1/31/22, 2:00 PM Advanced Financial Accounting and Reporting

Advanced Financial Accounting and Reporting

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Questionnaire

General Instructions: Provide answers to the requirements in the best of your

ability. Should you have questions or clarifications, ask directly the instructor.

CORN Corporation sells equipment with a book value of P160,000 to 1 point

BEANS Company, its 75% owned subsidiary for P128,000 on April 1, 2021.
BEANS determines that the remaining useful life of the equipment is four
years and that the straight-line depreciation is appropriate. The
December 31, 2021 separate financial statements of CORN and BEANS
show equipment-net of P 800,000 and P480,000,
respectively.Consolidated equipment-net will be *

P1,306,000

P 989,200

P1,061,200

P1,218,800

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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting

Which of the following does not affect the computation of the 1 point

noncontrolling interest in the net assets of a partially owned subsidiary? *

All of the above answers are correct

Depreciation and amortization of differences between current fair values and carrying
amounts of the subsidiary's identifiable net assets on the date of the business
combination

Dividends declared by the subsidiary

Impairment of goodwill recognized in the business combination

As of December 31, the books of AME Partnership showed capital 1 point

balances of: A - ₱40,000; M - ₱25,000; and E - ₱5,000. The partners’
profit and loss ratio was 3:2:1, respectively. The partners decided to
dissolve and liquidate. They sold all the non-cash assets for ₱37,000 cash.
After settlement of all liabilities amounting to ₱12,000, they still have
₱28,000 cash left for distribution.The loss on the realization of the non-
cash assets was *

P45,000

P44,000

P40,000

P42,000

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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting

Jayhawk Company has numerous branches in the state of Kansas. The 1 point
home office purchases merchandise and makes shipments to branches
from a central warehouse at the request of branch managers. Which of
the following would be an improper accounting practice? *

The Investment in Branch ledger account is debited in the accounting records of the
home office when merchandise is shipped to a branch, and the Shipments to Branch
account is credited (assume use of the periodic inventory system).

Cash received from a branch is credited to the Investment in Branch ledger account by
the home office.

The home office debits Trade Accounts Receivable and credits Sales when
merchandise is shipped to a branch.

Only the home office maintains a Common Stock ledger account and a Retained
Earnings account.

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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting

SULUAN. INC. established a BRANCH in JOLO to distribute part of the 1 point

goods purchased by the HOME OFFICE. The HOME OFFICE prices
inventory shipped to the BRANCH at 20% above cost. The following
account balances were taken from the ledger maintained by the HOME
OFFICE and the BRANCH: *

P56,000

P105,600

P222,400

P136,000

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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting

The SOLITARY branch of MULTIPLEX Company, at the end of its first 1 point

quarter of operations, submitted the following income statement: *

P40,000 and P44,000

P25,280 and P 4,000

P30,080 and P56,080

P30,080 and P58,080

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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting

The amount to be paid to partially secured creditors is: * 1 point

P56,200

P57,000

P52,700

P45,760

The amount to be paid to fully secured creditors is: * 1 point

P32,000

P35,000
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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting

P20,000

P24,000

Foley Electronics Corporation manufactures and assembles electronic 1 point

motor drives for video cameras. The company assembles the motor
drives for several accounts. The process consists of a just-in-time cell
for each customer. The following information relates only to one
customer's just-in-time cell for the coming year. Projected labor and
overhead, ₱4,800,000; materials costs, ₱25 per unit. Planned production
included 2,400 hours to produce 19,200 motor drives. Actual production
for August was 1,300 units, and motor drives shipped amounted to 1,260
units.From the foregoing information, determine the production costs
transferred to Finished Goods during August. *

P412,500

P400,000

P357,500

P346,500

On July 1, 2016, TBB Company lent ₱308,000 to a US supplier, evidenced 1 point

by an interest-bearing note due on July 1, 2017. The note is equivalent to
$8,000 on the loan date. The note principal was approximately included
at ₱328,000 in TBB’s December 31, 2015. The note was repaid to TBB on
July 1, 2017. Due date when the exchange rate was ₱39 to $1. In its income
statement for the year ended December 31, 2017 what amount should
TBB Company included as a foreign currency transaction gain or loss? *

P0

P26,000 gain

P16,000 loss
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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting

P16,000 gain

Which of the following ledger accounts is displayed in the combined 1 point

financial statements for a home office and branch? *

Home Office

Dividends Declared

Shipments to Branch

Allowance for Overvaluation of Inventories: Branch

The Home Office ledger account in the accounting records of the Tahoe 1 point
Branch had a credit balance of P12,000 at the end of April, and the
Investment in Branch account in the accounting records of the home
office had a debit balance of P15,000. The most likely reason for the
discrepancy in the two ledger account balances is: *

Merchandise shipped by the home office to the branch had not been recorded by the
branch.

The branch had not yet recorded the home office net income for April.

The home office had not recorded the branch net income for April.

The branch had just collected home office trade accounts receivable in the amount of
P3,000.

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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting

P Company acquired a 65% interest in S company in 2018. For years 1 point

ended December 31, 2020 and 2021, S reported net income of P260,000
and P312,000, respectively. During 2020, S sold merchandise to P for
P56,000 at a cost of P43,200. Two-fifths of the merchandise was later
resold by P to outsiders for P30,400 during 2021. In 2021, P sold
merchandise to S for P78,400 at a profit of P19,200. One-fourth of the
merchandise was resold by S to outsiders for P24,000 during 2021. Non-
controlling interest net income in 2021 is *

P107,824

P110,272

P115,096

P110,992

A HOME OFFICE transfers inventory to its BRANCH at a 20% markup on 1 point

cost. During 2021, inventory costing the HOMEOFFICE P64,000 was
transferred to the BRANCH. At year-end, the HOME OFFICE adjusted its
Unrealized Intercompany Inventory Profit account downward by P14,560.
The BRANCH’s year-end balance sheet shows P3,840 of inventory
acquired from the HOME OFFICE. How much is the beginning inventory
of the BRANCH at cost? *

P12,000

P2,400

P14,400

P12,800

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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting

The partnership agreement of ROGER, REGGIE and BOBBY provides for 1 point
the division of net income as follows:• REGGIE, who manages the
partnership is to receive a salary of P35,200 per year.• Each partner is to
be allowed interest at 20% on beginning capital.• Remaining profits are to
be divided equally. During 2020, ROGER invested an additional P12,800 in
the partnership. REGGIE and BOBBY had permanent capital withdrawals
of P16,000, and P12,800, respectively. REGGIE had a temporary drawing
of P4,500. No other investments or withdrawals were made during 2018.
On January 1, 2020, the capital balances were ROGER, P208,000; REGGIE,
P240,000; and BOBBY, P224,000.Total capital at year-end was
P806,400.Compute the capital balance of each partner at year-end:
ROGER; REGGIE; BOBBY *

258,300 297,000 251,100

257,500 297,800 251,100

250,665.6 292,800 244,266.4

258,300 297,000 251,010

Darius Corporation owns 100% of Pryce Enterprises. On July 1, 2021, 1 point

Darius sold Pryce delivery equipment at a gain. Darius had owned the
equipment for two years and used a five-year straight-line depreciation
rate with no residual value. Pryce is using a three-year straight-line
depreciation rate with no residual value for the equipment. In the
consolidated income statement, Pryce recorded depreciation expense
on the equipment for 2021 will be decreased by: *

100% of the gain on sale

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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting

16.67% of the gain on sale

33.33% of the gain on sale

50% of the gain on sale

P Company acquired a 65% interest in S company in 2018. For years 1 point

ended December 31, 2020 and 2021, S reported net income of P260,000
and P312,000, respectively. During 2020, S sold merchandise to P for
P56,000 at a cost of P43,200. Two-fifths of the merchandise was later
resold by P to outsiders for P30,400 during 2021. In 2021, P sold
merchandise to S for P78,400 at a profit of P19,200. One-fourth of the
merchandise was resold by S to outsiders for P24,000 during 2021. Non-
controlling interest net income in 2020 is *

P 89,208

P 88,408

P120,888

P 92,080

On January 1, 2020, the partners SELYA, TESSA, and URSULA, who share 1 point
profits and losses in the ratio of 5:3:2, respectively, decided to liquidate
their partnership. On this date the partnership condensed balance sheet
was as follows: SELYA; TESSA; URSULA *

P55,000 P33,000 P22,000

P15,000 P51,000 P44,000

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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting
, , ,

P40,000 P45,000 P35,000

P13,500 P45,900 P39,600

Green Company started 9,000 units in February. The company 1 point

transferred out 7,000 finished units and ended the period with 3,500
units that were 40 percent complete as to both material and conversion
costs. Beginning Work in Process Inventory units were *

600

500

2,000

1,500

Salazar Corporation issued 100,000 shares of P28.50 par ordinary shares 1 point
for all the outstanding shares of Pine Enterprises on August 5, 2019. It
also paid cash of P30,000 at the acquisition date and transferred used
equipment with a carrying value of P50,000 and a current value of 70%
thereof. Salazar’s ordinary stock was selling at P30 when the business
combination was consummated. *

P3,080,000

P3,065,000
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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting

P3,145,000

P3,162,000

Parker Corporation sells equipment with a book value of P80,000 to 1 point

Sheaffer Enterprises, its 75%-owned subsidiary, for P100,000 on January
1, 2021. Sheaffer determines that the remaining useful life of the
equipment is four years and that straight-line depreciation is
appropriate. The December 31, 2021 separate company financial
statements of Parker and Sheaffer show equipment-net of P500,000 and
P300,000, respectively. The consolidated equipment-net will be: *

P780,000

P 785,000

P650,000

P 800,000

Which one of the following balances appears on consolidated financial 1 point

statements *

Dividends, reported on the subsidiary's books

Plant assets, reported on the subsidiary's books

Investment in subsidiary, reported on the parent's books

Goodwill previously reported on the subsidiary's books

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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting

Patter Corporation issues 500,000 shares of its own P10 par common 1 point
stock for the net assets of Simpson Corporation in a merger
consummated on July 1, 2019. On this date, Patter stock is quoted at P20
per share. Summary balance sheet data for the two companies at July 1,
2019, just before combination, are as follows: *

P8,000,000

P6,000,000

P7,000,000

P5,000,000

Neither the Palmer Branch nor the home office of Rupert Company had 1 point
completed any intracompany transactions during the last half of May, yet
the credit balance of the branch's Home Office ledger account on May 31
was larger than the debit balance of the home office's Investment in
Palmer Branch account. The most likely reason for this discrepancy is: *

The home office reported a net loss for the month of May.

The branch returned merchandise to the home office.

The branch reported a net income for the month of May

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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting
The branch reported a net income for the month of May.

The branch reported a net loss for the month of May.

VERDI, Inc. has several branches. Goods costing P10,000 were 1 point
transferred by the head office to Cebu Branch with the latter paying
P600 for freight cost. Subsequently, the head office authorized Cebu
Branch to transfer the goods to Davao Branch for which the latter was
billed for the P10,000 cost of the goods and freight charge of P200 for
the transfer. If the head office had shipped the goods directly to Davao
Branch, the freight charge would have beenP700. The P100 difference in
freight cost would be disposed of as follows: *

Charged to Davao Branch.

Charged to Cebu Branch.

Charged to the Head Office.

Considered as savings

Albert and Bryan have just formed a partnership. Albert contributed cash 1 point
of P2,346,000 and office equipment that cost P1,170,000. The equipment
had been used in the sole proprietorship and had been 80% depreciated.
The current fair value of the equipment is P756,000. An unpaid mortgage
loan on the equipment of P252,000 will be assumed by the partnership.
Albert is to have a 60% interest in the partnership net assets.Bryan is to
contribute, only, merchandise with a fair value of P1,890,000. Both
partners agreed on a profit and loss ratio of 55% to Albert and the
balance to Bryan.To finalize the partnership agreement, Albert should
make additional investment (withdrawal) of cash in the amount of. *

P264,000

P(15,000)

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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting
P( 36,000)

P(540,000)

What date should be used as the acquisition date for a business 1 point
combination? *

The date when the acquirer purchased more than 20% of the stock of the acquiree

The date when all the contingencies related to the transaction are resolved

The date when the acquirer signs the contract to purchase the business

The date when the acquirer obtains control of the acquiree

* 1 point

P0.76

P0.78

P0.75

P0.43

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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting

A company owning a majority (but less than100%) of another's voting 1 point

shares on the date of acquisition should account for its subsidiary *

by including 100% of the fair market values or the subsidiary's net assets and
accounting for any unowned portion or the subsidiary's voting shares using the Non-
Controlling interest account

by including only its share of the book values of the subsidiary's net assets

by including only its share of the fair market values of the subsidiary's net assets

by including 100% of the fair market values of the subsidiary's net assets.

HO Corporation has one branch office, named BRA Branch. HO is 1 point

performing the end-of-the-period reconciliation of its BRA Branch
account whose current balance is P? and BRA’s Home Office account
whose current balance is P?. The following items are unsettled at the end
of the accounting period (you may assume that the item has been
reflected in the accounts of the underlined entity): A. HO has agreed to
remove P600 of excess freight charges charged to BRA when HO
shipped twice as much inventory as BRA requested. B. BRA mailed a
check for P8,800 to HO as a payment for merchandise shipped from HO
to BRA. HO has not yet received the check. C. BRA returned defective
merchandise to HO. The merchandise was billed to BRA at P3,200 when
its actual cost was P2,400. D. Advertising expense attributable to the BRA
office were paid for by the HO in the amount of P4,000. If the adjusted
balances for the BRA Branch Account and the HO Home Office Account
is P400,000, what unadjusted balance was listed in (1) HO’s Branch
Account and (2) BRA’s Home Office Account? *

(1) P411,200 and (2) P412,800.

(1) P408 200 and (2) P404 000

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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting
(1) P408,200 and (2) P404,000.

(1) P412,000 and (2) P396,600.

(1) P403,200 and (2) P400,600.

On January 1, 2016, Multiple Company, an SME, acquired Unilateral 1 point

Company, another SME, by issuing 600,000 of its own P10 par value
ordinary shares. Subsequently, Unilateral was liquidated and its net assets
and liabilities merged into Multiple Company. Multiple’s stock was selling
at P50 per share on January 1, 2016. The amount of goodwill recorded by
Multiple in connection with the combination was P6,120,000. Multiple
incurred P300,000 of professional fees associated with the combination
and P30,000 of indirect costs.Determine (1) the fair value of Unilateral’s
net assets and (2) amount of increase in Multiple’s stockholders’ equity at
the date of acquisition. *

(1) P23,880,000 and (2) P29,970,000

(1) P24,180,000 and (2) P 29,970,000

(1) P23,880,000 and (2) P29,670,000

(1) P24,180,000 and (2) P29,670,000

When consolidating the balance sheets of a parent and its subsidiary at 1 point

the date acquisition, consolidation eliminating entries of *

Remove the subsidiary's equity accounts and revalue the subsidiary's assets and
liabilities to fair value.

Remove the full balance of the parent's investment account and the subsidiary’s.
equity accounts.

Remove the full balance of the parent's investment account and the subsidiary's equity
accounts, and adjust the subsidiary's assets and liabilities to fair value at the date of
acquisition.

Remove the book value of the parent's investment account, the subsidiary capital
stock accounts and revalue the subsidiary's tangible assets to fair value
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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting
stock accounts, and revalue the subsidiary s tangible assets to fair value.

Entity A acquired 80% interest in Entity B on December 31. 20x1. How 1 point
much of Entity B's profit will be included in the December 31, 20x1
consolidated statement of profit or loss? *

80%

100%

100% or none

None

The amount to be paid to unsecured creditors: * 1 point

P58,240

P72,000

P70,800

P78,200

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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting

In an asset acquisition: * 1 point

The acquiring company deals only with existing shareholders, not the company itself.

Statements for the single combined entity are produced automatically and no
consolidation process is needed.

The assets and liabilities are recorded by the acquiring company at their book values.

A consolidation must be prepared whenever financial statements are issued.

On January 1, 2016, CJ Corporation acquired the net assets of Rex, Inc., 1 point
by issuing 600,000 shares of its ₱10 par value common stock.
Subsequently, Rex was liquidated and its assets and liabilities merged into
CJ Corporation. CJ’s stock was selling for ₱50 per share on January 1,
2016. The amount of goodwill recorded by CJ in connection with the
combination was ₱6,120,000. CJ incurred ₱300,000 of legal and brokers
fees associated with the combination and ₱30,000 of stock issuance
costs. *

₱23,880,000 and ₱29,670,000

₱24,180,000 and ₱29,760,000

₱24,180,000 and ₱30,000,000

₱23,880,000 and ₱29,760,000

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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting

On January 1, 2021 the Blumentritt Corporation sold equipment to its 1 point

wholly-owned subsidiary, Morayta Enterprises, for P1,440,000. The
equipment cost Blumentritt P1,600,000; accumulated depreciation at the
time of the sale of P400,000. Blumentritt was depreciating the
equipment on the straight-line-method over twenty years with no
salvage value, a procedure that Morayta continued.On the consolidated
balance sheet at December 31, 2021 the cost and accumulated
depreciation, respectively, should be: *

P1,600,000 and P480,000

P1,440,000 and P 80,000

P1,440,000 and P400,000

P1,200,000 and P480,000

Consolidated financial statements are designed to provide: * 1 point

the results of operations, cash flow, and the balance sheet as if the parent and
subsidiary were a single entity.

the results of operations, cash flow, and the balance sheet in an understandable and
informative manner for creditors.

subsidiary information for the subsidiary shareholders.

informative information to all shareholders.

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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting

How is the non-controlling interest (NCI) in the subsidiary's profit or loss 1 point
presented in the consolidated statement of profit or loss? *

As part of the group's profit or loss. The group's profit or loss is then attributed to both
the owners of the parent and NCI.

Not presented but disclosed either as a footnote or in the notes. The consolidated
profit or loss pertains to the parent only.

The consolidated profit or loss pertains to the parent only. The NCI in profit is
presented separately.

Any of these as a matter of accounting policy choice

The LEGIT COMPANY established a BRANCH in MAKATI CITY on June 1, 1 point

2019. The BRANCH is to receive substantially all merchandise from the
HOME OFFICE. During the remainder of 2019, shipments to the branch
amounted to P144,000 which included a 20% mark-up on cost. The
BRANCH purchased P36,000 additional merchandise for cash and
reported unsold merchandise of P48,000 at year-end. The BRANCH made
sales of P234,000, paid expenses of P57,600 and remitted to the HOME
OFFICE all sales proceeds. The allowance for overvaluation of branch
inventory account on the HOME OFFICE books showed a balance of
P6,000 after adjustment. Compute the: (1) BRANCH inventory on
December 31, 2021 at cost, and (2) the BRANCH net income as far as the
HOME OFFICE is concerned: *

(1) P42,000; (2) P62,400

(1) P50,000; (2) P79,500

(1) P36,000; (2) P62,400

(1) P41 600; (2) P44 400

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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting
(1) P41,600; (2) P44,400

BICOL COMPANY is engaged in merchandising both at its HEAD OFFICE 1 point

in MAKATI and a BRANCH in CEBU. Selected accounts in the trial balances
of the BICOL COMPANY and the CEBU BRANCH at December 31, 2021
follow: Net income of the Head Office was. . . *

P12,000

P8,000

P17,600

P16,000

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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting

An investor records its share of its investee’s income as a separate 1 point

source of income because: *

The investor has a controlling interest in its investee.

The investor has an influential interest in its investee.

The investor has a passive interest in its investee.

The investor has an active interest in its investee.

A. Both the Home Office account and the Branch account appear in the 1 point

combined financial statements for the home office and its branches. B.
The combined net income for the home office and its branches would be
the same when the home office bills merchandise to branches at cost as
when the home office bills branches at amount above cost. C. An
accounting system for a sales agency is essentially the same as an
accounting system for a branch. *

True; False; True

True; True; True;

False; True; False

False; False; False

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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting

The following data were taken from the records of STAR CORPORATION 1 point
of MANILA and its BULACAN BRANCH for 2021: *

P38,660

P44,860

P38,860

P39,880

Goodwill is attributed to both the owners of the parent and non- 1 point

controlling interests (NCI) if *

the goodwill is big

the NCI is measured at 'fair value'.

the NCI is measured at 'proportionate share.

in both a and b

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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting

On 1 October 2016 BDO Company acquired 100% of PCI Company when 1 point
the fair value of PCI’s net assets was ₱116 million and their carrying
amount was ₱120 million. The consideration transferred comprised ₱200
million in cash transferred at the acquisition date, plus another ₱60
million in cash to be transferred 11 months after the acquisition date if a
specified profit target was met by PCI. At the acquisition date there was
only a low probability of the profit target being met, so the fair value of
the additional consideration liability was ₱10 million. In the event, the
profit target was met and the ₱60 million cash was transferred. What
amount should BDO present for goodwill in its statement of consolidated
financial position at 31 December 2016, according to IFRS 3 Business
combinations? *

P84 million

P94 million

P80 million

P144 million

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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting

MLQ COMPANY filed a voluntary bankruptcy petition on August 15, 2020 1 point

and the statement of affairs reflect the following amounts: *

P160,000

P125,000

P240,000

P180,000

An investor receives dividends from its investee and records those 1 point

dividends as dividend income because: *

The investor has an influential interest in its investee.

The investor has an active interest in its investee

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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting
The investor has an active interest in its investee.

The investor has a controlling interest in its investee.

The investor has a passive interest in its investee.

Any excess of fair value over book value attributable to land on the date 1 point

of acquisition is to be *

Capitalized and amortized.

Allocated to other identifiable assets.

Taken into income when the Land is sold.

Charged to Retained Earnings on the date of acquisition.

The amount that will be paid to creditors with priority is: * 1 point

P7,500

P6,200

P6,000

P5,600

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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting

An enterprise uses a branch accounting system in which it establishes 1 point

separate formal accounting systems for its home office operations and
its branch office operations. Which of the following statements about
this arrangement is false? *

The home office and branch office accounts are reciprocal accounts that must be
eliminated in the preparation of the enterprise’s financial statements that are
presented in accordance with GAAP.

The branch office account on the books of the home office represents the equity
interest of the branch office in the net assets of the home office.

The home office account on the books of a branch office represents the equity interest
of the home office in the net assets of the branch.

Unrealized profit from internal transfers between the home office and a branch must
be eliminated in the preparation of the enterprise’s financial statements that are
presented in accordance with GAAP.

The balance sheet of Blue Company as of December 31, 20x3 is as 1 point

follows: *

P300,000

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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting

P200,000

P100,000

P0

BLUE MAGIC, INC. has a BRANCH in BORACAY established on April 1, 1 point

2021. During the year 2021, the BLUE MAGIC shipped merchandise to the
BRANCH at billed value of P100,000 which was 25% above cost. At the
end of the year, the BRANCH reported sales of P160,000, operating
expenses of P76,000, and a net income from operations of P12,000. The
true income of the BRANCH was *

P26,400

P20,000

P14,400

P12,000

Foley Electronics Corporation manufactures and assembles electronic 1 point

motor drives for video cameras. The company assembles the motor
drives for several accounts. The process consists of a just-in-time cell
for each customer. The following information relates only to one
customer's just-in-time cell for the coming year. Projected labor and
overhead, ₱4,800,000; materials costs, ₱25 per unit. Planned production
included 2,400 hours to produce 19,200 motor drives. Actual production
for August was 1,300 units, and motor drives shipped amounted to 1,260
units. From the foregoing information, determine the production costs
transferred to Cost of Goods Sold during August. *

P346,500

P412,500

P400,000

P357 500
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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting
P357,500

A. Normally, a sales agency does not maintain inventories or accounts 1 point

receivable in its accounting records. B. The Branch account is reported
as a noncurrent asset in the separate balance sheet of the home office
and the Home Office account is reported as a long-term liability in the
separate balance sheet of the branch. C. The fiscal year for the home
office must coincide with the fiscal year for the branch to facilitate the
preparation of combined financial statements. *

False; False; False

False; True; False

True; False; True

True; True; True;

On January 1, 2021, Paul Company purchased 90% of the common stock 1 point
of Bryan Company for P64,800 over the book value of the shares
acquired. All of the differential was related to land held by Bryan. On May
1, 2021, Bryan sold the land at a gain of P116,000. For the year 2021, Bryan
reported net income of P264,800 and paid dividends of P64,000. Paul
reported income from its own separate operations of P527,200 and paid
no dividends. Consolidated net income for 2021 was *

P 804,320

P 720,000

P 659,200

P 700,720

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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting

Which of the following statements about consolidation is not true? * 1 point

Consolidation is not required when a subsidiary’s operations are not homogeneous

with those of its parent.

Consolidation is not required when control is temporary.

Consolidation may be appropriate in some circumstances when an investor owns less

than 51% of the voting common stock.

Unprofitable subsidiaries may not be obvious when combined with other entities in
consolidation.

JRU ENTERPRISES. has been forced into bankruptcy and liquidated. 1 point

Unsecured claims will be paid at the rate of P0.70 on the peso. CEBU
ENTERPRISES holds a non-interest bearing note receivable from RIZAL in
the amount of P60,000 collateralized by machinery with a liqudation value
of P10,000. The total amount to be realized by CEBU on this note
receivable is: *

P45,000

P25,000

P30,000

P10,000

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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting

Condensed statements of financial position of Love Corp. and You Corp. 1 point

as of December 31, 2014 are as follows: *

P1,567,000

P1,742,000

P1,825,000

P1,772,000

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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting

SYSTEM CORPORATION operates a number of BRANCHES in Metro 1 point

Manila. On June 30, 2021, its STA. CLARA BRANCH showed a HOME
OFFICE account balance of P21,880 and the HOME OFFICE books showed
a STA, CLARA BRANCH account balance of P20,440. The following
information may help in reconciling both accounts: *

P16,120

P19,000

P21,880

P17,400

As of December 31, 2016, Stand Still Industries had ₱1,500 of raw 1 point
materials inventory. At the beginning of 2016, there was ₱1,200 of
materials on hand. During the year, the company purchased ₱183,000 of
materials; however, it paid for only ₱175,500. How much inventory was
requisitioned for use on jobs during 2016? *

P175,800

P175 200
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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting
P175,200

P182,700

P183,300

As of December 31, the books of AME Partnership showed capital 1 point

balances of: A - ₱40,000; M - ₱25,000; and E - ₱5,000. The partners’

profit and loss ratio was 3:2:1, respectively. The partners decided to
dissolve and liquidate. They sold all the non-cash assets for ₱37,000 cash.
After settlement of all liabilities amounting to ₱12,000, they still have
₱28,000 cash left for distribution. Assuming that any partner’s capital
debit balance is uncollectible, the share of A in the ₱28,000 cash for
distribution would be *

P19,000

P17,800

P40,000

P18,000

An investor prepares a single set of financial statements which 1 point

encompasses the financial results for both it and its investee because: *

The investor has an influential interest in its investee.

The investor has a passive interest in its investee.

The investor has a controlling interest in its investee.

The investor has an active interest in its investee.

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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting

A subsidiary was acquired for cash in a business combination on 1 point

December 31, 2021. The purchase price exceeded the fair value of
identifiable net assets. The acquired company owned equipment with a
fair value in excess of the book value as of the date of the combination. A
consolidated balance sheet prepared on December 31, 2021, would *

reduce retained earnings for the excess of the fair value of the equipment over its book
value.

report the excess of the fair value over the book value of the equipment as part of the
plant and equipment account

report the excess of the fair value over the book value of the equipment as part of
goodwill.

make no adjustment for the excess of the fair value of the equipment over book value.
Instead, it is an adjustment to expense over the life of the equipment.

The Statement of Affairs for CAMARINES SUR CORPORATION shows that 1 point

approximately P0.78 on the peso probably will be paid to unsecured

creditors without priority. The corporation owes ALBAY COMPANY
P23,000 on a promissory note, plus accrued interest of P940. Inventories
with a current fair value of P19,200 collateralize the note payable.
Compute the amount that the ALBAY COMPANY would receive from
CAMARINES SUR CORPORATION assuming that the actual payments to
unsecured creditors without priority consist of 78% of total claims.
Round all amounts to the nearest peso. *

P33,987

P22,897

P52,200

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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting

P19,200

In which of the following instances does Entity A have control over Entity 1 point
B? *

Entity A holds a majority of the shares of Entity B and is entitled to a variable return on
Entity B's shares. The relevant activities of Entity B are directed by a third party
unrelated to Entity A.

Entity A holds 90% interest in Entity B. Entity A's interest in the earnings of Entity B is
fixed at 10% of the aggregate par value of Entity A's shareholdings.

Entity A is the ultimate boss of Entity B. Entity A makes all the major decisions and
earns profit the most if Entity B earns profit, but suffers the most if Entity B incurs loss

Entity A holds a majority of the shares of Entity B. The major holdings entitle Entity A
to voting rights that relate solely to administrative tasks.

ASSER, JING, and TONY are in the process of liquidating their 1 point
partnership. They have the following capital balances and profit and loss
percentages: *

P28,800 to JING only.

P8,000 to JING only

P8,000 split between JING and TONY by a ratio of 5:3, Respectively

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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting

P1,600 to ASSER, P4,000 to JING and P2,400 to TONY

Which represents the proper journal entry for a periodic inventory 1 point
system that should be made on the books of the home office when
goods that cost the home office P100,000 to manufacture are shipped
to a branch at a transfer price of P125,000 and the billed price is not
recorded in the shipments to branch account? *

DR. Branch Office P125,000; CR. Shipments to branch P125,000

DR. Branch Office P100,000; CR. Shipments to branch P100,000

DR. Shipment to branch P100,000 and Unrealized Profit P25,000; CR. Shipments from
home office P125,000

DR. Branch Office P125,000; CR. Shipments to branch P100,000 and Unrealized Profit
P25,000

On January 1, 2020, the partners CARLO, DIEGO, and EDGAR, who share 1 point

profits and losses in the ratio of 5:3:2, respectively, decided to liquidate

their partnership. On this date the partnership condensed balance sheet
was as follows: CARLO; DIEGO; EDGAR *

P 24,000 P 81,600 P 70,400

P 30,000 P102,000 P 88,000

P120,000 P 72,000 P48,000

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1/31/22, 2:00 PM Advanced Financial Accounting and Reporting
, , ,

P 80,000 P 90,000 P 70,000

a. In a centralized accounting system for branches, the branch 1 point

accounting records are maintained by the home office. b. The combined
net income for the home office and branches would be the same when
the home office bills merchandise to branches at home office cost as
when the home office bills branches at amounts above home office cost.
c. In most cases, a branch is operated more as a cost center than as a
profit center. *

True; True; False

False; False; False

True; True; True

False; False; True

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