Question
1. A manufacturer at the end of its fiscal year recorded the following data below: Direct labor P800,000 Indirect labor 100,000 Manufacturing overhead 160,000 Selling
1. A manufacturer at the end of its fiscal year recorded the following data below:
Direct labor P800,000
Indirect labor 100,000
Manufacturing overhead 160,000
Selling and other expenses 80,000
Raw materials used 140,000
What is the total manufacturing cost of the manufacturer?
a. P960,000
b. P1,200,000
c. P1,280,000
2. What is the accounting concept that justifies the usage of accruals and deferrals?
a. Stable monetary unit
b. Going concern
c. Consistency
3. How should exchange gains or losses resulting from foreign currency transactions be accounted for?
a. Included in net earnings for gains, but deferred for losses
b. Included in the statement of financial position as a deferred item.
c. Included as component of income from continuing operations for the period in which the rate changes.
4. Which of the following is a component of other comprehensive income?
a. Unrealized loss on debt investment measured at fair value through other comprehensive income.
b. Gain from translation of the financial statement of a domestic operation.
c. Unrealized loss from derivative contracts designated as fair value hedge.
5. PlantTito Company provided the following information during the current year:
Cash balance, Jan 1 P1,250,000
Cash received from customers 2,000,000
Interest paid on long term debt 75,000
Income taxes paid 50,000
Cash paid to suppliers 1,500,000
Proceeds from sale of long term investments 500,000
Gain from sale of long term investments 150,000
Cash paid for land 750,000
Cash received for dividends 100,000
Proceeds from issuance of share capital 1,100,000
Cash paid for dividends 100,000
Cash paid to employees 300,000
Cash received for interest 75,000
Gain on sale of treasury shares 75,000
Depreciation expense 200,000
What is the net cash provided/used by operating activities?
a. P625,000
b. P250,000
c. P600,000
6. Which of the following group of cost should be included as part of distribution cost?
a. Freight out, marketing expense, freight in, sales commission
b. Advertising, transportation in, depreciation of delivery equipment, depreciation of store equipment
c. Salesmen's salaries, sales commission, marketing expense, freight out
7. The following statements relate to analysis of expenses in the income statement based on either the nature of expenses or their function within the entity. Which statement is incorrect?
I. An entity classifying expenses by function shall disclose additional information on the nature if expenses including depreciation, amortization expenses and employee benefit cost.
II. PAS 1 requires the use of the cost of sales method because this presentation often provides more relevant information to users than the nature of expense method.
a. Neither I nor II
b. II only
c. I only
8. In which section of the statement of financial position should cash that is restricted for the settlement of liability due 18 months after the reporting period be presented?
a. Current assets
b. Equity
c. Noncurrent asset
9. Noncash investing and financing transactions include all of the following, except:
a. Noncash items such as depreciation, deferred taxes and unrealized foreign currency gains and losses.
b. The conversion of debt to equity.
c. The acquisition of an entity by means of an equity issue.
10. IFRIC Interpretations issued by IASB
a. Are considered authoritative and must be followed.
b. Cover newly identified financial reporting issues not specifically addressed.
c. Cover issues where unsatisfactory or conflicting interpretations have developed.
11. PlantTito Company provided the following information during the current year:
Cash balance, Jan 1 P1,250,000
Cash received from customers 2,000,000
Interest paid on long term debt 75,000
Income taxes paid 50,000
Cash paid to suppliers 1,500,000
Proceeds from sale of long term investments 500,000
Gain from sale of long term investments 150,000
Cash paid for land 750,000
Cash received for dividends 100,000
Proceeds from issuance of share capital 1,100,000
Cash paid for dividends 100,000
Cash paid to employees 300,000
Cash received for interest 75,000
Gain on sale of treasury shares 75,000
Depreciation expense 200,000
What is the cash balance on December 31?
a. P2,325,000
b. P2,400,000
c. P2,250,000
12. Which is not within the new definition of an assets?
a. Future economic benefit is expected to flow to the entity
b. The economic resource is controlled by the entity as a result of past event
c. The economic resource is a right that has potential to produce economic benefit
13. Which of the following statements are true?
- Investing activities are presented using direct method in the statement of cash flows.
- Financing activities are presented using direct method in the statement of cash flows.
- Investing activities are presented using indirect method in the statement of cash flows.
- Financing activities are presented using indirect method in the statement of cash flows.
a. 2 and 3
b. 1 and 4
c. 1 and 2
14. PlantTito Company provided the following information during the current year:
Cash balance, Jan 1 P1,250,000
Cash received from customers 2,000,000
Interest paid on long term debt 75,000
Income taxes paid 50,000
Cash paid to suppliers 1,500,000
Proceeds from sale of long term investments 500,000
Gain from sale of long term investments 150,000
Cash paid for land 750,000
Cash received for dividends 100,000
Proceeds from issuance of share capital 1,100,000
Cash paid for dividends 100,000
Cash paid to employees 300,000
Cash received for interest 75,000
Gain on sale of treasury shares 75,000
Depreciation expense 200,000
What is the net cash provided/used by operating activities?
a. P1,000,000
b. P1,075,000
c. P1,175,000
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