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Question 1
The following are type of errors, except
Question 2
Recto Legarda, a retired engineer, formed Ralph Loren Trading on July 1, 2020, investing his retirement pay of P400,000
in the business. To cut on operating expenses, he did not hire an accountant; as a consequence, his accounting records
were incomplete. On January 1, 2021, his cash balance was P410,000 and on December 31, 2021, it was P430,000. He
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wanted to have an idea if the result of his operations for the year ended December 31, 2021. The following information
and other data were gathered for the year 2021:
Jan. 1 De
Legarda was able to arrange with the owner of the building that his rental deposit be reduced by 50% and the amount
against rentals in 2021.
From the 2021 cash memoranda of Recto Legarda, you were able to extract the following:
Collections of AR 1,3
Matured money market placement not rolled over
Total P1,7
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Trade payables
9
Notes payable (delivery equipment)
Operating expenses 4
Recto Legarda, drawing
Total P1,6
You have established that the fixed assets have not been depreciated since they were acquired on July 1, 2020.
Estimated useful life of these assets is ten years. Based on the above and the result of your audit, determine the
following for the year 2021: (ignore income taxes; input answer figures without spaces and special characters)
Response: 1748000
Response: 1134900
Response: 496500
Response: 99400
Question 3
Misamis Company’s December 31, year-end financial statement contained the following errors:
An insurance premium of P75,000 was prepaid in 2019 covering the years 2019, 2020, and 2021. The same was
charged to expense in full in 2019. In addition, on December 31, 2020, a fully depreciated machinery was sold for
P160,000 cash, but the sales was not recorded until 2021. There were no other errors during 2019, 2020, and 2021 and
no corrections have been made for any of the errors. Ignore income tax considerations.
Based on the above and the result of your audit, answer the following:
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What is the net effect of the errors on the 2019 profit? (If understated, input the figure with negative/minus sign) _____
What is the net effect of the errors on the 2020 profit? (If understated, input the figure with negative/minus sign) _____
What is the net effect of the errors on the company’s retained earnings at December 31, 2020? (If understated, input the
figure with negative/minus sign) _____
Response: -130000
Response: 55000
Response: -75000
Question 4
Bea Company provided the following comparative statement of financial position.
9,300,00 7,50
9,300,000 7,50
Additional information:
The statement of retained earnings for 2019 showed net income of P1,500,000 and cash dividend paid if
P300,000.
During the year, the entity purchased equipment for cash and issued share capital for cash.
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What is the net cash provided of cash flow from operating activities? (if the amount is negative, input the figure with
parenthesis and do not input spaces and comma) _____
What is the net cash provided of cash flow from investing activities? (if the amount is negative, input the figure with
parenthesis and do not input spaces and comma) _____
What is the net cash provided of cash flow from Financing activities? (if the amount is negative, input the figure with
parenthesis and do not input spaces and comma) _____
What is the total decrease or increase in cash and cash equivalents? (if the amount is negative, input the figure with
parenthesis and do not input spaces and comma) _____
Response: 600000
Response: (1000000)
Response: 200000
Response: (200000)
Question 5
Which of the following are examples of cash flows from operating activities?
Question 6
The income statement of CDO Corporation for 2021 included the following items:
The following balances have been excerpted from CDO Corporation's statement of financial position:
12/31/2020 12/31/2021
Accrued Interest Payable 165,000 200,200
Accrued Salaries Payable 92,400 195,800
Prepaid Insurance 33,000 24,200
Based on the above and result of your audit, determine the following:
The cash paid for insurance premium during 2020 was? _____
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Response: 2065800
Response: 1546600
Response: 244200
Question 7
The computation procedure followed in determining net income or loss is simply to compare the capital or retained earnings at the
beginning of the year and capital or retained earnings at the end of the same year after taking into consideration withdrawals or
dividends and additional investments.
Question 8
The income statement for the current year, Ace Company reported revenue P5,000,000, excluding intersegment sales P1,000,000,
expenses P4,700,000 and net income P300,0000
The combined identifiable assets of all operating segments at year-end totaled P4,000,000.
The entity should disclose major customer data is sales to any single customer amount to at least? _____
Response: 400000
Response: 3000000
Question 9
Which of the following are examples of cash flows from financing activities?
Response: Cash receipts from issuing debentures, loans, notes, bonds, mortgages, and other short or long-term borrowings.
Question 10
Nina Company and its divisions are engaged solely in manufacturing operations. The entity reported the following segment profit
(loss) for the current year:
A – 3,400,000
B – 1,000,000
C – (2,000,000)
D – 400,000
E – (200,000)
In segment information for the current year, what are the reportable segments? _____
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At what amount of profit figure is the basis for identifying the reportable segments? _____
Response: ABC
Response: 4800000
Question 11
Counterbalancing errors normally include the misstatement of the following, except:
Question 12
Which of the following statements is false?
Response: If the total external revenue of reportable operating segments constitutes less than 75% of the entity internal revenue.
Additional operating segments shall be identified as reportable segments.
Question 13
Which of the following are examples of cash flows from investing activities?
Response: Cash payments from sales of equity or debt instruments of other entities and interests in joint venture
Question 14
An entity shall disclose information to enable users of its financial statements to evaluate the nature and financial effects of the business
activities in which it engages and the economic environments in which it operates.
Question 15
Input “added” or “deducted” or “no effect” in the blank space provided to adjust the net income to cash basis:
Response: added
Response: added
Response: deducted
Question 16
An operating segment is a component of an entity because of the following except:
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Response: That engages in business activities from which it may earn revenue and incur expenses, excluding revenue and expenses
relating to transactions with other components of the same entity.
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