AP Solutions 2012

7/28/2019 AP Solutions 2012

1/13

AUDITING PROBLEMS CPA Review

PROBLEM NO. 1 TOY COMPANY

1.A

Acquisition cost (P8,297,000 P297,000 = P8,000,000 x75%) P6,000,000Reconditioning cost 342,000Salvaged materials garage (66,000)Construction of warehouse 1,013,000

Total cost - Buildings P7,289,000

2. B Land - acquisition cost (P8,000,000 x 25%) P2,000,000

3. B Machinery (P310,000 + P610,000) P920,000

4. C Share premium (P640,000 P40,000) + (P1,110,000 P1,000,000)P710,000

5.A

Patent (P640,000 P310,000) P330,000Franchise 500,000Total intangibles P830,000

PROBLEM NO. 2 LAFAYETTE CORPORATION

Computation of Estimated Loss on Returns on Sales WarrantiesSubsequent to June 30, 2012

Month Sales

Percentage

ofEstimatedReturns

TotalEstimated

Returns

Percentage ofEstimated

Returns Sub-sequent to

6/30/12

TotalEstimated

Returns Sub-sequent to

6/30/12

January P4,200,000 7% P294,000 10% P29,400

February 4,700,000 7 329,000 20 65,800

March 3,900,000 7 273,000 30 81,900

April 3,250,000 7 227,500 50 113,750

May 2,400,000 10 240,000 70 168,000June 1,900,000 10 190,000 100 190,000

P1,553,500 P648,850

Total estimated returns............... P648,850 Required liability balance....... P421,753Loss percentage on returns......... 65% * Less balance, 6/30/12............ 120,400

Total estimated loss on returns... P421,753 Required adjustment to

liability account P301,353

*Estimated loss on component replacement (in percentage of sales price):

Cost of unit replacement 70%

Add freight charges on return and replacement 5

75%

Deduct salvage value of components returned 10

Net loss on components returned 65%

Adjusting Entry

Warranty Expense 301,353

Estimated Liability for Product Warranty 301,353

1. D 2. B 3. A 4. B 5. B

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PROBLEM NO. 3 MALOX SPECIALTY COMPANY

FG WIP RM FS

Down tube shifters at NRV P266,000Bar end shifters at cost 182,000Head tube shifters at cost 195,000Work-in-process at NRV P108,700Derailleurs at NRV P110,0001

Remaining items at NRV 127,400Supplies at cost P64,8002Totals P643,000 P108,700 P237,400 P64,800

1P264,000 x = P132,000; P132,000/1.2 = P110,0002P69,000 P4,200 = P64,800

1. B 2. C 3. D 4. A 5. C

PROBLEM NO. 4 GATAS COMPANY

1. C Cows (15,000 x P4,000) P60,000,000

Heifers (1,000 x P3,000) 3,000,000Fair value, Nov. 1, 2010 P63,000,000

2. A Cows (15,000 x P5,000) P 75,000,000Heifers (1,000 x P4,500) 4,500,000Heifers (7,500 x P3,600) 27,000,000Fair value, Oct. 31, 2011 P106,500,000

3. C Increase in fair value due to price change:Cows 15,000 x P(4,500-4,000) P7,500,000Heifers 1,000 x P(3,200-3,000) 200,000Heifers 7,500 x P(3,200-3,000) 1,500,000

Total P9,200,000

4. B Increase in fair value due to physical change:Cows 15,000 x P(5,000-4,500) P7,500,000Heifers 1,000 x P(4,500-3,200) 1,300,000Heifers 7,500 x P(3,600-3,200) 3,000,000

Total P11,800,000

5. A Fair value of cattle in Central Visayas:Cows (6,000 x P5,000) P30,000,000Heifers (2,000 x P4,500) 9,000,000

Total P39,000,000

PROBLEM NO. 5 MINA MINING CO.

Depletable/Depreciable CostEstimated ReservesDepletion/DepreciationMineral propertyP 26,100,0001 120,000 P217.50Building 1,080,000 120,000 9.00Machinery (1/2) 900,000 120,000 7.50Machinery (1/2) 900,000 120,000 15.00 2

1P27,000,000 P900,0002P900,000/120,000) x 2

1. D Year 1

Depletion DepreciationMineral property (P217.50 x 6,000) P1,305,000Building (P9 x 6,000) P 54,000Machinery (1/2) (P7.50 x 6,000) 45,000Machinery (1/2) (P15 x 6,000) 90,000

P1,305,000P189,000

2. C Year 5

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Depletion DepreciationMineral property (P217.50 x 12,000) P2,610,000Building (P9 x 12,000) P108,000Machinery (1/2) (P7.50 x 12,000) 90,000Machinery (1/2) (P15 x 12,000) 180,000

P2,610,000P378,000

3. D Year 6Depletion Depreciation

Mineral property (P217.50 x 12,000) P2,610,000Building (P9 x 12,000) P108,000Machinery (1/2) (P7.50 x 12,000) 90,000Machinery (1/2) (P15 x 6,000) 90,000

P2,610,000P288,000

4. A Year 11Depletion Depreciation

Mineral property (P217.50 x 6,000) P1,305,000Building (P9 x 6,000) P54,000Machinery (1/2) (P7.50 x 6,000) 45,000Machinery (1/2) --

P1,305,000P99,000

5. A Year 1Depletion Depreciation

Mineral property (P217.50 x 5,000) P1,087,500Building (P9 x 5,000) P 45,000Machinery (1/2) (P7.50 x 5,000) 37,500Machinery (1/2) (P15 x 5,000) 75,000

P1,087,500P157,500

PROBLEM NO. 6 DEBBY CORP.

1. B Land (appraised value) P8,700,000

2. A Total purchase price P12,000,000Less: Land appraisal 8,700,000Balance of purchase price to be allocated P 3,300,000

Appraisal Value Ratios Allocated Values

Building P3,150,000 315/450 = 0.70 x P3,300,000 P2,310,000Machinery 1,350,000 135/450 = 0.30 x P3,300,000 990,000P4,500,000 P3,300,000

Building (allocated value) P2,310,000Renovations

3,000,000Capitalized interest (P3,000,000 x 12%) 360,000Total cost of building P5,670,000

3. D Machinery (allocated value) P990,000

4. C 2012 Depreciation Building (P5,670,000 x 10%* x ) P283,500* 150% x 1/15

5. B 2012 Depreciation Machinery (P990,000 x 40%* x ) P198,000* 200% x 1/5

PROBLEM NO. 7 FISHING CORPORATION

1. C Sales price of Salmon ordinary shares (P70 x 1,200) P84,000

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Acquisition cost (P660,000 x 1,200/13,200) 60,000Gain on sale of Salmon ordinary shares P24,000

2. D

3. C Investment in equity securities 72,000Dividend income (P1.20 x 60,000 shares) 72,000

4. B Unrealized loss (P3,000,000 P2,808,000) P192,000

Investment Quantity Cost Fair ValueSalmon Company 12,000 shares P 600,000 P 888,000 1

Tamban, Inc. 60,000 shares 2,400,000 1,920,000 2

Totals P3,000,000 P2,808,0001 P74 x 12,000 shares2 P32 x 60,000 shares

5. ACost Net Realizable Value Lower

Aluminum siding P 210,000 P 168,000 P 168,000Cedar shake siding 258,000 254,400 254,400Louvered glass doors 336,000 504,900 336,000Thermal windows 420,000 420,000 420,000

P1,224,000 P1,347,300 P1,178,400

PROBLEM NO. 8 GARLA HOME IPROVEMENTS/MANGO BANGGO

1. B Allowance to reduce inventory to NRV, May 31, 2012(P1,224,000 P1,178,400) P45,600

2. A Allowance balance prior to adjustment P82,500Required allowance balance 45,600Gain to be recorded P36,900

3. B Gain from change in fair value of biological asset P45,000

4. A Agricultural produce, at fair value P90,000

5. A Gain from change in fair value biological asset P 45,000Gain from change in fair value agricultural produce 90,000Gross profit on sold mangoes 15,000

Total effect on income P150,000

PROBLEM NO. 9

1.Cost of trademark P300,000Less: Accumulated amortization, 20X4 20X6 (P300,000/10 x 3 yrs.) 90,000

Carrying value, December 31, 20X6 P210,000

Remaining useful life, 20X7 20X9 3 years

Amortization for 20X7 P 70,000

Answer: B

2.

Cost P300,000

Less: Accumulated amortization, 20X4 20X7 (P90,000 + P70,000) 160,000


Recoverable value 50,000

Impairment loss P 90,000

Answer: A

3.

Probability-weighted expected cash flows:

P400,000 x 5% P 20,000

P200,000 x 20% 40,000

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P80,000 x 50% 40,000

P20,000 x 25% 5,000

Total P105,000Add: 6% risk adjustment 6,300

Total P111,300Present value factor (at 5% for 6 months) 0.95238

Present value of warranties, December 31, 20X2 P106,000

Answer: D

4. It is probable that SME B will successfully defend the court case. Therefore, SME B has apossible obligation and hence a contingent liability. No amounts are recognized forcontingent liabilities. However, disclosure is necessary.

Answer: D

5.

Cost of investment in entity DD (P28,000 x 101%) P28,280

Fair value less cost to sell (P15,000 x 95%) 14,250

Impairment loss P14,030

Answer: B

6.

Impairment loss P(14,030)

Cash dividends (P2,000 + P250) 2,250

Net P(11,780 )

Answer: A

7.Cost of investment in entity DD (P28,000 x 101%) P28,280

Less: Share of entity DDs loss (P20,000 x 25%) 5,000


Fair value less cost to sell (P15,000 x 95%) 14,250Impairment loss P 9,030

Answer: C

8.Share of income, entities BB and CC (P1,250 + P4,500) P5,750

Share of loss, entity DD (5,000)

Impairment loss (9,030 )

Net P(8,280 )

Answer: A

9. Cost Fair ValueBB P10,000 P13,000

CC 15,000 29,000

DD 28,000 15,000

P53,000 P57,000

Increase in fair value (P57,000 P53,000) P4,000

Answer: A

10.

Cost model:

Acquisition cost, including transaction cost (P53,000 + P530) P53,530Less: Impairment loss 14,030Carrying value, December 31, 20X1 P39,500

Equity method:

Acquisition cost, including transaction cost P53,530

Cash dividends (P250 + P2,000) (2,250)

Share of income, entities BB and CC (P1,250 + P4,500) 5,750

Share of loss, entity DD (5,000)

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Impairment loss (9,030)


Fair value model:

BB P13,000CC 29,000

DD 15,000

Carrying value, December 31, 20X1 P57,000Answer: C

PROBLEM NO. 10 HIATT TEXTILE CORPORATION

ADJUSTING JOURNAL ENTRIESDecember 31, 2012

1. Prepaid insurance (P31,000 x 3/5) 18,600Insurance expense (P31,000 x 1/5) 6,200

Retained earnings (P31,000 x 4/5) 24,800

2. Allowance for bad debts 25,000Bad debt expense 25,000

(2% - 1 % = % x P5,000,000)

3. Retained earnings 75,500

Cost of goods sold (P99,000 P75,500) 23,500

Inventory 99,000

4. Equipment 150,000

Depreciation expense

(P125,000 x 1/10) 12,500

Retained earnings (P150,000 P12,500) 137,500Accumulated depreciation Equipment 25,000

(P125,000 x 2/10)

2012 2011Reported net income P1,100,000 P975,000

Prepaid insurance charged to expense (6,200) 24,800

Decrease in bad debt expense rate 25,000

Ending inventory overstated:

Cost of machine charged to expense 150,000

Unrecorded depreciation (12,500 ) (12,500 )Corrected net income P1,082,800 P1,061,800

1. A 2. B 3. C 4. D 5. C

PROBLEM NO. 11 BENEFICIO CORPORATION

1.

Sales P 898,000

Gain on sale of trading securities 12,000

Cost of goods sold (539,000)

Selling and general expenses (287,000)Income taxes (35,000)

Unrealized loss on trading securities (4,000)Loss on sale of equipment (1,000)

Net income P 44,000

Answer: D

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2.

Unappropriated retained earnings, Dec. 31, 2011 P112,000Net income (see no. 1) 44,000

Decrease in appropriation for treasury stock 5,000

Increase in appropriation for possible building expansion (15,000)

Stock dividend declared (100,000 issued 1,000 treasury =

99,000 outstanding x 30% x P2) (59,400)Remaining unappropriated retained earnings 86,600

Unappropriated retained earnings, Dec. 31, 2012, including

net income for 2012* 78,600Assumed cash dividends declared and paid during 2011 P 8,000

Answer: A

3.

Increase in common stock (P359,400 P200,000) P159,400

Less: Stock dividend (P2 x 99,000 x 30%) 59,400

Par value of additional common stock issued in 2012 P100,000

Increase in share premium (P116,000 P5,000) P111,000

Less: APIC from resale of treasury stock at more than cost 1,000APIC from stock issued in 2012 P110,000

Proceeds from issuance of ordinary shares in 2012(P100,000 + P110,000) P210,000

Answer: C

4.

Net decrease in investment in trading securities P 30,000

Less: Unrealized loss on trading securities 4,000Carrying value of trading securities sold 26,000

Add: Gain on sale of trading securities 12,000Proceeds from sale of trading securities P38,000

Answer: B

5.

Proceeds from sale of equipment (see information b) P 7,000

Add: Loss on sale of equipment 1,000Book value of equipment sold 8,000

Cost of equipment sold (see information b) 15,000Accumulated depreciation of equipment sold P 7,000

Answer: A

6.

Net increase in equipment (P305,000 P170,000) P135,000

Sale of equipment (see information b) 15,000Purchase of equipment 150,000*

Less:Note payable issued 50,000Cash paid P100,000

Answer: D

* Equipment

Bal. 12/31/10 170,000 15,000 Sale

Purchase(SQUEEZE) 150,000Bal. 12/31/11 305,000

7.

Cost of treasury stock sold (P10,000 P5,000) P5,000APIC from sale of treasury stock 1,000

Proceeds from sale of treasury stock P6,000

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Answer: A

8. CASH FLOWS FROM OPERATING ACTIVITIES

Net income P 44,000

Depreciation expense (P3,750 + P25,250) 29,000

Loss on sale of equipment 1,000Unrealized loss on trading securities 4,000

Amortization of bond discount (P9,000 P8,500) 500Gain on sale of trading securities (12,000)

Proceeds from sale of trading securities (see no. 4) 38,000*

Decrease in deferred tax liability (6,300)

Increase in net accounts receivable (45,000)

Decrease in inventories 9,000

Increase in prepaid insurance (500)

Decrease in accounts payable (5,000)

Increase in accrued expenses payable 9,300Increase in income taxes payable 25,000

Decrease in unearned revenue (8,000)

Net cash provided by operating activities P 83,000

Answer: C

9. CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of equipment (see no. 6) P(100,000)Overhaul of equipment (see information h) (6,000)

Sale of equipment (see information b) 7,000Net cash used in investing activities P(99,000)

Answer: B

10. CASH FLOWS FROM FINANCING ACTIVITIES

Payment of cash dividends (see no. 2) P (8,000)

Retirement of notes payable (P60,000 P40,000) (20,000)

Sale of treasury stock (see no. 7) 6,000Issuance of common stock (see no. 3) 210,000

Net cash provided by financing activities P188,000

Answer: A

PROBLEM NO. 12 CORNETTE MANUFACTURING COMPANY

1.

Cash price P171,000Freight charges 1,326

Installation cost 5,274

Total cost of machine 3 P177,600

Answer: B2.

Cash price P45,600Repainting cost 1,965

New tires 1,035

Total cost of second-hand vehicle acquired P48,600

Answer: D

3. Fair value of the machine given up P34,500

Answer: A

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4.

Cost of machine 1 P129,000

Accumulated depreciation, Oct. 7, 2008 Aug. 28, 2012(P129,000 P7,500 = P121,500/5 x 3 11/12) (95,175)

Carrying value 33,825

Fair value 34,500

Gain on exchange P 675Answer: D

5.

Depreciation expense for 2012:

Buildings ([P557,160 P15,000]/20 years) P 27,108

Machinery:

1 ([P129,000 P7,500]/5 X 8/12) P16,200

2 ([P144,000 P9,000]/6) 22,5003 ([P177,600 P12,000]/5) 33,120 71,820

Vehicles:

Old ([P140,400 P58,968] x 40%) P32,573New (P48,600 x 40% x 6/12) 9,720 42,293

Office furniture

([P34,500 P1,620]/8 x 4/12) 1,370

Total P142,591

Answer: D6.

Proceeds from sale P19,800

Carrying value, Jan. 1 ([P81,432 P32,573] x ) P24,430

Depreciation, Jan. 1 May 25 (P24,430 x 40% x 5/12) (4,072) (20,358)

Loss on sale P (558)

Answer:A

7.Depreciation expense for 2013:

Buildings P 27,108Machinery:

2 P22,500

3 33,120 55,620

Vehicles:

Old sold on May 25, 2013 P4,072

Old still on hand on 12/31/13 (P24,430 x 40%) 9,772 9,772

New ([P48,600 P9,720] x 40%) 15,552 29,396

Office furniture (P32,880/8) 4,110Land improvements (P16,500/10 x 6/12) 825

Total P117,059

Answer: B

8.

Total cost of machine 2 (P144,000 + P36,000 cost of overhaul) P180,000

Accumulated depreciation, Feb. 4, 2008 Jan. 5, 2014:

([P144,000 P9,000]/6 x 4 11/12) 110,625Carrying value 69,375

Revised residual value (15,000)

Remaining depreciable cost P 54,375

Revised remaining life (6-4 11/12+1) 25 months

Revised annual depreciation (P54,375/25 x 12) P26,100

Answer: C

9.

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Cash paid P69,900

Trade in value of old vehicle 11,100

Total cost of new vehicle P81,000

Answer: A

10.

Depreciation expense for 2014:

Buildings P 27,108

Machinery:

2 P26,100

3 33,120 59,220

Vehicles:

Old traded-in on June 20([P24,430 P9,772] x 40% X 6/12) P 2,932

Acquired June 20 through trade-in(P81,000 x 40% X 6/12) 16,200

Acquired June 22, 2011, scrapped

Oct. 4, 2013 ([P38,880 P15,552] x 40% X 9/12) 6,998 26,130

Office furniture 4,110Land improvements (P16,500/10) 1,650

Total P118,218

Answer: C

PROBLEM NO. 13 CHELSEE COMPANY

1.

Outstanding checks, December 31 (P49,400 P1,400 P8,000) P40,000

Answer: D

Balance December BalanceNov. 30 Receipts Disb . Dec. 31

Per bank statement P194,000 P1,487,000 P1,325,000 P356,000

Outstanding checks:

Nov. 30 (23,000) (23,000)

Dec. 31 40,000 (40,000)

Deposits in transit:

Nov. 30 11,000 (11,000)

Dec. 31 24,000 24,000Interest on note discounted

(P90,000 x 6% 60/360) 900 900NSF checks (4,000) (4,000)

Bank service charge (300) 300

Cancellation of check no. 1434 1,400 (1,400)

Error in recording check no. 1562

(P7,500 P750) 6,750 (6,750)

Cancellation of check no. 1584 8,000 (8,000)

Counter check drawn by president (2,000) 2,000

Check of Chelsea charge inerror (3,000) 3,000

Postdated check presented forpayment (100,000) 100,000

Per book balances P182,000 P1,496,900 P1,248,850 P430,050

2. A 3. D 4. C

5.

Book Bank

Unadjusted balances P430,050 P356,000Outstanding checks (40,000)

Deposits in transit 24,000

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Interest on note discounted (900)

Bank service charge (300)

Cancellation of check no. 1434 1,400Error in recording check no. 1562 6,750

Cancellation of check no. 1584 8,000Counter check (2,000)

Check of Chelsea charged in error 3,000

Postdated check presented for payment (100,000)Adjusted balance P343,000 P343,000

Answer: A

PROBLEM NO. 14 SABILA COMPANY

1.

Accounts receivable, Dec. 31, 2012 P 33,000Add: Collections, 2010 2012 567,600

Total 600,600Less:Accounts receivable, Jan. 1, 2010 16,600

Total credit sales 584,000Add: Cash sales, 2010 2012 74,200

Total sales, 2010 2012 P658,200

Answer: A

2.

Sales revenue for 2011 (see no. 5) P206,400

Answer: A

3.

Accounts payable, Dec. 31, 2012 P 11,000

Add: Payments to suppliers 440,000Total 451,000Less:Accounts payable, Jan. 1, 2012 5,000

Total purchases, 2010 2012 P446,000

Answer: D

4.Sales (see no. 1) P658,200

Less: Cost of sales

Inventory, Jan. 1, 2010 P 11,600

Add: Purchases (see no. 3) 446,000

Goods available for sale 457,600Less:Inventory, Dec. 31, 2012 18,800 438,800

Gross profit P219,400

Gross profit ratio (P219,400 / P658,200) 33 1/3%

Answer: A

5.

2010 2011 2012 TotalCash sales P 17,000 P 26,000 P 31,200 P 74,200

Collections in:2010 148,800 - - 148,800

2011 15,000 161,800 - 176,800

2012 2,000 16,800 208,800 227,600

A/R, Dec. 31 800 1,800 28,200 30,800

Total sales 183,600 206,400 268,200 658,200

Multiply by gross profit ratio 33 1/3% 33 1/3% 33 1/3% 33 1/3%

Gross profit P 61,200 P 68,800 P 89,400 P219,400

Answer: D

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PROBLEM NO. 15 MABUHAY COMPANY

1.Sales proceeds (P69 x 4,000) P276,000

Carrying value (P528,250 x 4/8) 264,125Gain on sale of Toronto shares P 11,875

Answer: C

2.

Sales proceeds (P62 x 4,000) P248,000

Unrealized gain on share sold (P40,000 x 4/10) 16,000

Total P264,000

Carrying value (P630,000 x 4/10) 252,000Gain on sale of Bulacan shares P 12,000

Or

Sales proceeds P248,000

Cost of Bulacan shares sold (P590,000 x 4/10) 236,000

Gain on sale of Bulacan shares P 12,000

Answer: A

3.

Yemen Corp. stock (P76.60 x 13,000) P 995,800

Toronto, Inc. stock (P68.50 x 4,000) 274,000

Manila Water bonds 205,550

Pasay Co. stock (P55.25 x 15,000) 828,750Carrying value (Fair value), December 31, 2012 P2,304,100

Answer: C

4.

Bulacan, Inc. stock (P61 x 6,000) P366,000

Jumbo Unlimited, Inc. stock (P27 x 20,000) 540,000

Carrying value (Fair value), December 31, 2012 P906,000

Answer: C

5.Balance of trading securities, December 31, 2011 P1,477,500

Cost of 3,000 Yemen shares purchased on March 1 229,500Carrying value of Toronto stock sold on April 15 (264,125)

Cost of Pasay shares purchased on October 30 832,500

Balance before market adjustment P2,275,375Market value, December 31, 2012 2,304,100

Unrealized gain Trading Securities P 28,725

Balance of AFS securities, December 31, 2011 P1,180,000

Carrying value of Bulacan stock sold on May 4 (252,000)Balance before market adjustment P 928,000

Market value, December 31, 2012 906,000Decrease in unrealized gain AFS P (22,000)

Balance of unrealized gain AFS, 12/31/12 (P100,000 P16,000) 84,000

Unrealized gain to be reported in equity P 62,000

Or

Cost of Bulacan stock (P590,000 x 6/10) P354,000

Cost of Jumbo Unlimited, Inc. stock 490,000

Total cost P844,000

Market value, December 31, 2012 906,000

Unrealized gain AFS, December 31, 2012 P 62,000

Answer: A

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PROBLEM NO. 16 BABOLS COMPANY

COMPUTATIONSSUMMARY INCREASES

(DECREASES) IN INCOME

2010 2011 2012 2010 2011 2012

1. Net income as reported P143,200 P222,800 P207,160

2. Elimination of profit on

consignments:

Billed at 130% of cost 13,000 11,180Cost (/130%) 10,000 8,600

Profit error 3,000 3,000 2,580 (3,000) 3,000 (2,580)

3. To correct COD sale 12,200 (12,200)

4. Adjustment of warranty expense:

Sales per books 1,880,000 2,020,000 3,590,000

Corrections for Consignments (13,000) 13,000 (11,180)

Correction for COD sale 12,200 (12,200 )

Corrected sales 1,867,000 1,867,000 2,045,200 3,566,620

Normal warranty expense

(1/2 of 1%) 9,335 10,226 17,833

Costs charged to expense (1,520

) (3,340

) (7,700

)

Additional expense 7,815 6,886 10,133 (7,815) (6,886) (10,133)

5. Bad debt adjustments:Normal bad debt expense,

of 1% of sales 4,668 5,113 8,917

Previous write-offs (1,500) (2,640) (7,700)

Additional expenses 3,168 2,473 1,217 (3,168) (2,473) (1,217)

6. Adjustment for commissions (2,800

) 1,200 (640)

126,417 229,841 180,390

7. Adjustment for bonus, of 1% of income before

taxes & bonus (632

) (1,149

) (902)

INCOME BEFORE INCOME TAXES P125,785 P228,692 P179,488

1. A 2. D 3. B 4. A 5. A 6. D 7. A 8. C 9. A 10. A

--- END ---

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AP Solutions 2012

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