8/16/2019 CPAR_P2 07.28.13
1/6
PRACTICAL
ACCOUNTING
PROBLEI""iS
I
t
First Pre-hoald
Exalnittation
Cash
()ther
assets
Loan to
Raiph
l"iahrlities
lf Mon
receiveri
P9.000
on
assets
was
A.
80.000
Loatt
fi"o'nr
Mon
Pl0'000
Erwil1.
capitai
(30%)
45.000
Ralph,
capitut
(50%)
30"000
lvloa.
capital
(20%)
15.000
Sunday.
July
28.
20
I
3
3:00
p.m to
5:00
P.nr
D.
P4"71.399
D.
P411
.399
problem
l.Ol
October
r.20l '.
PPC
\.'onipanv
soltJ
Article
C)ne
ct-rsting
P270.000
for
P400'000
Article
Two,
a
used
article
was
ae(;i:Dle,.j
as
down
pu,o.,ir.nt
aitd
tlte
balattce
on
monthly'
instalments
ibr
two
years
thar
irrclgde
both
principal
ari.l
interesi at
lSilo
per,vear,
starting
October
3
l'
2013.
P
120,000
was
allowed
orrrlrearlicletraded-in,
firecornparryestimatesretonditionin[costofPS,000ontlrisarticleandasales
price
of
Pl
i0,000
after
sr.rt:ii
r^eronditloning'
Tlre
company,ormally
expects
20%
gross
profit
on
sale
of
usedarticles.
Howrnui,irlstlier-ealrzedgrossprofitiriZOl:f(RoLrndoffpresentvalrrefactorsto3
decirnal
places)
A.
i7"00i
Il.
-18..16.1
a.
28.750
D.28.486
probleur
?.T5e
rcr,.tyrts
rlf tlre
parruersliip
r.rf'E,i'uiit.
iialph
arl'l
Mcrir
at
the
etld
ol
its
fiscal
)ear
ol.)
SepternLrer
i0. 201-i
ri'e
as
tbllorvs:
p
I
:.000
liii.000
i.0c0
5u.000
tlie first clistribution
of
cash.
tlie
cash
realizecl
ft-om
the
initial
sale
of
D.
15.000
B.
65.000
c.
95.000
Froblem
3
apcl
4.psalrn
is
currently
preparirrg
its
conrtrinecl
fitrancial
statenlents.
On
December
3l'
2013'
ihe
houre
ofllce accouni
sl,{x,,';r
balance
of'{+s:,:OO.
T'he
branoh
sent
a
check
for
P12,000
on
December
3l
,:013.'lhe
home
ofl'ict
di,J
rtot receive
tlie
check
urrtil
,lanuarlt
4.2C14
Ftrrtherrnore'
Psalm
shipped
nrerc6andise
costiug
Pl0"00C
to the
branch
ot..
l)ecenrber
28.
l0ll at
a transfer
price
of
P25'000''Ihe
merchandise
was
rrot
lc:eiii:ci
b'
the brailcl-'
i.ttltil iallititr'l
lt.20l4'
Lastly'
adr"ertisirig
expenses
trf
P8'500
were
allocated
by.
I?sallr
i,r tire
lrrarrch.
Tlris
rvas
rectlrded
a::
P5.800
by
the
brrarrclt'
j.
Hor..
rl;uch
is the
ad.iusted
bala:,tle
cl
the
reciplt)t)al
accotlnts'l'
A.
P480.00;.
B.
1492.0(10
c'
P500.000
4.
Hc.',
intt':I
rs the
ulad-ilisled
balatlce
of
tlie
branclt
accoutrt'?
A.
P-i1{0.000
"i.
Pr'q2.C00
C'
P5u0.U''r0
Problem
5.Cerry |r,;rrpatl)'
adds
ttr:ter:'iaI
is avaiiable
lbr
Jun,.::
a.t rhe,;1a:-i
of
pr.oclrrctir--.r,,
The
follow'ing
production
infbrmatiott
V/hat
is
thl
eost,';,"r
ll
lttrits iratt:;1i:rreii
lLtt
ttsittg
the
l'ti:O
rnethcd'l
A. P2Q
r
0-l
+
B.
P 191.289
c.
[']287.004D.P298.029
problem
6
par-rl
arjr-i,iis
Claire
as a
partner
irr business.
iust
beli:re
th*
t:afitlersliip's
iormation.
Paul's
books shurred
thc
foilowing:
Cash
Accounts receiv'able
Merchatrd
i se i ttvetrtcln
Acccxrltts
payahle
PaLrl. capital
2.60ij
i:"00i)
Iti.t,0(l
6.200
26.40(i
(45%
corlplete
as
qqgryqMglU
110.000 units
_
__(80% 99ryp 9ii
i;1o
,q 19tr19'il
units
I
Current
Period
C'osts:
_MateLia
Con
t,e
r ,
'a
it
8/16/2019 CPAR_P2 07.28.13
2/6
It was
agreed
that.
tbr
establishing
Paul's
irrvestrrent
in the
tlrrn.
the
tollovrilrg
adjustnrents
shall
reflectrd:
o
Ailo*arrce
tbr
bad
debts
of
2o'i,
shourlci
be set
up'
o
Merchanclise
inventory
should
be
valued
at
P20.200'
o
lrr.epaid e\pense
of
P350 and
accrued
expelrse
of"P400
shorrld
be
rect-r5tltized'
Hclvr
nruch
cash
should
Claire
iuvest tr"r
SCCuli'A
f)tli:-lhir,1
iilt*t"ir,.f
irl tl,';
pafiitership?
A
l-i.155
U.
9.{37
'1.
'".{i00
ii' ll'105
be
lrr
Depaf'tent
2
r:t
Rodel
ComPanY
j._
l,rat"riul--
-t--c;i',er"*_
] Ctrsts ]
C,tsts
-i
-
---
I
ir
i..150
Problern
7.-t
he tbllcw ing co*tts
were aciluntulated
i- -
-
cnttr*,ltt'e;red
I i
tirn, Deot.
I
L-___
__-I
"-"'"-r-
..--
I
Beirirtuirtu lrrr e
ttttlrr
i
l,,
i
7.()5{
t..r--
r
r
I
I Current Pelir.-'d Cost
I
84.00(
L ___ i__
.___l;91,01(
Productiorr
tbr A.pril iu Departurent
2
(in
urtiis):
durirrg
April:
T-
T"t^l
l
]__
_---l
I
_,P_?l-._5t'q
]
I
rr2.@q
WIP-April
I
I
rarrsli.rr':cl
OLrt
dLir';nll ;\pril
WIP-Aprrl
.i0
Matenals ale riot
add','d
irr Dr:;;artiletrt
2 until
r
Hou
much is the
sosl
irt'r*'orl;
itt
prrti:es:'-rtt,.i')
A. P
I
0.000
1'] l'-iJ.ti00
1.000
60920
cornplete
10.000
5,000
409/o
conrplete
the
le:r
etrrJ
crf
pi-acessiltg
Departinellt
2
c.
P4iJ.l
l0
D.
P50.160
ProblemsSandg.ThepafinershipofJoriteand.larrnesbegattbr-rsitresso 1
Janttarl'1.2013'
Thefollowing
assetii
were
contributeri
'oy
eaclr
partner
(the
nttn
casi'r asselr
are
stated
at
their
fhir
rilarket
Values
on
this
date).
('aslt
Itrr
crttories
Laud
Eqri
ipnrcnt
Inieresl
rlr
bcginrring
halauces
Salaiies
Renra i
nder
Jtxgc
P
l0.Lr00
.i0.000
r00-000
,la\
ntri
P 10"00u
: 0(i.(rc0
J'he
larrcl
ua.s
srib.iect
io
a
P65.000 nlorlgtrge.
r,rhich th€
pafillerslrip
as:'itt-'red
on
the
sante
date'
The
equipnrerit *ur
r,,i,.1..r to sn in:;tairrent
note-'payahle'tlrat
iracl
art
trrtpaid
princiPa
anlount
of
P35'000
on
JanJa.l
L
l0l3. l-hE
p..lrtnersl:ip
also
assurned
this,lot.
lrul'rtl..
Accordirlg
to
ilre
partnership
agreement.
each
panner
\vas
to
har.,e a 50
percent
cirpital
int,rrest
r,'tt
January
1.2013"
with
total
parlnership
capitai breing P300.000.
Jorse arrd
Jal,nies
agreed
to
sirtre
pa(rrei'sllip
itrcotne
and
losses
in
the
fbllou
irrg
rnanrrer:
Jaytnes
10 /-
AU
P
I
6.00()
,1i9/o
Durirtg
l0l
l.
tlrc ibllr-.w ing
t.r
ctrts
or;curretl:
e
ln,,errtol'\
\\as
aettrire,l at
a cost
t-rf P]0"0()0.
A-t
l)t:t:erltb'-'r
I
i.
20
13. the
partnership
r'llvcci
F6'0[10
to
its suppliers
{
^,r
rlre
,irrrrroqrrp
:urred
on
trre
Prirrcipal
ttl
Pl$.000
rvas
paid
on the
rlroi'igage.
ittte:est
c\pell:ie
lllc
nlortgage
rlas
P-i.CiO0. all
8/16/2019 CPAR_P2 07.28.13
3/6
age
J
8,
The capital
credit
to
Mr.rngo
Lloyd
upon
his adnrission
trust
be:
A.90.000
B.
100.900
c' 88'000
9.
'fhe
capital
baiar:ce
of Jorge.
after
Morrgo
Llo;,d's
adnrission
tnust be:
A.
l8l.34C
B.
i63,140
c.
175'040
D.
80"000
D.
167,300
Inlormation
for
nurr.rbers
l0 and
ll
ABC
Corporation
has
two
hrranches
tc
wirich
rnercirandise
is trarrsferred
at
'-:ost
pltrs 20%'
plus freight
c6arges.
drr
Novernber
30.2013.
ABC
shipped
nrerclran< ise
thar
cost
P5^500
to
its
('ehlu
brattch"
and
the
p200
shipping
charge
was
paid'o;,
ABC.
On
Decenrber
15.2013.
the
Ilocos
branch
encountered
an
inveutor),shor-tage.
arrd
the
Cebu
bi-anch
slirppecl
tlte tuercltatidise
to the
llocos
branch
at
a
freiglit
cost
of
pl60
paid
br
the Cebu
brnnch.
Shipping
charges
iiorn
tlre
ltome
office
to
the
llocos
branch
rvould
ltave
been
Pl
75.
10.
lf'tlre
rnerclraudist.is
tiirsold
ai
\ear
circl.
the
Il.rct-rs
branch
rrili
inverrtorr
the
ttterchalldise
at
lvltat
a l11r)tl
llt'l
A
P6'es0
B'
P6'gl0
c
P6'775
D'P6'575
ll.
lf
tlre
rnerchandire
is uns'tld
at
),ear
errd,
irow
nruch
wouid
A.BC
irlcir"rCe
as
itlVetrtorv
in
its repoft
to stocklrolcer
s'i
A. Pi.67s
B' P5.850
c'
P5'500
D'
P5'47s
prgblern
l2.Yuiln-v
Yc,":Lrr"t
Cornpany,produces
-y-oc,ut1
itt
two
depaftrnents-Mi|illg
and
Finishing
ln
Mixirrg"
all
ingredierr,.e\c(-pr
iiuit
are aclCed
at
tlre start
of
production' In Finishing,
frtrit
is added
and
theii the
nrirture
;;
i.,i:i.-;cl
into contairiers.
A,Jding
the
fi'i:it
to
the
basic
yogurt
nixtltre
increases
the
volunre
transferrcir
iir LLl the
utrrnber'of
r,.a ions.,ltirir
aclclecr
.
Any
spoiiage
that
t)cctlrs
is
irt tlre
Fillishirrg
Depari;rrer,t.
Spoil,y-e
; detectecl
.irrst
b,eliire
the
rogtiil
is
plar:ed
iillo
c0tltaitlers
or at
the
98
percellt
crtmpletiilu
poirrt. /ril
:,poilage
is i'ihtlcrrtial.
l'inishing
Department
BWIP
(
100% liuit.
0%
cotrtaitrer.
30%
CC)
(lal
lons
tlansl'erred
in
Callons
of
il"Lrit
added
EWIP
(
100%
tiuit. 0%o
ctlttaitter"
609/o
CC)
Abnornral
spoilage
BWIP
Costs:
Trarrst-erred
ln
Fruit
CC
(lurrenr
(losts:
Transf'erreC
lii
Fi"iiit
C.,'ontainers
C]C
l'()tal
Cosr:i
Problem
l3. Tlie
following
irrfbrmation
relates
to Job
i\o
to
rreet
a
cLtstolner's
order:
Di rect
rnaterials consuired
Dir'ecr labor
rate
per
hottr
Productr.iort ol'erhead
pel
ciireii
labor
liorrr
D irec
t
labo
r
lt
ou
rs
etrr
p
i
.,', c
ii
Adrrrinistlatir
e
artd
othet
overlt.::id
ctlst
Profil nrarktip
What
is the sellirrq
prict:
r
the
custotner
of .iob
2(r85;
A. 17.i33
tl.
l0.8ti0
How
ruuch
is
tlte cosi
of units
tratlsi'erred
rlr.tt
t-tsitrg
l"ieiC,litec-i
evcrage'/
A.
148.826
B.l9r.
i35
C''
i
70.080
D.
165,210
i685.
wliich
is
being
carried
out by
Flexy
Fleet
Dept.
A
_
-Depf-B
5.000
gailons
5.50t)
i"200
1.700
gallons
1.000
$
e.700
r0.50c
15.000
12"400
s4.000
l r.000
--
i)8.900
s 2l
0.600
P5.000
4
4
400
209/u of
lLtil
prLlclrrctioll
cost
l:r%
oi
sellirrg
price
P3.000
5
4
200
(.'
r9.800
D.
16.2s0
8/16/2019 CPAR_P2 07.28.13
4/6
Problem
l4.Shiprnents
receivecl
tiom
the
home
oft'ice
are billeri
tt l.}Catcabt,-ve
cost.
During
the
year.
the
branch
received
shipmenls
billed
at
P360.000.
and retunred
clnrnageil goods
rviilr
rillecl
priie
of
irZq.OOO.
The
branch
has
an
endirtg
invL'irt(ri'\
of
i'71.000.
at
billed
price.
-l'.he
hr"rLrrh
repofied
ioss
of
p10.000.
How
tnuclt
is
the
balance
of
tlte
allt-inance
l(lr
nrarkup
acrlc,unt br.fbre
r*r,r-a,',ii
arl.iustnrents'l
A.
P56.000
B.p8u.u0L
c.
pi83.271
i).
p44.000
Problenl
l5.ln
2013"
Bobadilla
Construclisrl f'1.np6,r,,tegan
consaructir:n
rvork
under
a
three-year
contract.
The
corrtract
price
is
P600.000.
;r..har l'.
r,ses
tlle
pcrceirtitge-ol'-con.rpletion
nlethod fbr
financial
aecoulltillg
pLrrposes.
J'he irrcorne
to
he recoglrized
ear:lr
5,ru,
iu ir;iseil oir rhe
ilropor-tion
eil
ct-lsts
inctlrred
to
ttital
eslitnated
costs
frir
cotnpleiing
tlre
uontract. Tlre tlnancial statement
prescntati()n.
related
to
this
colltraci
at Decenrber
_l
l.
l0l
j.
tirllow:
Statement
of
f
inancial Positinn
Accr:unts
recei
i,ab
les-constructir-rrr
Conrract
bjllings
Construct
iori
i
lr progress
l
c)s:
c(,ntr?:t
billingrs
(
()sts
of'rrrrcornpieled
c,)lltraci
iil
Excess
of
biliings
Incorne
Statement
Gross
prrtfit
(h,,-filr.r_,
ta:,)
rer.:or,.rrized
it,
l0lt
t50.;.100
:)q.,lE-u
Problern
16.(Jn.ialtuarl
1.2013.
lr.arl"
rrc.
sirlned
r.r
ti,.r:elniirt authorizing
Mr.
rJe
['asiro
Io
operate
as
a
franclrisee
tbt'arr
ir:itia
fianehise
f'ee
ol'P5.0{i0.0r'r
(r:-
11-,i,
enro .mr. F2"000.t100 rvas received upolt
signing
of
tlre
agreeitietrt
and
rhe
tralance
e.,,idericrul
ir
:
it,9,c pr6rrrisscir\
tloie
lllrich
is due
in three
atrttual
ittstalltnettt-s
o1'
Ill.000.t)00
eaclr
hegirin:nr,.
i),-.c::r"nirri l l.
l0I
i.
lr,1r'.
de Castro
started franchise
operailcins
ort
Septetnbei'
I .
2 0
I 3
after
Karl
rentlered
irr
itial
senr
ices
"eqrrired
at
a tota
I
cost of
P I
"500.000.
The
flrst
ittstallnlent
',1'at
t:oller:ted
on
due
date.
The
collectibiliil
oi
the
ncte
is rrot
l.rrrrionirb:',/
assured.H.w
rnur:h
rre:
iucuni,:
is
io
lre
i.i-crg;riz,:c.i
on
Dccember
31.2013?
4..
p2.i00.tiu0
B.
p2.580.000
c.
p600.000
D.
p1.080.000
Problern
l7'
Jack
Cornpattl'
ttrattuf'actures
picture
fiarnes
ancl
rrses.iob
r--,rder
r:osting srsteru. The
lbllowing
costs
relate
lo
tl.le
crlrrenl
procluctir.rrr
ruu:
F.stinrateilorerheird/:xcltr.,iret:fspoilage)
pl6CCrl0
Spoilage
(estinrateci)
l5.ir00
Sales
value
of
spoilecl
il"anres
I
1.50{i
Labor
hours
l00.ti0r)
ll.-::i:'11,t,1tt.?ii
j:p"ilecl
lj'arne
is
P7.00.
f)uririg
rhe pcrit.ld.
I70
fianie:;
ar.e
spt,iJeti.
Each
spoile
8/16/2019 CPAR_P2 07.28.13
5/6
.
Assuuriirir
the
jOiirt
cost
are
allocated
using
tlre
ad.iLrstecl
sales
''alLre
tlleth'od'
$liat'ioint
costs
were
allocated'to
product
B
and
rvhat
is
the
sales
vaiue
at
Split
otrof
A.
respectivell:
n.le.ooo
u,i,t
os.ooo
c'
15'000
and
60'000
B.
14.286
and
63'000
D'
12'000
and
60'000
How
muchis
the
total
estinrated cost to complete
b-'
the
end
of
2012'?
A.
2.800.000
B.
1.000.000
.
l'400'000
protrleur
2l.ou
Jirly
I.2013.
DrRCF
cornpany
signe
8/16/2019 CPAR_P2 07.28.13
6/6
Problenr
27.11apro.iect
required
50
hours
to
contplete
at
a
cost
of
Pl0
per hour.
but should
have
taken
only
45 ht'rurs
at
a cost
of
Pl2
per
hour.
Wlrat
is
tlie
proper
journalentry't9 record
the
costs?
What
is
t[e
cost
al|:cateil
ttr
prodrrct
E']
A.
PI17.600
B.P122.400
A.
Work
in
process
I.ahor
price
valiatlce
Labor
effi
ciettcY
variance
Payroli
PaYable
B.
Wages
expellse
i.atror
etfi
cietrcY
v'at'iattce
Pa1'roll
PaYable
(
.
W'ork
in
Plocess
PaYroll
Pa1'a[rle
D
Work in
Process
Labor
eft-icietlcl'
variatrce
l-abor
Price
r''ariance
Payroll
PaY'able
Pr',;blem
l8.The
fbllowing
selected
accolrnts
appeared
of
Deceruber
31.
2013:
Instalment
receivable-2012
sales
P
15.000
Ittstalmerttreceivable-2013
sales
200'000
Inventor').
Decetrlher
j
1.2012
70.000
Purchases
I
555-000
Additional
in[ormation:
Page
6
ct.
Pl
19.512
D. P
121.200
60
500
50
500
500
5,{0
OU
100
500
in the
trial
balattce
of
Bab1,'
V.
Sales
Cornpattl'
as
460
100
550
500
Repossessions
lnstalnrent
sales
Regular
sales
Deferred
gross
Protrt-201
2
P
3.000
415"0c0
i
85.000
50.;60
P
r20.000
95.000
i0oZ
orr
sales
Irrstalniettt
receivable-
?0 il
sales.
Decetlber
3 i'
20l2
lnventorl,,
clf
irerl
aucl
repossessed
mercltartdise
as
of
Deceprber
3
l.
201
-l
Cross
protit
percetltage
ott
regttlar
sales
dLrring
tlte
1'ear-
Repossessiolrs
\
ere
nrade
dirring
the
accourtl
at
lhe
tittte ot'rept'sscssitrii
as
A.
l-14.5l0
B.
245.010
p16bie6
29.
pedro
Cornpanl
has
a
c1,cie
tiine
of
3
days.
uses
a
Materials
and
In
Process
(MIP)
account'
a,d
charges
allconversion
costs
to Cost
of
Coods
l;oicl.
et
the
end
of
each
niortth.
all
invelttories
are
counted.
tlreir
conversiort
costs
(CC)
compollellts
are estimated,
and
inventory
account
balances
are
ad.f usted.
Raw
nraterial
cost
is
backflushed
fl'onr
MIP
to
Finished
Coods.
The
tollowirig
intirrr-rtation
is
1br
J
uue:
Yea|
l'
oras
a
l0Il
sale
attd
thc
corresponding
Lrnctlllected
P7.l()t).
What
is
tire
trr'iai
i'er,lizc.'l
e.i
\):i-
ir r)fli'l
c.245.b10
D'246.010
P29.2s0
P I
0.000
of
CC
30.000
562"500
32.000
ot'('('
26"150
D. 563.500
66
)13%
P
r
q2.000
360.000
c.
.180.000
A.
561.000
B. 56
i.250
l-
-,t;r-1,150
probleut
j0.Jualita
Corlpap;-
uses
iustallrrient
rref
ltod
olaccoutltitlg
arld
has
the
following
data
at
lear
end.
Beginning
balance
MIP
account
inclLrding
P3,000
CC
Beginning
balance
of
finished
goods account.
inclLrding
Raw
nraterials
received
ort
credit
Ending
MIP
inr,entory
per
phl,sical
count.
inclUding
P.1.500
olccl
Endin
fl,isirecl
g..ocis
i'i
r.i-.ror\
per
piil
sicrl
co,,t.
i.cluc1i,gPll.750
What
is the
t'lil
tlaterial
e
ost tli-
Lttlits
corttpleted
itl
Jtt:li:'')
Clirss
rlargin
ott
cost
Ll
urealized
gross
protit
Cash collections
includirrg
doun
pa)'lrerlts
What
was the amotttlt
of .iale
tltt
it-:st;iilirietti
A.
646.000
s s
2.000
i1.8.i0.000
.)asrs
D