Afar

NATIONAL FEDERATION OF JUNIOR PHILIPINNE INSTITUTE OF ACCOUNTANTS –NATIONAL CAPITAL REGION ADVANCED FINANCIAL ACCOUNTING & REPORTING (AFAR) 1. Certain balance sheet accounts of a foreign subsidiary of Rose Company have been stated in Philippine pesos as follows: Stated Current Rates Historical Rates Accounts receivable, current P 200,000 P 220,000 Accounts receivable, long-term 100,000 110,000 Prepaid insurance 50,000 55,000 Goodwill 80,000 85,000 P 430,000 P 470,000 I. The subsidiary’s functional currency is the local currency unit. What amount should Rose’s balance sheet include for the preceding items? a. P430,000 b. P435,000 c. P440,000 d. P450,000 II. The subsidiary’s functional currency is peso. What total amount Rose’s balance sheet include for the preceding items? a. P430,000 b. P435,000 c. P440,000 d. P450,000 A. I – c; II – a C. I – a; II – c B. I – a; II – d D. None of the above 2. A partnership begins its first year with the following capital balances: Arthur, capital P 60,000 Baxter, capital 80,000 Cartwright, capital 100,000 The articles of partnership stipulate that profits and losses be assigned in the following manner:  Each partner is allocated interest equal to 10 percent of the beginning capital balance.  Baxter is allocated compensation of P20,000 per year.  Any remaining profits and losses are allocated on a 3:3:4 basis, respectively.  Each partner is allowed to withdraw up to P5,000 cash per year. Assuming that the net income is P50,000 and that each partner withdraws the maximum amount allowed, what is the balance in Cartwright’s capital account at the end of that year? A. P105,800 C. P106,900 B. P106,200 D. P107,400 3. Under PAS 29, one of the following is an indicator of hyperinflation. a. People prefer to keep their wealth in monetary assets b. People prefer to keep their wealth in relatively stable foreign currency c. Interest rates, wages and prices are not linked to a price index d. The cumulative inflation rate over three (3) years exceeds or is approaching 50% 4. The following are information regarding partnership business: I. A partnership has the following capital balances: Allen, capital P60,000 Burns, capital 30,000 Costello, capital 90,000 Profits and losses are split as follows: Allen (20%), Burns (30%), and Costello (50%). Costello wants to leave the partnership and is paid P100,000 from the business based on provisions in the articles of partnership. If the partnership uses the bonus method, what is the balance of Burns’s capital account after Costello withdraws? a. P24,000 b. P27,000 c. P33,000 d. P36,000 II. At year-end, the Cisco partnership has the following capital balances: Montana, capital P130,000 Rice, capital 110,000 Craig, capital 80,000 Taylor, capital 70,000 Profits and losses are split on a 3:3:2:2 basis, respectively. Craig decides to leave the partnership and is paid P90,000 from the business based on the original contractual agreement. If the goodwill method is to be applied, what is the balance of Montana’s capital account after Craig withdraws? a. P133,000 b. P137,500 c. P140,000 d. P145,000 A. I – a; II – d C. I – b; II – d B. I – b; II – c D. None of the above 000 Art. capital (30%) 18.334 to Darby.000 Liabilities P 50. A partnership has the following balance sheet just before the final liquidation is to begin: Cash P26.000 Raymond. Proportionate consolidation method in accordance with PAS 31 7.000 Total P119. Costs are assigned to the joint products by the market value method. P12. II – b C. I – b. capital (40%) 18. Woodrow.to Art. P12. Angela. P3. None of the above 6.000 c. it must recognize any investment retained in the former subsidiary at a.200 to Raymond. Production and cost data follow: Pep Vim Zest Units produced 5. The value of Zest to be deducted from the joint costs is: a.000 during the quarter.000 1. I – c. The total manufacturing costs for 10.000 d.000. A local partnership is liquidating and is currently reporting the following capital balances: Angela.000 Inventory 31. I – d. What distribution can be made to the partners? a.333 to Raymond. Angela.000 Total P119. P1. capital (30%) 25.000 Cassidy. and a by- product. P1.000. P13. P13.500 c. Equity method in accordance with PAS 28 c. Fair value method in accordance with PFRS 9 d. P11.200 to Darby. P2. The other assets are sold for P40. capital (30%) 26. d.500 to Darby. II – a D. For allocating joint costs to the by-product. b.000.000 b. I – c. capital (50% share of all profits and losses) P 19.333 to Art. P2.000 Liquidation expenses are estimated to be P12. I – c.500. adjusted for any dividend received from the subsidiary 8. None of the above AFAR – NCR Frontliners 2017 . P1. P1. Woodrow. P 0 b.000 Other assets 62.000 Sales price per unit P50 P40 P 5 Further processing cost per unit 10 5 - Selling and administrative expense per unit 2 Operating profit per unit 1 I. P600 to Art. P1.500 II. Angela. Under PFRS 10. P12.000 units were P172. How much of this money should each of the partners be given? a. Under PFRS 11. The following are information regarding a partnership undergoing liquidation: I. with any gain or loss recognized in other comprehensive income d. P5. P13. II – d B. Fair value. Compute the gross profit for Pep: a. P-0.500. P100. A chemical company manufactures joint products Pep and Vim. P70. capital (20%) (12. P 80. II – a C. P-0. A. P12. II – d D.000 d. Woodrow.000 b.000 ________ Darby. Carrying amount b. P2. Fair value.500 to Raymond. Zest. joint arrangements that are joint ventures (which were ‘jointly controlled entities’ under the PAS 31) are accounted for under a. with any gain or loss recognized in profit or loss c.000 Woodrow. Woodrow. P1.200 to Raymond.000 in cash that is presently available. the market value or reversal cost method is used. II – a B.NFJPIA-NCR Page 2 of 14 5. I – b.000 A.000 4.to Art.000 d. Cost method in accordance with PAS 39 b. Angela. Zero II.000) Cassidy has indicated that a forthcoming contribution will cover the P12.000. when a parent loses control of a subsidiary. c.000 c. Original acquisition cost.000 deficit. which considers further processing costs in subsequent operations. However. P2.800 to Darby. the two remaining partners have asked to receive the P25. 40A + . The following are information regarding parent and subsidiary: I. On May 1. I – d. Reinsurer d. II – d B. Income is recognized when received while expenses are recognized when paid.NFJPIA-NCR Page 3 of 14 9. Par Company owns 60% of Sub Corp. with P20. I – c.30U +. II – a C. Clark owns a 15% interest in Dean and does not exert significant influence. a wholly-owned subsidiary. P320.10U C. P303.125% c. 80% . it refers to a party that has a right to receive compensation under an insurance contract if an insured event occurs. P42. Kent’s gross profit on the sale was P48. Distinctions between current fund and noncurrent fund AFAR – NCR Frontliners 2017 . 2008. The modified accrual basis in accounting for government transactions means a. a. Hartwell Company distributes the service department overhead costs to producing departments and the following information for the month of January is presented as follows: Maintenance Utilities Overhead costs incurred P18. M = P 9.40A + .000 b. Insurer c. II – d D. Basic information for the organization as a whole b.000 b. P 0 A. I – c. Clark had P60. Under PFRS 4. P317.700 + .40B 14. 100% .000 in cash. 100% . Cedant b. 2008. what would be the formula to determine the total maintenance costs? A.000.700 + . P70. consolidated balance sheet for current assets? a.000 of this inventory remaining on December 31.000 gross profit.000 II.125% 12. Inherent differences of not-for-profit organization that impact reporting presentations d. Income is recognized when received while expenses are recognized when incurred b.000 of this inventory on hand at year-end.000 c. Standardization of funds nomenclature c. 2008 consolidated balance sheet? a. Clark had consolidated current assets of P320. Income is recognized when earned while expenses are recognized when incurred. What amount should Clark report in its December 31. M = P27. except for transactions that are required by law to be accounted for under cash or another basis 11. which was still outstanding at December 31. To be highly effective. 10% Utilities department 20% - Producing department A 40% 30% Producing department B 40% 60% Hartwell Company distributes service department overhead costs based on the reciprocal method.000. except for transactions that are required by law to be accounted for under another basis d. Financial statement of not-for-profit organization focuses on a.000 d. the actual results of the hedge must be within a range of a.000 + .  Purchases of raw materials totaling P240.000 from Kent Corporation. 2008.700 P 9. P28. Income is recognized when earned while expenses are recognized when paid c. Policyholder 13. Dean had P15.700 + . M = P18. Before eliminating entries. Clark Company had the following transactions with affiliated parties during 2008:  Sales of P60. None of the above 10. What portion of this advance should be eliminated in the preparation of the December 31.150% b.000 to Dean. M = P18.20U D.000 Services provided to: Maintenance department . 2008. Par advanced Sub P70.000 d.100% d.40B B.’s outstanding capital stock. P308.000 c. 80% . .......250 P 10....P 3.960 Direct labor (900 hours)...500 Factory overhead applied............ Statement III:For each business combination.000 for Z.210 Inventory of direct materials......... the following information was gathered in connection with the inventories: Inventory of work-in-process: Direct materials used.000...000 Cost of installment basis 240.Share the remaining partnership profit was P5....... X invested an additional P60..960 Direct labor (1. .. 2012 had the following initial investment: X……………………………………………………………………………………………………………………………P 100.... P222.Salaries allowed to partners: P60......... P 108..000 P500.... P207....000 350..000 The partnership agreement states that the profits and losses are to be shared equally by the partners after consideration is made for the following: ..500 hours).. Y..560 C..... P48..... At the end of June 2012..710 Direct materials inventory..000 Cash collected on installment sales: AFAR – NCR Frontliners 2017 .... a partnership formed on January 1..50 per direct labor hour was applied to production.. a.. 4.....750 D......ZZ withdrew P70... 2010 selling home appliances and furniture sets both for cash and on installment basis.... 2012.. 2010 and 2011 were as follows: 2010 2011 Installment sales P400.. P 118... 48.600 16...P 12..000 for each partner. Pistahan Corporation is a manufacturing company engaged in the production of a single special product known as “Marvel”. P 142. ....000 Y…………………………………………………………………………………………………………………………… 150....... Production costs are accumulated with the use of a job-order-cost system.Average partners’ capital balances during the year shall be allowed 10%..900 hours at P 5 per hour Factory overhead of P 2..... 7.600 In analyzing the job-order cost sheets....... Statement II:The acquirer shall measure the identifiable assets acquired and the liabilities assumed at their acquisition date fair values........... 2012. 2...850 B.........750 C..000 from the partnership on September 30.......... X. Only statement I is true c.750 P 24.............. interests and partners’ share on the remainder was: A....500 Factory overhead applied.. 2012 before salaries........750 17....NFJPIA-NCR Page 4 of 14 15. Data on the installment sales operations of the company gathered for the years ending December 31.........000 Direct labor worked 9........000 Compute the cost of goods manufactured: A..On June 30..000 Z…………………………………………………………………………………………………………………………… 225. Only statement II is false d. Kanlaon Corporation started operations on January 1..... P 131.P 51.. P199... and Z.710 The following manufacturing activity occurred during the month of June 2008: Purchased direct materials costing P 60.P 10. 3..... 2012 were as follows: Direct materials used.. Additional information: . the acquirer shall measure any non- controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets...... All of the statements are true b...... Only statement III is false 18.... P211...... ........000 for Y.. the records disclosed that the compositions of the work-in-process inventory on June 1... The following statements are based on PFRS 3 (Business Combinations): Statement I: An entity shall account for each business combination by applying the acquisition method..... and P36.... 2012: Work-in process..... Partnership net profit at December 31......625 B...000 for X.350 D... The following information is available as of June 1.. only when the interest in the foreign operation is sold 23. Profit or loss b. If Lucille changes its method of accounting for Robon sales by showing the net amount as "Other Income.000.00 for each unit. b. P 76. A Philippine importer that purchases merchandises from a foreign firm’s foreign current unit (FCU) would be exposed to a net exchange gain on the unpaid balance if the a. Abnormal spoilage in a manufacturing process should be charged to a. What is the correct accounting for Joint Arrangements? a. manufactures a product that gives rise to a by-product called "Robon. Apportioned to the years of the contract according to the percentage of completion method d." the effect on the gross margin would be: A. Peso weakened relative to the FCU and the FCU was the denominated currency b. an installment sales on 2010 was defaulted and the merchandise with an appraised value of P5.000 was repossessed. NFJPIA-NCR Page 5 of 14 2010 installment sales 210. Peso strengthened relative to the FCU and the FCU was the denominated currency d. Set off against profit of other construction contract where available b. Joint arrangements classified as joint ventures are accounted for under PFRS 11. 2011 was: A.000 respectively. Gains or losses that arise as a result of translating foreign currency denominated operations into the reporting currency are recognized in income: a. All joint arrangements are accounted for under PAS 28.000 D.000 and P400. Lucille Inc. The balance of the Deferred Gross Profit controlling account at December 31. d. 2012. Manufacturing overhead applied d.000 Additional information: On January 5. P160. Sales revenue and cost of goods sold from the main product were P500. Accumulated profit or loss c.000 B. unless revenue to date exceeds costs to date c. the expected loss should be a." The only costs associated with Robon are additional processing costs of P1. Related installment receivable balance on January 5. in the reporting period in which they arise d. 2012 was P8.00 each. P2.000 units of Robon were produced which were sold for P3. c. Under PAS 11.000 AFAR – NCR Frontliners 2017 . Joint arrangements classified as joint ventures are accounted for under PAS 28. Recognized as an expense immediately. Peso strengthened relative to the FCU and the peso was the denominated currency 20. when it is probable that total contract costs on a fixed price construction contract will exceed total contract revenue. P190.000 2011 installment sales 300. P130. Recognized as an expense immediately 24. For the past year 2. only when they are settled in cash c. P4.000 C. P6. P 0 C. Compute the gross margin after considering the by- product sales and costs. only if they are material items b.000 B. 22. Lucille accounts for "Robon" sales first by deducting its separable costs from such sales and then by deducting this net amount from the cost of sales of the major product. Manufacturing overhead control 21.000 D.000 19.000 150. Peso weakened relative to the FCU and the peso was the denominated currency c. Joint arrangements classified as joint operations are accounted for under PAS 28. 780 Fixed 5. 1. P520.400 27. P244. P33. P 50.000 Installment accounts receivable. 2010 140. .00 unfavorable What were the actual direct labor hours worked during the month? A. P32. .NFJPIA-NCR Page 6 of 14 25.000 Accounts payable – trade P 50. The packaged sawdust can be sold for P2 per pound. Joint products are assigned joint costs based on board feet.000 Gain on repossession 6. .200 B.80 3. Packaging costs for the sawdust are P. .100 D.000 ________ Total P 932. .00 unfavorable Labor rate.000 Other assets 497. . The by-product net revenue serves to reduce joint processing costs for joint products. Sterling Products Corporation adopts perpetual inventory procedures. Using the same information in No.000 Retained earnings 80.975 Items 28 and 29 are based on the following information: Presented below is the unadjusted trial balance of Sterling Products Corporation at December 31.080. 1.133 D. . . On installment sales. .000 Four-by-eights produced (board feet) .500 Variances: Materials price. Analyses of these transactions were summarized as follows: Inventory………………………………………………………………………………………………… 7.000 Capital stock 600. . . . A lumber company produces two-by-fours and four-by-eights as joint products and sawdust as a by-product. 4.500 Unrealized gross profit. .000 Unrealized gross profit – 2008 10. 2. what were the actual quantities of materials used during the month? A.000 B. P32. 200. .156 C. 100. In addition. Data follows: Joint processing costs .000 P 932.00 10. . .000 Unrealized gross profit – 2010 100. . the corporation charges installment accounts receivable and credits inventory gross profit accounts.60 5.20 10.400 Installment Accounts Receivable – 2008…… 2. . 2.000 Unrealized gross profit – 2009 86.00 unfavorable Labor efficiency. 26.333 26. 2009 40. 2009…………………………………………… 2.000 Inventory. .225 B. . . . .400 Direct labor 2 hrs @P2. .920 Factory overhead: Variable 1. 5.000 Sawdust produced (pounds).000 C. The following information summarizes the standard cost for producing one metal tennis racket frame.000 Installment accounts receivable. . P32. . . Repossessions of merchandise have been made during 2010 due to some customers’ failure to pay maturing installments. .000 Operating expenses ___50. . . . . P500.000 Installment Accounts Receivable – 2009…… 6.10 per pound and sales commissions are 10% of sales price. Assume that all inventory accounts have zero balances at the beginning of the month: Standard Cost Standard Monthly Per Unit Costs _____ Materials P 4. 12/31/2010 200. the variances for one month's production are given.00 P 8. . . 2. 3. . 2008…………………………………………… 800 Unrealized gross profit.000 Gain on repossession…………………………………………………… 2. P2.000 What is the cost assigned to two-by-fours? A.000 Two-by-fours produced (board feet) . 2010: Debit Credit Cash P 5.700 AFAR – NCR Frontliners 2017 . . 4. .000 Cost of goods sold had been uniform over the years at 60% of sales.000 C. .800 D.75 unfavorable Materials quantity. . . The joint venture accounts in the books of the venturers (participants) M. The consideration was estimated to include a control premium of P24 million.200.000. Current cost only b. P4. Moon acquired a 65% interest in The Homer Company for P300. P200 loss C.000 and Job No. P44. P124. Loco's net assets were P85 million at the acquisition date.700 33. (2) Goodwill should be measured at P34 million if the non-controlling interest is measured at fair value.000 D. O pays P900 to M and P750 to N C. Statement (1) Statement (2) Statement (1) Statement (2) A. The Moon Company acquired a 70% interest in The Swan Company for P1.000 29.000 Direct labor 40. P300 loss B. Neither Swan nor Homer had any contingent liabilities at the acquisition date and the above fair values were the same as the carrying amounts in their financial statements.650 Final settlement of the joint venture will require payments as follows. True True 34. The work-in-process on April 30 represents the cost of Job No. True False B. The work-in-process account of the Malinta Company which uses a job order cost system follows: Work-in-process April 1 balance P25. 789 which has been charged with applied overhead of P2. N pays P1. False True D. Annual AFAR – NCR Frontliners 2017 . A.000 Finished goods P125.000 when the fair value of Homer's identifiable assets and liabilities was P640. A fair valuation of these items would be a sale price of the repossessed merchandise at P10. M pays P900 to O and N pays P750 to O B.400. It was ascertained that they were booked upon repossession at original costs. Current cost less cost of beginning work in process inventory 32. Moon measures non-controlling interests at the relevant share of the identifiable net assets at the acquisition date.000 Overhead applied 30. Gain/loss on repossession was: A. which has been charged with direct labor cost of P3. M pays P900 to N and N pays P750 to O 31.420. The cost per equivalent unit under the weighted average method of process costing considers a.500 B. Are the following statements true or false. The cost of direct materials charged to Job Nos. P136.500 D.000 B. 456.200 C. P7.000 C. The Natural Company acquired 80% of The Loco Company for a consideration transferred of P100 million. show the balances below. Current cost plus cost of beginning work in process inventory d. upon termination of the joint venture and distribution of the profits: BOOKS of M N O Accounts with Dr Cr Dr Cr Dr Cr M 900 900 N 750 750 O 1.000 after incurring costs of reconditioning of P5.000 Overhead is applied to production at a predetermined rate based on direct labor cost. P56. N and O. 2010.650 to M and O pays P900 to N D. Current cost plus cost of ending work in process inventory c.650 1. P8. 456 and 789 amounted to: A. P200 gain D.000 when the fair value of Swan's identifiable assets and liabilities was P1. according to PFRS3 Business combinations? (1) Goodwill should be measured at P32 million if the non-controlling interest is measured at its share of Local's net assets. Realized gross profit on 2010 sales was: A.000 and cost to dispose them in the market at P500. NFJPIA-NCR Page 7 of 14 The repossessed merchandise was unsold at December 31. 28. False False C.450 Direct materials 50. P4.000. P300 gain 30. 000 16. P19. The partners also sold during the month the entire inventory on which they realized a total of P32.000 Inventory 39.800 Items 36 and 37 are based on the following information: The income statement submitted by the Pampanga Branch to the Home Office for the month of December.000 B.000 Cost of sales: Inventory. The balance sheet of the partnership appeared as follows: Assets Liabilities & Capital Cash P 8. Gains on the bargain purchases: Nil or zero D. Gains on the bargain purchases: P116. Sales …………………………………………………………………………… P 600. 140% C. P16. Goodwill: Nil or zero.200 Accumulated N. 2010.000 Inventory. drawing ___200 33. at which time the partners were sharing profits and losses 40% to M and 60% to N.400 D. 2.000 Total available for sale……………………… P460. 2010 is shown below.400 B. respectively.000 P 84.000 B.600 Equipment P65.000. Interest of 10% shall be paid on that portion of a partners capital in excess of P100. The billing price based on cost imposed by the home office to the branch.000 360.000 C. A. Gains on the bargain purchases: P116. None of the above 38. Their capital account balances at year-end were A. P10. loan 14. B. capital P31.000 and P12.000 for the year. the partners collected P600 of the receivables with no loss. They share profits and losses on a 4:4:2. The balance of allowance for overvaluation of branch December 31.000.000 Net income P 60. P16.000 Gross margin ………………………………………………………… P240.000 Operating expenses ………………………………………… 180. How much of the cash was paid to M’s capital on July 31. B.600 C. Goodwill: P580.000 and C.400 25.000 Total …………………………………………………………………………… P 80. After effecting the necessary adjustments the true net income of the Branch was ascertained to be P156. P90. what figures in respect of goodwill and of gains on bargain purchases should be included in Moon's consolidated statement of financial position? A. Gains on the bargain purchases: Nil or zero 35. 3. P320 B.000 The branch inventories were: 12/01/201 12/31/201 0 0 Merchandise from home office………………… P 70. Goodwill: Nil or zero.000 C.400 N.000 shall be paid to partners A & C.800 34.400. Partner C is to receive a bonus of 10% of net income after the bonus.200 N.000 Total P105.400 M. P50.000 Total P105. P19.000. drawing __5.000 Shipments from Home Office………………… 350. P 0 AFAR – NCR Frontliners 2017 . NFJPIA-NCR Page 8 of 14 impairment reviews have not resulted in any impairment losses being recognized. 40% B. and A. Goodwill: P580. after the following special terms: 1.000 36.000 D.000. P 5.000.800 C. A.000. Under PFRS 3 Business combinations. P25. December 1……………………………… P 80. 2008 after adjustment.000 Depreciation 30.000 Local purchases……………………………………………… 30. 2010? A. Salaries of P10. capital P33.000 Local purchases…………………………………………………… 10. the total profit share of partner C was: A.800 D.400 Receivable 22.800 Accounts payable P 32. The partners of the M&N Partnership started liquidating their business on July 1.000 During the month of July. 100% D. P110.400 M. P24. 29% 37. December 31…………………………… 100. P 7. Assuming a net income of P44. and C are partners in an accounting firm.000 P100. 4.000 P 320. P1. At the end of the year. The branch made profit of P10.215. 2010 P 24.420 B.400. P123. P117.360 C. Following data pertain to Matiisin Company which sells appliances on an installment basis: 2008 2009 2010 Installment sales P390. including P30. P 96. What is the balance of the Home Office account on the books of the branch as of December 31. P106.000 44.500 The total realized gross profit in 2010 on the collections of 2008. 2.100 for the month of December but the home office erroneously recorded it as P11. A home office accounts receivable for P10.000 P420.920 D. P1.000 and retained earnings of P500. Said collection was not reported to the home office by the branch. P 60.600 288.000 P480.000. Supplies of P4.180.920 C.000 P 300. what figure in respect of Pulley's retained earnings should be included in the consolidated statement of financial position? AFAR – NCR Frontliners 2017 .500 was collected by the branch. P 9.000 sent by home office on December 31. P106. All transactions are presumed to have been properly recorded.900 243. P 800 B. P167. as follows: From Sales Made in: 2009 2010 Account balance P 10. and 2010 sales was: A. including P40.600 B.000 P 5. This was charged to General Expense account. P 96.960 40. The following information are ascertained: 1. P121.000 From Sales Made in: Installment accounts receivable balances: 2008 2009 2010 January 1. 3. The home office has billed the branch the amount of P37.920 43. P179.000 and retained earnings of P1. the Branch account in the books of the home office at Manila shows a balance of P150. According to PAS 27 Consolidated and separate financial statements.420 B. The following figures are from their separate financial statements: Carly: Trade receivables P1. before adjustments? A.000 C. what figure should appear for trade receivables in Carly's consolidated statement of financial position? A.000 due from Halley. Pulley's current statement of financial position shows share capital of P100.000.225. P(1. What is the adjusted balance of the reciprocal accounts? A.000.000. Halley: Trade receivables P215.000 due from Carly. P117. Under PAS 27 Consolidated and separate financial statements.920 42.500 for the merchandise. which was in transit on December 31.000 B. NFJPIA-NCR Page 9 of 14 39. P62. The net gain (loss) on repossession on defaulted sales of 2009 and 2010 was: A.000 Repossessions on defaulted accounts were made during 2010. The branch has not received the cash in the amount of P25. P(800) D.000.000 D.000.000 D. The White Company acquired an 80% interest in The Pulley Company when Pulley's equity comprised share capital of P100.300) 41.500 3.000 D. a revaluation reserve of P400.185. 2010 . 5. Pasig Garment Company operates a branch in Cabanatuan City.000 Cost of sales 237.255. The Carly Company owns 75% of The Halley Company. P 500 C. 2009.500 was returned by the branch to the home office but the home office has not yet reflected in its records the receipt of the supplies.420 C. P1.040.000 Net resale value of repossessed merchandise 4.000 December 31. P1. P1.000 D. The Snipes Company owns 65% of The Genie Company.000 No change 48. On the last day of the accounting period Genie sold to Snipes a non-current asset for P200. Increase by P1.000 45.000 D. P1. P1. The asset originally cost P500.NFJPIA-NCR Page 10 of 14 A. Bonifacio contractors had a 3-year construction contract in 2012 for P900.000 Increase by P300.000 C. On December 31.000 No change C. The asset's original cost was P2. Data on this contract follows: Accounts receivable – construction contract billings P 30. 2012 its carrying amount in Virgil's books was P800.000 Increase by P195.000. 2012 its carrying amount in Viking’s books was P160.000 D. Under PAS27 Consolidated and separate financial statements. Reduce by P40.000.000 B. On December 31.000 D. the last day of the accounting period. Income to be recognized each year is based on the ratio of cost incurred to total estimated cost to complete the contract. 2012 The Muldon Company acquired 100% of Roel and estimated the fair value of the equipment at P460.000 Reduce by P40.000. The group's consolidated statement of financial position has been drafted without any adjustments in relation to this non-current asset.040. The Virgil Company owns 65% of The Migu Company.000 B. Under PAS 27 Consolidated and separate financial statements.000 B. Under PAS27 Consolidated and separate financial statements. 2009 at a cost of P800.000 B.440. depreciating it over 8 years with a nil residual value. Reduce by P200 Reduce by P70 D. what adjustments should be made to the consolidated statement of financial position figures for non-current assets and retained earnings? Non-current assets Retained earnings A.000. Reduce by P40. Bank deposits to this contract amounted to P50. 2012. Increase by P300.375 Net income recognized in 2012 (before tax)………………………… 15.000 Bonifacio Contractors maintains a separate bank account for each construction contract. Virgil sold to Migu a noncurrent asset for P1. Reduce by P40. 2012. The group's consolidated statement of financial position has been drafted without any adjustments in relation to this non-current asset. Increase by P1.000.000 C. Reduce by P200 No change C.000.375 10% retention……………………………………………………………………………………………………… 9.000 Increase by P75. P45. Increase by P300. with a remaining life of 5 years. P144. Vikings sold to Lakers a noncurrent asset for P200. On January 1.000 47. Reduce by P30. P94. The asset's original cost was P500.000 Reduce by P10.000 C.000 46. what adjustments should be made to the consolidated statement of financial position figures for retained earnings and non-controlling interest? Retained earnings Non-controlling interest A. What was the estimated total income before tax on this contract? A.000 and at the end of the reporting period its carrying amount in Genie's books was P160.000.000 Construction in progress…………………………………………………………………………P 93. The company uses the percentage-of-completion method for financial statement purposes. the last day of the accounting period.000. Increase by P300.000 and on December 31.520. The Lakers Company owns 75% of The Viking Company.000 Reduce by P26.500 Increase by P525 B. The Roel Company acquired equipment on January 1. P 720. The group's consolidated statement of financial position has been drafted without any adjustments in relation to this non-current asset.500 and on December 31. Increase by P225.500 No change 49. This fair AFAR – NCR Frontliners 2017 .000. what adjustments should be made to the consolidated statement of financial position figures for non-current assets and non-controlling interest? Non-current assets Non-controlling interest A. P135.750 Less: Amounts billed…………………………………………………………………………………… 84. 470 B.000 Allowance for branch inventory. December 31.550 Davao Branch 58. 2010 P 23.470 D.000 Credits Home office P 53. 2010 inventories excluding the shipment in transit .000 B.000 Bad debts 10. A firm reports above normal earnings for five or more consecutive years Items 51 and 52 are based on the following information: Apo Supply Company is engaged in merchandising both at Home Office in Makati. Decrease by P8.000 C. what adjustments should be made to the depreciation expense for the year and the statement of financial position carrying amount in preparing the consolidated financial statements for the year ended December 31. P25. are: Home office.000 P 11. a shipment with a billing value of P5. P690.000 C.000 54. It can be established that a definite benefit or advantage has resulted to a firm from some item such as good name. Net income of the Home Office was: A. P11. P20.300 Purchases 190. P800.NFJPIA-NCR Page 11 of 14 value was not incorporated into Roel's books and the depreciation expense continued to be calculated by reference to original cost.000 Davao branch. P13.400 51. two real estate companies (the parties . It is internally generated b. at billed value (excluding freight of P520)……… 10. Selected accounts in the trial balances of the Home Office and the branch at December 31.000 Salary expense – nurses 100.000 50.000 B.000 C.000 Sales to Branch 110. Increase by P8.300 Sales P155.Packet Company and Sacket Company) set up a separate vehicle (Harrison Company) for the purpose of acquiring and operating a shopping centre. capable staff.000 28.000 Contractual adjustments 110. Decrease by P8. P15. or reputation c.000 D.000 Decrease by P24. 2013. P680. 2010.000 Additional information: 1.000 Undesignated gifts 80. P10.000 B.000 What is the hospital’s net patient service revenue? A. Goodwill should be recorded in the accounting records only when a. P12.500 Sundry expenses 52. 2010 follow: Debits Home Office Branch Inventory. January 1. Net income of Davao branch was: A. Increase by P8. 2010 1.470 C. A hospital has the following account balances: Revenue from newsstand P 50.470 53. The Home Office bills the goods at cost plus 10% mark-up.000 140. Davao branch receives all its merchandise from the home office. P10.000 Increase by P24.000 Freight-in from home office 5.000 105.000 D.000 Interest income 30. P880. The contractual AFAR – NCR Frontliners 2017 . 2013? Depreciation expense Carrying amount A.000 Decrease by P24.000 Amount charged to patients 800. On January 1. 2. It is acquired through the acquisition of another business d. At December 31. Metro Manila and a branch in Davao.000 Increase by P24.000 52.000 D. January 1. at cost…………………………………………P 30. Freight on this shipment was P250 which is to be treated as part of inventory.000 was in transit to the branch. Under PAS 27 Consolidated and separate financial statements. 844. P1. . . . had a realized foreign exchange loss of P15. P 23. . 2. Packet Company paid P1.015. 5. .724.784.000.000 B.000 B. 2012 Loans payable account balance obtained to hedge the net investment amounted to A. . what amount should be included as foreign exchange loss? A. managing the car park. 2011 and must also determine whether the following items will require year-end adjustment: • Connie had an P8.000 shares of Harrison’s voting common stock. The invoice is payable on January 30. Interest calculations are ignored. P1.05 2012 average. . P 11.200 Use the following information for questions 58 to 59: AFAR – NCR Frontliners 2017 . 2011 invoice date.000 D.NFJPIA-NCR Page 12 of 14 arrangement between the parties establishes joint control of the activities that are conducted in Harrison Company. 3. . .800 1. not the parties. 2011.000 meters. . P 15. . Finished 16. Connie Corp. the firm produced 16. has rights to the assets.000 translation adjustment gain. Compute the Finished Goods.00 December 31. .000 on December 31. 1. 1.000 56. In Connie’s 2011 consolidated income statement.884.011.000 for the year ended December 31. . The bank loan has a principal amount of 200.200 B.000 d.024.000 of conversion costs. P196. P210. .000.800 1. relating to the arrangement.000 of direct materials.000 D. Selected exchange rates between the functional currency (Nt dollar) and the peso are as follows: Date Rate January 1. .800. 2012 .6 million for 50. which represents a 40% investment. . Noting that there was a P5.022.000 C. . .000. .000 of conversion costs to Raw and In Process Inventory.000. . Dora Inc. .200 C.000 c. No allocation to goodwill or other specific account was made. .015. P 0. . . P206. . Incurred P708. maintaining the centre and its equipment. such as lifts. . The following event took place in August: 1. The bank loan is designated as a hedge of net investment and is considered to have satisfied all necessary criteria.03 The December 31.000 57.000 Nt dollars. and building the reputation and customer base for the centre as a whole. 1. -0.000. . 12. .000 C. The Philippine peso equivalent of the payable was P64. P -0.000. These activities include the rental of the retail units. The standard cost for each meter is: Direct material P 20 Conversion costs 44 Total P 64 Assume that the company had no inventory on August 1. 1. . The joint control over Harrison is achieved by this acquisition and so Packet applies the equity method. . Sold 15. P1. and obligations for the liabilities. 4. 2012 . . P1.000 D. . 2012. (the parent company) secured a foreign bank loan denominated in the functional currency when the spot rate was 1 Taiwan Nt dollar = P1.000 55. Kuchen Manufacturing uses backflush costing to account for an electronic meter it makes. . . P 1.000 on the October 31. . .000 loss resulting from the translation of the accounts of its wholly owned foreign subsidiary for the year ended December 31. P 19. 2013? a. The main feature of Harrison’s legal form is that the entity.000 meters of which it sold 15. During August 2011. As a result. • Connie had an account payable to an unrelated foreign supplier payable in the supplier’s local currency. 2011 . 12. . . . P200. What is the balance in the Investment in Harrison account found in Packet’s financial records as of December 31. and it was P60. Purchased P320. Applied P704. Harrison distributed a dividend of P2 per share during the year and reported net income of P560. 2011.780. ending and the amount of Cost of Goods Sold after the adjustment of over-under applied conversion cost: Finished Goods. .000 b. .98 October 1.800 meters for P100 each. . ending Cost of Goods Sold as adjusted A. . . .000) P(500. . .000) P(260. . . transactions costs such as brokerage fees may be incurred.000) Cash and receivables .000 Net income . . .000) Retained earnings. . The remaining 20 percent of SZ had an acquisition- date fair value of P65. P460. . . II and III 62.000) P(200. P80. As of December 31. . . . .000. . Cash b. . . of this equipment in the 12/31/x6 consolidated balance sheet? a. . . . . .000 60. . Cash flow hedge b. . . . . AFAR – NCR Frontliners 2017 . .000. P100. . . . . . . . . . . . . 63. . . . .000 b. . . . . . . . . . . . . b. . . P400. . . . . . Operating hedge c. . . Sylux. . SZ possessed equipment (5-year life) that was undervalued on its books by P25. . . .060. . . . . . . . . . . . . . . . . . .000 and P56. I and III c.000) Dividends paid . . -0- Retained earnings.000) P(140. .000 d. . . What are the cost and accumulated depreciation. .000) (260. . . . . . . . . . . . . . . P(420. . . . 150. . . Investments c. . . . 1/1 . . .000. . .000 and P16. . . . (200. Of these goods. What is the total consolidated cost of goods sold? a. . . . . .000) P(110. . . . .000. . . . . . . . . . .000 and P16. . . . . . . . . . . . . JJ acquired 80 percent of the outstanding voting stock of SZ for P260. I and II b. . . respectively. . . . . Pylux sold equipment costing P100. P(1. . 260. . Which models are allowed to be used by the private operator for build- operate-transfer (BOT) schemes under IFRIC 12? I – Financial Asset model II – Intangible Asset model III – Property. . . . . . . . . . . . . .000 and P60. . . II and III d. . P420. . . .000. . . 12/31 .000. . (440. the equipment had been 50% depreciated (using the straight-line method and an assigned life of 10 years). . .000 P500.000. . .000 c. . . . .000 59. . . . . . . .000 and P60. . Acquisition expenses Use the following information for questions 63 to 65: On 1/3/x6. P500. . P(140. . P130. were estimated to have a 20-year future life. . . . . . . . . . . . . . . . . . . . . . . . . . . . d. . . P140. . These formulas. c. . . .000) During the year. . At the time of the sale. . .000) Cost of goods sold . . . . . .NFJPIA-NCR Page 13 of 14 On January 1. . . . . . .000 d. . . . . . . . . . . for P80. . . . . P80. 140. .000 cash consideration. .000.000 80. . . .000 -0- Equipment (net) . . . What is the total of consolidated revenues? a. . . . . . . .000) (110.000 Total assets .000 c. . . . . P152. . (140. . . . SZ had paid for only half of this purchase by the end of the year. . . although not recorded on SZ’s financial records. . P1. . . . .000 300. Fair value hedge d. SZ also had developed several secret formulas that JJ assessed at P50. . On January 1. . . . P(300. Share capital d. . .000) Total liabilities and equities . . . . . Notional value hedge 61. . . . . .000 10. . . P210. I. .000) Net income . .000 Investment in JJ . .000 and sold it to SZ for P100. . . . . . . e. . . . .000 to its 100%-owned subsidiary. . . . According to PFRS 3 Business Combinations the appropriate accounting treatment for such costs in the records of the acquirer is a debit to: a. 12/31 . . . Sylux continued depreciating the equipment by using the straight-line method over a remaining life of 5 years. . P132. . Plant & Equipment model a. . . If shares are issued as part of the consideration paid. . . P80. 440. . . . . 20. . .000 110. . . . . .000) (100. . . . . . . .000 Inventory .060. P (300. . . . . . . JJ bought inventory for P80. . 58. . . . . . . . .000 P90. . . . SZ still owns60 percent on December 31. . . . . . . -0. . . . . .000. .000 Expenses . . . . .000) Retained earnings.000) Common stock . P(440. .000) P(150. . . . . . . . . . . . . . . . . P100. . .000 Liabilities . . . . . . . . .000. . .000 b. . . . . . For which type of hedge are changes in fair value deferred and amortized as an equity adjustment? a. . . . . . the financial statements appeared as follows: JJ SZ Revenues . . . . 67. . . Assume that the peso is the subsidiary’s functional currency.000 and Inventory = P17. 0. Marketable equity securities P19. P6. 0. . 20x4 .000 65.000 and Inventory = P16. . . 20x4? a. The test indicating that an intra-group business transaction has been realized is: a.000 c. Marketable equity securities = P17. . . .000 e. Under NGAS.000. Marketable equity securities P19.000 and Inventory = P16. d. Marketable equity securities = P17. d. . Obligation c. It pays for both items on June 1. What is the amount of the adjustment to Depreciation Expense in preparing the consolidation worksheet at 12/31/x6? a. c. power over the investee b. . P24. What is the amount of the intercompany profit or loss that must be deferred at 12/31/x6? a.000 e. the presence of only within the group as parties to the transaction d.000 foreign currencies each. 20x4 . exposure.000 and Inventory P19. P5.15=1 FC April 1.000 Use the following information for questions 66 and 67. Marketable equity securities P19.000.000. .NFJPIA-NCR Page 14 of 14 64.000 and Inventory = P16. 0. What balances does a consolidated balance sheet report as of December 31. . Allotment b. . to variable returns from involvement with the investee d. . Marketable equity securities = P16.P0. 20x4. P4. the involvement of an external party in the transaction c. .000 and Inventory = P16. .000 b. the generation of profit from the transaction b. whether or not an operating profit or loss occurred as a result of the transaction 70. . 20x4 .000.000. Currency exchange rates for 1 peso follow: January 1. for 100. Inventory is carried at cost under the lower-of-cost-or-market rule. P16. Marketable equity securities P19. . .16=1 June 1. or rights. Appropriation d. .000 c. Assume that the FC (foreign currency) is the subsidiary’s functional currency. .19=1 66. 20x4 . 20x4. a. it is an authorization issued by the DBM to government agencies to withdraw cash from the National Treasury through the issuance of Modified Disbursement System checks. P30.000 and Inventory P19.000 d. . P–0– d. P6. P3. holding majority voting rights c.20x4? a. b. . CC Corporation subsidiary buys marketable equity securities and inventory on April 1.000. b.17=1 December 31. the ability to use power over the investee to affect the amount of the investor’s returns 69. . Under PFRS 10. c. and they are still on hand at year.000 b.end.000.000 and Inventory = P17. What balances does a consolidated balance sheet report as of December 31. Notice of Cash Allocation AFAR – NCR Frontliners 2017 . which is NOT one of the three (3) elements of control? a. P14. Marketable equity securities = P16.000. 68.