Maderen company has written off the account of Aljhon (insolvent

1 customer) using the allowance method, the effect on net income,

accounts receivable and allowance for uncollectible accounts are?

Allowance for
End
10
9
8
7
6
5
4
3
2
1 Net Income
Accounts
Receivable uncollectible accounts

a No effect Increase Increase

b Increase Decrease No effect

c Increase Increase Decrease

d No effect Decrease Decrease

 On December 31, 2018, Michael Company sold merchandise for 850,000

4
to Karen company. The terms of the sale were net 30, FOB shipping
point. The merchandise was shipped on December 31, 2018 and arrived
on January 3, 2019.
Due to a clerical error the sale was not recorded until January 2019 and
the merchandise sold at a 25% markup on cost was included in inventory
End
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1 on December 31, 2015?

What was the effect of the errors on Cost of goods sold for 2018?

Understated by Understated by
a 850,000 c 680,000

Understated by d No effect
b 580,000
 On January 1, 2019, Alpha Company signed an annual

9 maintenance agreement with a software provider for P15,000

and the maintenance period begins on March 1 2019. Alpha
incurred P5,000 on January 1, 2019 related to software
modification request that will increase the functionality of the
End
45
44
43
42
41
40
39
38
37
36
35
34
33
32
31
30
29
28
27
26
25
24
23
22
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1 software asset over five years using the straight-line method.
What is the total expense that should be recognized as a result
of the maintenance agreement and the software modification
for 2019?

a 5,000 c 16,000

b 13,500 d 20,000
 Good Thing PH provided the following details at year-end December 31,
2020:
4 Authorized share capital- 10,000,000
Unissued share capital- 5,000,000
Subscribed share capital- 2,000,000
Subscription receivable- 800,000
End
60
59
58
57
56
55
54
53
52
51
50
49
48
47
46
45
44
43
42
41
40
39
38
37
36
35
34
33
32
31
30
29
28
27
26
25
24
23
22
21
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1 Share premium- 650,000
Retained earnings unappropriated- 750,000
Retained Earnings appropriated- 300,000
Revaluation Surplus- 250,000
Treasury shares, at cost- 200,000
What must be reported as shareholder’s equity?

a 3,200,000 c 3,400,000

b 3,800,000 d 3,550,000