CPA REVIEW SCHOOL OF THE PHILIPPINES

MANILA
ADVANCE FINANCIAL ACCOUNTING AND REPORTING SUNDAY APRIL 16, 2016
FINAL PRE-BOARD

SOLUTION

1. [(18,000 + (378,000 – 20,000) + 920,000 + 200,000)] * 3= 4,488,000

2. 1,496,000 + 4,488,000 + (4,488,000 * 2) = 14,960,000

3. X: [(500,000 x 6/12)+ (800,000 x 6/12)] x 10% = 65,000

Y: (750,000 x 10%) = 75,000
Z: [(1,125,000 x 9/12) + (775,000 x 3/12) x 10% = 103,750
243,750

4.

X Y Z Total
300,00 240,00 180,00
Salaries 0 0 0 720,000
103,75
Interest 65,000 75,000 0 243,750
Remainder 25,000 25,000 25,000 ___75000
1,038,75
5. 20,000,000 – 22,000,000
0
= (2,000,000)
cumulative gross loss
as of December 31, 2021

6. 12,000,000/ 16,000,000 = 75% percentage of completion as of December 31, 2022

TEC = Total estimated cost

CP: 20,000,000
TEC: (16,00,000)
Est. Profit 4,000,000
___x 75%
Profit to date: 3,000,000
Cumulative gross loss: 2,000,000
Profit for the year: 5,000,000
7. D
8. A

9. 2015% of completion: (1,450,000 – 100,000)/ (1,350,000 + 3,150,000 ) = 30%

2016% of completion: (1,350,000 + (2600,000 – 350,000))/(3,600,000 +
400,000)=90%

CP: 5,000,000
TEC: (4,500,000)
Est. Profit: 500,000
x 30%
Profit to date: 150,000
Opex (100,000)
Income before tax 50,000
x70%
Net income 35,000

10.
 CPA REVIEW SCHOOL OF THE PHILIPPINES
MANILA

CP: 5,000,000
TEC: (4,000,000)
Est. Profit: 1,000,000
x 90%
Profit to date: 900,000
Prior yr gross profit (150,000)
Profit for the year 750,000
Opex (350,000)
Income before tax 400,000
___x 70%
Net Income 280,000

11. 1,350,000 + 150,000 = 1,500,000

12. (1,350,000 + 2,250,000 + 150,000 + 750,000) – (400,000 + 2,000,000)= 2,100,000
due from

13.

Sales 800,000
BI 140,000
Purchases 250,000
Shipments from HO 500,000
EI 200,000
(690,000
COS )
GP 110,000
(100,000
Opex )
Income before tax 10,000
x 70%
Net income 7,000
14.

BI 120,000
Purchases 250,000
Shipments from HO @ cost)
(500,000/125%) 400,000
EI [(200,000 x 14%)/ 140%] 20,000
[(200,000 x 26%)/ 125%] 41,600
(200,000 x 60% 120,000
(181,600)
COS 588,400

15.

Total sales 1,800,000

(1,188,400
Total COS (600,000 (HO) + 588,400 (Branch) )
GP 611,600
Opex (300,000)
Income before tax 311,600
__x 70%
Net income 218,120
 CPA REVIEW SCHOOL OF THE PHILIPPINES
MANILA

16. Ending inventories from shipments from HO

EI @ BP (200,000 * 40%) 80,000

EI @ cost
[(200,000 x 14%)/ 140%] 20,000
[(200,000 x 26%)/ 125%] 41,600
(61,600)
18,400

Transaction Home Office Account (Br. Book) Inv. In Branch (HO Book)
17. Unadjusted balances 54,700 51,100
a. (24,000)
b.RE Parent 280,000 30,000
c. NI Parent 105,000
d.NI Sub (31,500 x 80%) 25,200
(7,200)
e. Impairment loss (2,400) (2,400)
f. Intercompany Div (7,200)
(17,500
Adjusted x 80%)
balances (14,000)
47,500 47,500
Consolidated Net Income
Attributable to Parent 113,800
Dividends declared by Parent (63,000)
330,800

18.

NI Parent 105,000
NI Sub (31,500 x 80%) 25,200
Impairment loss (2,400
Intercompany Div
(17,500 x 80%) (14,000
19. 113,800

NI Parent 75,250
NI Sub (21,875 x 60%) 13,125
Intercompany Div
(17,500 x 60%) (10,500)
Upstream RPBI
[(17,500 X 20%) x 20%] x 60% 420
Upstream UPEI
[(21,000 X 30%) x 20%] x 60% ___(756)
77,539

20.

NI Sub (21,875 x 40%) 8,750

Upstream RPBI
[(17,500 x 20%) x 20%] x 40%) 280
Upstream UPEI
[(21,000 x 30%) x 20%] x 40% __(504)
8,526

21.

NCI (12.31.2015)
 CPA REVIEW SCHOOL OF THE PHILIPPINES
MANILA

(150,000 x 40%) - (((17,500 x 20%) x 20%) x 40%) 59,720

NCI net income 2016 8,526
Div Declared by Sub (17,500 x 40%) (7,000)
NCI (12.31.2016) 61,246

22.

NI Parent 945,000
NI Sub (165,000 x 70%) 115,500
Upstream Realized Loss 7,875
Downstream Unrealized Loss 60,000
Downstream Realized Loss ___(3,000)
1,125,375

23.

NI Sub (165,000 x 30%) 49,500

Upstream Realized Gain (11,250 x 30) __7,875
52,875

24.

PV Factor (4.32948)
IFF: (200,000 + (60,000 x 4.32948)) 459,769
CFF: (100,000 x 5%) __5,000
464,769
25.

IFF 459,769
CFF 5,000
Interest 6/30 (259,769 x 50%) 12,988
Interest 12/31 (212,757 x 5%) 10,638
488,395
26. C
27. D
28. D since cash flow from financing activities, all restricted contributions only
are included

29.

Amount billed 384,000

Employee disc (25,000)
Philhealth (90,000)
269,000

30.

Unrestricted contributions 250,000

Board-designated
contributions 75,000
Contribution for scholarship 60,000
385,000

31. D
32. B
33. C
 CPA REVIEW SCHOOL OF THE PHILIPPINES
MANILA
34. [(4.965 – 4.934) x 65,000] – [(4.908) x 65,000] = 1,690

35. (62.05 – 62.35) x 625,000 = (187,500) decrease in FC Rec therefore loss

36. Hedge Item: (62.85 – 61.55) x 625,000 = (812,500) increase in AP therefore loss

Hedging Instrument: (62.35 – 60.75) x 625,000 = 1,000,000 increase in FC Rec

therefore gain
Hedging activity: (812,500) + 1,000,000 = 187,500 net gain

37. D (No goods received yet as of December 31, 2016)

38.

Sales 98,000
BI 15,000
Purchases 40,000
EI (6,000)
COS (49,000)
GP 49,000
BDE (1,000)
Depreciation exp (5,000)
Other selling exp (3,000)
Gen & Admin exp (9,000)
Net income (in dollars) 31,000
____x44
1,364,000

39.

DEBIT CREDIT
Cash 11,000 AP 16,000
Marketable securities 22,000 NP-trade 14,000
AR 25,000 NP 20,000
Inventories 12.31.2016 6,000 TOTAL 50,000
Prepaid exp 2,000   x 41.00
PPE, net 90,000 TOTAL LIAB (in PHP) 2,050,000
Intangible asset, net 16,000 Share Cap (50,000 x 50) 2,500,000
Other noncurrent asset 8,000 Share Premium (20,000 x 50) 1,000,000
TOTAL ASSETS 180,000 *Retained earnings (PHP) 2,254,000
  x 41.00    
TOTAL ASSETS (in PHP) 7,380,000 TOTAL LIAB and SHE 7,804,000
  424,000    

*RE beg (PHP) 1,320,000

Net income (PHP) 1,364,000
Dividends (10,000 x 43.00) (430,000)
RE end (PHP) 2,254,000

40.

Share capital 2,500,000

Share premium 1,000,000
Retained earnings 2,254,000
Cumulative transaction
loss (424,000)
 CPA REVIEW SCHOOL OF THE PHILIPPINES
MANILA
5,330,000

41. .

Actual OH Job08 25,300

Debit balance in HO Job08 (7,620)
Applied OH Job08 17,680

17,680/680 = 26 (predetermined rate based on DL hrs) x 14.500 = 377,000

Budgeted OH for Job08

Total Budgeted OH 786,200

Budgeted OH Job08 (377,000)
Budgeted OH Job88 409,200

42.

BI WIP Cost 18,780

DM 86,500
DL (35 x 680) 23,800
OH 17,680
146,730

43.

Job08: (23,800 + 17,680) 41,480

Job88: (37,600 + 34,980) 72,580
114,060

44.

DM 78,700
DL (40 x 940) 37,600
OH 34,980
151,280
45. C

46.

DM 1,750
DL 1,200
OH 850 (since due to internal failure, allowance is excluded)
3,800 per unit cost

Total cost of 600 drills: (3,800 x 600) 2,280,000

Total cost of 35 spoiled drills: (3,800 x 35) (133,000)
2,147,000

47.

DM 1,750
DL 1,200
OH 765 (since due exact specifications, allowance is excluded)
3,715 per unit cost
 CPA REVIEW SCHOOL OF THE PHILIPPINES
MANILA
Total cost of 35 spoiled drills: (3,715 x 35) 130,025
Loss (79,450)
Net realizable value of 35 spoiled drills 50,575

Total cost of 600 drills: (3,715 x 600): 2,229,000

Net realizable value of 35 spoiled drills (50,575)
Rework cost 16,500
Total cost transferred to FG 2,194,925

2,194,925/ 565 (Good units) = 3,885

48. .

Completed 82,200
EI EUP (5,000 x 0) -
BI EUP (10,000 x 0%) -
Normal lost units
(method of neglect because continuous process) -
Abnormal lost units (300 x 100%) __300
82,500
49.

Transferred-In:
Competed 82,200
EI EUP (5,000 x 100%) 5,000
BI EUP (10,000 x 100 %) (10,000)
Normal lost units
(method of neglect because continuous process) -
Abnormal lost units (300 x 100%) ____300
77,500

Transferred-In:
Competed 82,200
EI EUP (5,000 x 0%) -
BI EUP (10,000 x 0 %) -
Normal lost units
(method of neglect because continuous process) -
Abnormal lost units (300 x 100%) ____300
82,500

CC:
Competed 82,200
EI EUP (5,000 x 35%) 1,750
BI EUP (10,000 x 30 %) (3,000)
Transferred-In Cost/EUP: 1,162,500/77,500= 15
Normal lost units
(method of neglect because continuous
DM Cost/EUP: 742,500/82,500 =9 process) -
CCAbnormal lost units (300 x 100%)
Cost/EUP:650,000/81,250 =8 ____300
81,250

BI Cost 306,000
BI Cost to complete this yr
DM: (10,000 x 100% x 9) 90,000
CC: (10,000 X 70% X 8) 56,000
Total BI Completed Cost 452,000
Started and Completed Cost
(72,200 x 32) 2,310,400
Cost of completed goods 2,762,400
 CPA REVIEW SCHOOL OF THE PHILIPPINES
MANILA

50.

Ending Inventory
Transferred-In: (5,000 x 15) 75,000
CC: (1,750 x 8) 14,000
89,000

51. (300 x 32) = 9,600

52. A

53. B

54. D

55. B

56. B

57. D

58. C

59. B

END