CPA-quizbowl-2008-1

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Page 1 of 10 www.prtc.com.ph

EASY

1. Which of the following is not regarded as constituting a separate element in the Framework for the Preparation andPresentation of Financial Statements?a. Income c Expenseb. ain d. E!uit"

#. $t the date of purchase of a ser%ice which is not immediatel" used up& the cost of such unused ser%ice is a'n()

a. re%enue c. assetb. liabilit" d. expense

*. +e%enue from an artistic performance is recogni,ed oncea. -he audience register for the e%ent online.b. -he tickets for the concerts are sold.c. ash has been recei%ed from the ticket sales.d. -he e%ent takes place.

/. $n" gain on a subse!uent increase in the fair %alue less cost to sell of a noncurrent asset classified as held for saleshould be treated as follows)a. -he gain should be recogni,ed in full.b. -he gain should not be recogni,ed.c. -he gain should be recogni,ed but not in excess of the cumulati%e impairment loss.

d. -he gain should be recogni,ed but onl" in retained earnings.

0. When it is difficult to distinguish between a change of estimate and a change in accounting polic"& then an entit"shoulda. -reat the entire change as a change in estimate with appropriate disclosure.b. $pportion& on a reasonable basis& the relati%e amounts of change in estimate and the change in accounting polic"

and treat each one accordingl".c. -reat the entire change as a change in accounting polic".d. Since this change is a mixture of two t"pes of changes& it is best if it is ignored in the "ear of the change the

entit" should then wait for the following "ear to see how the change de%elops and then treat it accordingl".

2. Which of the following is the most reliable basis for determining the fair %alue of a biological asset and agriculturalproduce?a. -he !uoted market price in an acti%e market.

b. -he most recent market transaction price.c. 3arket prices for similar assets with ad4ustment to reflect differences.d. Sector benchmarks such as the %alue of cattle expressed per kilogram of meat.

5. -he classification of the lease is normall" carried outa. $t the end of the lease term.b. $fter 6cooling off7 period of one "ear.c. $t the inception of the lease.d. When the entit" deems it necessar".

8. 9nder P$S # Inventories & items of in%entor" that are used b" business enterprise as components in a self:constructedpropert" asset are re!uired to be)a. aggregated into the ;cost of goods sold< expense in the period in which the items are usedb. expensed directl" into e!uit" in the period in which the items are used

c. capitali,ed and depreciatedd. added to a ;propert" construction< pro%ision account.

=. Which of the following procedures would an auditor most likel" perform in planning a financial statement audit?a. Performing anal"tical procedures to identif" areas that ma" represent specific risks.b. +e%iewing in%estment transactions of the audit period to determine whether related parties were credited.c. +eading the minutes of stockholder and director meetings to disco%er whether an" unusual transactions ha%e

occurred.d. >btaining a written representation letter from the client to emphasi,e management

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PROFESSIONAL REVIEW and TRAINING CENTER, INC.

1#. In considering internal control within the re%enue@receipt c"cle& what is the purpose of a transaction walk through?a. -o assure that emplo"ees are performing assigned functions accuratel".b. -o confirm the auditor

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/. hamberlain E!uipment Inc. furnishes "ou with the following list of accounts)

$ccounts pa"able P 22&$ccounts recei%able / &$ccumulated depreciation //&$d%ances to sales persons 1 &$d%ertising Expense 5#&

$llowance for Aad Debts 1 &Aonds pa"able 8 &

ash ##&ertificates of deposit 12&

Share capital& 'par( 1 &Deferred income tax liabilit" /2&E!uipment #10&0In%entor" 00&In%estment in +owe >il o. shares

'/ H of outstanding shares owned( 52&0In%estment in Siebert o. shares 'trading securities( #1&Share premium /#&0Premium on Aonds Pa"able 2&Prepaid Insurance 2&

+ent re%enue *5&+ent re%enue recei%ed in ad%ance '/ months( 1#&+etained earnings =5&0-axes pa"able 1 &-ools 0#&

-he compan"A shipping point. Sales& net of returns and allowances&totaled P8& & for the "ear ended December *1& # 5 before "ear:end ad4ustments.$dditional data are as follows) In # 5& Deception transferred goods to a retailer on consignment. -he transaction was recorded as a sale b"

Deception. -he goods cost P/0& and normall" are sold at a * H markup. In # 8& P1#& 'cost( of merchandise was sold b" the retailer at the normal markup& and the balance of the merchandise was returned toDeception. -he retailer withheld a 10H commission from pa"ment.

>n December * & Deception ompan" segregated goods costing P1 & for future shipment to one of itscustomers& -all" ompan". -all" was billed P1* & . -all" is a regular customer& and Deception has beenexpecting an order for the past # weeks. -o make sure that sufficient goods are a%ailable when the order from-all" finall" does come& Deception has segregated the goods.

>n December * & Deception ompan" segregated goods costing P10 & for future shipment to one of itscustomers& Sall" ompan". Sall" was billed P1=0& . Sall" has re!uested& in writing& that Deception segregatethe goods. Sall" is conducting temporar" repairs to its storage warehouse& so Sall" has arranged to make itsshipments directl" from DeceptionGs warehouse for the duration of the repairs. -he goods ha%e been carefull"separated so that Deception emplo"ees donGt accidentall" ship them to another customer.

Deceptionne of the checks was returned in Canuar".

$ check was recei%ed and deposited for P150& in December. -he check was returned b" the bank in Canuar"market 6 SF7.

$ check from a customer for P85& & was recei%ed and deposited in December. In Canuar" it was disco%eredthat it was in pa"ment of an in%oice in the amount of P58& . $ check for P=& was issued and mailed b" thecompan" to the customer.

9sing the abo%e data& what is the total amount to be included in the cash balance for purpose of the December *1 5 balance sheet?a. P# *& c. P*85&b. P#1#& d. P*58&

5. >n Canuar" 1& # 5& + ompan" sold e!uipment with a carr"ing amount of P8 & to J ompan". $s pa"ment&J ga%e + ompan" a P1 & note. -he note bears an interest rate of 0H and is to be repaid in three annualinstallments of P/ & 'plus interest on the outstanding balance(. -he first pa"ment was recei%ed on December*1& # 5. -he market price of the e!uipment is not reliabl" determinable. -he pre%ailing rate of interest for notes of this t"pe is 1 H.

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-he interest income to be recogni,ed in # 8 is (Round off present value factors to four decimal places)a. P1 =&5*0 c. P5/&5 8b. P 2=&085 d. P/ &

8. -he $lcala ompan" counted its ending in%entor" on December *1. one of the following items were included whenthe total amount of the compan"A shipping point. P/ & in goods were sold b" $lcala and shipped on December * and were in transit on December *1 the

goods were recei%ed b" the customer on Canuar" #. -erms were F>A shipping point.

-he compan"ne animal aged #.0 "ears was purchased on 1 Cul"# 5 for 1 8& and one animal was born on 1 Cul" # 5. o animals were sold or disposed of during the period. Per:unit fair %alues less estimated point:of:sale costs were as follows)

# : "ear old animal on Canuar" 1& # 5 1ewborn animal at Cul" 1& # 5 5

#.0 : "ear old animal on Cul" 1& # 5 1 8ew born animal on December *1& # 5 5#.0 : "ear old animal on December *1& # 5 8

# : "ear old animal on December *1& # 5 1 0#.0 : "ear old animal on December *1& # 5 111* : "ear old animal on December *1& # 5 1#

-he increase in fair %alue of biological assets in # 5 due to price change is

a. P 00 c. P 0*b. P### d. P#1#

1 . >n December *1& # 5& harlton ac!uired an in%estment for P0 & plus a purchase commission of P1 & . -hein%estment is designated as a%ailable:for:sale. >n December *1& # 5& !uoted market price of the in%estment isP0 & . If the in%estment were sold& a commission of P10& would be paid. >n December *1& # 5& thein%estment should be carried ata. P01 & c. P/80&b. P/=0& d. P0 &

11. >n Canuar" 1& # 5& Doodles ompan" borrowed P0& & from a bank at a %ariable rate of interest for / "ears.Interest will be paid annuall" to the bank on December *1 and the principal is due on December *1& # 1 . 9nder theagreement& the market rate of interest on each Canuar" 1 resets the %ariable rate for that period and the amount of interest to be paid on December *1.

-o protect itself from fluctuations in interest rates& the entit" hedges the %ariable interest b" entering into a four:"earKrecei%e %ariable& pa" fixedK interest rate swap with a speculator. -he interest rate swap is based on the notionalamount of P0& & and an 8H fixed interest rate. -he entit" has designated this interest rates swap as a cashflow hedge of the %ariabilit" of interest pa"ments on the %ariable rate loan. $ssume that market interest rates are8H on Canuar" 1& # 5& 1 H on Canuar" 1& # 8& and 11H on Canuar" 1& # =. (Round off present value factors tofour decimal places)

-he amount to be recogni,ed as deri%ati%e asset on December *1& # 8 isa. P1##&180 c. P#02&850b. P*22&000 d. P 80&2#0

1#. In a cash flow hedge& the gain on the hedging instrument in the first period after designation is P2 & and the

loss on the hedged item is P8 & . Low much will be recogni,ed in profit or loss?a. P8 & c. P# &b. P2 & d. P

1*. >n Canuar" 1& # /& the Sahara ompan" purchased machiner" for P20 & which it installed in a rented factor". Itis depreciating the machiner" o%er 1# "ears b" the straight:line method to a residual %alue of P0 & . ate in # 8&because of increasing competition in the industr"& the compan" belie%es that its asset ma" be impaired and will ha%ea remaining useful life of 0 "ears& o%er which it estimates the asset will produce total cash inflows of P1& & andwill incur total cash outflows of P8#0& . -he cash flows are independent of the compan"Gs other acti%ities and will

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occur e%enl" each "ear. -he compan" is not able to determine the fair %alue based on a current selling price of themachiner". -he compan"Gs discount rate is 1 H. -he impairment loss to be recogni,ed in # 8 profit or loss isa. P#25&*## c. P#/2&/=b. P*15&*## d. P

1/. In # 2& epanto 3ining ompan" purchased propert" with natural resources for P#8& & . -he propert" had aresidual %alue of P0& & . Lowe%er& the compan" is re!uired to restore the propert" to its original condition for

P#& & .

In # 2& epanto spent P1& & in de%elopment costs and P*& & in buildings on the propert". epanto doesnot anticipate that the buildings will ha%e utilit" after the natural resources are remo%ed. In # 5& an amount of P1& & was spent for additional de%elopment on the mine. -he tonnage mined and estimated remaining tons for"ears # 2 to # 8 are as follows)

-ons extracted -ons remaining# 2 1 & 5 *& & 5& 8 *&0 & #& &

-he compan" should recogni,e depletion for # 8 ata. P1 &10 & c. P1//0&

b. P1#& / & d. P =&/0 &

10. P$D+E has 4ust ac!uired the net assets of $+ I$ for P1 & . In ac!uiring $+ I$& the owners of P$D+E felt that$+ I$ had unrecorded goodwill. -he" decided to capitali,e the estimated annual superior earnings of $+ I$ at

# H to determine the amount of goodwill. -he computation resulted in an estimated goodwill of P1 & . $ rate of 1 H on net assets before recognition of goodwill was used to determine normal annual earnings of $+ I$& becauseit is the rate that is earned on net assets in the industr" in which $+ I$ operates. $ll other assets of $+ I$ wereproperl" recorded. -he estimated annual earnings of $+ I$ isa. P1 & c. P #&b. P =& d. P11&

DIFFICULT

1. >n December *1& aismith ompan" noted the following transactions that occurred during # 5& some or all of whichmight re!uire ad4ustment to the books.a. Pa"ment of P#&= to suppliers was made for purchases on account during the "ear and was not recorded.b. Auilding and land were purchased on Canuar" # for P150& . -he buildingn $ugust 1& P/ & was loaned to a customer on a 2:month note with interest at an annual rate of 1#H.e. During # 5& aismith recei%ed P8&0 in ad%ance for ser%ices& 8 H of which will be performed in # 8. -he

P8&0 was credited to sales re%enue.f. -he interest expense account was debited for all interest charges incurred during the "ear and shows a balance of

P1&1 . Lowe%er& of this amount& P2 represents a discount on a 2 :da" note pa"able& due Canuar" * & # 8.

-he net reduction in reported net income as a result of the re!uired ad4ustments isa. P1/&51 c. P1 &8=b. P11&81 d. P =&81

#. -he Sterling ational Aank has a note recei%able of P# & from the -rembling ompan" that it is carr"ing at face%alue and is due on December *1& # 11. Interest on the note pa"able at =H each December *1. -he -rembling

ompan" paid the interest due on December *1& # 5& but informed the bank that it would probabl" miss the nexttwo "earsG interest pa"ments because of its financial difficulties. $fter that& it expected to resume its annual interestpa"ments& but it would make the principal pa"ment one "ear late& with interest paid for that additional "ear at thetime of the principal pa"ments. -he carr"ing amount of the note recei%able as December *1& # 8 is (Round off

present value factors to four decimal places.)a. P# & c. P128&**1b. P18*&/8 d. P120&/8

*. >n December #8& # 5& Aakeks ompan" commits itself to purchase a financial asset to be classified as held fortrading for P1& & & its fair %alue on commitment 'trade( date. -his securit" has a fair %alue of P1& #& andP1& 0& on December *1& # 5 'AakeksG financial "ear:end(& and Canuar" 0& # 8 'settlement date(& respecti%el".If Aakeks applies the settlement date accounting method to account for regular:wa" purchases of its securities& howmuch should be recogni,ed as unreali,ed gain on trading securities in its # 5 income statement?a. P#& c. P*&b. P/& d. P

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/. >n Canuar" 1& # *& Super orporation ac!uired #0H of the shares of -wins& Inc. for P1& & . $t that date& thee!uit" of -wins was P/& & & with all the identifiable assets and liabilities being measured at amounts e!ual to fair%alue. -he table below shows the profits and losses made b" -wins during # * to # 5)

ear Profit ' oss(# * P # / '#& & (

# 0 '#&0 & (# 2 12 5 * &

-he income from in%estment in -wins& Inc. for "ear ended December *1& # 5 isa. P/ & c. P50&b. P10& d. P

0. +eile" o. purchased land as a factor" site for P1& & . +eile" paid P/ & to tear down two buildings on theland. Sal%age was sold for P0&/ . egal fees of P*&/8 were paid for title in%estigation and making the purchase.Income of P8& was earned through using the land as a car park before construction started. $rchitectGs fees wereP/1 . -itle insurance cost P#&/ & and liabilit" insurance during construction cost P#&2 . Exca%ation costP1 &// . -he contractor was paid P#&/ & . $n assessment made b" the cit" for pa%ement was P2&/ . Interestcosts during construction were P15 & .

-he cost of the land that should be recorded b" +eile" o. isa. P1& / &/8 c. P1& /2&88b. P1& *#&/8 d. P1& *8&88

2. -he following information was included in the bank reconciliation for +"an& Inc. for Cune. $ssume all other reconcilingitems are listed.

hecks and charges recorded b" bank in Cune& including a Cune ser%ice charge of P2 P*//Ser%ice charge made b" bank in 3a" and recorded in the books in Cune /-otal of credits to ash in all 4ournals during Cune *=2& /

ustomerutstanding checks at Cune * #20Deposits in transit at Cune * 1#&

What was the total of outstanding checks at the beginning of Cune?a. P*1=/ c. P#1=&*2b. P#11&12 d. P#1*&12

5. During # 8& rant Industries& Inc. constructed a new manufacturing facilit" at a cost of P1#& & . -he weighteda%erage accumulated expenditures for # 8 were calculated to be P0&/ & . -he compan" had the following debtoutstanding at December *1& # 8)

1 percent& fi%e:"ear note to finance construction of the manufacturing facilit"& dated Canuar" 1& # 8&P*&2 & .

1# percent& # :"ear bonds issued at par on $pril * & # /& P8&/ & . 8 percent& six:"ear note pa"able& dated 3arch 1& # 5& P1&8 & .

Determine the amount of interest to be capitali,ed b" rant Industries for # 8.a. P*2 & c. P005b. P02*# d. P0=1&8/

8. Edmond Dantes ompan" purchased a customer list and an ongoing research pro4ect for a total of P/ & .Edmond uses the expected cash flow approach for estimating the fair %alue of these two intangibles. -he appropriateinterest rate is 5H. -he potential future cash flows from the two intangibles& and their associated probabilities& are asfollows)

Customer List >utcome 1 : # H probabilit" of cash flows of P0 & at the end of each "ear for 0 "ears.>utcome # : * H probabilit" of cash flows of P* & at the end of each "ear for / "ears.>utcome * : 0 H probabilit" of cash flows of P1 & at the end of each "ear for * "ears.

Ongoing Research Project >utcome 1 : 1 H probabilit" of cash flows of P0 & at the end of each "ear for 1 "ears.>utcome # : 1 H probabilit" of cash flows of P1 & at the end of each "ear for / "ears.>utcome * : 8 H probabilit" of cash flows of P1 at the end of each "ear for * "ears.

Low much should be recogni,ed as customer list?a. P/ & c. P 55& #0b. P 8/&2 = d. P*##&=50

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=. $t the beginning of "ear 1& the entit" grants 1 & shares with a fair %alue of P#5 per share to a senior executi%e&conditional upon the completion of three "ears< ser%ice. A" the end of "ear #& the share price has dropped to P#1 pershare. $t that date& the entit" adds a cash alternati%e to the grant& whereb" the executi%e can choose whether torecei%e 1 & shares or cash e!ual to the %alue of 1 & shares on %esting date. -he share price is P18 on %estingdate.

-he net expense to be recogni,ed in "ear * isa. P= & c. P5 &b. P2 & d. P/ &

1 . -he ph"sical in%entor" of 3erlion ompan" as of December #2& # 8 totaled P1&=20& . In tr"ing to establish theDecember *1 in%entor"& the accountant noted the following transactions from December #5 to December *1& # 8.

Sales '# H markup on cost( P 2 &redit memos issued)

For goods returned on)December 10 #5&December # *0&December #= *2&

For goods deli%ered to customers not in accordance with

specifications =&0redit memos recei%ed)

For goods returned on)December 1 15&December #2 #*&December #8 8&

Purchases)Placed in stock 1# &In transit& F>A shipping point 0 &In transit& F>A destination **&

-he in%entor" as of December *1& # 8 isa. P1&250&8 c. P1&22*&b. P1&205& d. P1&228&225

11. ou are preparing the income statement of $non"mous ompan" for the "ear ended December *1& # 8. oudetermine that compan"Gs income from continuing operations before income taxes is P#&/ & . $t this point& "ouare considering the proper treatment of the items listed below. 9nless otherwise indicated& assume that none of theitems listed are included in the P#&/ & income figure.a. Aecause of changes in technolog"& in%entor" costing P1 & was written off as obsolete in # 8. -he compan"

had ne%er recorded this t"pe of loss before.b. $n unusual earth!uake damaged the compan"Gs plant on Canuar" 1 & # = resulting in a loss to $non"mous of

P/ & .c. $ loss of P*2 & was sustained on $pril 0& # 8 as a result of t"phoon damage to the compan"Gs warehouse in

Da%ao. -"phoons are a "earl" occurrence in that area.d. Prior to # 8& $non"mous used an accelerated depreciation method for its plant e!uipment. In # 8&

$non"mous changed to the straight:line method for pre%iousl" ac!uired e!uipment and new ac!uisitions. $tDecember *1& # 5& the carr"ing amount of plant e!uipment was P5& & . If the straight:line method hadpre%iousl" been used& the carr"ing amount would ha%e been P5&0 & on December *1& # 5.

e. In # 8& $non"mous changed its method of accounting for in%entor" from direct costing& which was used inpre%ious "ears& to absorption costing. -he # 8 ending in%entor" has been recorded on the absorption costbasis& but no ad4ustment has been made to beginning in%entor"& which has a total cost of P#&* & & made upof P1&/ & direct materials and P= & direct labor. -he manufacturing o%erhead application rate is 50H of direct labor cost.

f. >n Cul" 1& # 8& $non"mous paid bondholders P1 & to retire its bonds pa"able with a carr"ing amount of P=0 & .

Low much should be reported as income from continuing operations before income taxes for the "ear endedDecember *1& # 8?a. P1= & c. P1& 10&b. P1&110& d. P1&2= &

1#. Augis orp. ac!uired a machine on Canuar" 1& # . Details of the machine at December *1& # 5 are gi%en below)

omponent ostDepreciation

basisEngine P15 & & 9seful life of

/ & hours>uter casings 01 & & #0 "ears

straight line>thercomponents #00& &

1# "earsstraight line

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P520& &

During the "ear # 8& the following e%ents took place)a( Engine& which had run for * & hours till date de%eloped serious snags. It was replaced b" a better engine

with a cost of P#*8 million and estimated life of 0 & hours. -he new engine was used for 0& hours duringthe "ear.

b( Polishing and painting was done to the outer casings at a cost of P1.* million.

c( >ther components were upgraded at a cost of P1 # million. -he remaining life of the other components is 0"ears.

ompute the total depreciation for the "ear # 8& assume that all the work mentioned abo%e was completed at thebeginning of # 8.a. P80&80 & c. P= &=0 &b. P81&252&/5 d. P81&2 &

1*. >n Canuar" 1& # 8& Santa"ana ompan" sold a special machine that had a list price of P= & . -he bu"er paidP1 & cash and signed an P8 & note. -he note specified that it would be paid off in four e!ual annualpa"ments of P#5/&020 each starting on December *1& # 8. -he carr"ing amount of the recei%able on December *1 8 is ' Round off present value factors to four decimal places)a. P0#0&/*0 c. P5 1&/*0b. P2*5&/*0 d. P5#0&/*0

1/. -he following segments ha%e been identified for a business& along with their sales. o segment !ualifies on an" othercriterion for determining reportable segments except possibl" for re%enue. Sales for each segment& and the total forthe compan" follow)

Segment Sales1 P 0 # &* 1 &/ 8 &0 10 &2 # &5 150&

P#&1#0& 'total compan" sales(

What is the minimum number of reportable segments for this compan"?a. 0 c. *b. / d. #

10. -he following information pertains to ellow ompan" for # 8)a. -he compan" had net monetar" items of P8 & on Canuar" 1.b. Sales of P* & and purchases of P1# & were made e%enl" throughout the "earc. >perating expenses of P= & and income tax expense of P2 & were incurred e%enl" throughout the "eard. ash di%idends of P# & were declared on December *1. Selected %alues of the PI:9 during # 8 appear

below)

Can. 1 11 .$%erage for "ear 1#1.Dec. *1 1**.1

-he purchasing power gain or 'loss( for # 8 expressed in constant "ear:end pesos isa. P1=&8 c. P'1=&8 (b. P18& d. P'18& (

TIE BREAKER

1. ewcastle td uses man" kinds of machines in its operations. It constructs some of these machines itself andac!uires others from the manufacturers. -he following information relates to machine $ that it has recorded in the# 0: 2 period.

ash paid for e!uipment& including B$- of P8& P88&osts of transporting machine : insurance and transport *&abor costs of installation b" expert fitter 0&abor costs of testing e!uipment /&

Insurance costs for # 0: 2 1&0osts of training for personnel who will use the machine #&0osts of safet" rails and platforms surrounding machine 2&osts of water de%ices to keep machine cool 8&

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osts of ad4ustments to machine during # 0: 2 to make it operatemore efficientl" 5&0

Determine the amount at which machine $ should be recorded in the records of ewcastle td.a. P11*&0 c. P112&b. P1#1&0 d. P1 0&0

#. In 3a" # 2& hubb" ompan" relocated an emplo"ee from the compan"Gs head office to an office in another cit".$s of Cune * & # 2& the compan"Gs balance sheet date& the relocation costs are estimated as follows)

ost of shipping goods P* &$irfare 2 &-emporar" accommodation costs for 3a" and Cune 8 &-emporar" accommodation costs for Cul" and $ugust = &+eimbursement for lease break cost paid in Cul". -he

lease was terminated 3a" # &+eimbursement for costs of li%ing increases for the

period 3a" # 2 to $pril # 5 1# &-otal P/ &

Low much is the pro%ision for relocation costs as of Cune * & # 2?a. P/ & c. P#8 &b. P#1 & d. P1= &

*. -he following differences enter into the reconciliation of financial income and taxable income of eltics ompan" forthe "ear ended December *1& # 2& its first "ear of operations.

Pretax accounting income P/&0 &Excess tax depreciation *& &

itigation accrual /0 &9nearned rent re%enue deferred on the books but

appropriatel" recogni,ed in taxable income #0 &Interest income from long:term certificate of deposit 1 &

$dditional information) Excess tax depreciation will re%erse e!uall" o%er a four:"ear period& # 5:# 1 . It is estimated that the litigation liabilit" will be paid in # 1 . +ent re%enue will be recogni,ed during the last "ear of the lease& # 1 . Interest re%enue from the from long:term certificate of deposit is expected to be P1 & each "ear until their

maturit" at the end of # 1 .

ompute for the current income tax expense in # 2.a. P5*0& c. P02 &b. P2/5&0 d. P55 &

/. 3andaue ompan" pro%ides the following information for # 2)

ash recei%ed from customers P8& &+ent recei%ed 0 &Interest recei%ed * &

ash paid to suppliers and emplo"ees *& &-axes paid / &Interest paid on long term debt 2 &

ash di%idend paid 1& &

9nder the direct method& cash pro%ided b" operating acti%ities wasa. P*&8 & c. P0&/ &b. P/&8 & d. P0&1 &

0. 9nder the accrual basis& rental income of 3acho ompan" for the calendar "ear # 5 is P2 & . $dditionalinformation regarding rental income are)

9nearned rental income& Can. 1& # 5 P0&9nearned rental income& Dec. *1& # 5 5&0$ccrued rental income& Can. 1& # 5 *&$ccrued rental income& Dec. *1& # 5 /&

Low much actual cash rental was recei%ed b" 3acho ompan" in # 5?a. P08&0 c. P2#&0b. P21&0 d. P20&0

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2. -o determine whether accounts pa"able are complete& an auditor performs a test to %erif" that all merchandiserecei%ed is recorded. -he population of documents for this test consists of alla. Pa"ment %ouchers.b. Purchase re!uisitions.c. +ecei%ing reports.d. Bendor

CPA-quizbowl-2008-1

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Transcript of CPA-quizbowl-2008-1