29,900,000)
Other income 500,000 + 2,000,000 2,500,000
Investment income 3,000,000
General and admin expense 4,000,000
Selling expense 5,000,000
• PAGE 11 OF 21•
Finance cost 2,000,000
Other expense 500,000 (11,500,000)
Profit before tax 14,100,000
Income tax expense (5,000,000)
Revaluation surplus for the period 700,000
Unrealized loss on financial assets at fair value through other comprehensive income (550,000)
Foreign translation adjustment, net of income tax – credit 1,250,000 1,400,000
Comprehensive income 10,500,000
Retained earnings, beg 4,200,000

Correction of error 400,000
Dividend (1,300,000)
Retained earnings, end 12,400,000
Use the following information for the next four (4) questions:
The following data were taken from the records of Artillery Company for the year 2016:
Sales 5,590,000
Sales return 55,000
Inventories – January 1:
Raw materials 131,000
Work in process 238,350
Finished goods 442,000
Inventories – December 31:
Raw materials 145,500
Work in process 175,720
Finished goods 412,000
Purchases 2,051,500
Purchase return 17,150
Purchase discount 12,550
Freight in 8,250
Freight out 200,000
Allowance for doubtful accounts 25,000
Office salaries 155,000
Depreciation – factory building 44,000
Depreciation – office equipment 44,000
Depreciation – factory machinery and equipment 77,000
Amortization patent 33,000
Bad debt expense 20,000
Factory supplies 75,550
Accrued manufacturing expenses salary 34,500
Interest income 116,240
Interest receivable 34,250
Factory light and power 65,000
Property taxes and insurance – factory building 13,200
Prepaid insurance 18,750
Royalties on production 13,200
Supervision expense 65,000
Tools expense 10,500
Miscellaneous factory expense 50,150
Dividends paid 70,000
10) What is the total manufacturing costs?

A 3,496,250 B. 3,450,050 C. 3,420,750 D. 3,431,250
.
11) What is the total cost of goods sold?

A 3,588,880 B. 3,542,680 C. 3,523,880 D. 3,513,380
.
12) What is the total selling expenses?

A 800,200 B. 735,200 C. 722,000 D. 522,000
.
13) What is the income before income tax?
• PAGE 12 OF 21•
A 1,121,360 B. 1,114,860 C. 1,051,360 D. 1,005,120
.
ANSWER: A, A, C, A
Sales 5,590,000
Sales return (55,000) 5,535,000
Purchases 2,051,500
Purchase return (17,150)
Purchase discount (12,550)
Freight in 8,250
Net purchases 2,030,050
Raw materials, beg 131,000
Raw materials, end (145,500)
Depreciation – factory building 44,000
Depreciation – factory machinery and equipment 77,000
Amortization patent 33,000
Factory supplies 75,550
Factory light and power 65,000
Property taxes and insurance – factory building 13,200
Royalties on production 13,200
Supervision expense 65,000
Tools expense 10,500
Miscellaneous factory expense 50,150 3,547,750
14) The expenses other than interest expense of Blitz Company for the current year is 40% of cost of sales but only 20% of sales.
Interest expense is 5% of sales. The amount of purchases is 120% of cost of sales. Ending inventory is twice as much as the
beginning. The income after tax of 35% for the current year is P390,000. What is the amount of inventory at the end of the
year?
A 480,000 B. 400,000 C. 260,000 D. 240,000
.
15) The general ledger trial balance of Dampire Limited includes the following accounts at December 31, 2016:
Share of profit of associates 15,000
Other income 8,000
Decrease in inventories of finished goods 25,000
Raw materials and consumables used 350,000
Employee benefit expenses 150,000
Loss on translation of foreign operations 30,000
Depreciation of property and equipment 45,000
Impairment of property 80,000
Finance costs 35,000
How much should be reported as profit for the year ended December 31, 2016?
A 288,000 B. 263,000 C. 213,000 D. 183,000
.
ANSWER: C
Cost of sale
Raw materials and consumables used 350,000
Employee benefit expenses 150,000
Depreciation of property and equipment 45,000
Impairment of property 80,000
Decrease in inventories of finished goods 25,000 650,000
Gross profit 325,000
Share of profit of associates 15,000
Other income 8,000
Total income 368,000
Finance costs 35,000
• PAGE 13 OF 21•
Income tax expense 75,000 155,000
Profit 213,000
16) Flint Beastwood Company’s accounting records for the current year included the following information:
Work in process inventory increase 100,000
Finished goods inventory increase 70,000
Raw materials purchased 860,000
Freight-out 90,000
Cost of goods sold is

A 2,000,000 B. 1,810,000 C. 1,790,000 D. 1,720,000
.
ANSWER: D
Raw materials purchased 860,000
Raw materials used 890,000
Manufacturing cost 1,890,000
Work in process inventory increase (100,000)
Goods manufactured 1,790,000
Finished goods inventory increase (70,000)
CGS 1,720,000
17) Riptide Corporation reports operating expenses in two categories: (1) selling, (2) general and administrative. The adjusted trial
balance included the following expense and loss accounts:
Advertising 150,000
Freight-out 80,000
Interest 70,000
Loss on sale of long-term investment 30,000
On half of the rented premises is occupied by the sales department. Riptide’s total selling expenses are
A 480,000 B. 400,000 C. 370,000 D. 360,000
.
ANSWER: A
Advertising 150,000
Freight-out 80,000
Total selling 480,000
18) The following information for 2017 is provided by Parallax Company:

Sales 20,000,000
Correction of inventory error, net of income tax – credit 800,000
What was the 2017 income from continuing operations?

A 7,000,000 B. 6,600,000 C. 4,900,000 D. 4,500,000
.
• PAGE 14 OF 21•
ANSWER: D
Sales 20,000,000
Gain on early extinguishment of long-term debt (500,000)
Investment income – equity method (600,000)
Gain on sale of investment ( 2,000,000)
Interest expense 1,500,000 (4,500,000)
Operating profit before tax 6,600,000
Income tax (2,100,000)
Operating income after tax 4,500,000
19) The December 31 balances of selected accounts of Gemini Company and pertinent information are shown below:
Inventory – January 1 2,000,000
Purchases 7,500,000
Purchases returns and allowances 500,000
Inventory at December 31 2,800,000
Gross profit rate on net sales 20%
Gross sales for the current year amount to

A 9,125,000 B. 8,500,000 C. 7,750,000 D. 7,000,000
.
ANSWER: B
Inventory – January 1 2,000,000
Purchases 7,500,000
Purchases returns and allowances (500,000)
Inventory at December 31 (2,800,000)
Cost of sales 6,200,000
Cost of sales to sales ratio 80%
Net sales 7,750,000
Purchase return 750,000
Gross sales 8,500,000
The adjusted balance of Cooler Company includes the following accounts at December 31, 2016:
Sales revenue 8,000,000
Sales return 500,000
Commission income 30,000
Interest expense 180,000
Inventory, December 31, 2016 ?
Purchases 5,500,000
Sales salaries and commissions expense 350,000
Administrative staff costs 650,000
Office supplies expense 120,000
Dividends declared 800,000
Rent expense 250,000
Gain on sale of machinery 50,000
Unrealized gain on FVOCI 90,000
Depreciation expense – store equipment 60,000
Depreciation expense – office equipment 70,000
Freight-out 130,000
Freight-in 400,000
Additional information:
• Inventory, January 1, 2016, P750,000.
• Gross profit rate is 25% of net sales revenue.
• Rent expense is allocated 55% to selling and 45% to administrative.
• Ignore income tax.
• PAGE 15 OF 21•
20) What is the distribution cost to be reported in Cooler’s 2016 financial statements?
A 677,500 B. 547,500 C. 540,000 D. 410,000
.
21) What is the net income to be reported in Cooler’s 2016 financial statements?
A 105,500 B. 215,000 C. 125,000 D. 35,000
.
ANSWER: A, A/C
Net sales
Sales revenue 8,000,000
Sales return (500,000) 7,500,000
Cost of sales 7,500,000 x 75% (5,625,000)
Commission income 30,000
Gain on sale of machinery 50,000 80,000
General and admin 650,000 + 120,000 + (250,000 x 45%) + 70,000 (952,500)
Selling expense 350,000 + 130,000 + 60,000 + (250,000 x 55%) (677,000)
Finance cost interest expense (180,000)
Other expense loss on sale (40,000)
Net income 105,500
22) Vegetta Company reported the following information for the current year:
Unrealized loss on futures contract designated as cash flow hedge 500,000
Revaluation surplus during the year 350,000
Unrealized gain on financial asset at FVTOCI 150,000
Remeasurement gain on employee benefits 120,000
Gain on translation of financial statements of a foreign operationsd 150,000
Loss from change in fair value attributable to credit risk of a financial liability designated at FVTPL 200,000
In the statement of comprehensive income, what net amount should be reported as component of other comprehensive income
that may not be recycled to profit or loss?
A 820,000 B. 620,000 C. 420,000 D. 350,000
.
Barbet Company provided the following:
Distribution cost 450,000
Gain – exchange differences in translating foreign operations 100,000
Gain – cash flow hedge 50,000
Gains on property revaluations 250,000
Loss for the year from discontinued operations 90,000
Loss – remeasurements on defined benefit plan 270,000
Sales 3,200,000
Share of gain on property revaluation of associates 120,000
Loss – Available-for-sale financial assets 70,000
23) The amount reported in the Profit or Loss section for 2021 is
A 410,000 B. 340,000 C. 290,000 D. 210,000
.
24) The amount reported in the Other Comprehensive Income section for 2021 is
A 450,000 B. 260,000 C. 180,000 D. 80,000
.
Bluetick Company’s trial balance reflected the following account balances on December 31, 2021:
Auditing and Accounting fees 300,000
Advertising 500,000
Delivery expense 300,000
• PAGE 16 OF 21•
Interest 125,000
Loss on sale of long-term investment 110,000
Officer’s salaries 625,000
Insurance 200,000
Sales commissions 1,075,000
Depreciation on factory machine 12,500
Depreciation on office equipment 15,000
Depreciation on delivery truck 14,000
One-half of the rented premises is occupied by the sales department.
25) What amount should be reported as total distribution costs?

A 2,389,000 B. 2,375,000 C. 2,139,000 D. 2,014,000
.
26) What amount should be reported as general and administrative expenses?

A 1,527,500 B. 1,440,000 C. 1,390,000 D. 1,352,500
.
27) Border Company’s trial balance reflected the following account balances on December 31, 2021:
Net sales 4,000,000
Revaluation surplus during the year 300,000
Finance cost 35,000
Administrative expense 120,000
Translation 50,000
Unrealized gain on FVTOCI securities 200,000
Income from discontinued operations 100,000
How much is the comprehensive income for the year 2021?

A 1,655,000 B. 1,632,000 C. 1,390,000 D. 1,082,000
.
The following are among the expenses incurred by Boykin Company during the year.
Cost of inventories sold 1,200,000
Insurance expense 200,000
Advertising expense 40,000
Freight-out 20,000
Freight-in 8,000
Legal and other professional fees 24,000
Rent expense (one-half occupied by sales department) 16,000
Sales commission expense 28,000
Doubtful accounts expense 32,000
28) How much are the distribution costs or selling expenses?

A 316,000 B. 232,000 C. 128,000 D. 96,000
.
29) How much are the administrative expenses?

A 361,000 B. 316,000 C. 264,000 D. 232,000
.
ANSWER: D, C
Advertising expense 40,000
Freight-out 20,000
Rent expense 8,000
Sales commission expense 28,000
Total selling expense 96,000
• PAGE 17 OF 21•
Insurance expense 200,000
Legal and other professional fees 24,000
Rent expense 8,000
Doubtful accounts expense 32,000
Total general and admin expense 264,000
30) The records of Bulldog Company showed the following information:

Increase in accounts receivable 200,000
Collections on accounts 1,600,000
Cash sales 240,000
Inventory 80,000
Freight-in 28,000
Freight-out 26,000
Decrease in accounts payable 120,000
Disbursement for purchases 960,000
Purchase discount 8,000
How much is the gross profit for the year?

A 1,252,000 B. 1,244,000 C. 1,226,000 D. 1,225,000
.
31) The records of Bullmastiff Company showed the following information:

Accounts receivable, net January 1, 2021 80,000
Accounts receivable, net December 31, 2021 320,000
Accounts receivable turnover 4:1
Inventory, January 1, 2021 240,000
Inventory, December 31, 2021 120,000
Inventory turnover 3:1
How much is the gross profit for the year?

A 300,000 B. 280,000 C. 260,000 D. 240,000
.
ANSWER:
Average Accounts receivable (80,000 + 320,000) / 2 200,000
Accounts receivable turnover 4
Credit sales 800,000
Average Inventory (240,000 + 120,000) / 2
32) The records of Cane Company showed the following information:

Decrease in accounts payable 120,000
Disbursements for purchases 880,000
Increase in raw materials 200,000
Increase in work-in-process 80,000
Decrease in finished goods inventory 100,000
Direct labor is 50% of raw materials used in production. Manufacturing overhead is 20% of prime costs. How much is the cost
of goods sold?
A 1,082,000 B. 1,048,000 C. 1,032,000 D. 1,028,000
.
33) Chow Chow Company has the following information on December 31, 2021:
• Cost of sales is P520,000.
• Operating expense are 13% of sales and 20% of cost of sales.
• Interest expense is 5% of sales
• Income tax rate is 30%.
How much is the profit for the year?

A 105,200 B. 104,200 C. 98,200 D. 95,200
• PAGE 18 OF 21•
.
34) Cardigan Company reported profit after tax of P420,000. Cardigan’s income tax rate is 30%. Operating expenses for the year
were 15% of sales and 25% of cost of sales. Other expenses were 10% of sales. How much is the sales?
A 4,100,000 B. 4,000,100 C. 4,000,000 D. 3,900,000
.
ANSWER: C
15% Sales = 25% Cost of sales
.60 sales = cost of sales
Sales 100%
Cost of sales (60%)
Gross profit 40%
Operating expense (15%)
Other operating expense (10%)
Profit 15%
Profit before tax 420,000 / 70% 600,000

/ 15%
Sales 4,000,000
The records of Bracco Company on December 31, 2021 showed the following information:
Sales 4,000,000
Sales discount 40,000
Administrative cost 480,000
Casualty loss on typhoon 80,000
Dividends received from investments in FVPL 48,000
Dividends received from investment in associate 96,000
Share in profit of an associate 144,000
Dividends declared and paid 56,000
Unrealized gain on investments in FVPL 60,000
Unrealized gain on investment in FVTOCI 76,000
Loss on revaluation 52,000
Remeasurements of the net defined benefit liability – gain 44,000
Correction of understatement in depreciation in prior year 64,000
Translation adjustment of foreign operation – loss 16,000
35) How much is the other comprehensive income?

A 152,000 B. 127,000 C. 52,000 D. (24,000)
.
36) How much is the total comprehensive income?

A 1,424,000 B. 1,448,000 C. 1,242,000 D. 1,224,000
.
37) Soul Reaper Company reported net income of P7,410,000 for the current year. The auditor raised questions about the following
amounts that had been included in net income:
Unrealized loss on foreign currency translation (540,000)
Gain on early retirement of bonds payable 2,200,000
Adjustment of profit of prior year for error in depreciation, net of tax (750,000)
Loss from fire (1,400,000)
What amount should be reported as adjusted net income?

A 8,700,000 B. 8,160,000 C. 6,610,000 D. 6,500,000
.
38) Hammerstorm Company reported the following data for the current year:
• PAGE 19 OF 21•
Valuation gain on available-for-sale investment 20,000
Share in profit of associate 35,000
Cost of goods sold 600,000
Finance cost 15,000
Administrative costs 30,000
Exchange difference on translation of foreign operation – credit 15,000
What is the profit for the year?

A 350,000 B. 270,000 C. 265,000 D. 250,000
.
ANSWER: D
Share in profit of associate 35,000
Cost of goods sold (600,000)
Distribution cost (50,000)
Administrative costs (30,000)
Net profit 250,000
39) Jeraziah Company provided the following information for the current year:
Increase in raw materials inventory 200,000
Increase in finished goods inventory 500,000
Raw materials used 4,400,000
Factory overhead 3,000,000
Freight-out 600,000
Freight-in 300,000
What is the cost of goods sold for the current year?

A 9,900,000 B. 9,400,000 C. 9,300,000 D. 9,600,000
.
ANSWER: C
Increase in finished goods inventory (500,000)
Raw materials used 4,400,000
Factory overhead 3,000,000
Total
40) The following information was taken from Dream Company’s accounting records:
Sales 10,000,000
Raw materials purchased 2,100,000
Factory overhead 800,000
Selling expenses 300,000
Freight out 900,000
Dream Company’s profit before tax is

A 4,250,000 B. 4,150,000 C. 3,550,000 D. 3,250,000
.
ANSWER: C
Sales 10,000,000
Decrease in goods in process inventory (200,000)
Decrease in raw materials inventory (350,000)
• PAGE 20 OF 21•
Raw materials purchased (2,100,000)
Direct labor payroll (1,000,000)
Factory overhead (800,000)
Selling expenses (300,000)
Freight out (900,000)
• PAGE 21 OF 21•

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1) Lola Company reported the following information for 2023:

• J.S. CAYETANO ♣• • FAR EASTERN UNIVERSITY • • FINANCIAL ACCOUNTING II • • PAGE 1 OF 21•

1) What total amount of expense classified as distribution costs or selling expenses?

2) What total amount of expense classified as administrative expenses?

4) What amount should Vane report as the cost of goods manufactured?

12) Mayo Company provided the following data for 2022:

What is the net profit for the current period?

15) Cattleya Company provided the following account balances at year-end:

What total amount should be reported as current assets at year-end?

1) What is the amount of gross profit for the current period?

2) What is the amount of net profit for the current period?

Legal and audit fees 1,800,000

2) The following information for 2022 is provided by Panunumpa Company:

What was the 2022 income from continuing operations?

2) What was the amount of sales for the year 2021?

Sand Wraith Company’s profit before tax is

What net amount may be subsequently recognized in profit or loss?

1) What is the net income for the current year?

3) What is the total comprehensive income for the current year?

Compel Company’s cost of sales for the year 2016 is

5) How much shall be reported as cost of goods sold?

6) How much shall be reported as net income?

7) How much shall be reported as total other comprehensive income?

8) How much shall be reported as total comprehensive income?

Retained earnings, beg 4,200,000

10) What is the total manufacturing costs?

11) What is the total cost of goods sold?

12) What is the total selling expenses?

13) What is the income before income tax?

Cost of goods sold is

18) The following information for 2017 is provided by Parallax Company:

What was the 2017 income from continuing operations?

Gross sales for the current year amount to

One-half of the rented premises is occupied by the sales department.

25) What amount should be reported as total distribution costs?

26) What amount should be reported as general and administrative expenses?

How much is the comprehensive income for the year 2021?

28) How much are the distribution costs or selling expenses?

29) How much are the administrative expenses?

30) The records of Bulldog Company showed the following information:

How much is the gross profit for the year?

31) The records of Bullmastiff Company showed the following information:

How much is the gross profit for the year?

Average Inventory (240,000 + 120,000) / 2

32) The records of Cane Company showed the following information:

How much is the profit for the year?

Profit before tax 420,000 / 70% 600,000

35) How much is the other comprehensive income?

36) How much is the total comprehensive income?

What amount should be reported as adjusted net income?

What is the profit for the year?

What is the cost of goods sold for the current year?

Dream Company’s profit before tax is

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