= TYVTr_rrTKY — : ‘wancitl SI 361 CHAPTER LI — Awalysis axl Intenpneration of Financial SrAreMENIS MULTIPLE CHoice; 41. Infinancal statements analyss, expressing all nancial statement items asa percentage of base yeer amounts is called 2, trend analysis, . horizontal common-size anabss. 3. variance analysis, 4, vertical common-size analysis . 2. In financal statements analysis, expressing figures for a single year as a percentage of @ base amount on the financial sate (fo: ‘@ampl, toa assets na balance sheet or sales in fe income statement) is called end anayse . heron cmon ares. lane Sia 4. vertical common-site analysis. 4, Which of the folowing statements is correct? a, Lquidty refers to the fim abit to pays obi m ts obligations and to continue operations. ‘Solvency refers toa firm's ability to survive in the long-term by paying its short-term obligations. & Tar Me te uty {fers to 2 fm’ sl of own seks inthe stck exchange . 565 uch issues a ray vaca SUChisues ste ers uty, use ofleerage, management of 258s, costco, 4, Solvency i a firm's ability to survive in the long-term by pai ts key ingredients are capa ruc an earn poner Capa sacurecnsce er ne OUeatON: TSI a, the capital stocks ofthe firm: b. theirs total assets. ‘¢_ the fim’s sources of financing, whether long-term or short-term, ofits assets d_ the stockholders’ equity accounts. 5. Financial leverage or trading on equity is advantageous when ‘a. allof the corporaticn’s authorized capital stocks have already been isued. b. a frm has an avalible credit line with its depository bank. ¢_eamings from borrowed funds exceed borrowing costs. 4. a fimisin finarcal distress, 6. Through financial Statements analy, interested parties ~ such as manager, investors, and creditors ~ can identify the company's financial strenaths and weaknesses ard know about the folowing, except 2, profitability of the bustess firm. safety ofthe avestment in the busines. the firm's ability to mest its obligations. d. composton of maragement running the firm. 7. Financial statements analysis is rot without problems and limitations. Among such imitations isa follows, except: a.__Atatio that is acceptable to one company may nat be acceptable to another when some other factors are considered. b,_ There may be some differences in the accounting methods and estimates used by companies so that comparison oftheir ratios may not be advisable, Financial statements are based on current market value ofthe firm's assets, therefore they do not reflect historical costs, 4. The timing of transactions and use of averages in applying the various techniques in financial statements analysis affect the results to be obtained. 8. Which ofthe folowing is nota limtatlon of ratio analjsis affecting comparability among firms? 2. Provision of useful information regarding the efficiency of operations and the stablty of financial conltions ._ Different sources of information _<— Different accourting periods 4: Diferent accountng policies 9. Inassessing the financal heath of a firm, financial analysts use different techniques. One technique isthe vertical, commarrsize analyss, an example of which is a, total current assets is 20% of the total assets as of a certain date. b. total current assets as of a certain date is 20% greater compared with the previous year. the finished goods inventory turnover is twelve times during the year. cash provided by operators is P100,000. ScannetPART 2 — Foundations of Management Accounting 362 ranges avec nancial statements analysis. In measuring price level changes, some Indices are use, 10, fc ln ana ers the Cross Domest prod (GDP) price Index or GOP defatr, which "a. measures price level by a monthly pricing of specified set of goods and services purchased by a typical ‘consumer. oe tke pies ofl goods and services produce in the county, fled commodities at the time of ther fist commercial sale. | measures the price of speci is the amount charged by one organizational unit forthe transfer of goods or services to another organizational = nit within the same firm, Which of the folowing statements is not correct? A limitation of ratio analysis aftecin ily fr interim period to the next within a firm Is that ys 19 comparability from one ina seasonal busines, Inventory and receivables may vary wid wth year-end balances not reflecting the averages forthe period. management has less incentive to window dress financial statements to improve resus, c._ comparability is impaired if dfferent firms use diferent accounting polices, {._ misleading conclusions may result if improper comparisons are selected. “The variance that arises solely because the actual nits sold dfers from the budgeted units to be sold is cated a, sales volume variance. c. master budget increment. b. sales price variance. sales mix variance. © a. u. b 12, For 2 multr-product company, the sales volume can be divided into the ‘8. sales mix variance and production volume variance. sales mix variance and sales quantity variance, Cc sales price variance and sales vclume variance. dd. sales volume variance and sales quantity variance. : B, 14, The statement of cash flows . ‘a. reports the revenues earned and expenses incurred by the firm during the period. . shows the company's total assets, broken down into current and non-current assets. ‘c_ shows the company’s capital structure for a period of time, d. reports the net change in cash resulting from operating, investing, and financing activities of the firm during the perod, 15. In cash flow analysis, the cash flows from operating actvties ; 2. are the cash effects of transactions that create revenues and expenses. b. generally relate to changes in non-current assets. generally relate to changes in long-term liabilities and stockholders’ equity accounts. 0. are irelevant, 16. In computing a ratio, when a balance sheet amount is related to an income statement amount, athe income statement amount should be converted to an average for the year. b. the balance sheet amount should be converted to an average for the year. both amounts should be converted to an average for the year. d._ the amounts may be used as is to develop a meaningful ratio. 17, Which of the following statements is incorrect? | 2. The ratio of sales to working capital is a measure of liquidity and activity, 7 The number of days’ sales in receivables is a measure of liquidity, as well as of activity. 4 &Ahgysletowetng copa eto welt that the frm not suscep to qulyprolens, : The earnings per share is a profitabiity ratio. 18. The following are taken from the balance sheet of Juls Company as of December 31, 2008: Current assets: Cash on hand and in banks 341,600 Accounts recowable 200,000 Merchandise inventory 308,400 P 850,000 Scanned with Camscanner363 CHAPTER 11 — Analysis and Irenpretation of Financial Statements abilities: orrentKbities: wots payable 280,900 secounts payable 210 1,062,500 Long term tabiies 300,000 ‘What are the company’s current ratio and quick (acid test) ratio? (Current Ratio Quick (Acid Test) Ratio 2 0.80 Ost b. O51 0.80 ' c 0.21 193 4. 3.03 032 19, The following data were taken from the comparative balance sheets of Dolms Company: December 31, 2008 December 31, 2004 Osh 35,000 P 33,125 Marketable securities 16,375 15,125 Notes and accounts receivable, net 49,375 48,000 Inventories 71,250 69,375 Prepaid expenses 2,375 5,000 Notes and accounts payable (short-term) 31,250 35,605 ‘Accrued lables 7/500 10500 Bonds payable, due 200M 100,000 100,000 “The company’s working capital increased (¢ecreased) from 200A to 2008 by a. P135,625, c (PLL125). b. Pi24,500. dg. PuL25. ITEMS 20 to 25 ARE BASED ON THE FOLLOWING INFORMATION: Following are selected financial and operating data taken from the financial statements of Antiporda Corporat ‘As of December 3t 2008 2004 Cash P £0,000 P 640,000 Notes and accounts receivable, net 400,000 3,200,000 Merchandise inventory 720,000 4,200,000 Marketable securities ~ shorttem 240,000 80,000 Land and buildings (net) 2,720,000 2,880,000 ‘Bonds payable ~ long-term 2,160,000 2,240,000 ‘Accounts payable ~ trade ‘360,000 880,000 Notes payable ~ short-term 160,000 320,000 For the Year Ended December 31 2008 2004 Sales (20% cash, 80% creit sles) 18,400,000 19,200,000 Cost of goods sold 8,000,000 11,200,000 Compute te following ratios: 20. Current ratio as of December 31, 2008: a OS: © 261 b. 20: 4d. 1:26 21, Quick (acid test ratio as of December 31, 2008: 3 a 20to1 © tol b. O5tot a 07 tot Scanned with CamscannerPART. 2 = Foundations of Management Accounting 364 22. Asoo wweable tumover for 2008: ee ea a 2H b. 18.4 times. Me 5 tines ise inventory turnover for 2008: 2. Neen tmes © 10.0times b, 1120tmes d, 8,33times 24. The gross margin rate for 200A: i 41.67% . C. 58,33% b, 71.43% d. 56.52% 25. The average age of accounts receivable for 2008 (use 360 days): a. 19.57 days c. 0.05 day b. 19.57 months d, 18.40 days 26. The following information pertains to Batalla Company for 2008: Inventory at December 31, 2008 16,000 Purchases of merchandise, all on credit 72,000 Cost of goods sold 80,000 The company’s merchandise inventory turnover for 2008 was a. 4,0 months, c. 4,0 times. 'b. 10.0 times. d. 3.60 months. 27. The fellowing information pertains to Cenon Company for 2008: Accounts receivable, January 1, 2008 8,000 Accounts receivable, December 31, 2003 9,600 Net cash sales 3,200 ‘Accounts receivable turnover for 200B ‘S times ‘The company’s net sales for 2008 was a. P47,200. c. P51,200. b. P88,000. d. 48,000. 28. Super Hot Pan de Sal and Flaming Hot Pan de Sal compete with each other in the hat pan de sal market. Supers strategy is to bake pan de salto customer orders rather than for inventory. Flaming, on the other hand, bake hot pan de sal even if there is no order, then sells from inventory so that customers do not have to wait. Selected financial information from a recent year’s financial statements is given below: Super Flaming Sales P729,720 1,246,760 | Cost of goods sold 565,480 959,200 i Inventory, beginning 9,320 62,800 Inventory, ending 10,920 80,200 ‘Which company has the higher inventory turnover and by how many times? ic Neh esi v (Round your answer to one digk after a. Super, 55.9 times © Super, 42.5 times b. Flaming, 13.4 times d. Flaming, 42,5 times Scanned with CamScanner365 CHAPTER 1 | — Analysis and Interpretation of Financial Srarements ITEMS 29 to 31 ARE BASED ON THE FOLLOWING INFORMATION: Following are some data from the financial records of Rle Corporation: ‘2008 200A sales 500,000 375,000 ‘Common stock 125,000 Retained earnings 105,000 Dividend payout ratio 40% ‘After tax proft 49% of sales Gash 12% of sales ‘Accounts receivable 18% of soles Inventory 30% of sales Fixed assets, net 40% of sales ‘Accounts payable 20% of sales ‘Accruals 5% of sales 29, How much isthe retained earnings balance as of the end of 20037 3. P120,000 & P105,000 b. P117,000 ¢. P125,000 30. How much isthe company’s total assets as ofthe end of 2008? ‘2. 500,000 c. P242,000 b. 375,000 .P742,000 31, How much was the companys long-term debtas ofthe end of 2008? 2. PO . P375,000 b. P125,000 - 4. P133,000 32. For the year 2008, Lim Companys return on common stockholders’ equity was 12.5%. Its average stockholders’ equity forthe same period wes PS00,000, inclusive ofP50,000 par value of preferred stock with a dividend rate of 8%. How much was the company’s net income for 20082 2. P60,250 P58,500 b. 756,250 4. 62,500 33, The following ratios were computed from Siason Company's financial statements for 200B: . Return on asset 2% ‘Ascot turnover 1.6 times What was the company’s profit margin ratio? a. 384% © 15% b. 6% 4. 24% 34, The folowing figures are taken from Ethaniel Company's financial statements for the calendar years 2008 and 200A: 2008 2008 Total assets 300,000 750,000 Long-term debt (12% interest rate) 125,000 8% Preferred stocks, P1OD par value 225,000 225,000 Total stockholders’ equity 600,000 550,000 Net income (after tax of 20%) 70,000 What isthe return on average total assets? a. 9.8% © 12.95% b. 10.5% 4 14.9% |__s Scanned with Camscanner366 PART 2 — Foundations of Management Accounting 35. Last year, a business had no long-term investments; this year, long-term Investments amount to P500,000. In a horizontal analysis, the change in long-term investments should be expressed a5 ‘a. an absolute value of P500,000 and an increase of 100%. , an absolute value of PSO0,000 and an increase of 1,000 percent. an absolute value of P500,000 and no value for a percentage change. ._no change in any terms because there was no investment in the previous year- 36. Eamings per share amounts to P10 and the price earnings ratio Is 5. Ifthe dividend yield is 896, ‘the market price ofthe stock must be P40. . the market price ofthe stock cannot be determined. the amount of dividend cannot be determined. d.__the dividend is Pa per share, 37. The following information was taken from last year's financial statements of Dianice Industries: Current liabilities 60,000 Long-term liabilities 180,000 Preferred stock 50,000 ‘Number of common shares outstanding 10,000 “The company has a debt-to-equity ratio of 0.96 to 1 at the end of last year. What was the book value per share at the end of last year? a. P1375 25.00 b. P20.00 . P49,00 ITEMS 38 and 39 ARE BASED ON THE FOLLOWING INFORMATION: Net sales, P1.8M; Cost of goods sold, P1.08M; Operating expenses, P315,000; Earnings before interest and tax, 405,000; Net income, P195,000; Total stockholders’ equity, PO.75M; Total assets, PIM; Cash flow from operating activities, P25,000. 38. ‘The return on investment is c. 19.5%. a. 22.5%. b. 26.5%. d. 40.5%. ; 39, The cash flow margin is, a 1.4%, c 10.8%. b. 2.5%. d. 12.8%. : 40. If 2 company has current assets of P200,000, including inventory of P800,000 and a quick ratio of value of the company’s current liabilities? ‘a. 100,000 c. P240,000 b. 140,000 dP 60,000 ITEMS 41 and 42 ARE BASED ON THE FOLLOWING INFORMATION: Consider the following data about @ company: Current ratio 35to1 Acd-test ratio 3.0to1 Current abilities at year-end 150,000 Inventory, beginning ofthe year 125,000 Inventory turnover Bitimes 41. What is the value of the company’s inventory at the end of the year? a. P.75,000 c. P150,000 b. P125,000 d. 525,000 Scanned with CamScannerCHAPTER 11 ~ Analysis avd Intenprerntion of Fivavcial Starnes 367 42. How much is the companys cost of goods sold during the year? ‘a. P400,000 ©. PA,600, ‘600,000 a >on ITEMS 43 to 45 ARE BASED ON THE FOLLOWING INFORMATION; Presented below are the comparative State ‘years 2008 and 200A: 2ments of Finandal Position of DM Atienza Company for the calendar DM ATIENZA COMPANY ‘Statements of Financial Position December 31 ‘ASSETS: (aN OY : Current assets: (2008 | Cash , Marketable secures Pe P 20 Accounts receivable (et) ig 220 Inventaries x 20 Other curent assets = Total current assets <1 Non-current assets: Pao LAZO Investment in securities 7 P\ 200 P_ 160 Property, plant, and equipment, net 2,000 2,120 Other non-current assets, net 440 20 Total non-current assets Peo 92.520 Total assets 4,000 3,640 LIABILITIES AND EQUITY Liabites: Current liabitties P 680 P 440 Non-current liabilities 200 200 Total lablties Pee Beto Equity: 5% Cumulative, non participating Preferred stock, P10 par value, 8,000 shares issued and outstanding P 800 P 800 ‘Common stock, P10 par, 160,000 shares ‘authorized, 120,000 shares issued and outstanding 1,200 1,200 ‘APIC ~ Common 600 00 Retained earnings 520 —400 Total equity P3120 3,000 Total iabilties and equity 4.090 P3640 43. Based on the given statements of financial position, the company’s ‘a. current rtio for 2008 wos 2.54 to 1. c._ 2cid test (quick ratio) for 2008 was 1.12 to 1. . current ratio for 200A was 2,00 to 1. 4. acid test (quik ratio) for 200A was 1.72 to 1. 444. Assume that for 2008, net credit sales was P2,400,000 and the gross profit was 25.67 Ye. What was the company's ‘accounts receivable tumover forthe year? a. Btimes b. 8% 45. Assume that the company’s net income for 2008 was P280,000 and there were no preferred stocks dividends in arrears, what was the company’s return on common equity fer such year? a 12,38% . c. 10.62% b. 7.84% 4. 8.00% Scanned with Camscanner_____ PART 2 = Foundations of Management Accounting 368 46. C. Atienza Company's equity balances as of the end of 2008 are as follows: 6% Cumulative, fully partilpating preferred stocks, 200 par value, with Iquidation value of P20 P 400,000 ‘Common stocks, PAO per value 800,000 Retained earnings 1,024,000 No dividends were dedared during the year, . Atienza Company's book value per share of common stock is a. PLML20. P9120. b. 88.00, 3 d. P89.20. 47._As of the end of 2008, Ice Company had total assets of P375,000 and equity of F206,250. For 2006, its budget for ‘capital investment projects is P52,500. To finance a portion of the capital budget, the company may borrow from 2 bank which set a condition that the loan would be approved, provided that the 200C's debt-torequty ratio should te the same as the debt-to-equity ratio in 2008. How much debt should be incurrec to satisfy the bank’s condition? a. 28,125 c. 734,375 b. 62,500 dd. P51,138 48, During the year, Tindugan Company earned net income of P60,000. For next year, it has @ capital budget of P80,000, If the company’s plowbeck ratio is 30%, how much external funding isneaded for the capital investment project? ‘a, 80,000 c. P56,000 b. 67,000 d, 98,000 ITEMS 49 to 55 ARE BASED ON THE FOLLOWING INFORMATION: ‘The following deta show actual figures for selected accounts of Lieze! Corporaticn for the calendar year 200A and selected budget figures for 2008. ‘The company’s accounting manager 1s in the process of reviewing the 2008 budget and calculating some ratios which he thinks are relevant in the review: Budgeted Actual Current assets: December 31, 2008 December 31, 2004 Cash P 16,000 P 8,000 Accounts receivable 80,000 6,000 Inventory 56,000 64,000 (Other current assets 16,000 — 16.000 Total current assets 168,000 P4400 Non-current assets 220,000 204,000 Total assets +P388,000 348,000 Current liabilities P 62,400 P 68,000 Long-term liabilities 80,000 —24,000 Total liabiltties P122,400 292,000 Common stack (P24 par value) 240,000 240,000 Retained earnings 25,600 16,000 Total equity 265,600 ‘P256,000 Total liabilities and equity 38,c00 348,000 Scanned with CamScannerCHAPTER [| = Analysis ave Inrenprenion of Financial Suen 369 BUDGETED INCOME STATEMENT For the Year Ended December 31, 2008 Sales (all on credit) Seacrest aon cuore Administrative expenses: Fesz 00 Operating income mer Interest expense P 9940 eT ae Income tax (40%) toe Net income ‘P.S7,600 49. How me Reed ‘does the company plan to pay in 20087 . P ry "600 c. P32,000 d, P57,600 50. For the year 2008, the company expects to hi 7 " ave a(an) %. eit toot set ratio OF 66.5%, inventory turnover of 2.29 times. ivable turnover of 3.5 times, d. total assets turnover of 0.76. 51. The ae ‘on assets in 2008 is : a pong c. 14.84%, b. 16.55%. 4 783%, ‘52. On the average, the company expects to collect its receivables during 200B in (use 360 days) a. 88.59 days. e169 days b. 87.38 days. d. 78.83 days. ‘53. The average age of the company’s inventory in 2008 is (use 360 days) a. 171.36 days. 169 days. dD. 140.85 days. d. 6 months. 54. The expected number of times the company can earn interest expense in 2008 is a. 24 times. c. 63 times. b. 40times. d, 41 times. 55. For 2008, the company’s earnings per share (EPS) is a. P5.76, cP 9.84. b. P9.60. d. P15.20. 156, The following selected data were taken from Magallado Company's income statement forthe calendar year 2008: Net sales 334,000 Gross income 103,600 Interest expense 4,000 Income tax 9,600 Net income 30,000 Gain on sale of a business segment, net of tax 16,800 ‘The number of times interest was earned in 200B was a. 7.70 times. c 69 times. D OsP time 6 350times, 57. Last year’s asset turnover of Johvic Company was 3.0. This year, the company’s sales increased by 25% and average total assets decreased by 5%. What is this year’s asset turnover? a 39 «34 b 3.6 Ces Scanned with Camscanner370 _ by PART 2 ~ Foundations of Management Accounting 58, Following ae selected data taken from the records of Jemson Company: Income before tax 200,000 Income tax rate 40% Dividend payout ratio. 0.80 ‘Number of common shares outstanding 10,000 shares How much dividends per share was paid by the company during the year? a. P3.60 PIG b. P5640 4. pts 59. In 200A, Sweet Company paid out 50% of its earnit ings In dividends. In 2008, ts earrings decreased by 20% and its dividends decreased by 10%, What is the company’s dividend payout ratio in 20087 nm 2 62.50% c. 50% b. 36.25% a. 178% 60. What is the company’s dividend yield on common stock if ts asset turnover (ATO) is 0.9, payout ratio (POR) is 0.60, and price earnings ratio (PE Ratio) is 12? a 7.2% c _5% b. 10.8% d. 7.5% 61. Atthe end of 200A, Gabbuat Company's total assets was P500,000. In 2008, it eamed net income of P30,000 and paid cividends of P10,000. What is the company's internal growth rate? a. 1% 5% b. 4% d % ITEMS 62 and 63 ARE BASED ON THE FOLLOWING INFORMATION: Manaloto Company had sales of P300,000 in 200 and the price index fér its industry is expected to increase from 300 in 2008 to 320 in 2008. 62. If sales in 2008 is exactly P320,000, it means that the company realized a. a zero real growth rate. c. 2 6.67% real growth rate. b. 2 20% real growth rate. d. 2 negative growth rate. 63. How much should the 2008 sales be in order to achieve a real growth rate of 30%? 2. P416,000 cc. 390,000 b. P365,625 d. 329,000 64. Jumawan Company had sales of P300,000 in 200A when the price level index for its industry was 320. in 2008, the price level index is expected to decrease to 300. What is the level of sales that Jumawan Company should reach in 2008 in order to achieve a real growth rate of 30% a. P416,000 .P390,000 b. P365,625 .P320,000 165. The following data were taken from the financial statements of Macarambon Company for 200B: Total assets 500,000 Current labiities 100,000 Long-term liabilities 150,000 Stockholders’ equity 250,000 Operating income after taxes 70,000 If the company’s weighted-average cost of capital is 10%, what fs ts economic value added (EVA)? a. P45,000 30,000 b.P35,000 4, 720,000 Scanned with CamCHAPTER LL = Analysis a Inteapreration of Financial Statements : 371 66. Tn 2008, Matanguihan Com ih pany earned an after-ta As of the end of that year, it vt "operating income of P400,000, As q bad an equity capital of F1,600,000, with an after tne cost of capital of 15%. Its fabilties are Composed solely of short-term, non tnt aes ‘ rest bea ° Seino Wai the Matangutinn Companys ng notes and accounts payable ansonton to rate a ‘conor value added (EVA)? Beano Remon TEMS 67 0 73 ARE BASED ON THE FOLLOWING INFORMATION: ‘Sta. Maria Company produces and sells cot emote commander. “This is used by cel phy thieves. The static mas Phone blaster, gadget which explodes when activated with a ister budget and the Phone oviners when their unt is snatched from them or is taken by Actual results of operations for the month of June are as follows: ‘aes Budget Adtual (8,000 units) P800,000 (2,600 units) 1,056,000 Cost of goods sold Y ‘ 480,000 556,800 Gross proft Baz0.000 499,200 Management wants an explanation of the favorable fit of P173,200 (actual profit of #89200 less budgeted gross proto 320,000), s* MON variance of 173,200 (actual ross 67. What isthe sales price variance? 2. P 96,000 favorable | 19,200 favorable b. P160,000 favorable .P96,000 unfavorable t ‘What is the sales volume variance? | a. P_96,000 favorable b. P160,000 favorable P19,200 favorable 96,000 unfavorable eo 69. What is the cost price variance? a. 96,000 favorable © 19,200 favorable b. P160,000 favorable 4. 96,000 unfavorable 70. What is the cost volume variance? a. 96,000 favorable 19,200 favorable | b. P160,000 favorable 96,000 unfavorable 71. What is the percentage change in sales price? a. 20% decrease ©. 20% increase b. 3.33% decrease 4.10% increase 72. What is the percentage change in volume? a. 20% decrease © 20% increase b. 3.33% decrease d. 10% increase 73. What is the percentage change in cost price? a. 20% decrease 20% increase b. 3.33% decrease 4d, 10% increase ITEMS 74 to 80 ARE BASED ON THE FOLLOWING INFORMATION: The management of Seymour Corporation asks you to prepare an analysis of the gross profit variance based on their comparative income statements for 200A and 2008: 2008 200A Variance Sales 990,000 800,000, 190,000 favorable Cost of goods sold _I6t 640,000 120,000 unfavorable Gross profit 230,000 160,000 P_70,000 favorable Scanned with Camscanner372 PAIUT2.= Foundations of Management Accounting IB by 10%. ‘he only known information oven to you ' tha volume Increased from 200A to 2008 by Jes volume variance Is 74. Tm p00 favorable. 110,000 favorable, b. P56,000 unfavorable. d._ P 64,000 unfavorable. 75. The sales price variance Is ‘a. P80,000 favorable. c. 110,000 favorable. 'b, P56,000 unfavorable, d. P 64,000 unfavorable. 76. The percentage change in sales price is a, 12.5% increase. c. 10% Increase. b. 12.5% decrease. d, 10% decrease. 77. The cost volume variance is 7 ‘a. P80,000 favorable. cP 110,000 favorable. 'b. P56,000 unfavorable. d. P 64,000 unfavorable. 78. The cost price variance is ‘a. P80,000 favorable. cP 110,000 favorable. b, P56,000 unfavorable. dd. P 64,000 unfavorable. 79. The percentage change in cost price is a. 7.95% increase. c. 12.5% increase. b. 7.95% decrease. d. 12.5% decrease. 80. The variance in gross profit due to the change in volume is a. 80,000 favorable. ¢. 16,000 favorable. 70,000 favorable. b. 64,000 unfavorable. a. ITEMS 81 to 84 ARE BASED ON THE FOLLOWING INFORMATION: ‘The income data of Escafio Company for the years 200B ard 200A are as follows: 2008 Sales 276,000 Cost of sales -151,800 Gross profit P124,200 1, If the sales price in 2008 is approximately 20% higher than the sales ‘may be analyzed into: ‘Seles Price Variance Sales Volume Vartance a. 46,000 favorable 26,000 unfavorable b. 46,000 unfavorable 26,000 favorable c. _ 26,000 favorable 46,000 favorable 4. 46,000 favorable 26,000 favorable 82. The number of units increased (decreased) by a. (12.745%). es b. 12.745%. a 83. The P29,400 increase in cost of sales may be analyzed into: Cost Volume Variance Cost Price Variance 2, P15,600 favorable 13,800 unfavorable b. 15,600 unfavorable 13,800 unfavorable © 13,800 unfavorable 15,600 unfavorable 4. 13,800 favorabie 15,600 unfavorable 200A Variance 204,000 72,000 favorable 122,400 29,400 unfavorable 281,600 42,600 favorable price in 200A, the P72,000 increase in sales» 20%. (20%). Scanned with CamScannetCHAPTER IL — Analysis and Interpretation of Financial Statements 373 84, The 2008 cost price i higher (ower) than the 200A cas pre by a. (12.745%). 10%, b 12745%, 4. (10%). ITEMS 8% to 91 ARE BASED ON THE FOLLOWING INFORMATION: ‘Amoroso Traders, Inc. sels three consumer products, Sales and other information pertaining to the three products are as follows: 2008 me Unis Sales Price Sales Cost Price Castof Sales Gross Prot ee 4 P20 12,000 P16 P 9,600 72,400 Te 16 12,800 4 11,200 1,600 ym 2 2300 9 —1e = __600 a sn Ezz200 ws = BGO Prod mere 2 4 F920 0B 14,400 4,800 | toe ae 18 14,400 15 12,000 2,400 | zis 10 —1609 8 1280 320 1250 7520 P2780 PL520 85. The gross proft variance amounts to a. P2,920 favorable. > cP 8,000 unfavorable. 'b. P2,920 unfavorable, d. P12,120 favorable. 86. big dae ds unfavorable, c_P3,600 favorable. b. P4,400 unfavorable, d._P3,600 unfavorable. 87. eS cel | a 1,400 unfavorable. & Mito mene 4. Biome | 88. The cost price variance is a. 1,800 favorable. ¢.P5,080 favorable. | b. 1,800 unfavorable, d, P3,280 unfavorable, 89, The cost volume variance is 3. i800 favorable. 3,200 favorable 'b. P3,280 unfavorable. d, P5,080 favorable. 90. The net gross profit volume variance amounts to '. P7680 unfavorable. ¢. P1,120 unfavorable. ‘dD. P 160 unfavorable. d. P1,120 favorable. 91, Thenet gross profit volume variance may be analyzed further into: Sales Mix Variance Final Sales Volume Variance a 'P436 unfavorable 684 unfavorable b. 436 favorable 6684 favorable © 560 unfavorable '560 unfavorable a 960 unfavorable 160 unfavorable 92. Aquino Company uses the indirect method in determining the net cash provided by operating activities. During the year, its net income was 105,600, its accounts payable decreased by P8,000, its inventory increased by P4,800, and its accounts receivable decreased by PS,600. How much isthe net cash provided by operations? a. 402,400 < P128,000 b. 108,800 dP 83,200 Scanned with Camscanner4 PART. 2 ~ Foundations of Management Accounting ises the direct method in determining the net cash provided by operating activities. During | 83. Berm operating expenses. was P208,00,prpald expenses Increased by P16,000, and accrued expenses 4 payable increased by P24,000. Cash payments for operating activities amounted to ; 5 a. P208,000, c. P200,000, . bP, 000. 26,000. 94. For the year 2008, Macarambon Company's income statement shows operating expenses of P204,800. The following information is also available: % Prepaid expenses, January 1, 2008 P12,000 Accrued expenses payable, January 1, 2008 33,600 Prepaid expenses, December 31, 2008 16,800 Accrued expenses payable, December 31, 2008 28,000 How much was the cash paid for operating expenses? a. 206,800 cc. P193,600 b. 199,400 d. P215,200 q 7 95. In 200B, Rovi Company's land account decreased by P600,000 because of @ cash sale for the same amount. Its ‘equipment account increased by P240,000 as a result of a cash purchase, and its bonds payable increased by 800,000 due to an issuance for cash at face value. 3 ‘The net cash provided by investing activities is a. P360,000.

Depreciation expense of F70,400 | ‘+The company purchased machinery for P50,000 cash during the year. + The income tax shown on the income statement was'paid in full during the year, * During the year, the company deciared and paid dividends of P16,000. 96. Ifthe indirect method is used, how much is cash provided by operating activities? a. (97,760) ©. (P28,960) b. P97,760 4, P95,840 Scanned with CamscannerCHAPTER 1 1 _— Avalysis and Inenpeeration of Financial Stamens 97. If the divect method is used, how much is net cash provided by operating activites? & (P97,760) ¢. (P28,960) b. P97,760 dd, P9S,640 98. How much isthe net cash lows from investing actives? 3. P81,600 36,400 b. (81,600) 4. (36,400) 29. How much isthe net cash flow from financing activities? ‘@ (P16,090) < P38,400 b. P16,000 4. (P38,400) 100. "Which of the following statements about the Statement of Cash Flows i incorrect? It provides information P about the operating, investing, and financing actiuties during the period. Ttis one of the basic financial statements, Trexorides information about cash receipts and cash payments of afm during a period. Terecencles the ending cash account balance per books tothe balance pe the bank statement aose Scanned with Camscanner