lOMoARcPSD|40326003

Par Cor Quizzes Soln PCA 2019

Bachelor of Science in Entrepreneurial Management (Our Lady of Fatima University)

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Quiz No I. TEST I
1. H 4. O 7. F 10. T 13. D
2. L 5. P 8. G 11. R 14. J
3. A 6. M 9. Q 12. C 15. B

Test II.
1. B 4. A 7. B 10. D 13. D
2. C 5. B 8. D 11. A
3. B 6. A 9. B 12. C

QUIZ NO. 2 Perez, Capital Perez, Drawing

10/1 500,000 12/31 66,667
12/15 200,000

Que, Capital Que, Drawing

10/1 300,000 11/30 50,000 12/31 66,667
12/15 400,000
Ruiz, Capital Ruiz, Drawing
10/5 700,000 12/31 66,666

Zafra, Capital Zafra, Drawing

Admitted as an industrial partner with a 20% 11/30 10,000 12/31 50,000
share in the profit

Loan Payable to Zafra

10/10 50,000
Partners’ Equity in the Financial Position should show:
Perez, Capital P766,667
Que, Capital 716,667
Ruiz, Capital 766,666
Zafra, Capital 40,000

Perez Quiros Ruiz Zafra Total

Initial investments 500,000 300,000 700,000 1,500,000
Additional investments 200,000 400,000 600,000
Profit shares 66,667 66,667 66,666 50,000 250,000
Personal drawings ______ (50,000) (10,000) (60,000)
December 31 766,667 716,666 766,666 40,000 2,290,000

QUIZ 3
1. C (50,000 + 20,000 + 50,000 – 27,000)
2. A (60,000 + 500,000 + 30,000 – 15,000-1,350)
3. D (10,000 + 45,000 + 60,000 + 100,000)
4. A (10,000 + 40,000 + 120,000 + 67,500 – 60,000)
5. A (150,000 / 60%)x 40% = 100,000
6. D (500,000 x 75% x ½)=187,500
7. C (375,000+325,000)/2 = 350,000
8. A (2,500,000/.4) = 6,250,000
9. C (6,250,000 x 60% = 3,750,000 – 2,000,000-750,000= 1,000,000
10. C (6,250,000 x 60% = 3,750,000)

QUIZ NO. 4 a)
1. Cash 80,000
Accounts receivable 31,000
Inventory 15,000
Equipment 60,000
Allowance for bad debts 6,000
Accounts Payable 46,000
Kate, Capital 59,000
Notes Payable 75,000

2. Cash 68,000
Accounts Receivable 30,000
Inventory 30,000
Furniture & Fixtures 44,000
Allowance for bad debts 10,000
Accounts Payable 42,000
Kory, Capital 120,000

Cash 61,000 61,000

Kate, Capital
3. Kory, Capital 30,500
Kate, Capital 30,500
(120,000 + 59,000)/2 = 89,500-59,000 = Bonus 30,500

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QUIZ NO. 5
A)
1. D 9. C
2. D 10. B
3. B 11. D
4. A 12. A
5. A
6. C
7. B
8. A
B)
a. Income Summary 210,000
Joe, Drawing 105,000
Mike, Drawing 63,000
Phil, Drawing 42,000

b. Joe Mike Phil

500,000 300,000 200,000
105,000 63,000 42,000
(50,000) (30,000) (20,000)
555,000 333,000 222,000

c. 55,000 33,000 22,000

d. Joe, Drawing 20,000

Mike 12,000
Phil 8,000
Income Summary 40,000

Joe Mike Phil

e. 555,000 333,000 222,000
(20,000) (12,000) (8,000)
(30,000) (40,000) (20,000)
505,000 281,000 194,000

f. 5,000 (19,000) (6,000)

None None

QUIZ NO. 6 Test I

a) Income Summary 120,000
David, Drawing 96,000
Jose 24,000

b) Income Summary 120,000

David, Drawing (350,000/750,000 x 120,000) 56,000
Jose, Drawing (400,000/750,000 x 120,000) 64,000
c) Computation of Average Investments:
Date Capital Bal. No. of mos. Used Pesos Mos. Average Cap.
David 1/1 400,000 3 1,200,000
4/1 350,000 9 3,150,000
P4,350,000/12 P362,500

Jose 1/1 100,000 4 400,000

4/30 400,000 8 3,200,000
P3,600,000/12 P300,000
Income Summary 120,000
David, Drawing (362,500/662,500 x P120,000) 65,660
Jose, Drawing (300,000/662,500 x P120,000) 54,340

c) David Jose Total

a. 10% interest on beg. capital P40,000 P10,000 P50,000 Income Summary 150,000
b. Salary 10,000 10,000 David, Drawing 85,000
c. Remainder equally 45,000 45,000 90,000 Jose, Drawing 65,000
P85,000 P65,000 P150,000

d) David Jose Total

a. 10% interest on ending cap. P 35,000 P 40,000 P 75,000
b. Salary of P5,000/mo. to David 60,000 60,000
c. Remainder 1:2 ratio (5,000) (10,000) ( 15,000)
P( 90,000) P (30,000) P( 120,000)

Income Summary 120,000

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David, Drawing (362,500/662,500 x P120,000) 90,000

Jose, Drawing (300,000/662,500 x P120,000) 30,000

e) David Jose Total

12% on beg. capital P24,000 P6,000 P 30,000
10% bonus to Jose 8,182 8,182
Remainder 1:2 ratio 27,273 54,545 81,818
P 51,273 P68,727 P200,000
120,000-30,000 / 1.1 = 81,818
81,818 x 10% = 8,182

QUIZ NO 6 Test II
a)
Dec. 31, 2011 May, Capital 32,000
Jordan, Capital 48,000
Income Summary 80,000

Mike (160/400 x 80,000) = 32,000

Jordan = 48,000

Dec. 31, 2012 Income Summary 120,000

May, Capital 90,000
Jordan, Capital 30,000

b) M J Total
Salaries 60,000 60,000
Rem. 30,000 30,000 60,000
90,000 30,000 120,000
c)
M J Total
Jan. 1, 2011 160,000 240,000 400,000
Share in Loss ( 32,000) ( 48,000) ( 80,000)
Dec. 31, 2011 128,000 192,000 320,000
Additional Investment 80,000 80,000
Profit Share 2012 90,000 30,000 120,000
Withdrawals ( 55,000) ( 55,000)
Dec. 31, 2012 243,000 222,000 465,000

QUIZ NO. 7
1. Average Capital
Keith: Jan. 1 120,000 x 6 = 720,000
July 1 160,000 x 6 = 960,000
1,680,000 / 12 = P140,000 B)
Tiny: Jan. 1 100,000 x 9 = 900,000
Oct. 1 140,000 x 3 = 420,000
1,320,000 / 12 = P110,000
2&3.
Keith Tiny Total
Salaries 120,000 240,000 360,000
Interest 28,000 22,000 50,000
Remainder 195,000 195,000 390,000
Share in Net Income A) 343,000 457,000 800,000
Less Drawing (110,000) (220,000) (330,000)
Add: Capital 160,000 140,000 300,000
Capital 12/31 393,000 C) 377,000 770,000
4&5.
Virgie Rose Total
Salaries P72,000 72,000
Interest 12,000 24,000 36,000
Remainder ( 6,000) (12,000) (18,000)
78,000 5 A) 12,000 90,000 4 A)

6. Sales P400,000
Less: Sales Returns & Allow. 15,000
Net Sales P385,000
Less: Cost of Sales:
Merchandise Inventory, Jan. 1 P 20,000
Purchases P200,000
Less: Purchases Ret. & Allow. ( 5,000) 195,000
Total Goods Avail. for Sale P 215,000
Less: Merchandise, Dec. 31 30,000 185,000
Gross Profit P 200,000
Less: Expenses
Utility Expense P 25,000
Rent Expense 22,000
Salaries Expense 18,000
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Depreciation 10,000
Taxes Expense 10,000 85,000
Net Income from Operations 115,000
Less: Income Tax Provision 34,500
Net Income After Tax P 80,500 B.

7. Perla Jasmin Total

Salary for Perla 60,000 60,000
10% interest 17,500 12,500 30,000
Bonus of 10% of P30,500 3,050 3,050
Balance ( 6,275) 6,275 (12,550)
Total 74,275 B 6,225 80,500 B

Jasmin Perk
8. Capital 12,500 175,000
Profit Share 74,275
Drawing 6,225 ( 10,000)
Salary (18,000) ( 30,000)
Total P113,225 209,275 D
QUIZ 8
BC Boutique
10 Column Worksheet
June 30, 2012
Trial Balance Adjustments Income Statement Beth, Capital Carol, Capital Fincl Position
Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
Cash 40 40
Accounts Receivable 80 80
Allowance for Bad Debts 2 a)2 4
Merchandise Inventory Jul 1 42 42
Furniture & Equipment 50 50
Accounts Payable 52 52
Notes Payable 30 30
Beth, Capital 50 50
Carol, Capital 50 50
Beth, Drawing 12 12
Carol, Drawing 15 15
Sales 640 640
Purchases 408 408
Purchase Returns 6 6
Salaries and Wages 25 25
Rent Expense 78 78
Delivery Expense 25 25
Store Expense 55 55
Totals 830 830
Bad debts a)2 2
Depreciation b)5 5
Accum Depn b)5 5
Interest Expense c)2 2
Interest Payable c)2 2
Total 9 9 642 696
Net income before tax 54
696 696
54
30% tax 16 16
Net income after tax 38 19 19
12 69 15 69
Beth Capital 57 57
Carol, Capital 54 54
69 69 69 69 220 220
QUIZ 9
1. A 2. D 3. B 4. A 5. A 6. B 7. C
8. B 9. D 10. D 11. A 12. A 13. B 14. B

QUIZ 10
1. C Entry to record purchase: Revised Partner’s Equity
Mel, Capital 50,000 Mel 50,000
Eva, Capital 50,000 Alice 100,000
Yol 100,000
Eva 50,000
2. B Entry to record write-up:
Plant & Equipment 30,000
Mel, Capital 7,500
Alice, Capital 7,500
Yol, Capital 15,000

Entry to record purchase: Revised Partner’s Equity

Yol, Capital 57,500 Mel, Capital 107,500
Cel, Capital 57,500 Alice, Capital 107,500

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Yol, Capital 57,500

Irene, Capital 57,500

3. A Entry to record profit distribution:

Income summary 50,000
Mel, Capital 12,500
Alice, Capital 12,500
Yol, Capital 25,000

Entry to record the purchase: Revised Partner’s Equity

Alice, Capital 56,250 Mel, Capital 112,500
Rene, Capital 56,250 Alice, Capital 56,250
Yol, Capital 125,000
Nino, Capital 56,250
4. C Entry to record revaluation:
Asset 100,000
Mel, Capital 25,000
Alice, Capital 25,000
Yol, Capital 50,000

Entry to record purchase: Revised Partner’s Equity

Yol, Capital 37,500 Mel, Capital 125,000
Nino, Capital 37,500 Alice, Capital 125,000
Yol, Capital 112,500
Nino, Capital 37,500

5. B Entry to record admission: Revised Partner’s Equity

Cash 100,000 Mel, Capital 105,000
Mel, Captl 5,000 Alice, Capital 105,000
Alice, Captl 5,000 Yol, Capital 110,000
Yol, Captl 10,000 Nitz, Capital 80,000
Luis, Capital 80,000 Total 400,000
(*400,000 x 30% = 120,000 – 100,000)

6. A. Entry to record admission

Cash 100,000 Mel, Capital 100,000
Mercy, Captl 100,000 Alice 100,000
300,000 / 75% = 400,000 x 25% = 100,000 Yol 100,000
Mercy 100,000
QUIZ 11 400,000
1. B Entry to record admission: Revised Partner’s Equity
Cash 50,000 Jay, Capital 117,000
Jay, Capital 8,000 Jun, Capital 71,000
Jun, Capital 4,000 Josh, Capital 92,000
Josh, Capital 8,000 Nitz, Capital 70,000
Nitz, Capital 70,000 350,000

2. D Entry to record admission: Revised Partner’s Equity

Cash 220,000 Jay, Capital 137,500
Queen, Capital 220,000 Jun, Capital 82,500
Josh, Capital 110,000
Queen, Capital 220,000
Assets 30,000
Jay 12,500
Jun 7,500
josh 10,000

3. D Entry to record revaluation Revised Partner’s Equity

1)Assets 50,000 Jay 165,000
Jay 20,000 Jun 95,000
Jun 10,000 Josh 140,000
Josh 20,000 Jess 100,000
Total 500,000
Entry to record admission:
2)Cash 150,000
Jay 20,000
Jun 10,000
Josh 20,000
Jess, Capital 100,000
Revised Partner’s Equity
4. D Cash 120,000
Jay 8,000 Jay 109,000
Jun 4,000 Jun 67,000
Josh 8,000 Josh 84,000
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King 140,000 King 140,000

400,000

Jay, Capital8,000
Jun 4,000
Josh 8,000
Assets 20,000

5. D Jay, Capital 125,000 Jun, Capital P200,000

Jun, Capital 125,000 Josh, Capital 100,000
P300,000
QUIZ 12

a) 1,000,000/80%= 1,250,000 x 20%= 250,000 vs 200,000 investment

PE After Admisson
Cash 200,000 Rose 500,000
Goodwill 50,000 Lily 300,000
Bell, Capital 250,000 Tulip 200,000
Bell 250,000
1,250,00
0

b) 1,000,000 + 200,000= 1,200,000 x 20%= 240,000 – 200,000= bonus

PE After Admisson
Cash 200,000 Rose 480,000
Rose, Capital 20,000 Lily 288,000
Lily, Capital 12,000 Tulip 192,000
Tulip, Capital 8,000 Bell 240,000
Bell Capital 240,000 1,200,00
0

c) PE After Retirement
Tulip, Capital 180,000 Rose 368,750
Rose, Capital 18,750 Lily 251,250
Lily, Capital 11,250 620,000
Cash 150,000

d) 250,000-180,000=70,000/20%= 350,000
PE After Retirement
Asset 350,000 Rose 525,000
Rose, Capital 175,000 Lily 345,000
Lily, Capital 105,000 870,000
Tulip, Capital 70,000

Tulip, Capital 250,000

Cash 250,000

B 1) B2)
Appropriation Acct 300,000 Stocks of L Corp 1,675,000
Inventories 100,000 Notes Payable 450,000
Building 200,000 Accounts Payable 250,000
Accrued Interest 25,000
Land 500,000 Cash 100,000
Appropriation Acct 500,000 Inventories 100,000
Building 800,000
Appropriation Account 25,000 Land 1,000,000
Accrued Interest 25,000 Furniture & Equipment 400,000

Appropriation Acct 175,000 Lorna, Capital 390,833

Lorna, Capital 40,833 Lina, Capital 781,667
Lina, Capital 81,667 Lucy, Capital 502,500
Lucy, Capital 52,500 Stocks of L Corp 1,675,000

QUIZ NO. 13
Fei Wang Lim Uy Total
March 1, 2009 500,000 600,000 1,100,000
Profit 300,000 300,000 600,000
Drawings (200,000) (300,000) ________ ________ (500,000)
Dec 31, 2009 600,000 600,000 1,200,000
Admission by purchase (120,000) (120,000) 240,000
Salaries 240,000 240,000
Remainder 204,000 204,000 102,000 510,000
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Drawings (200,000) (200,000) (240,000) ________ (640,000)

Dec 31, 2010 484,000 484,000 342,000 1,310,000
Uy investment/ Bonus Capital 16,000 16,000 8,000 450,000 490,000
Salaries 180,000 180,000 180,000 180,000 170,000
Rem 2:2:1:1 60,000 60,000 30,000 30,000 180,000
Drawings (180,000) (180,000) (180,000) (180,000) (720,000)
Dec 31, 2011 560,000 560,000 380,000 480,000 1,980,000
Fei Retires/Bonus Capital (560,000) 28,000 14,000 14,000 504,000
Partner’s Equity 0 588,000 394,000 494,000 1,476,000

Fei, Capital 560,000

Cash 504,000
Wang, Capital 28,000
Lim, Capital 14,000
Uy, Capital 14,000

QUIZ NO. 14
1. B 6. A 11.B
2. A 7. B 12. D
3. B 8. C 13. C
4. B 9. D 14. C
5. D 10. B 15. B

Cash New Cash AP LP K Q P

300 900 450 50 400 200 100
750 (900) ___ __ (75) (37.5) (37.5)
1,050 0 450 50 325 162.5 62.5

QUIZ 15.
A. Accounts Loan due Lea, Der,
Cash Non Cash Payable to Lea Capital Capital
Balances 0 160,000 70,000 20,000 30,000 40,000
Sale at a loss 71,000 (160,000) (35,600) (53,400)
Balances 71,000 - 70,000 20,000 ( 5,600) (13,400)
Payment of liabilities (70,000) (70,000)
Balances 1,000 - - 20,000 ( 5,600) (13,400)
Right of offset ( 5,600) 5,600
Balances 1,000 - - 14,400 - (13,400)
Additional Investment 13,400 13,400
Balances 14,400 - - 14,400 -
Payment to Partner ( 14,400) ( 14,400)

B. Journal Entries
1) Cash 71,000
Lea, Capital 35,600
Der, Capital 53,400
Non-cash Assets 160,000
2) Accounts Payable 70,000
Cash 70,000

3) Lea, Loan 5,600

Leny, Capital 5,600

4) Cash 13,400
Der, Capital 13,400
5) Lea, Capital 14,400
Cash 14,400

C. Assume Der is personally insolvent. Complete the liquidation process starting from the balances right after the
right of offset
|Der Lea Der
Balances 1,000 - - 14,400 - (13,400)
Deficiency Transferred (13,400) - 13,400
Balances 1,000 - - 1,000 - -
Payment to Partner (1,000) (1,000) -

QUIZ 16
1. A 2. C 3. D 4. B 5. D 6. C

1) Non-Cash Assets:
Accounts Receivable P25,000
Allowance for bad debts 5,000 P 20,000
Merchandise Inventory 60,000
Furniture & Equipment 50,000
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Accumulated Depreciation 5,000 45,000

P125,000 A
2) Selling price P 60,000
Book Value 125,000
Loss on sale of non-cash assets P(65,000) C

3) Cash (60,000+20,000-37,000) = P73,000D

4), 5) & 6)
Loss Share in Partners Capital Partner’s Deficiency Free
Distribution the loss Loan Balance Interest absorbed Interest
Dino (4/10 x 65,000) P26,000 5,000 P20,000 ( 1,000)B 1,000
Doods (1/10 x 65,000) 6,500 7,000 40,000 40,500 A (167) 40,333 D
Dong (5/10 x 65,000) 32,500 36,000 3,500 (833) 2,667 C
P43,000 D 43,000

Other Loan, Loan, Dino, Doods, Dong,

Cash Assets Liabilitie Dino Doods Capital Capital Capital
s
Balances before liquidation 20,000 125,000 5,000 7,000 20,000 40,000 36,000
Sale of Other Assets 60,000 (125,000 (26,000) (6,500) (32,500)
)
Balances 80,000 - 37,000 5,000 7,000 ( 6,000) 33,500 3,500
Payment of Liabilities (37,000) (37,000)
Balances 43,000 - - 5,000 7,000 ( 6,000) 33,500 3,500
Right of Offset (5,000) 5,000
Balances after offset 43,000 - - - 7,000 ( 1,000) 33,500 3,500
Additional Investment 1,000 1,000
Balances 44,000 - - - 7,000 - 33,500 3,500
Payment to Partners (44,000) (7,000) (33,500) ( 3,500)

Loan to Doods P 7,000

Dood, Capital 33,500
Total P40,500 A

5) Based on the no. 4 computation

Non- Loan, Loan, Dino, Doods, Dong,
Cash Cash Liabilities Dino Doods Capital Capital Capital
Balances 43,000 7,000 (1,000) 33,500 3,500
Absorbed 1,000 (167) ( 833)
Balances 43,000 7,000 - 33,333 2,667
Payment to Partners (43,000) (7,000) (33,333) (2,667)

QUIZ NO. 17
1. Cash Non Cash Liabilities Loan, Boy Loy Mon Boy
Balances 10,000 375,000 200,000 5,000 50,000 70,000 60,000
Sale 175,000 (375,000) (60,000 ) (60,000) (80,000)
Balances 185,000 0 200,000 5,000 (10,000 ) 10,000 (20,000)
Deficiency absorbed (10,000) (10,000) 20,000
Balances 185,000 0 200,000 5,000 (20,000 ) - -
Payment of liabilities (185,000) (185,000)
0 0 15,000 5,000 (20,000)
Payment by Loy (15,000) (5,000) 20,000

2. Partner’s Equity before Liquidation P 100,000 a. 34%, 16% 50%

Partner’s Equity After Liquidation 50,000 b. P50,000
Loss on Realization 50,000 c. P8,333
Book Value of Non-Cash Assets 160,000
Proceeds 110,000

3) Cash Non-Cash Liabilities Fred Fely Flor

Balances 60,000 2,700,000 1,750,000 350,000 450,000 210,000
Sale 950,000 (2,700,000) ( 750,000) (300,000) (500,000) (200,000)
Balances 1,010,000 1,000,000 50,000 ( 50,000) 10,000
Payment of Liabilities (1,000,000) (1,000,000)
Balances 10,000 - - 50,000 ( 50,000) 10,000
Absorption ( 36,000) 50,000 ( 14,000)
Balances 10,000 - - 14,000 - ( 4,000)
Additional Investment 4,000 4,000
Balances 14,000 - - 14,000 - -
Payment to Partner ( 14,000) ( 14,000)

3) Fred, Capital 36,000

1) Cash 950,000 Flor, Capital 14,000

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Mortgage Payable 750,000 Fely, Capital 50,000

Fred, Capital 300,000
Fely, Capital 500,000 4) Cash 4,000
Flor, Capital 200,000 Flor, Capital 4,000
Non-Cash Assets 2,700,000
5) Fred, Capital 14,000
2) Current Liabilities 1,000,000 Cash 14,000
Cash 1,000,000

QUIZ 18
Cash Other Assets Liabilities Jose Adrian Connie Kelly
Balance 500,000 175,000 60,000 80,000 90,000 95,000
July: Sale & Liq. Exp. Paid 42,500 ( 50,000) ( 2,500) ( 2,500) ( 1,250) ( 1,250)
Balance 42,500 450,000 175,000 57,500 77,500 88,750 93,750
Notes Payable Paid (40,000) ( 40,000)
Balance 2,500 450,000 135,000 57,500 77,500 88,750 93,750
Aug.: Sale & Liq. Paid 147,500 (200,000) (17,500) (17,500) (8,750) ( 8,750)
Balance 150,000 250,000 135,000 40,000 60,000 80,000 85,000
Liability Paid (35,000) (35,000)
Balance 115,000 250,000 100,000 40,000 60,000 80,000 85,000
Payment (Sch 1) (10,000) ( 2,500) ( 7,500)
Balances 105,000 250,000 100,000 40,000 60,000 77,500 77,500
Sept. Sale & Liq. Exp. Paid 196,000 (250,000) 0 (18,000) (18,000) (9,000) ( 9,000)
Balance 301,000 0 100,000 22,000 42,000 68,500 68,500
Payment (100,000) (100,000)
Balances 201,000 22,000 42,000 68,500 68,500
Payment (201,000) (22,000) (42,000) (68,500) (68,500)

Shedule 1: Jose Adrian Connie Kelly

Balance 40,000 60,000 80,000 85,000
Restricted Interest of
P250,000 Equip’t. &
P5,000 for Liquidation
Expense (85,000) (85,000) (42,500) (42,500)
Balances (45,000) (25,000) 37,500 42,500
Restricted Interest for
Deficiencies 45,000 25,000 (35,000) (35,000)
Free Interest 0 0 2,500 7,500

QUIZ 19
A. 1. P 6. C B. 1. True 6. True 11. True C. 1. J 6. O 11. S
2. C 7. C 2. True 7. True 12. False 2. K 7. T 12. B
3. P 8. P 3. True 8. False 13. True 3. R 8. H 13. F
4. P 9. C 4. True 9. False 14. True 4. I 9. G 14. D
5. C 10. P 5. False 10. False 15. False 5. Q 10. M 15. A

QUIZ 20
1. D 6. D 11. B 16. D
2. D 7. D 12. D 17. B
3. A 8. A 13. B 18. A
4. B 9. B 14. A 19. A
5. C 10. A 15. B 20. D

QUIZ 21
Entries:
12/1 Authorized to issue 50,000
common shares at par P100

Subscription Receivable 1,500,000

Subscribed Share Capital 1,500,000

Cash 375,000
Subscription Receivable 375,000
15 Cash 2,000,000
Share Capital 1,800,000
Share Premium 200,000
20 Legal Expenses 50,000
Share Capital 45,000
Share Premium 5,000
30 Cash 450,000
Subscription Receivable 450,000
Subscribed Share Capital 600,000
Share Capital 600,000
31 Share Premium 15,000
Cash 15,000
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a) Legal Requirement: Authorized 5,000,000

25% Subscribed 1,250,000
25% Paid 312,500
Actual Subscription 1,500,000
Down Payment 375,000
Yes, the pre-incorporation was complied with.
b) Stockholders’ Equity
Authorized to issue 50,000 shares at P100 par
Issued 24,450 shares P2,445,000
Subscribed 9,000 shares P900,000
Subscription Receivable 675,000 225,000
Share Premium 205,000
P2,972,000
Share Subscribed Subscription Share
Capital Share Capital Receivable Premium
Subscribed 1,500,000 1,500,000
Collected (375,000)
Issued 1,800,000 200,000
Issued 45,000 5,000
Collected (450,00)
Issued 600,000 ( 600,000)

Balances, Dec. 31 2,445,000 900,000 675,000 205,000

No. of Shares 24,450 9,000
c) Legal Capital P3,345,000
d) Total Paid In Capital P4,875,000
e) Average Price 3550,000/33,450 shares= P1-6.13

QUIZ 22
1) Date Particulars Debit Credit
a) Authorized to issue 20,000 P100 par value shares.
b) Subscription Receivable 720,000
Subscribed Share Capital 600,000
Subscribed Share Premium 120,000
c) Cash 690,000
Subscription Receivable 690,000
d) Subscribed Share Capital 400,000
Share Capital 400,000
e) Cash 500,000
Share Capital 500,000
Share Capital Subscribed Share Capital
2)
d) 400,000 d) 400,000 b) 600,000
e) 500,000

Subscription Receivable Share Premium

b) 720,000 c) 690,000 b) 120,000

3) a) 900,000 / 100 = 9,000 shares

b) 20,000 – 9,000 = 11,000 shares
c) 11,000 – (200,000 / 100) = 9,000 shares
d) 11,000 shares x 100 = P1,100,000

Authorized P2,000,000
Unissued 1,100,000
Issued P900,000
Subscribed 200,000
Share Premium 120,000
P1,220,000
Legal capital 900,000 + 200,000 P1,100,000
QUIZ 23
A. Entries:
Jan. 1 Authorized to issue 50,000 par P100 shares

Subscription Receivable 2,000,000

Subscribed Share Capital 2,000,000

Cash 600,000
Subscription Receivable 600,000

Feb. 15 Cash 1,200,000

Share Capital (10,000) 1,000,000
Share Premium 200,000

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Feb. 20 Land (5,000) 500,000

Share Capital 500,000

Feb. 21 Organization Cost (1,000) 100,000

Share Capital 100,000

22 Equipment 175,000
Share Capital 150,000
Share Premium 25,000

Mar. 25 Subscription Receivable 60,000

Subscribed Share Capital 50,000
Share Premium 10,000

Cash 30,000
Subscription Receivable 30,000

Mar. 27 Merchandise 280,000

Subscription Receivable 280,000

Subscribed Share Capital 400,000

Share Capital (4,000) 400,000

Mar. 28 Cash 560,000

Subscription Receivable 560,000

Mar. 31 Income Summary 500,000

Retained Earnings 500,000
B. Share Capital Subscribed Subscription Share Retained
Share Capital Receivable Premium Earnings
Jan. 1 2,000,000 2,000,000
( 600,000)
15 1,000,000 200,000
Feb. 20 500,000
21 100,000
22 150,000 25,000
Mar. 25 50,000 60,000 10,000
(30,000)
27 400,000 ( 400,000) (280,000)
28 (560,000)
31 500,000
2,150,000 1,650,000 590,000 235,000 500,000

QUIZ 24
8/1 Unissued Share Capital 5,000,000
Authorized Share Capital 5,000,000

Cash 1,000,000
Unissued Share Capital 1,000,000

Subscription Receivable 400,000

Subscribed Share Capital 400,000

Cash 80,000
Subscription Receivable 80,000

8/5 Subscription Receivable 360,000

Subscribed Share Capital 300,000
Share Premium 60,000

Cash 180,000
Subscription Receivable 180,000

8/6 Organization Costs 50,000

Cash 50,000

8/8 Organization Cost 34,000

Unissued Share Capital 30,000
Share Premium 4,000

8/10 Subscription Receivable 44,000

Subscribed Share Capital 40,000
Share Premium 4,000

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Machinery 15,000
Cash 7,000
Subscription Receivable 22,000

8/20 Equipment 120,000

Unissued Share Capital 100,000
Share Premium 20,000

8/25 Cash 120,000

Subscription Receivable 120,000

Subscribed Share Capital 240,000

Unissued Share Capital 240,000

8/31 Share Premium 10,000

Cash 10,000

Issued Subscribed Share Premium

8/1 1,000,000 400,000
8/5 300,000 60,000
8/8 30,000 4,000
8/10 40,000 4,000
8/20 100,000 20,000
8/25 240,000 (240,000
8/31 (10,000)
P1,370,000 P500,000 P 78,000

QUIZ. NO. 25
1) B 6) B 11) D
2) C 7) A 12) C
3) A 8) A 13) C
4) D 9) B 14) C
5) B 10) D 15) A

QUIZ NO. 26
a) Shareholders’ Equity
Paid In Capital:
Preference Share Capital, P200 par, authorized to issue 50,000
Shares, issued 15,000 shares P3,000,000
Ordinary Share Capital, P100 Stated Value, authorized to issue
50,000 shares, issued 16,000 of which 6,000 are Treasury P1,600,000
Subscribed Ordinary Share 1,200,000 2,800,000
5,800,000
Additional Paid In Capital:
Share Premium– Preferred P1,300,000
Paid in Excess of Stated Value – Ordinary Share 500,000
Additional Paid In Capital – Donation of land 1,400,000 3,200,000
9,000,000
Retained Earnings – Unappropriated P3,400,000
Retained Earnings – Appropriated 600,000 4,000,000
Total Shareholders’ Equity 13,000,000
Treasury Shares 600,000
Net Shareholders’ Equity P12,400,000

B. 1. Legal capital: Preference Shares P3,000,000

Ordinary Shares (P1,600,000 + P1,200,000 + P500,000) P3,300,000
2. Total Paid In: Preference Shares (3,000,000 + 1,300,000) P4,300,000
Ordinary Shares (1,600,000 + 1,200,000 – 1,100,000 + 500,000 – 600,000) P1,600,000
3. Ordinary Shares issued and outstanding (16,000 – 5,000) 11,000 shares
4. Ordinary Shares issued 16,000
5. 3,000,000 +1,300,000 = 4,300,000 / 15,000 shares = P286.67
6. P3,400,000 retained Earnings
C.
Subscription Receivable - Preferred 2,500,000
Subscribed Preference Shares (10,000 x 200) 2,000,000
Share Premium – Preference Shares (10,000 x 50) 500,000

Cash 625,000
Subscription Receivable – Preference Shares 625,000

Subscription Receivable – Ordinary Shares (5,000 x 150) 750,000

Subscribed Ordinary Shares (5,000 x 100) 500,000
Share Premium- Ordinary (5,000 x 50) 250,000

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Cash 375,000
Subscription Receivable – Ordinary Shares 375,000

Cash 937,500
Subscription Receivable – Preference Shares 937,500

Cash 375,000
Subscription Receivable 375,000

Subscribed Ordinary Share Capital 500,000

Ordinary Share Capital 500,000

QUIZ NO. 27
A. Preference Shares P54,200,000 Ordinary Share Capital 18,800,000
Subscribed Preference Shares 6,600,000 Ordinary Share Premium 200,000
Preference Share Premium 1,540,000 Subscribed Ordinary Share 3,300,000
Total 62,340,000 Total 22,300,000
Less: Subs. Receivable Preference shares 5,500,000 Less: Subs. Rec’ble –Ordinary Shares 2,120,000
Cash Collected from Preference Shares 56,840,000 Cash Collected from Ordinary Shares P20,180,000
Total Cash (56,840,000 + 20,180,000) P 77,020,000

B. Due from Highest Bidder 14,500

Subscription Receivable 12,000
Cash 2,500

Cash 15,000
Due from highest Bidder 14,500
Interest Income 500

Subscribed Common Stock 100,000

Common Stock 100,000

c. Treasury Stock 15,000

Cash 15,000

Cash 13,000
Treasury Stock 7,500
Paid In Capital for Treasury Shares 5,500

d. Preference Share Capital 1,000,000

Premium on Preferred Shares 2,239*
Cash 750,000
Paid In Capital from Stock Retirement 252,239
*(1,000/68,800 x 154,000)= 2,239 Assuming subscribed shares have also been credited for Premium.

QUIZ NO. 28
A. 1. Reconstruction of journal entries:
a) Preferred Stock in exchange for equipment:
Equipment 3,000,000
Preference Share Capital 2,000,000
Preference Share Premium 1,000,000
b) Preference shares in exchange for cash:
Cash 700,000
Preference Share Capital 500,000
Preference Share Premium 200,000
c) Common Shares in exchange of cash:
Cash 1,560,000
Ordinary Share Capital 1,200,000
Ordinary Share Premium 360,000

d) Common shares in exchange for legal service

Organization Cost 108,000
Ordinary Share Capital 80,000
Ordinary Share Premium 28,000
2. Shares issued for the legal services:
a) Ordinary shares P80,000 / par P50 = 1,600 shares
Sales price of the Preference Shares and Ordinary Shares:
b) P/S P3,500,000 / par P500 = 1,000 shares
P700,000 / 1,000 shares = P700
c) C/S P1,200,000 / par P50 = 24,000 shares
P1,560,000 / 24,000 shares = P65

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B. Capital Adjustment (25,000 + 50,000 + 65,000) P140,000

Jake Capital 950,000 – (3/5 x P140,000) P866,000 /100 par = 8,660 shares
Bob, Capital P725,000 – (2/5 x P140,000) P669,000 = 6,690 shares

Jake Capital 84,000

Bob, Capital 56,000
Accounts Receivable 65,000
Merchandise Inventory 25,000
Furniture & Fixtures 50,000

QUIZ NO. 29
A) Journal Entries
2000 Jan 3 Treasury Shares (P200 x 2,500) 500,000
Cash 500,000
6 Cash (750 x P220) 165,000
Treasury Shares (750 x P200) 150,000
Paid In Capital from Treasury Shares 15,000
10 Cash (1,250 x P180) 225,000
Paid In Capital – Treasury Shares 15,000
Retained Earnings 10,000
Treasury Shares (1,250 x P200) 250,000
20 Ordinary Share Capital (500 x P50) 25,000
Ordinary Share Premium
(500 /50,000 x 7,000,000) 70,000
Retained Earnings 5,000
Treasury Shares (600 x P200) 100,000
25 Memorandum entry: Received from a stockholder
1,000 shares as donation.
Cash (P160 x 1,000) 160,000
Paid in Capital from Donated Shares 160,000
31 Machinery 500,000
Paid in Capital from Donation 500,000
Paid in Capital from Donation 15,000
Cash 15,000

Billboards
Partial balance Sheet
Jan. 31, 2012
Paid in Capital
Ordinary Share Capital (P50 par, 100,000 shares authorized,
49,500 shares issued P2,475,000
Additional Paid In Capital:
Ordinary share premium P6,930,000
Paid in capital from donations 645,000 7,575,000
Retained Earnings 2,985,000
P13,035,000
QUIZ NO. 30
Jan 3 Authorized to issue 100,000 ordinary shares
par P50 and 30,000 preference shares par P500.

Cash 500,000
Ordinary Share Capital (8,000 x P50) 400,000
Ordinary Share Premium 100,000
Cash 600,000
Preference Share Capital (1,000) 500,000
Preference Share Premium 100,000

Organization Cost 8,000

Cash 8,000

15 Subscription Receivable – Ordinary Shares 720,000

Subscribed Ordinary Shares (12,000) 600,000
Ordinary Share Premium 120,000

Cash 240,000
Subscription Receivable – Ordinary Share 240,000

31 Organization Cost 100,000

Preference Share Capital 100,000

Feb 1 Cash 240,000

Subscription Receivable – Ordinary Share 240,000

Mar 1 Cash 200,000

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Subscription Receivable – Ordinary Share 200,000

(12,000-2,000=10,000x60,000/3)

Subscribed Ordinary Share Capital 500,000

Ordinary Share Capital 500,000
(10,000 x P50)

Due from highest Bidder 40,000

Subscription Receivable-Ordinary Share 40,000
(2,000x60=120,000-80,000)

May 30 Land 75,000

Donated Capital 75,000

June 3 Due from highest Bidder 1,500

Cash 1,500
5 Cash 41,750
Due from Highest Bidder 41,500
Interest Income 250
Subscribed Ordinary Shares 100,000
Common Stock 100,000
20 Treasury Shares 150,000
Cash 150,000

29 Cash (500 x P100) 50,000

Treasury Stock (500 x P75) 37,500
Paid In Capital from Treasury Shares 12,500

30 Retained earnings 112,500

Appropriated for Treasury Stock 112,500

Income & Expense Summary 350,000

Retained Earnings 350,000
QUIZ 31
1. a 2. a 3. d 4. d 5. c 6. b 7. b 8. c 9.a 10. c
11.c 12.b 13.a 14.b 15.d 16.b 17.b 18.c* 19.a 20.d

*if the shares are not for trading or stated as available for sale, then use its carrying value.
QUIZ 32
1. Retained Earnings (20% x 400,000) 80,000
Stock Dividends Payable 80,000
2. Retained Earnings 40,000
Cash Dividends Payable 40,000
(4,000 x P10)
3. Sales 662,500
Merchandise inventory, end 240,000
Merchandise Inventory, beg. 350,000
Purchases 370,000
Selling Expenses 70,500
Administrative expense 25,000
Income & Expense Summary 87,000
4. Income & Expense Summary 87,000
Retained Earnings 87,000

Place Inc.
Statement of Financial Position
December 31, 2012
Assets Liabilities & Stockholder’s Equity
Current assets Current Liabilities
Cash P219,000 Accounts Payable P27,500
Marketable Securities 135,000 Dividends Payable 40,000
Merchandise Inventory 240,000 Total P 67,500
Total P594,000 Share Capital 500,000
Furniture & Equipment 320,500 Stock Dividends to be distributed 80,000
Unappropriated RE * 267,000
Appropriated for TS 120,000
Total SHE 1,209,000
Less Treasury Shares 120,000 P 847,000
Total Assets P914,500 Total Liab & Stockholder’s Equity P914,5000

*Statement of Changes in Retained Earnings:

Undjusted Balance Dec 31 P420,000
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Less Dividends 120,000

Add Net Income 87,000
Less Appropriation for Treasury Shares 120,000
Retained Earnings, Unappropriated, Dec 31 P267,000

QUIZ 33
A. a. Retained Earnings 140,000
Cash 140,000
(15,000-1,000=14,000xP100x10%)
b. Retained Earnings 280,000
Property Dividends Payable 280,000
(14,000 x P20)
c. Retained Earnings 350,000
Scrip Dividends Payable 350,000
(14,000 x P25)
d. Cash 62,500
Paid In Capital from Treasury Stock 5,000
Retained Earnings 7,500
Treasury Shares 75,000

Appropriated for Treasury Shares 75,000

Retained Earnings 75,000

e. Share Capital 50,000

Share Premium(50/1,500 x 300) 10,000
Retained Earnings 15,000
Treasury Shares 75,000

Appropriated for Treasury Stock 75,000

Retained Earnings 75,000

B. Authorized _____Shares, Par P100

Issued 9,000 shares 900,000
Subscribed 5,000 shares 500,000
Paid-In Capital 290,000
Total Paid-In 1,690,000
Retained Earnings, Unappropriated 487,500
Total 2,177,500

QUIZ 34
Date Explanation Unapprop
Share Share Retained Treasury
Capital Premium Earnings Reserves Shares
1/1 Balance P3,000,000 P1,000,000 P1,800,000 P500,000
1/1 10,000 shares 1,000,000 500,000
1/4 Cash Dividends ( 500,000)
2/18 Shares donated 150,000
6/28 Purchased Treasury Shares ( 120,000) 120,000 120,000
9/6 Sold Treasury Shares 2,000 48,000 (48,000) ( 48,000)
12/15 Increase Appropriation ( 200,000) 200,000
12/31 Net Income 500,000
Unrealized Gain 50,000
Net Effect P4,000,000 P1,652,000 P1,528,000 P822,000 P72,000

QUIZ 35
a) Cash 2,200,000
Preference Shares 2,000,000
Preference Share Premium 200,000

b) Cash 2,475,000
Ordinary Share Capital 2,475,000

c) Organizational Cost 20,000

Ordinary Share Capital 20,000

d) Treasury Shares (1,000) 100,000

Cash 100,000

e) Cash 60,000
Treasury Stock 60,000

f) Retained Earnings 626,000

Cash 626,000
(4,000 x 7% of P500)+ (16,200 x 30)

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g) Ordinary Shares 40,000

Treasury Shares 40,000

h) Land 500,000
Donated Capital 500,000
i) Revenue & Expense Summary 3,200,000
Retained Earnings 3,200,000

Shareholder’s Equity
Preference Share Capital (4,000 shares) P2,000,000
Common Stock (16,500 + 200) 2,455,000
Total P4,455,000
Share Premium 175,000
Donated Capital 500,000
Total 675,000
Retained Earnings 2,574,000
P 7,704,000
QUIZ 36
Year 1 Year 3
a) Preferred Common Preferred Common
(100,000 x 12%) 12,000
(100,000 x 12% x 2) 24,000
(38,000 - 12,000) 26,000
(46,000 - 24,000) ______ ______ _____ 22,000
Total 12,000 26,000 24,000 22,000
Per Share P12 P1.30 P24 P1.10

Year 1 Year 3
b) Preferred Common Total Preferred Common Total
(100,000 x 12%) 12,000 12,000
(100,000 x 12% x 2) 24,000 24,000
(150,000 x 12%) 18,000 18,000 18,000 18,000
(100,000/250,000) 3,200 8,000 1,600 4,000
(150,000/250,000) ______ 4,800 ______ ______ 2,400 ______
15,200 22,800 38,000 25,600 20,400 46,000
15.20 1.14 25.60 1.02
Year 1 Year 3
c) Preferred Common Total b) Preferred Common Total
(100,000 x 12%) 12,000 12,000 (100,000 x 12%) 12,000 12,000
(150,000 x 12% ) 18,000 18,000
(150,000 x 12%) 18,000 18,000 (100/250 x 6,000) 6,400 16,000
(100,000/250,000) 3,200 8,000 (150/250 x6,000) ______ 9,600 ______
(150,000/250,000) ______ 4,800 _____ 18,400 27,600 46,000
15,200 22,800 38,000 18.40 1.38 46,000
15.20 1.14

QUIZ 37
a) BVS P2,050,000/30,000 shares = P68.33
EPS =250,000/30,000=P8.33 ROE= 250,000/2,050,000= 12.20%

b) EPS= P500,000/50,000 shares = P10 ROE= 500,000/1,750,000= 28.57&

BVS = P1,750,000/50,000 shares = P35

c)
Excess over Par PS CS
Balance P1,400,000 P500,000 P 750,000
Less 10% (50,000) 50,000
Remainder 1,350,000 ______ 1,350,000
P550,000 P2,100,000

Book Value per share (550,000/5,000) P110 (2,100,000/75,000) P28

EPS = (500,000 - 50,000) /75,000 = P6 ROE= 450,000/2,100,000= 21.43%

d)
Excess over PS CS
par
Balance P1,400,000 P500,000 P750,000
Less: (2 x 10% x 500,000) (100,000) 100,000
P1,300,000
C/S 10% (75,000) 75,000
P1,225,000
500/1,250 x 1,225,000 (490,000) 490,000
750/1,250 (735,000) _______ 735,000
P1,090,000 P1,560,000
5,000 sh. 75,000
Book Value per share = P218 = P20.80

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EPS = 270,000*/75,000=P3.60 ROE= 270,000/1,020,000= 26.47%

Preferred Common
(2 x 10% x 500,000) 100,000
(10% x 750,000) 75,000
(500/1,250 x 325,000) 130,000 195,000
230,000 * 270,000
QUIZ 38
A. 1. Service Concern B. a. S
2. Cost of goods manufactured statement b. A
3. Work In Process Inventory c. DM
4. Direct Materials d. M
5. Manufacturing/Production/ Factory Cost e. DL
6. Direct costs f. A
7. Marketing / Selling Expense g. M
8. Direct Labor h. M
9. Administrative / General Expenses I. A
10. Periodic method j. A
11. Full cost pricing
12. Operating expenses
13. Factory overhead
14. Indirect costs or common costs

Raw Materials Used:

Raw Materials Inventory, beg. P 58,400
Add: Purchases 297,600
Raw Materials Available for Use 356,000
Less: Raw Materials, end 67,200 288,800
Direct Labor 184,200
Factory Overhead:
Depreciation Expense, Machinery 62,000
Supplies Expense 54,100
Insurance expense 46,900
Indirect labor expense 32,700
Supervisory Salaries, Factory 39,900
Loss on Spoilage 10,700
Property Tax Expense, Factory 16,500 262,800
Total Manufacturing Cost P735,800
Add: WIP Beg. 98,400
Less: WIP End ( 96,400)
Cost of Goods Sold P737,800

QUIZ 39
1) Materials Inventory, Jan. 1, 2012 P 596,950
Add: Materials Purchases 1,525,330
Total Materials Available for use P2,122,280
Less: Materials Inventory, March 31, 2012 514,030
Raw Materials Used P1,608,250

2) Raw Materials Used P1,608,250

Direct Labor 146,310
Manufacturing Expenses:
Depreciation - Plant & Equipt. P14,230
Equipt. Repairs Expense – Factory 1,290
Plant Supervisor’s Salaries 18,750
Insurance Expense -Plant & Equipment 1,040
Utilities Expense – Plant 3,420
Indirect Labor 15,000
Manufacturing Supplies Expense 3,760
Small Tools Expense 800 58,290
Total Mfg. Costs P1,812,850

3) Total Mfg. Costs P1,812,850

Add: Work In Process Inventory, Jan. 1, 2012 829,840
Total Work In Process 2,642,690
Less: Work In Process, Inventory March 31, 2012 815,560
Cost of Goods Manufactured P1,827,130 / 50,000
Unit Cost 36.54

5) Cost of Goods Manufactured P1,827,130

Add: Finished Goods Inventory, Jan. 1, 2012 675,010

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Total Goods Available for Sale P2,502,140

Less: Finished Goods Inventory, March 31, 2012 702,840
Cost of Goods Sold P1,799,300

4) 36.54 x 2= Selling Price P 73.08

QUIZ 40
a) Materials Inventory, Jan. 1, 2012 P 268,000
Add; Materials Purchased 1,946, 700
Total Materials Available for Use P2,214,700
Less: Materials Inventory, March 31, 2012 167,000
Raw Materials Used P2,047,700
Direct Labor 2,125,800
Factory Overhead 764,000
Cost of Goods Manufactured P4,937,500

b) Finished Goods Sold 12,400

Add: Finished Goods Inventory, March 31 2012 200
Finished Goods Available for Sale 12,600
Less: Finished Goods Inventory, Jan. 1, 2012 100
Number of Units Manufactured 12,500
Cost of Goods Manufactured P4,937,500
Divide by Units Manufactured 12,500
Unit Cost P395
c) Finished Goods Inventory, Jan. 1, 2012 (100) P43,000
Add: Cost of Goods Manufactured 4,937,500
Cost of Finished Goods P4,980,500
Less: Finished Goods Inventory, March31, 2012 (200 x 395) 79,000
Cost of Goods Sold P4,901,500

e) Sales (4,901,500 x 1.50) P7,352,250

Less Cost of Goods Sold 4,901,500
Gross Profit P2,450,750
Less: Operating Expenses
Marketing Expense 516,000
Gen. & Admin. Exp. 461,000 977,000
Net Income P1,473,750

QUIZ 41
a. Journal Entries:

1) Raw Material Purchases 125,000

` Accounts Payable 125,000

2) Freight In 3,000
Cash 3,000

3) Factory Supplies 500

Cash 500

4) Direct Labor 25,000

Indirect Labor 8,000
Indirect Labor – Selling 10,000
Indirect Labor – Administrative 17,000
SSS Payable (P60,000 x 3%) 1,800
Med. Payable (P60,000 x 2% 1,200
HDMF 600
W/T Payable (P60,000 x 5%) 3,000
Cash 53,400

5) SS Premium Expense - Mfg. (33,000x5% 1,650

SS Premium Expense – Selling (10,000x5%) 500
SS Premium Expense – Administrative(17,000x5%) 850
SS Premium Payable(60,000x5% 3,000

MCR Premium Expense – Manufacturing 660

MCR Premium Expense – Selling 200
MCR Premium Expense – Administrative 340
MCR Premiums Payable (60,000x2% 1,200

HDMF – Manufacturing 330

HDMF – Selling 100
HDMF – Administrative 170
HDMF Payable (60,000x1%) 600
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6) Factory Heat, Light & Power 15,000

Cash 15,000

7) Accounts Receivable 300,000

Sales 300,000
8) Commission Expense 7,500
Cash 7,500
9) Bad debts Expense 5,000
Depreciation – Machinery 8,000
Factory Insurance 2,000
Depreciation - Delivery Truck 3,000
Factory Supplies Expense 2,000
Rent-Manufacturing 10,000
Rent- Selling 6,000
Rent-Administrative 4,000
Tel and Com-Manufacturing 6,000
Tel and Com- Selling 3,600
Tel and Com-Administrative 2,400
Allowance for Bad Debts 5,000
Accumulated Depreciation - Machinery 8,000
Prepaid Factory Insurance 2,000
Accumulated Depreciation - Delivery Truck 3,000
Factory Supplies 2,000
Accrued Rent 20,000
Accrued Tel and Com 12,000

Matis Corp.
Cost of Goods Sold Statement
for the year ended Dec. 31, 2012
Raw Materials, Jan. 1 P 12,000
Add: Raw Materials Purchases P125,000
Add: Freight In 3,000 128,000
Total Materials Available for Use P140,000
Less: Raw Materials, Dec. 31 10,000
Raw Materials Used P130,000
Direct Labor 25,000
Manufacturing Expenses:
Factory Supplies Expense P 2,000
Indirect Labor 8,000
Factory Heat, Light & Power 15,000
Utility Expense 6,000
Rent Expense 10,000
Depreciation Expense – Machinery 8,000
SS Premium Expense 1,650
MCR Premium Expense 660
HDMF Premium Expense 330
Factory Insurance 2,000 53,640
Total Mfg. Cost 208,640
Add: Work In Process, Jan. 1 15,000
Total Work Placed In Process 223,640
Less: Work In Process, Dec. 31 12,000
Cost of Goods Manufactured 211,640
Add: Finished Goods Inventory, Jan. 1 20,000
Cost of Goods Available for Sale 231,640
Less: Finished Goods Inventory, Dec. 31 25,000
Cost of Goods Sold 206,640
Matis Corp.
Income Statement
For the year ended Dec. 31, 2012
Sales P300,000
Less: Cost of Goods Sold 206,640
Gross Profit P 93,360
Less: Operating Expenses:
Selling Expenses
Salaries P10,000
Utility Expense 3,600
Rent Expense 6,000
Commission Expense 7,500
SS Premium Expense 500
MCR Premium Expense 200

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EC Premium Expense 100

Depreciation - Delivery Truck 3,000 30,900
Administrative Expense
Salaries P17,000
Utility Expense 2,400
Rent Expense 4,000
SS Premium Expense 850
MCR Premium Expense 340
EC Premium Expense 170
Bad Debts Expense 5,000 29,760 60,660
Net Income P32,700

Quiz No. 42
A. B.
1. B 6. C 1. T 6. F
2. B 7. D 2. T 7. T
3. E 8. D 3. F 8. F
4. D 9. B 4. F 9. T
5. B 10. D 5. T 10.T

Quiz No. 43
A.
Voucher Register
Vouchers SUNDRY
Dat Payee Vo. Date Chec Payable Utilitie Rent Salarie
Accounts Debit
e No Paid k No. Credit s s
.
7/2 International 01 7/17 004 7,500 Supplies 7,500
7/3 ML Lansing 02 7/3 001 15,000 15,00
0
7/5 PLDT 03 7/5 002 4,500 4,500
7/10 PDI 04 2,750 Advertising 2,750
7/15 Gretchen 05 7/15 003 1,250 Gretchen Pers. 1,250
7/20 Meralco 06 7/20 005 2,780 2,780
7/25 Employees 07 7/25 006 3,750 3,750

37,530 7,280 15,00 .3,750 11,500

0
(401)

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Check Register
Vouchers Cash In Purchase
Date Payee Check No. Vo. No. Payable Bank Credit Discount
Debit Credit
7/3 Lansing 001 02 15,000 15,000
7/5 PLDT 002 03 4,500 4,500
7/15 Gretchen 003 05 1,250 1,250
7/17 Internationa 004 01 7,500 7,500
l
7/20 Meralco 005 06 2,780 2,780
7/25 Employee 006 07 3,750 3,750

34,780 34,780
(401) (101)

B.
Cash In Bank 101 Advertising Expense 701
34,780 2,750

Office Supplies 105 Rent Expense 702

7,500 15,000

Vouchers Payable 401 Salary Expense 703

34,780 37,530 3,750

Gretchen, Drawing 502 Utility Expense 704

1,250 7,280

C.
a) Use of special columns.
b) Special columns must be for specific accounts only. Those with no specific columns are recorded in the sundry
column with account titles and must be posted one by one.

Quiz No. 44
Customer Sales Clerk Cashier Accounting Clerk

SO SO S1 S1
1 2
P 2

Recor
ds in
P P
Prepar
e SI

Enters
CR
P in the
B
S1
1
2
S1
3 S1 S1
3 2

S1
1

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II.
Patient Nurse-Secretary Doctor

Patient’s Patient’s
Card Card

Enters
height,
weight &
BP in th

Patient’s Patient’s
Card Card

Examines
patient, fill
s up
prescriptio

Patients Patient’s
Card Card

Prescriptio Prescription

Give
money
to nurse
nd

Card Card
P
P

Issues
OR &
places P
in the

OR
1
OR
1 OR
2

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Quiz No. 45
1. L 2. H 3. E 4. A 5. G
6. N 7. C 8. J 9. D 10. F
11. M 12. L 13. O 14. B 15. H
B.
1. Return On Sales = Net Income/Net Sales 2. Asset Turnover = Revenue/Average Total Assets
3. Ret On Assets = Net Income 4. Receivable TO = Credit Sales
Average Total Assets Average Receivables
5. Times Interest Earned = Operating Income 6. Equity Ratio = Owner’s Equity
Interest Total Assets
7. Gross Profit Ratio = Gross Profit/Net Sales 8. Ret On Equity = Net Income/Ave Owner’s Equity
C.
1. Liquidity = Receivable Turnover
2. Profitability = Return on Sales, Return on Assets, Gross Profit Rate, Return on Equity
3. Solvency = Times Interest Earned, Equity Ratio
4. Quality Use of Assets = Asset Turnover, Receivable Turnover, Inventory Turnover

Quiz No 46
A.
1. D 2. C 3. C 4. C 5. B 6. A
7. D 8. D 9. A 10. B 11. A 12 B
13 .. Current Ratio= 44.7/130.5= 34.25%
14. Acid Test= 19.5/130.5= 14.94%
15. 2006= Receivable TO= 4,100/515= 7.96 x Collection Period= 360/7.96= 45.23 days
2007= Receivable TO= 4,800/550= 8.73 x Collection Period= 360/8.73= 41.24 days
16. 2006= Invty TO= 837 + 4661- 960= 4,538/905= 5.01 x Holding Period= 360/5.01= 71.86
2007= Invty TO= 960 + 4640 – 1020= 4580/990= 4.63 x Holding Period= 360/4.63= 77.75
17. Times Interest Earned= 2012 1,350/45=30 2011 1,258/60=20.97
Debt Ratio = 1,025/1,770= 58% 285/1,931= 15%
Equity Ratio 42% 85%

More solvent in 2012

18. ROE 2012= 1,350/745= 181% 2011 1,258/706 = 178%
ROA 1,350/1770 = 75% 1,258/1931= 65%

More profitable in 2012, positively leveraged in both years

E. King Harry’s Restaurant has three revenue departments with direct costs and indirect costs given in the
following information:

Departments Dining Banquets Beverages

Sales revenue P204,000 P110,000 P92,000
Cost of sales 81,600 41,800 29,440
Gross Income 122,400 68,200 62,560
Wages and salaries cost (65,250) (35,200) (12,880)
Other direct costs (18,360) (8,800) (1,840)
Contribution Income P38,790 P24,200 P47,840
Gross Profit Ratio 60.00% 62.00% 68.00%
Contribution Income Ratio 19.01% 22.00% 52.00%

19. The beverages department is most profitable and efficient.

Departments Dining Banquet Beverages
Sales revenue 100.00 100.00 100.00
Cost of sales 40.00 38.00 32.00
Gross Income 60.00 62.00 68.00
Wages and salaries cost 32.00 32.00 14.00
Other direct costs 9.00 8.00 2.00
Contribution Income 19.00 22.00 52.00

20. Dining's strength is in the control of cost but has no effective control of expenses.
Banquet's strength is also in the costing but is weak in the control of operating expenses.
Beverages strength is in controlling both cost and operating exp

QUIZ 47
2012 2011
Return on sales 186.2/780 61.44/624 23.87% 9.85%
Return on equity (410.3+396)/2
186.2/608.3 61.44/396 30.61% 15.52
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Return on assets (672+735.8)/2

186.2/ 703.9 61.44/672 26.45 9.14
Current ratio 280.5/193.5 212.4/156 1.45:1 1.36:1
Receivable TO (93.8+106.2)/2
780/100 624/93.8 7.8 x 6.65 x
Collection period 360/ 7.8 360/6.65 46 days 54 days
Inventory TO (64+116.4)/2
440/ 90.2 405.6/64 4.88 x 6.34 x
Holding Period 360/ 4.88 360/6.34 74 days 57 days
Times interest earned 196.12/9.92 68.64/7.2 19.77 9.53
Asset turnover 780/ 703.9 624/672 1.108 .93
Debt ratio 325.5/735.8 276/672 44% 41%

More profitable, liquid and solvent in 2012.

Quiz No. 48
A. 1. D 2. B 3. C 4. B 5. D
6. D 7. C 8. C 9. B

10. 200 – 50 = 150,000

11. 22,000-7,500= 14,500
12. 168 + 1,134 – 277= 1,025

Quiz No. 49
A.
Operating Investing Financing
a. Issuance of shares for cash 500,000
b. borrowed cash 250,000
c. cash sales 80,000
d. cash purchase of stock (15,000)
e.
f. cash dividends (100,000)
g. acqn of building (300,000)
h. paid mortgage (45,000)
i. expenses paid (25,000)
j. accounts collected 100,000
j. supplier paid (80,000) _______ ______
60,000 (345,000) 650,000

Most of the cash came from financing. And was used for acquisition of building. Cash from operation
Is unattractive, of minimal amount.

B. Collection from customers (545,000+20,000) 565,000

Payment to suppliers (400,000+11,000) (411,000)
Payment for taxes (47,000 – 6,000) ( 41,000)
Cash flow from operating activities P113,000

C.
Operating
Net income 98,000
Decrease in accts recble 20,000
Decrease in accts payble (11,000)
Increase in taxes payble 6,000
P113,000

D.
PEP HEALTH
Liquidity 432,800/62.340 6.94 545,600/76,140 7.17
140,558/62.340 2.25:1 225,890/76,140 2.97:1
Solvency 432,800137,020 3.16 545,600/129,290 4.22
Profitability 356,800/2,697,100 13.22% 434,700/2,104,400 20.66%

Health is more liquid, solvent and profitable.

Quiz No. 50
Cash Flow Statement

Cash from operating activities

Net Income P340,000
Depreciation* 155,000
Increase in Accounts Payable 140,000
Decrease in Taxes Payable (10,000)
Increase in accounts receivable (240,000)
Increase in merchandise inventory (70,000) P315,000
Cash from investing activities
Proceeds from Sale 85,000
Cash from financing activities

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Payment of bonds P(60,000)

Cash dividends (270,000)
Investments of shareholders 40,000 (290,000)
Increase in Cash 110,000
Cash balance Jan 1 200,000
Cash balance Dec 31 310,000

Average current liabilities (230+ 360)/2= 295

Average total liabilities= (500+560)/2 = 530
Current cash debt coverage= 315/295=1.07 This shows firm is liquid
Cash debt coverage= 315/530= .59 This shows firm not solvent.
Cash adequacy ratio= 315/270= 1.17 This shows adequacy.

*Accum Depn 2011 24,000

Less accum depn for equipment sold ( 9,500)
14,500
Accum depn 2012 30,000
Depreciation provision 15,500

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