Test Bank Chapter 3 Cost Volume Profit A
Test Bank Chapter 3 Cost Volume Profit A
3-CASH TO ACCRUAL
The income statement of Cagayan Corporation for 2010 included the following
items:
12/31/2009 12/31/2010
Accrued interest receivable P165,000 P200,200
Accrued salaries payable 92,400 195,800
Prepaid insurance 33,000 24,200
QUESTIONS:
Based on the above and the result of your audit, determine the following:
PROMLEM 11-5
INCREASE
2012 2011 (DECREASE)
Cash P4,037,500 P3,500,000 P537,500
Accounts receivable 5,640,000 5,840,000 (200,000)
Inventories 9,250,000 8,575,000 675,000
Property, plant, & equipment 16,535,000 14,835,000 1,700,000
Accumulated depreciation (5,825,000) (5,200,000) (625,0000
Investment in associate 1,525,000 1,375,000 150,000
Loan receivable 1,312,500 1,312,500
Total assets P32,475,000 P28,925,000 3,550,000
Additional Information:
1. On December 31, 2011, Namibia acquired 25% of Orly Co.’s ordinary shares
for P1,375,000. On that date, the book value of Orly’s assets and
liabilities, which approximated their fair values, was P5,500,000. Orly
reported income of P600,000 for the year ended December shares during the
year.
4. On December 31, 2012, Namibia entered into a finance lease for an office
building. The present value of the annual rental payment is P2,000,000, which
equals the fair value of the building. Namibia made the first rental payment
of P300,000 when due on January 2,2013.
6. Namibia declared and paid cash dividends for 2012 and 2011 as follows:
PROBLEM 11-6
The schedule below shows that account balances of LESOTHO CO. at the
beginning and end of the year December 31, 2012:
CREDITS
Allowance for bad debts P24,000 P15,000
Accumulated depreciation- Building 78,750 67,500
Accumulated depreciation- Equipment 137,250 82,500
Accounts payable 165,000 180,000
Notes payable-current 210,000 60,000
Accrued expense payable 54,000 26,100
Income tax payable 105,000 30,000
Unearned revenue 3,000 27,000
Notes payable-noncurrent 120,000 180,000
Bonds payable 750,000 750,000
Deferred tax liability 141,000 159,900
Ordinary shares, P10 par 1,078,200 600,000
Retained earnings appropriated for treasury 15,000 30,000
shares
Retained earnings appropriated for possible 114,000 69,000
building expansion
Unappropriated retained earnings 103,800 336,000
Share premium 348,000 15,000
Sales 2,694,000
Gain on sales of trading securities 36,000
Total credits P6,117,000 P2,628,000
Additional information: