1. An analysis of Palmes Corporation's unadjusted prepaid expense account at

December 31, 2006 revealed the following:

An opening balance at P6,000 for Palmes comprehensive insurance policy.

Palmes had paid an annual premium of P12, 000 on July 1, 2005.

A P12,800 annual insurance premium payment made July 1, 2006.

A P8, 000 advance rental payment for a warehouse Palmes leased for 1 year

beginning January 1, 2006.

In its December 31, 2006 balance sheet, what amount should Palmes report as

prepaid expenses?

2. The following were provided by Charm Company for the month of October

Total book debits for the month of October P785, 000

Total bank credits for the month of October P640, 000

Deposit in transit at October 30, P16, 000

October deposits for P29, 000 was recorded in the books as P92, 000

A deposit in October by Charm Company for P9, 000 was recorded by the

bank in another account

Credit memo for the month of September, P60, 000 was recorded by Charm

Company only in October.

Interest income for the month of October, P30, 000 has not been recorded

in the books.

The deposit in transit at the beginning of October is

3. The following were provided by Falcon Company for the month of June

May bank charges, recorded on the books only in June, P6,000

Customer's NSF check returned as a bank charge in June (no entry made on

books), P9,000

Customer's NSF check returned in May and re-deposited in June (no entry

made in books in either May or June), P5,000

Outstanding checks as of June 30, P55, 000

Deposited in transit as of June 30, P90, 000

Checks against Falcone Company was charged to Falcon Company by the bank

in June, P20, 000. No corrections were yet made as of June 30

Check for P25, 000 written in June 28, was recorded om the disbursement

journal as P52, 000

Check for P16, 000 written on June 30, was recorded in the disbursement

journal as P1, 600

Checks and charges recorded by the bank in June, including a June service

charge of P3, 000; P264, 000

Total credits to Cash in all journal during June, P276, 000

The amount of outstanding checks at the beginning of June

4. Linda Company's accounts receivable balance at January 1, 2017 was P1,

450,000 net of allowances totaling P75, 000.

During 2017, Linda Company reported sales of P5, 200, 000. 15% of sales in 2017

were cash sales and the rest were on account under a 3/10, n/10 credit term.

Sales returns amounted to P80, 000 for cash sales in which the costumers are

refunded and P95, 000 for credit sales.

Total debit to cash during the period P5, 740, 000 which includes recoveries of

previously written-off accounts totaling P110, 000. 40% of the collections from

its current costumers were made within the discount period.

Receivables written-off in 2017, P90, 000

The gross accounts receivable of Linda Company at December 31, 2017 is:

5. The following information is shown in the accounting records of Container

Company:

January 1 December 31

Cash P186,000 ?

Accounts Receivable P201,000 P273,000

Merchandise Inventory P258,000 P234,000

Accounts Payable P159,000 P144,000

Prepaid Expense P120,000 P108,000

Total sales and cost of goods sold for 2018 were P2,394,000 (including P500,000

cash sales) and P1,749,000, respectively. Purchases were made on credit. Various

operating expenses of P321,000 were incurred. Assume that there were no other

pertinent transactions.

What is the cash balance on December 31, 2018 of Container Company?

6. In determining the amount to be reported on its December 21, 2020 balance

sheet as cash and cash equivalents, the following items were identified;

BDO checking account, includes a P120,000 compensating

balance maintained in relation to an existing short-term loan

which is not restricted to withdrawal P1,000,000

AUB checking account, includes a P150,000 compensating

balance maintained in relation to an existing long-term loan

which is legally restricted as to withdrawal

800,000

Bank of Commerce checking account, in which the Company

is required to a maintain a minimum average balance of

P250,000 at all times to insure future credit availability

750,000

The amount reported by Eva Company under cash and cash equivalents is:

7. Equestrain Roads sold $80,000 of goods and accepted the customer's $80,000

10% 1-year note receivable in exchange. Assuming 10% approximates the market

rate of return, what would be the debit in this journal entry to record the

sale?

a. No journal entry until cash is collected.

b. Debit Notes Receivable for $80,000.

c. Debit Accounts Receivable for $80,000.

d. Debit Notes Receivable for $72,000.

8. Equestrain Roads sold $80,000 of goods and accepted the customer's $80,000

10% 1-year note payable in exchange. Assuming 10% approximates the market

rate of return,how much interest would be recorded for the year ending

December 31 if the sale was made on June 30?

a. $0.

b. $2,000.

c. $4,000.

d. $8,000.

9. Equestrain Roads accepted a customer's $50,000 zero-interest-bearing six-

month note payable in a sales transaction. The product sold normally sells

for $46,000. If the sale was

made on June 30, how much interest revenue from this transaction would be

recorded for the year ending December 31?

a. $0.

b. $2,000.

c. $4,000.

d. $5,000.

10. Assuming the market interest rate is 10% per annum, how much would

Green Co. recordas a note payable if the terms of the loan with a bank are

that it would have to make one$80,000 payment in two years?

a. $80,000.

b. $72,563.

c. $72,727.

d. $66,116.

11. Sun Inc. factors $3,000,000 of its accounts receivables without

recourse for a finance charge of 5%. The finance company retains an amount

equal to 10% of the accounts receivable for possible adjustments. Sun

estimates the fair value of the recourse liability at

$115,000. What would be recorded as a gain (loss) on the transfer of

receivables?

a. Loss of $150,000.

b. Gain of $265,000.

c. Loss of $565,000.

d. Loss of $115,000.