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Number 1 and 2 On December 31, 2020, Jamie, Anthony, and Barbie organized JAM partnership wherein Jamie contributed P3,200,000 for 20% interest in the partnership. Barbie contributed P 9,600,000 for a capital credit of P8,000,000. After closing the accounting book, Anthony and Barbie withdrew the following amounts respectively: P800,000 and P960,000. Profit or Loss arrangement are agreed as follows: Annual salary of P40,000, P32,000 and P24,000 respectively The remainder will be divided in the ratio of 2:3:5 On December 31, 2021 the capital balance of Jamie is P3,224,000. 1. What is the net income / (net loss) of the partnership for the year ended December 31, 2021? 2. What is the capital balance of Barbie on December 31, 2021? Number 3 If a retiring partner receives more than his adjusted capital balance before retirement, what is the logical reason if the capital balances of the remaining partner decrease after the said retirement? A. Bonus is given by remaining partners to retiring partner B. Bonus is given by retiring partner to remaining partners C. Goodwill arising from retirement of a partner is recognized. D. Impairment loss of an existing asset is recognized at the time of retirement. Number 4 Kevin, a partner in a law firm, decided to withdraw from the partnership. Kevin's share in the partnership profits and losses was 20%. Upon withdrawal from the partnership he was paid cash in final settlement for his interest. The total of the partners' capital account before the recognition of the revaluation prior to Kevin's withdrawal was P315,000. After his withdrawal the remaining partners' capital accounts, excluding their share of revaluation, totaled P246,000, but including their share of revaluation, totaled P384,000. 4. What is the total amount of cash paid to Kevin?Number 24, 25 and 26 Karrie, Mundo and Elise formed a partnership to be named KME Co-Partnership on January 1, 2020. Karrie contributed sufficient cash for & 20% capitalization in the partnership. Mundo contributed an equipment that cost him P 900,000 and accumulated depreciation of P 300,000, This equipment was sold on January 2, 2020 for P 360,000. Mundo has 30% share in the partnership assets and liabilities. Meanwhile Elise contributed the following assets and liabilities. Cash 60,000 Accounts Receivable 300,000 Inventory 240,000 Property, Plant and Equipment 1,200,000 Accounts Payable 300,000 Mortgage Payable 600,000 Elise Capital 900,000 An allowance for doubtful accounts should be recognize at 20% and inventory must be carried in the partnership books at P300,000. Moreover, an accumulated depreciation must be recognized for P300,000. 24. What is the cash contributed by Karrie to the partnership? 25. What is the capital credit of Elise? 26. What is the total capital of the partnership?Number 27 Walang Jowa Company is under liquidation and a trustee is appointed to liquidate the company. The following data were provided in relation to the liquidation: Assets at book value P200,000 Assets at net realizable value 150,000 Liabilities at book value: Fully secured 80,000 Unsecured 90,000 Unrecorded liabilities: Accrued interest 620 Administrative expenses 6,580 27. What is the estimated deficiency?Number 28 At the time of corporate liquidation, the preferred stockholders were not able to receive anything. Which corporate creditors were certainly paid in full in the absence of other data? I. Fully secured creditors II. Partially secured creditors III. Unsecured creditors with priority W. Unsecured creditors without priority A. | only B. land ll only C. I, II and Ill only D. I, III Ill and IV Numberlsandi On January 1. 2020, an entity entered into a long'term construction contract to be completed on June 30, 2020 at an original contract price of P2400000. Due to the change in structural design as requested by the customerc the contract price increased by P3y00y000 for the year ended December 31, 2021. The Project was completed on September 30. 2022 which resulted to penalty of P1y200y000 for delayed construction. The following data were provided bythe cost accountant of the entity: 2020 2021 2022 Cost incurred du ring the year P3 50,000 P33342100 P456300 Estimated remaining cost to complete at the end of the year P1340300 P2490000 - 20. What is the realized gross loss to be recognized by the entity for the year ended December 31, 2021 under percentage of completion method? 30. What is the realized gross prot to be recognized by the entity for the year ended December 31, 2022 under cost recovery method? Number 31 and 3'2 On January 1. 2020, an entity entered into a long~term construction contract with fixed contract price of P2,500,000. The entity billed its client as follows: 30% during 2020, 40% do ring 2021 and the remainder at the year of project completion. The following data were provided by the cost accountant of the entity. 2020 2021 2022 Cumulative Cost incurred as of the end of the year 1,300,000 2,400,000 Estimated remaining cost to complete at the end of the year 1,650,000 _ 31. What is the excess of construction in progress over progress billings on December 31, 2020 under percentage of completion method? 32. What is the excess of construction in progress over progress billings on December 31, 2021 under cost recovery method? Number 3'3 In what year will the balance of construction in progress under percentage of completion method he certainly equal to the balance of construction in progress under cost recovery method? A. In the year when the entity recognizes realized gross loss under percentage of completion method. B. In the year when the entity recognizes realized gross loss under cost recovery method. C. In the year when the entity recognizes realized gross prot under percentage of completion method D. In the year when the entity recognizes realized loss prot under cost recovery method. Number!!! Under PFRS 15, when shall a consignor recognize revenue from consignment sales? A. When the consigner delivers the consigned goods to the consignee. B. when the consignor and consignee enter into a contract. C. when the consignee actually remits to the consignor the net proceeds from the sale of consigned goods to third persons. D. When the consignee sells and delivers the consigned goods to third persons. Number 35 Under FFRS 15, which ofthe criteria will justify an entity to recognize revenue from contract with customers over a period of time? A. When the entity's performance creates or enhances an asset that the customer controls as the asset is created. B. 1lll'u'hen the entity has transferred physical possession of the asset which is the subject matter of the performance obligation. C. when the customer acquires the signicant risks and rewards related to the owners hip of the asset upon full payment of the price. D. 1When the customer obtains legal title to the asset upon the execution of the formality required by Number 36 Under Philippine GAAP, what is the proper classification in the financial statement of deferred gross we account resulting from the application of installment method of revenue recognition of installment sales? A. Unearned revenue account in the liability section of Statement of Financial Position B. Contra-account to installment receivable in the asset section of Statement of Financial Position C. Revenue account in the income section of Income Statement D. Loss in the expense section of Income StatementNumber 37 On January 1, 2020, Mechathon Inc. accepted a long-term construction contract to build a condominium with a total contract price of P27,000,000. For the two years ended December 31, 2020 and 2021, the following data were provided by Mechathon Inc.: 12/31/2020 12/31/2021 General administration cost which is not reimbursable under P1,800,000 P2,700,000 the contract for the year Site labor costs including site supervision for the year 3,150,000 4,500,000 Selling costs for the year 3,600,000 900,000 Cost of direct materials used in construction for the year 2,250,000 3,060,000 Estimated cost to complete the condominium at year end 3,600,000 3,240,000 Mechathon Inc. billed its client 30% during 2020 and 40% during 2021. The outcome of the construction contract can be estimated reliably. 37. What is the balance of the Construction in Progress in excess of Progress Billings / (Progress Billings in excess of Construction in Progress) to be presented in the Mechathron's December 31, 2021 Statement of Financial Position? Number 38 If the collection of the long-term note received as consideration for initial services rendered by Franchisor to Franchisee is unlikely but not remote, what method shall be used by the franchisor to recognize gross profit from initial franchise fee revenue? A. Accrual basis B. Cost recovery method C. Installment method D. Percentage of completion methodNumber 39 On November 1, 2020, Cebu Express Motors which maintains a perpetual inventory records sold a new automobile to Speedex for P6,120,000. The cost of the car to the seller was P4,684,500. The buyer paid 30% down and received P576,000 allowance on an old car traded, the balance being paid in equal monthly instalment payments commencing the month of sale. The monthly amortization was P216,000 inclusive of 12% interest and unpaid amount of the obligation. The car traded- in has a wholesale value of P864,000 after expending reconditioning cost of P162,000. After paying three installments, the buyer defaulted, and the car was subsequently repossessed. When reacquired, the car was appraised to have a fair value of P2,160.000 39. How much is the realized gross profit on installment sales during 2020?Number 40 Eveready Co. sells heavy-duty batteries, which cost P7,000, at a total installment price of P12,000. A regular customer buys a unit and trades in his old unit for an allowance of P2,500. Eveready spends P250 to recondition each unit traded in and then sells them at P3,250 each. A profit of 20% results from the sale of used batteries. 40. What was the trade-in over-allowance granted to the customer? Number 41 to 45 On August 31, 2020, Lovely Co. consigned to Cute Co. ten ladies' handbags which cost Lovely P200 each. Lovely paid freight charges of P100 on the shipment. On September 30, 2020, Cute Co. submitted an account sales reporting that it sold for cash seven handbags for which it remitted P2,110 representing the net proceeds after deductions as follows: Commission 20% of sales price Advertising placed upon receipt of shipment P80 Total Delivery fee of units sold P50 41. The consignee sold the 7 handbags for a total of? 42. What is the gross profit of the consignor? 43. The Consignor realized a net income on the consignment amounting to? 44. The Consignee realized income from the sale of consigned handbags amounted to? 45. The inventory of unsold handbags at September 30, 2020 was valued at?Number 5 In the liquidation of general partnership, which of the following claims shall be settled first by the liquidating partner? A. Capital contribution by the managing partner B. Share in profit by the industrial partner C. Employee benefits of workers D. Advances made by capitalist partner to the Partnership Number 6 to 8 A balance sheet for the partnership of Mavi, Cong and Viy, who share profits in the ratio of 50:25:25, shows the following balance just before liquidation: Cash P 113,400 Mavi, capital (50% P 207,900 Other assets 562,275 Cong, capital (25%) 146,650 Liabilities 188,825 Viy, capital (25%) 132,300 On the first month of liquidation, the following occurs: Certain assets with book value of P500,000 were sold for P375,000. Liquidation expenses of P9,450 are paid and additional liquidation expenses are anticipated. Liabilities are paid amounting to P51,500 and sufficient cash is retained to ensure the payment to creditors before making payments to partners. . On the first payment to partners, Mavi receives P99,537.50. 6. What is the amount of cash withheld for anticipated liquidation expenses? 7. How much cash were received by Cong? 8. What is the balance of cash account after the first payment?Number .9 A partner retires from the partners and receives an amount higher than his capital balance at the time of his retirement. Under Philippine GMP. which of the following explanation is valid if the capital balanoes of the remaining partners increase after such retirement? A. Bonus has been given bvthe retiring partner to the remaining partners. B. Asset revaluation has been recognized all the time of retirement C. Goodwill arising from partner's retirement has been recognized. D. Bonus has been given by remaining partners to retiring partner. Number 10 In the absence of other relevant data, when a new partner is admitted in an existing partnership through the acquisition of capital interest of incumbent partners, which is always true? A. The partnership shall recognize gain or loss as a result of the disposal of capital interest. B. The total capital of the partnership will not change despite the admission of a new partner C. The total assets of the partnership will increase by the amount of the net proceeds of the disposal of capital interest. D. The partnership shall recognize goodwill arising from the admission of a new partner. Number 11 Under PFRS 15, when shall an entity recognize revenue from contracts with customers? A. When the entity becomes a party to a contract. B. When it is probable that any future economic benefit associate with the item of revenue will flow to the entity and the amount of revenue can be measured reliably. C. When (or as) the entity satisfies a performance obligation. D. When the entity receives the cash consideration. Number 12 and 13 On January 1, 2020, Royce, Stan and Timothy formed RST Partnership with total agreed capitalization of P4,000,000. The capital interest ratio of the RST Partnership is 5:1:4 while the profit or loss ratio is 3:2:5, respectively for Royce, Stan and Timothy. During 2019, Royce and Stan made additional investments of P800,000 and P2,000,000, respectively. At the end of 2020, Stan and Timothy made drawings of P1,200,000 and P400,000, respectively. On December 31, 2020, the capital balance of Stan is reported at P1,120,000. 12. What is the net income / (net loss) of RST Partnership for the year ended December 31, 2020? 13. What is the capital balance of Timothy on December 31, 2020?Number 14 Which of the following credits shall be settled first be the corporate liquidator in the winding up of the affairs of a dissolved corporation? A. Book value per share for the common stockholders of the dissolved corporation B. liquidation value per share for the preferred stockholders of the dissolved corporation C. Redemption value of the stocks for the redeemable preferred stockholders of the dissolved corporation D. Claims of the creditors of the dissolved corporation Number 15, 16 and 17 Lotte Inc. is engaged in the business of selling laptops at installment price. It is the policy of Lotte Inc. to recognize gross profit on its installment sales using installment method (Round DGP rate 2 decimal places, ex. 12345 = 12.35%). The company manufactures 10 laptops with the following production costs: Direct materials P75,000 Direct labor 15,000 Factory overhead 60,000 On January 1, 2020, Lotte Inc. sold to different students all the laptops at an installment price of P37,500 each payable as follows: . P15,000 down payment on January 1, 2020. The balance payable in three equal annual installments every December 31. The customer issued a non-interest bearing promissory note for the balance. The prevailing market rate for the similar note is 10%. (PV Factor = 2.48685) Lotte Inc. has reported the following operating expenses: 2020 2021 2022 Total marketing expenses 8,625 8,400 16,800 Total administrative expenses 4,875 6,600 5,700 On December 31, 2020, Lotte Inc. was able to collect all the installments due. On December 31, 2021, Lotte Inc. collected all the installments due except for those of the buyers of two laptops who defaulted on the installment due. As a result, Lotte Inc. repossessed the two laptops.At December 31, 2021, the repossessed laptop has an estimated selling price per unit of P5,625 after reconditioning cost in the amount of P750. The normal profit for each repossessed laptop is estimated at 20%. On July 1, 2022, LT Inc. was able to sell the two repossessed laptops at cash price of P7,500 each after reconditioning them. On December 31, 2022, LT Inc. was able to collect all the remaining installments due. 15. What is the net income to be reported by Lotte Inc. for the year ended December 31, 2020? 16. What is the net income to be reported by Lotte Inc. for the year ended December 31, 2021? 17. What is the net income to be reported by Lotte Inc. for the year ended December 31, 2022? Number 18 What is the accounting treatment to the excess of the net installment receivable (installment receivable minus deferred gross profit) over the fair value of the repossessed inventory at the date of the repossession of inventory due to the default of the installment balance? A. Deferred gain on repossession classified as liability B. Loss on repossession as part of profit or loss C. Deferred loss on repossession as part of other comprehensive income D. Gain on repossession as part of other comprehensive incomeNumber 1.9 When will the balance of construction in progress computed under cost recovery method be higher than the balance of construction in progress computed under percentage of completion method? A. In the year when the estimated contract price is lower than the estimated total construction cost. B. In the year when the entity reported realized gross profit under cost recovery method. [2. In the year when entity reported realized gross loss under percentage of completion method. D. Such scenario will never happen throughout the lifetime of the project. Number 20 and 2'1 'vien Inc. granted a franchise to Junnie Inc. to operate its registered business of computer shop. The contract was signed on January 1. 2020 with initial franchise fee of P500000 payable in P200000 cash and the balance in ve equal semi- annual installments every June 30 and December 31. The non-interest bearing promissory note {reasonably assured] has implicit rate of 10% [P12 Factor = 4.32943]. The contract provides that Junnie Inc. shall pay contingent franchise fee equal to 5'96 of the revenue from the computer shop. Junnie Inc. reported a revenue in the amount of P100,000 during 2020. vien Inc. has substantially performed all the services required under the franchise contract. 20. What is the total income to be recognized by Vien Inc. for the year ended December 31, 2020? 21. How much is the Total Franchise Revenue for the year ended December 31, 2020? Number 22 Under PFRS 15, what is measurement basis of revenue from contract with customers? A. Historical cost of the consideration received or receivable B. Book value of the consideration received or receivable C. Fair value of the consideration received or receivable [1. Recoverable amount of the consideration received or receivable Number 23 In the absence of profit agreement, how shall the profits of the partnership be distributed to capitalist partners assuming there is no industrial partner? A. It shall be divided in accordance with the loss agreement ratio. B. It shall be divided in accordance with capital contribution ratio. C. It shall be divided equally. D. It shall be forfeited in favor of the state