UNIVERSITY OF THE EAST

MANILA CAMPUS
Accounting Integration
MID-TERM EXAM IN AFAR

1 . A company can only satisfy ts performance obligations at a single point in time. A contract
liability is a company's obligation to transfer goods or services to a customer for which the
company has received consideration from the customer.

A. True; True C. False; False

B. True; False D. False; True
Falio
2. The most popular input measure used to determine the progress toward completion in in
0 If the difference between the Construction
long-term contracts is the cost-to-cost basis is a debit, the difference
Process and the Billings on Construction in Process account balances
is reported as a contract assets.
C. False; False
A. True; True
D. False; True
B. True; False
per EUP includes all
3. When using FIFO costing, the numerator In computing formethod
the cost
assumes that units in
0 beginning inventory costs. The weighted average costing
beginning inventory are the first units transferred.
C. False; False
A. True; Trus
D. False; True
True; False

are assumed to
occur uniformly throughout
A 4. In process costing, continuous production losses assumed to occur at the end of a
are generally
the process. Discrete production losses
process. C. False; False
A. True; True D. False; True
B. True; False
is
only construction costs when revenue
5. The Construction in Process account includes single point in time,
time. When revenue is recognized at
recognized over a period of contract is completed.
companies recognize costs only when the
C. False; False
A. True; True False; True •Jharhes2ng
D.
B. True; False

the two parties iS

6. Signing of the contract by
not recorded until
one or both parties perform under the contract.
A.
B. recorded at the time
the contract is approved by both parties.
c. not recorded until both parties perform under the contract.
contract is signed.
D. recorded immediately after the

Sl 7. A performance obligation exists when

to receive consideration.
A. company receives the right
a contract is approved and signed.
B.
service.
C. a company provides a distinct product of
D. a company provides interdependent product or service.

8.
When multiple performance obligations evists in a contract, they should be accounted for
as a single performance obligation when
A. each service is interdependent and interrelated.
but interdependent.
B. the performance obligations are distinct
c. the product is distinct within the contract.
D. determination cannot be made.

9. which of the following journai entries records tne accriual of the cost of indirectiabor usea in
production?
debit Work in Process Inventory, credit Wages Payable Overhead
credit Manufacturing
16 debit Work in Process Inventory, Inventory
C. debit Manufacturing Overhead, credit Work in Process
credit Wages Payable
D. debit Manufacturing Overhead,
Produd loo k

6lk

19xk built by TAY Manufacturing

contractedtothat havetwo products occur after both
July31, MILTON Company payment will only he standalone
10. On
The contract specifies
2.
P85,000 for Product entry to record
this event
prices are P100,000 for Product 1 and the journal
On August 1 , when 1 has been
Product
transferred.
include a
A. debit to Accounts Receivable for
P100,000.
B. debit to Accounts Receivable for P85,000. X
K
C. debit to Contract Assets for P85,000.
D. debit to Contract Assets for P100,000.
the following: and in its
Ortigas
Question Number 11-12 are based on in BGC
merchandise outlets: its main
store
and shipments to the
JBC Co PHILS Inc., has two the main store,
Branch. For control purposes, all purchases are made by inventories of the main store and
2024, the store
Ortigas Branch are cost plus
the Ortigas Branch were:
2024, the mrain
Uh 1e Con O Sa d p1a5, oo0, respectively. Duringto Ortigas
and shipped 40% of these
purchased merchandise costing P1,800,000
by Ortigas Branch:
At December 31, 2023, the following closing entry was made
1,050,000
Sales
230,000
Inventory, End 85.000
Main Store 205,000
Inventory, Beg 900,000
Shipments from Main Store 260,000
Operating Expenses

be reported in so far as the home office is concerned?

0 11. What was the branch net income to

C. P(85,000)
A. P90,000
D. P260,000
B. P100,000

P50,000 that
has P428,000 on hand as of December 31(excluding goods of that should
D' 12. If the mainonstore
consignment), what is the total amount of ending inventory
were placed
appear on the statement of financial position as of December 31, 2024?
C. P662,000
A. P642,000
D. P658,000
B. P562,000

and share in profits and losses

J, K and are partners whose January 1, 2024 capital balances
are as follows:

J (30%) - P 750,000; K(30 %)- P1,200,000; L(40%)-P1,500,000

Y was to be admitted on the following conditions in 2024:

Y is to pay J P500,000 for ¼ of his share interest
Y is also to invest P600,000 in the partnership
The total capital of the partnership after Y's admission will be P4,500,000, in
which Y's interest and share in profit and loss is 20%.

The old partners will share in the subsequent profit or loss based on their old

sharing ratio.
The partnership generated a profit of P1.500.000 in 2024. Each of the partners
availed of the maximum allowable drawings of P100,000 each.

13. What would be the capital of (1) Y and (2) L at the end of 2024?
A. (1) P1,350,000; (2) P2,030,000 C. (1) P1,550,000; (2) P2,250,000
B. (1) P1,175,000; (2) P1,685,000 D. (1) P1,500,000; (2) P3,000,000

Question Number 14-16 are based on the following:

On January 2, 2024,
MENDOZA Contractor entered into a contract to build a 4-story parking
area in the university belt vicinity for P20,000, 000. The construction will be completed at the
 end
of 2025. The contractor has an unconditional right to payment for performance
completed to date.

The following selected entries summarized the contractor's transactions in 2024:

1.
Construction In Progress 7,500,000
Various Accounts 7,500,000
Costs incurred during 2024

2. Accounts Receivable 8,000,000

Contract Assets ,000,000
Contract Billings 9,000,000
Progress billing

3. Cash 6,840,000
Contract Retention 360,000
Accounts Receivable 7,200,000

14. What is the percentage of completion in 2024?

A. 40% B. 50% 10 C. 45% D. cannot be determined
457.
15. How much is the Realized Gross Profit for the year?
A. P800.000 B. P1.000.000 C. P500.000 D. Cannot be determined

16. How much is the Earned Construction Revenue for the year?
C. P7,500,000 D. Cannot be determined
A. P8,500,000 B. P8,000,000

Question Number 17-23 are based on the following:

HENRY Manufacturing Company uses process costing in the manufacture of its sole product.
which just ended:
The following information is available for the current year

Beginning Work in Process (75% converted) 14,500 units

Started in Production 75,000
Ending Work in Process (60% converted) 16,000
Abnorinal spvilage 2,500
Normal Spoilage 5,000
Transferred Out 66,000

Cost of Beginning WIP: Materials- P 41,100; Conversion - P 25,905

Current Costs Added. Materials- P120,000; Conversion - P144,450

All materials are added at the start of production while units are inspected at the end of
processing.

USING FIFO COSTING: EMP

What are the Equivalent Units of Production for Materials and Conversion?
17.
A. 75,000 and 72,105, respectively C. 79,500 and 72, 105, respectively
B. 75,000 and 72,225, respectively D. 79,500 and 72,225, respectively

18. How much is the total cost transferred to finished goods inventory?
A. P 277,655 B. P203, 400 C. P270, 405 D. P270,405

19. How much is the materials cost included in ending inventory?

A. P44,800 B. P25,000 C. P28,800 D. P25,600

USING WEIGHTED AVERAGE COSTING

20. What are the Equivalent Units of Production for Materials and Conversion?
A. 75,000 and 72,105, respectively C. 89,500 and 83,105, respectively
B. 75,000 and 72,225, respectively D. 89,500 and 83,100, respectively

21. How much is the total cost transferred to finished goods inventory?
 C. P250,405 D. P254, 100
A. 273,350 B. P273,750

22. How much is the conversion cost included in ending inventory?

D. P19,680
A. P32,800 B. P25,000 C. P28,800

23. How much is the cost of the abnormal spoilage?

C. P8,800
D. P9,625
A. P9,000 B. P8, 480

24. Consignments are a specialized marketing method whereby the

14 A.
when
Consignee purchases goods for sale and sends payment
goods are sold.
B. Consignee (agent) hotds title to the product.
C. Consignee pays for good up front and is paid when merchandise is sold.
the manufacturer.
D. Consignee takes possession of merchandise but title remains with
25. Nonrefundable upfront fees
A. should be recognized immediately upon receipt of payment.
B. such as activation fees for
cable should be recognized as revenue immediately.
C. such as a one-time initiation fee in a
health club should be recognized immediately.
D. should not be recorded as revenue at the time of payment if they are for future delivery
of products and services.
services to a customer for
26. Contract liability is a company's obligations to transfer goods or
the customer. An example of a
which the company has received consideration from
contract liability is
C. Mortgage Payable.
A) Prepaid subscription.
D. Service Revenue.
B. Unearned magazine subscription.

would not use a process costing system.

A 27. A producer of
C. Potato Chips
A. Gasoline
D. Stained Glass Windows
B. Blank USB

the partnership by purchase of interest of existing

28. If a new partner is admitted to
partners, which of the following statements is incorrect?
A. The payment of the buying partner to the selling partner(s) is a personal transaction
between the partners.
B. The partnership shall recognize an increase in asset arising from the admission of a
new

partner.
C. The capital account of the new partner will be credited an amount equal to the interest
being acquired.
will not change immediately after the admission
D. The total capital of the old partnership
of a new partner.

29. UNILAB Pharmaceuticals entered into licensing agreement with Zenith Lab for a new
drug under development. UNILAB will receive P6,750,000 if the new drug receives FDA
approval.
Based on prior approval, UNILAB determines that it is 85% likely that the drug will gain
approval. The transaction price of this arrangement should be
A. P6,750,000. C, P1,012,500.
B. P5.737.500. D. PO until approval is received.i

Question Number 30-31 are based on the following:

30. MITCH & SANTI INC., is a full-service technology company. They provide equipment, and
installation services as well as training. Customers can purchase any product or service
separately or as a bundled package. ABENDER Corporation purchased computer equipment,
installation and training for a total cost of P120,000 on March 14, 2024. Estimated standalone
fair values of the equipment, installation, and training are P75,000, P50,000, and 25,000
respectively.

What is the transaction price allocated to equipment, installation and training?

A. P75,000, P50,000, P25,000 respectively B. P40,000, P40,000, P40,000 respectively
 C. P120,000 for the entire bundle. D. P60,000, P40,000 and P20,000
respectively

31. Which of
the following would be included in the journal entry to record the transaction on
March 14. 2024?
A. credit to Sales Revenue for P120,000.
B. debit to
Unearned Service Revenue of P25,000.
C. debit to Unearned Service Revenue of P20,000.
D. none of these 26 x 0.54

Question Number 32-33 are based on the following:

On March 5, 2024, FASHION FURNISHINGS INC., shipped 20 dining sets on consignment to
BGC

Outlet, Inc. The cost of each dining set was P6,500. The cost of shipping the dining sets
amounted to P2,800 and waspaid for by FASHION FURNISHINGS INC. On March 31, 2024, the
remitted
consignee reported the sale of 15 dining sets at P12,500 each. The consignee
payment for the amount due after deducting a 6% commission, advertising expense of
P35,300, and installation and setup costs of P15,090.

32. What is the amount of cash received by FASHION FURNISHINGS 1NC.?

A. P127,500 C. P125,860
B. 137,810 D. P133,270

How much is the consignment profit to be recognized ov BGC Outlet??

D 33.
A. P28,360 C. P11,250
B. P28,660 D, PO

Question Number 34-36 are based on the following:

The following balances from the books of the home office and its branch as of June 30,2023:
Home Office Branch
Sales P1,738,800 P1,250,000
Shipments to the Branch 360,000
Shipments from Home Office 414,000:
Purchases ,800,000 450,000

Operating Expenses 302.500 -275.300

Allowance for Branch Inventory 57,000
Merchandise Inventory 225,000 P56,000

Inventory on hand as of June 30,2023; Home Office P178,200; Branch P112,300 (of which
P54,800 came from outsiders).

34. How much of the branch beginning inventory that came from outside purchases?
A. P33,000 C. P56,000
B. P36,000 D. P45,000
9.711
00001070y
X A 35. Compute the branch TRUE net income:
A. P167,000 C. P216,500
B. P216,000 D. P167,500

36. What is the balance of shipments from Home Office on January 1, 2024?
A. P414,000 B. P360,000 C. P57,000 D. PO

Question Number 37-39 are based on the following:

On June 30, 2024, JOLIBI Corporation entered into a franchise agreement with LAPERAL INC.,
(franchisee)which requires the latter to pay a non-refundable upfront fee of P25,000,000
upon signing of the contract and to pay royalty equal to 5% on every peso sales generated by
him.

On the date of signing the contract, LAPERAL Inc., paid the non- refundable upfront. As part
of the franchise agreement, JOLIBI shall render the following performance obligations which
are considered separate and distinct from one another.
 of
office staff with a stand- alone price
a. Training of all the cooking crews and
P2,000,000
the franchisee's store and parking area
with a stand- alone price of
b. Construction of
a
RZ,500,000. and trademark for price
C. Allowing the franchisee right to access the JOLIBI's tradename stand- alone
term of 15 vears starting on the date the contract was signed with
of P10,500,000>
information:
On December 31, 2024, the franchisor's accountant obtained the following
75% of the personnel had already been trained. 10, 2024 which
The store and the parking area was 90% completed on October
allowed the franchisee to commence its business operations. , note and
By December 31,
paid in full his promissory
2024, LAPERAL Inc. had
reported sales of 1,000, 000 since its commercial operations.
would be included in the entry
of JOLIBi Corporation?
37. Upon signing of the contract, which
A. Debit Cash P20,000,000
B. Credit Unearned Construction Revenue- P7,500,000.
C. Credit Unearned Franchise Revenue- Intellectual Property- P13,125,000
D. Credit Unearned Service Revenue - P2,250,000
the entry of JOLIB: Corporation?
31, 2024, which would be included in
C 38. Cn December
A. Credit Earned Service Revenue- P1,875,000.
B. Debit Unearned Construction Revenue- P9,275,000.
c. Credit Royalty Revenue- P500,000
D. Debit Unearned Franchise Revenue- Intellectual Property: P875,000
for the year
reported by JOLIBI Corporation
39. How much is the total earned revenue to be
ended December 31, 2024?
11 01

C. P11,187,500 D.P10, 800,000

A. P10,750,000 B. P11,237,500

on the following:
Ouestion Number 40-43 are based nearby city. At the
On January 1, 2024, ACE Marketing Company established a branch in a
the Investment in Branch account on
close of the calendar year ended December 31, 2023,
the books of the
home office had a balance of P3,005,000. The branch
examined
books reflected
and the
in the reciprocal accounts was
another amount thus the difference
following data were arrived at:

RO Remittance in transit- P550,000

Shipment in transit- P606,000. the Branch on the nation-wide
Home Office debit memo representing the share of
advertising promotion still unrecorded by the latter: P340,000.
from the home office was erroneously
Cash of P750.000 received by the branch
P570,000.
recorded by the branch accountant as for P1,500,000
The home office purchased, for cash a second-hand delivery van
records of the fixed assets
for the use of the branch; all
(brand new was P2,200,000)
of the branches are maintained at the home office. 004 20

as of December 31, 2024?

40. Whai is the adjusted batance of the reciprocat account 1294
C. P955,500
A. P2,455,000 D. P1,135,000
B. P3,005,000

41. What is the unadjusted balance of home office current account?

C. P1,149,000
A. P2,829,000
D. P1,863,750
B. P1,329,000 14027132 2011

delivery van will include which of the

42. The entry of the Home Office on the purchase of
following?
A. Debit- Investment in Branch P1.500,000
B. Debit Delivery Equipment- P1,500,000
 C. Credit-
Investment in Branch - P2,200,000
D. Memo Entry

43. The entry of home

the Branch on its share in the advertising expense allocated by the
office will include which of the following?
A.
Debit- Advertising Expense- 340,000 C. Debit Home Office-340,000
B. Credit Home Office- 340,000 D Both letters A and B are applicable.

Question Numbers 44-47 are based on the following:

MICHAEL Company uses a job order costing system and the following information is available
from its records. The company has three jobs in process: #6, #9, and #13.

Raw material used P120,000 02

Direct labor per hour P8.50

Overhead 120%
applied based on direct labor cost

Direct material was requisitioned as follows for each iob respectively: 30 percent. 25
percent, and 25 percent; the balance of the requisitions was considered indirect. Direct labor
Other actual
hours per job are 2,500; 3,105 and 4,200; respectively. Indirect labor is P33,000.
overhead costs totaled P36,000.

44. What is the total prime cost incurred during the year?
CD. A. P203,300 B. P179,300 C. P713,250 D. P182,750

45. What is the total amount of actual overhead?

C. P93,000 D. P99,960
A. P36,000 B. P69,000 7

46. How much overhead is applied to Work in Process?

. A. P36.000 B. P69.000 C. P93,000 D. P99.960

Assume the balance inWork in Process Inventory was P18,500 on June 1 and P25,297 on June
30. The balance on June 30 represents one job that contains direct material of P11,250.
job (rounded to the nearest hour)?
C 47. How many direct labor
A. 751
hours have beenC.worked
B. 1.324 1.653
on this
D. 2,976

Question Numbers 48-49 are based on the following:

home office and its two
The following are some of the inter-branch transactions between the
branches; Branch A and Branch B.
office and Branch B amounting to
1. Branch A paid the Accounts Payable of the home
P120.000 and P40,000, respectively.
2. A customer of Branch A erroneously paid his account of P30,000 to the home office.
The home office has not yet notified Branch A.
3. The home office sent merchandise shipments amounting to P110,000 to Branch A
however the shipments did not reach Branch A since
they were inadvertently shipped
to Branch B and was retained by the latter..
but was recorded by the home office
4. Branch B reported net income of P105,500
accountant as P150,500.

A and Branch will have a net debit or (credit) by how

48. On the home office books, Branch
much?
Branch B
Branch A
P300,500 credit
A. P190,000- debit
300,500 debit
B. 150,000- credit
150,000- credit 300,500- credit
C.
D. 190,000- credit 300,500- debit

will have a net debit or credit of how much?

49. On the branch's books, Home Office Current
Per Branch B
Per Branch A
P190,000- debit P300,500 credit
A.
B. 150,000- credit 300,500 - debit
 C. 150,000- credit 300,500- credit
D. 190,000- credit 300,500- debit

Question Numbers 50-51 are based on the following: Additional shipments

OTTO Inc. shipped to its ORMOC Branch merchandise billed at P650.000.
returned some
were

made during the period and billed at P1, 500,000, ORMOC branch however
end of the period, the
branch
defective-merchandise worth P55,000 (at billed price). At the shipments to its
reported ending inventory of P550,000 and a net loss of P105,000. OTTO'S
ORMOC branch are billed at 125% of cost.
Financial
50. What is the cost of the branch's ending inventory to be included on the published
Statements?
A. P550,000 C. P440,000
B. P244,444 D. P400,000

51. What is the branch net income (loss) in so far as the home office is concerned?
A. P204,000 C. P222,330
B. P217,730 D. P215,000

not
52. On the separate Financial Statement of the home office, reciprocal accounts areon the
transactions are recorded
included in the computation of cost of goods sold. Agency
separate books of the agency..
True; False
A. False; True
B. False; False o. True, frve
WILSON POOL Company sells prefabricated pools that cost P100,000 to customers for
The fair
P180,000. The sales price includes afl installation fee, which is valued at P25,000.

value of the pool is P160,000. The installation is considered a separate performance

complete.
obligation and is expected to take 3 months to

to the pool and the installation?

53. How would the transaction price allocated
C.P180,000 and P25,000 respectively
A. P155,676 and P24,324 respectively X
P25,000 respectively D. P170,000 and P35,000 respectively
B. P160,000 and

been prepared as follows:

54. A statement of realization and liquidation has
Assets acquired- P40,000
Assets to be realized- P180,000
Assets not realized- 90,000
Assets realized- 30,000
80.000 Liabilities assumed- 50.000
Liabilities to be liquidated:
Liabilities not liquidated- 30,000
Liabilities liquidated- 100,000
Supplementary charges- 98,000
Supplementary credits- 110,000

and P(18,000),
The ending balances of capital stock and retained earnings are P100,000
respectively.

COMPUTE the net income or (loss) for the period?

C. P22,000
A. P10,000
D. P62,000
B. P24,000

a P1,750,000
55. On November 1, 2024, GREEN VALLEY Farm entered into a contract to buy
required Green Valley Farm to pay P1,750,000
harvester from JUAN DELA CRUZ. The contract
in advance on November 1, 2024. The harvester (cost of P950,000) was delivered on
November 30, 2024
record the contract on
What should be included in the journal entry for JUAN DELA CRUZ to

November 1, 2024
A. credit to Accounts Receivable for P1,750,000.
B. credit to Sales Revenue
for P1,750,000.
for P1,750,000.
0. credit to Unearned Sales Revenue
for P1,750,000.
D. debit to Unearned Sales Revenue
 Rupenmpany, uses a job order costine
appeared in the Work in Procerc system. During April
2024, the following costs
Inventory account:
Beginning balance
Direct material used P 48,000
Direct labor incurred 140.000
Applied overhead 120,000
Cost of goods manufactured 96,000
370,000
56.
There was only one job left in Worlk in Process
P11,200 of at the end of April which contained
overhead.
A. P8,400 What amount of direct material was included in this job?
B. P8,960 C. P13,840 D. P8,800

WINTER Products has no Work in Process or Finished Goods inventories at the close of business
on
are
December 31, 2024. The balances of Strong Products accounts as of December 31, 2024,
as follows:

Cost of Goods Sold-unadjusted P2,040,000

Selling it Administrative expenses
900,000
Sales
3,600,000
Manufacturing overhead control 700,000
Manufacturing overhead applied 648.000

57. What is income before tax for 2024?

A. P608,000 B. P660,000 C. P72,000 D. P107,000

58. D. and F decided to dissolve the partnership on July 31, 2023. Their capital balances and
profit ratio on this date follow: D. P101,200 (45%) : E. P194.400 (25%) : F. P86.400 (30%).
The net income from January 1 to July 31, 2023 was P32,400. Also, on this date, cash and
liabilities amounted to P113,400 and P156, 400 respectively.

If the non-cash assets amounting to P350,000 were sold forP175,000, which of the following is
true?
A. The tos5 from sale of total non-cash assets was P175,00
B. E received P126,764 in full settlement of his interest
A
C. P283,164 was the total distribution to the outsiders and to the partners
D. D's share in the loss on realization is P282,400. V,

59. The Allowance for Overvaluation in Branch inventories is debited:

A. When the home office ships to the branch at billed price that exceeds cost.
B. In a journal entry to close the account at the end of the accounting period.
C. When the branch ending inventory is recorded in the home office accounting records,
D. In some other circumstances.

The following transactions took place between the Home Office, Cagavan Branch and Isabela

Branch during the year.

The Home Office ships merchandise costing P120,000 to Cagayan Branch and pays the
freight of P3,500. Home office bills the branch at 115% of cost.

Upon the instruction of the Home Office, Cagayan Branch reships the merchandise to

isabeia Branch. The receiving branch pays the additional freight cost thereon of
P1, 400. Freight cost on direct shipment from the home-office to Isabela would have
been P4,500 only.

60. As a result of the above inter-branch transactions, Home office will debit Isabela Branch
by how much?
A. P124.500 B. P123, 100 C. P141,100 D.P142,500

-nothing follows-
120K
 UNIVERSITY OF THE EAST

SUGGESTED ANSWERS IN MID TERM AFAR- MANILA

1.D 11.A 21.A 31.D 41.B 51.A

2.A 12.C 22.D 32.C 42.B 52.B

3.C 13.B 23.D 33.D 43.D 53.A

4.A 14.A 24. D 34.A 44.B 54.D

5.C 15.C 25.D 35.C 45.C 55.C

6.A 16.B 26.B 36.D 46.D 56.D

7.C 17.B 27.D 37.C 47.A 57.A

8.A 18.A 28.B 38.A 48.D 58.B

9.D
19.D 29.B 29.D 49.A 59.D

10.D 20.D 30.D 40.A 50.C 60.C