Assignment

Directions: Read the statements carefully and encircle the best answer from the choices. Show your solutions.
No solutions no score.

1. Alfred Merchandising has the following selected accounts on December 31, 2019:
Cash surrender value P 150,000
Refundable deposits to supplier 60,000
Accounts payable 400,000
Notes payable 250,000
Accrued interest on notes payable 10,000
Cash dividends payable 150,000
Accrued expenses 90,000
Stock dividends payable 200,000
Warranty payable 80,000
Bonds payable 1,000,000

A portion of the bonds payable amounting to P200,000 will be maturing on March 31, 2020. If the
primary competitor of the business has current total liabilities of P1,300,000 for the year ended
December, the comparative current liabilities of Alfred will have a variance of
A. P60,000 favorable C. P80,000 unfavorable
B. P120,000 favorable D. P160,000 unfavorable
Refundable deposits to supplier 60,000
Cash dividends payable 150,000
2. Accounts payable 400,000 Janaya
Notes payable 250,000
Accrued interest on notes payable 10,000
Cash dividends payable 150,000
Stock dividends payable 200,000
Total 1,220,000
Total Liabilities ( 1,300,000)
Variance 80,000
Merchandising provides the following comparative information:
2020 2019

Trade and other receivables 300,000 450,000

Inventory 390,000 980,000
Property, Plant and Equipment 4,000,000 4,500,000
Bank loan payable 1,000,000 1,000,000
Mortgage payable 3,000,000 -

What is the percentage of change of trade and other receivables that will appear in the horizontal
analysis?
A. 0.0% B. 33.3% increase C. 33.3% decrease D. 66.7% decrease

= Current Year - Base Year Base Year

= 300,000 - 450,000 450,000
= - 0.333 x 100% = - 33.3%

3. Using the same data in no. 2, the percentage of change of bank loan payable that will appear in the
horizontal analysis would be
A. 0.0% B. 50% increase C. 100% increase D. 100% decrease

No changes.

4. Liezl Trading presents the following selected items from its financial statements:
Cash and cash equivalents 500,000
Trading securities 1,000,000
Inventory 2,500,000
Total current assets 5,000,000
Total assets 15,000,000
Trade and other payables 800,000
Total Liabilities 6,000,000
Net sales 8,000,000
Operating expenses 2,200,000
Income after tax 960,000
 On a common-size statement of financial position, how will the company present the trading securities?
A. 5.0% B. 6.7% C. 20.0% D. 25.6%

= Trading Securities
Total Assets
= 1,000,000
15,000,000
= 0.067 x 100% = 6.7%

5. Using the same data in no. 4, how will the company present the trade and other payables in a common-
size statement of financial position?
A. 13.3% B. 10.0% C. 5.3% D. 4.0%

= Trade and other Payable

Total Assets
= 800,000
15,000,000
= 0.053 x 100% = 5.3%

6. Using the same data in no. 4, how will the company present the operating expenses in a common-size
statement of comprehensive income?
A. 11.0% B. 14.7% C. 27.5% D. 229.0%

= Operating Expenses
Net Sales
= 2,200,000
8,000,000
= 0.275 x 100% = 27.5%

7. Selected items in the statement of comprehensive income of Louisa Trading are as follows:
Sales 3,675,000
Sales discounts and allowances 175,000
Office supplies 52,500
Advertising expense 71,000
Utilities expense 177,500
Interest expense 35,000

The gross profit of the company is 40 percent of net sales and the applicable tax rate for the period is 30
percent. In the common-size statement of comprehensive income, sales discounts and allowances will have a
proportional percentage of
A. 4.76% B. 5.00% C. 4.55% D. 95.23%

= Sales Discounts and Allowances

Net Sales
= 175,000
3,675,000
= 0.0476 x 100% = 4.76%

8. Using the same data in no. 7, office supplies will appear in the common-size statement 0f
comprehensive income as
A. 1.43% B. 1.46% C. 1.50% D. 2.5%

= Office Supplies
Net Sales
= 52,000
3,675,000
= 0.0143 x 100% = 1.43%

9. Using the same data, the proportional percentage of interest expense in the statement of comprehensive
income will be
A. 1.00% B. 0.95% C. 0.91% D. 1.15%

= Interest Expense
Net Sales
= 35,000
3,675,000
= 0.0095 x 100% = 0.95%
10. Using the same data, the business expects to allocate 8 percent proportional component for salaries and
wages in the common-size statement of comprehensive income, the absolute amount for salaries and
wages will be
A. P176,400 B. P280,000 C. P294,000 D. P308,000

= Net Sales x 8%
= 3,675,000 x 8%
= 294,000

11. Cyrell Merchandising provided the following comparative information:

2020 2019 2018 2017

Trade and other receivables P400,000 P520,000 P420,000 P550,000
Inventory 620,000 680,000 640,000 600,000
Trade and other payables 590,000 520,000 500,000 530,000

In the trend percentage statement of financial position, what would be the index of the year 2018 trade
and other receivables using 2017 as base?
A. 5% B. 24% C. 76% D. 105%

= Trade and other Receivables 2018 (2016)

Trade and other Receivables 2017
= 420,000
550,000
= 0.76 x 100% = 76%

12. What would be the index of 2016 trade and other receivables using 2020 as the base in trend percentage
financial statements of Cyrell Trading?
A. 5% B. 24% C. 76% D. 105%

= Trade and other Receivables 2018

Trade and other Receivables 2020
= 420,000
400,000
= 1.05 x 100% = 105%

13. What would be the index of 2017 trade and other payables using 2018 as the base?
A. 140% B. 98% C. 85% D. 96%

= Trade and other Receivables 2019

Trade and other Receivables 2018
= 520,000
500,000
= 1.04 x 100% = 104%

14. Melanie Trading has the following comparative data on the equity section of its statement of financial
position:
2020 2019 2018 2017
Trade and other payables P 80,000 P 65,000 P 120,000 P 90,000
Warranty payable 30,000 25,000 40,000 15,000
Bonds payable 500,000 500,000 400,000 300,000
Share capital 900,000 900,000 800,000 600,000
Retained earnings 650,000 600,000 700,000 400,000

In the trend percentage statement of financial position, Melanie Trading will present the bonds payable
of 2018 using 2020 as the base level is
A. 125% B. 133% C. 80% D. 75%

= Bonds Payable 2018

Bonds Payable 2020
= 400,000
500,000
= .08 x 100% = 80%
Bonds Payable 2020

15. How would Melanie Trading present the trade and other payables of 2020 in trade percentage
statement of financial position if the base level used is 2017?
A. 113% B. 89% C. 13% D. 11%

= Trade and other Receivables 2020

Trade and other Receivables 2017
= 80,000
90,000
= 0.89 x 100% = 89%

******THE END******

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