CPA REVIEW SCI-iTJOL OF THI PHILII FiNESManila

AUDITING PROBLEMSFINAL PREBOARD EXAMINATION

SET A

SFFTFMBERSUNDAY, B:00Al."1

-

15, 201311:00AM

INSTRUCTIONS: CHOOSE THE BESTSHADE ONLY ONE BOX FOR EACH ITEM.

ANSWER FCR EACI-I OF TI.IE , FOLI-C\^IING. FULLYSTRiCTLY NO ERASURES ALLOWED.

PROBLEM NO.1

The TGR Company commencecl operationsaccount is shown below.

Dare pa:leulalsJan. 1,2009 Purchase

1, lVhat is the total amount of gainJanuary 1, 2009?A. P50,400 B. FtlA,zAC

on Janu,ary 1, 2009. -Ihe company's machinery

Balance

Sept. 30, 2009 Purchase on installmentPayments from Sept. to Dec,

Oct 3, 2009 Freight and installationDec. 31, 2009 Depreciation

2010 Installment paymerrts foi- acgils;'ri:i,on Sept. 30, 2009

June 30, 2010 PurchaseDec. 31, 2010 Depreciation.rune 30, 2011 Acquisition

- trade in of oid

Dec. 31, 2011 Depreciationlan. 1, 2012 Sale

Dec. 31, 2012 DepreciailonOct. 1, 2013 Sale

Dec. 31, 2013 Depreciation

The details of the ti-ansactions are as follours:

a) On September 30,2009, a machine was i-1r.rir:lt:tsrtd,.\:r iil ,.1;lttir,rn' r'.,3:;ii, -l-he Iist prrcewas P180,0C0. but 12 pay.nents gf P1c1,rlf,)0 tlcir \,1/er"i .r,.tce hv I te r:itr.;any. Only themonthly payments were recoi'ded ir'the m,icl:iner\: aLa(runt sirrii;'g ^.'ith:it:piember 30,2009' Freigirt and instailation clrai-tc:; ol'i)i:.IC'.1 1^/ere lar(-r a,]r-i il,a;.1_lefl lc ihe machineryaccount on October"3, 2009,

b) On June 30, 2010, a machine was purclrasi:"*1 ici. i,).'+:.';,r':') t, .':.,,1,J, ,-;,'j:, arrtj recorded atP240,000 when paid for on July 5, 20i0.

c) Cn June 30,ZALL, ihe machine acquired far Pi57,ZAL.r lrras ira,ir{J i'cr a j.:ioer one having alist price of P279,000. Ailowance of p129,00C r^,as recei;-ei on the tld rrai.tiine. r:l-re balanceof thc'lisi price being paid ln cash and,:hai-gc;r io ilre rra,.l'!lei;/ ijJ(.rLrr:1.

d) On January 1, 2AL7, the machine acquireci on January i, 20U,1 rvirh cr:si o{' p132,000 wassold fbr P75,000. The cost of removal ancl crating ictaierj t,3,75c.

e) On October 1,7A73, the machine purchaserj nrr ianriiri 1, 21,'{-19 !,,,1i1, s:.)ic i'or p24,000 cash.Assume a S-year useful life for TGR Company,s nrachrnerT.

Deortilt57 2n0

I r0 t)ri la1 'r.'1

t -'l- rl .:1.

..'2,C,_)i.i6, i,0il

\,1,,a\ !::,\).f iil,Jt-l'i

t'aCiiii-:; i tt: i,i){j

!J'-,:di-!

?409,200

48L,200497,2A0

P'3t,4'li: 389,760533,760773,760

i.5-l ,::j":' 619,008769,008

i5-,iiii1 615,2067",).!,1) 543,956

icii,7il L 435,165z4,i.lt)0 41i,1658..,')_':,1' 328,932

,::t the Sul;+',,ii ;:i.if -i:.r Oi tr-e l1lc(,it,:-r?y aCqUifed On(:. F'16,.15r.1 D. r)86,850

Peae 1 ct .l P).);?

2. What is the adjusted balance of the Machinery account on December 31, 20L3?A. P694,200 B. P705,000 C. P700,200 D, P703,950

3. What is the adjusted balance of the Accumulaied depreciation account on December 31,7013?A. P465,600 B. P457,L40 C. P462,74A D. P397,740

4. What is the correct total depreciaticn provisior, it;* the years 2009-20732A. P737,40A B. P734,04A L. P728,9/r0 D' P669,540

5. The entry to correct the depreciaticn prr:vision for the years 2009-2013 should inciude adebit (credit) to

Depreciation Expense Bclained_EarntngsA, P75,807 P6L,215B. (P18,492) ?79,747c. P18,492 (P79,707)D

--:]-tr-t:1-------,ocoooooool-]-?'-1::-----PROBLEM NO.2

You have been engaged to audit the financial stater"nents of HABAGAT, INC. for the fiscal yearended June 30, 20t3. The cost of gor,ds soicj sectjcn of the income statement prepared byyour client for the year ended June 30, 201-? anpetars as follows:

Inventory, July 1, 201,2 P 75,0C0Purchases 540.000Goods available for sale 615,000inventory, June 30, 2013 IO-L.QAQCost of goods sold P51!*@

Although the books have been closed, your' \!r,ik,irE paper trial balance is prepared showing allaccounts with activity during the year. r-hr,

-lr;lv' 1 and -lune 30 inventories appearing abovewere deterr'nined through physical ccrnt anrl no reconciling items were considered, Allpurchases are FOB shipping point. The company uses the periodic inventory system,

In the course of your examination of the lnvenii:ry r.utoff, both at the beglnning and end of theyear, you discovered the following facts:

illlt,"I-.J0,X2

a) June inrroices total:ng I,19.500 were enlered in the voucher register in June, but the goodswere rict received until

-lr.ril ,

b) Invoices totaling P8,100 were enter-ed in the voucher register in July, but the goods werereceived during June.

luns-S,e 20il:la) Invoices totaling P27,900 were entered ;i-i llre ,;oucher register in July, and the goods were

received in July, but the invoices wer:: daieu iune,

b) June invoices totaling P11,100 were er,terea'in the voucher register in June but the goodswere not received until July.

c) Invoices totaling P16,200 (the corresponding qoods forwhich were received in June) wereentered in the voucher register, July.

d) Sales of P26,4OO were made on account on Jr-rne 30 and the goods were delivered at thattime, but all entries relating to the sales were made in July.

6. What is the adjusted inventory on lL,lv L,2012?A. P86,400 B, p94,500 c. p63,600 D. p102,600

Page 2 of '14 Pages

AUpmNG pRoBLEMs ;r -'-"'-""'' i.lIffiilfff,ilffiil7. what is the correct arlount of ourchases fo;- rhe year eniJerl ,iuine 30,

,A. P584,100 , B. P592.2C0 i. i,sl;s-Brjc 201-::?D. i,576,000

P135;900

P55,200

8. What is the correct inventory on June 30,A. P744,000 i; g. P132,9002013?1

c. Pti6.1C0 D.t

2013,;shoulci lie increased bv(.. P:i7,i0c D,L The accounts payable balance on Jrrne 30,A. P44.10tj l B. PZ7,}AA

10. The correct cost of goo

PROBLEM NO. 4

MINA MINING CO. has acquired a track of minei'al land for P50,000,000. Mina Mining estimatesthat the acquired property will yield 150,000 tons of ore with sufficient mineral content to makemining and processing profitable. It further estimates that 7,500 tons of ore will be mined thefirst and last year and 1"5,000 tons ever/ year in between, (Assurne 1L years of miningoperations,) The land will have a residual value of P1,550,000.

Mina Mining builds necessary structures and sheds on the site ai a total cost of P12,000,000'The company estimates that these struc'ures can be used for 15 years but, because they mustbe dismantled if they are to be movecl, they have nc residual value. Mina Mining does notintend to use the buildings elsewhere.

Mining machinery installed at the mine was purchased secondhand at a total cost ofP3,600,000. The machinery cost the former ou;ner p9,000,000 and was 50o/o depreciated whenpurchased. Mina Mining estimates that irirout half ol" this machineny' v^rill still be useful when thepresent mineral resources have been exh;tuste;l b'rl tn,;L dismantiing and removal costs will justahout offset its value at that time. 1-hc ccmpany ooes not intend to use the machineryelsewhere. The remaining machinery rvi I iasi i;ni:ii abouL one-half the present estimatedmineral ore has been removed and yvill tl:r:n be rrvorthless. Cost is to be allocated equallybetween these two classes of machinery,

16. What are the estimated depletion and depreciation charges for the 1't year?

A.B"C.ne"

DepletionP4,845,000P4,845,000P2,422,504P2,422,544

DepletionP2,422,540P2,422,500P4,845,000P4,845,000

DepletionP2,422,500P2,422,500P4,845,000P4,845,000

DepletionP2,422,50AP2,472,500P4,845,000P4,845,000

DepletionP4,845,000P4,845,000P2,427,500P2,472,540

DepreciationP870,000P780,000P870,000P780,000

.D-egeelalra!P1,740,000P1,560,000P1,560,000P1,740,000

DepreciationP1,560,000P1,740,000[]1,560,000P1,740,000

DepreciationP1,380,000P1,560,000P1,380,000P1,560,000

DepreciationP1,380,000

P690,000P1,380,000

P690,000

17. What are the estimated depletion arid depreciation charges for the 5th yearr

18. What are the estimated depletion and deprer-iaticn charges for the 6th year?

A.B,C.D,

A.B.C,D.

A.B.C,U,

19, What are the estimated depletion and Ceprecietion charges for the 7'n year?

20. What are the estimated depletior, and depreciation charges for the 1lth year?

A.B.C,D.

ooo000ooo--------PROBLEM NO.5

SANTOL CORP. invested its excess cash ia r,on-t.ading'equity securities during 2013. On initialrecognition, the entity rnade an irrevocabie erecr':ion to present its securities at fair value

Paqe 4 of '14 Paqes

;'*;iiri'".i;;i*n . - -* - -- '- _--_ sEpTEMBER 1s, 2013 / suNpAy / 8:00AM - 11:00AMI

tlrrough other comprehensive incor"ne'portfolio consisted of the following;

I

Investee Cdmpany

A.s of December 3L, 2O!3, the company's securities

r.fl, santor sord 60,c:0?jli:.^'?1.:]:y:.!,?:1^lrj:^,:1t:3t0 and purchased60,006 additional sh{res of Kelly, Inc. and 30,0Ct0 shai-es of Kongga Company'

2014, Santol's porffoiic cif tton-irading equiby securities comprised the

Kelly, Inc.Eloy Corp.Yogi Enterprises

Totais

On December 31,following:

A.B.C.D.

Investee ComPanYKelly, Inc.Kelly, Inc.Kongga Company IYogi Enterprises

Totals

Investee ComPanYYogi EnterprisesKongga Company

Totals

Shares30,00060,00060,000

Shares30,00060,00030,0006L),000

;t1:tlessc,00015,000

CostP 450,0001,500,0002.160.000

P4-UA.&La

CostP 450,00t)1,3oo,ooo

520,0002,160,00Q

P4 43_0-L00

CostP2, i60,000_loQ.-0!!-PL,i;ii,00g

Fair ValueP 425,0001,610,00c2.300,000

P4.335.000

Fair ValueP 500,0001,450,000

480,000700p80

P3.130.000

During the year 2015, Santol sold ali the Keliy, ir;r:. si:ares for P2,3rJ0,000 and 15,000 shares ofKongga Company at a loss of P90,00c on L,ecelrnber 31,2015, santol's porrfolio oi iron-trading equity securities consisted of the r>lii;winq:

tau-ValrcP4,200,000___

130,000P4.380.000

?t. What are tl-re balances of the iollc,ving a:ccuints as of December 31, 7013?

27. What are the balances of the following accrtlnts as of December 31, 20L4-)Non-trading lJi.i'eaiized

Equifry Gaii'r on Non-trading^lA,

iB. ID.

Non-tradirtgEquily

SecuritieSP4,335,0004,110,0004,085,0004,335,000

SecuritiqsP3,130,000

3,13o,ooo4,430,0002,450,000

SecuritiesP4,380,0007,470,4004,380,0002,340,000

Ui"ire.llizedGairi on Ncn-trading

F-cruLly-$-sc-u-nllcsPO

00

22-5,000

Eqirlg_SeeU![iesF,01,300,0c0

01,980,000

EqurU-SeeunltesF.l-,951J,000

00

2,090,0c0

23. What are the balances of the following accounts as of Decenrber 31, 2015?Non-trading tlnreal,zedEquity Gaiin c,r i'jon-trading

A.B.C.D.

74. What is the realized gain or loss on the saie ot Eloy Corp' shares in 2014?A. P10,000 loss B. P120,000 losr C. Pi00,000 gain D. P90,000 gain

7

25. What is the net realized gain r:n the saie cf secirriries in 2015?A. P550,000 B. P460,00{) a. n1\[ I n,1/1r-I )IJ,UJU

I

PROBLEM NO.6 iDONNA MANLIFACTURING COMPA|{Y \^/as incorporate:1 or janri;;i';' ), ".i{:iZ.financial staterlents for its first year of cperalir-rns'/ie,r. irot;r;"ldrre( [,r u Ci]r\engaged to auciit Donria': financrai l,;iai-e'ne',1: ict 'int: yuai- r:i]c: i ).lCfPresented beiow is Donna's trial L,llance (part,ai) on Dlccen'her 31, 20i ,.

L'. Pl-60,000lI

itlI

r Ie r-ompany sYl,-r rrave b9enr:r:r 3i,2013.,]

CashAccounts receivableAllowance for bad debtsInventoriesMachineryEquipmentAccu m ulated depreciationPatents (information 1)Leasehold improvements llnforrnaiicn 5)PrepaymentsCrganization costs (lnformation 5)Goodwill (Information 4)Licensing Agreerneirt i (infirrmation 2 anrl 3)Licensing Agreement 2 (informaticn 2)

Additional information :

Qqbiip 330,c00', l-i: . rnrlLr*, JrVU\,

i., :.55,Ci;,:?, Z5i),;-1r.'!)

ij'j i.: ::;i.t

ers-ql:

P 15,LrCr0

2 -,'. ,lr-.'r

_,i'iI'l,e,lrs, which

il3ir id in the leased

1. Patents ior Donna's man'lfa -turinE fro(ess .',f r ;: ; -i,r'!',r -i':li- 1i' ., ,l'.it ' at a cost

P2,040,000. Donna spent an additional P-c1,j,JLii.in Dr:cci'1b,.'r l-,-)1i :o ii:rr.\io\/e ntachinerycovered by the patents arrn inclr-ided rn llre Pateni- Ji.,i-,r,r",i i.)ar-rrrft.. -i-,e Uaterrts had aremaining ieqal life of 17 ,7ea,i-s

2. Donna purchased two licensing aqreeinents on -l{lriuili-r,,,

cPA REVIE\! SCHOOL OF THE pHILIpptNES (C9AR) - tlA\rLA FINAL PREBOAT?D EXAMINATION

-----5EflEryl-EEts-$-?g.13 I SUN[U]L'/ I s :-Q0A[1--1 ].QQM

27. What is the carrying aniount of Licensing agreement L on December 31, 2013?A. P1,500,000 B. P600,000 c. P900,000 D. P2,100,000

28' What is the cdrrying amount of Licerrsinq agreenient 2 on December 31, 2013?A. P2,100,000 B. P1,470,000 c. P60c,ilO0 D, P1,500,000

29. What is the carrying amcunt cf the L"easehokl tffipirl'r3r,1cnts cit De..errlber li, 2C13?A. P360,000 ts. P780,000 C. P,:150, C00 D, P624,000

30. The net adjustment to Retainec! earnings to i'r.fleci: ail the necessa-rrv coi-rect.rr.;ns frominformation 1 to 7 wili amount toA. P2,535,000 debitB. P2,580,000 debitC. P2,535,000 creditD' P2'sB0'0o0-::::1"

- ---r:orieoooo,,---.*--

PROBLEM NO. 7

You are examining the financial staternents of SALUYO-T COMPAXT'/ Fcr lhe '7ear endedDecember 3t,2A13. Your audit cf tire accounts receivanie ancl rlther relatecl accc-.unts cjisclosed

the foilowing information :

1. The December 31, 2013, balance ln the,Accounts [leceivanls corrtrci aci:,':r.]t-ti is P788,000,2. The only enLrie:; in the L-laiJ Dei-ts ExJr:i;s: a:r")uitl t',3irt,

a. A credit for P1,296 on L)elr.--t!:er ,, ,.3.iJ. l-;e:c"tui.t: -r-,,t- "t -i r ll.,rit..tC ir, r'uil for tl-re

account charged off Octobcr" Ji, Zt)t:,.b. A debiton December 31 fo: ihi. 3nr:r., 1

-r1t i-ri1; .-:.;.,

3. The Allowance for Bad Debts accoun'- rs prg5sn1._,,1 t,c;e v,,:Particulars

BalanceUncollectible:

Customer A Pl 290

4. An aging scheduie of the accounts receivabl.r r-ri, uf f):crjrrl),..i 'i r, lO.i; ,il riare as shown in the table belcw:

Jan 1Oct. 31

Itlel DebitA G E pi.al_a:ce

0-1 mr:nth P37Z,16A1-3 months 307,ZBA3-6 months 88,720Over 6 months 24,AAC

-r:q,l i _ili;:,jt,,,.* I

,jr; t'J u r rt lt; wh i cl-: if : r) i i i r.iuv ;i r.i c{,:i, it le a.llusleil a,'le :"t,Jjr;t;'.mttrrt.:;,jr,; i,"'ii_. lji. l' r' 11,.1 I -:t,;i '', !i,:1'./.'

2-:tt3,)/oDgfi:tite,), u,l(,-,i1,;: i,;;r.1, '-'' , 1-'j;f E. lCij ig i,911;,,i1r i'i.' :.r,, ;',,,. rl'.. 'r.tnfriie:-r;i:ie ; l.ii,,, , r.;11;,.1it6 f i ;.,e:.I-i;rri,i";',-i to bi '. :': ., ;' ',,,", 1jr

the decisionsi

?792,S6a_

5' There is a credit balance in one a.c{:i.r"'}r, receivar-,iE (0-1 ;l:rrii:\advance on a sales contract; also there is a crc*ril f.r,:,irri',tcaccoLints receivable of P2,00c ;or rryhich ,-nerrharici:,.r vriii l;. i,.

,_li I *i,, .r'il; ii represents anre ,if :htt .t-l months

,"' b,i -n:: cds[0iner.

i) I . )rj

IDec. 31

cpA REVIEW SCHOOL OF THE PHILIPPINES (CP,\qi - MAr(i:,A FINAL PREBOARD EXAMINATIONauprrlNc PROBTEMS _-----sr-]:TEpiarn is. zot: I s6. The Accounts Receivable control account is not in agreement with the subsidiary ledger.

The differences cannot be located, and the company's accountant decides to adjust thecontrol to the sum of the subsidiaries after corrections are made'

31. The adjustment to correct the entry rnade on Deccrnber 1, 20L3, isA. Bad debts expense 1,296

Accounts receivable 1,296ts, Bad debts expense 1,296

Allowance for bad debts L,296C. Accounts receivable L,296

Ailowance for bad debts I,296D. No adjusting entry is necessary.

32. The required allowance balance (per:gi:lu) cn l-iecember 31,2013, isA. P2g,354 B. P19,058 c. P19,858 D. P3?-,858

33. The net r"ealizable value nf Saluyot's accr:unLs re.ei','at-rle on Decemher 31, 2013 amountsLU

A. P77g,gA2 B. P774,!'.;:. c. P793,200 D. P788,66434. Saluyot should report bad debt expen$? ii-'i -{; ii of

A. P13,344 B. ?27,34/, C P10,296 D' P33,93635. What entry is necessary to adjust i,,13 3ii;'-';-i-r,- icCouflt at December 31. 2013?

A, Bad debts expense 10,296Allowance for bad debts 1'A,796

B. Bad debts expense 13,8{i0Allowance for bad debts 13,800

C. Allowance for bad debts 1A,796Bad debts expense 10,796

D. Allowance for bad debts 13,800Bad-debts :ll-:::----- oo'Gooooo-------- -----11:!-oo

PR.OBLEM NO.8

sAN FELipE TRADING CCR.PCTIV\TIOr'] was incorporateci 3 years ago as a trading companyengaged in the sale and distribution oi i'rardrruare and electrical supplies. Its offlce and store islocated in Batangas City.

You were given by your client's contrcller a cr,i,'/cf the unadjusted trial balance as of December31,2013.

The company maintains its Lrank acccr-rnt ,,,vitl. Sr:cr;red Bank. Your re'riew of the bankreconciliation statement disclosed the follr:wii-;i.r i.fi,rma ; ii.ln :

1. On December 22,2013, the bank erronecusl'i credlted the account of San Felipe Trading forP195,000 representing deposit for the acc,':t-r'ri :rf another company.

?-. Postdated checks tctaiing P40,000'"t,-re ir,:llidcd in the deposits in transit. These representcollections of accounts receivable from c,J:i1.crli'irs. The checks were actually deposited onJanuary 5,2014.

3. On December 28,2013, the company issueci

LPA RtVltW SLHUOL OF I HE PHiLiPPillES (CPA.R) FlANILA FINAL PREBCARD EXAMINATIONAUDITING PROBLEMS

-

_ SEfltMsr:R t5.2!13.l5UlluAYf_8-Q0AM

- i1:00AM

5. A check for F4,750 in payment of a n-rinr;r repair ol office eqir;pment was not recorded onthe compan'v books.

6. Transfer of fuhd of P59,300 to Secured Bank current account of DBS Securities was notrecorded. This pertains to p,:rchase of 5,000 s;hares of Wiiliarn Lines tr: be held .:s tradingsecuritles, Based,:n quoted prlce as of Decemb,3r:r, 2-013, the nrarket va!ue per share isP1 5.

7. interest earned arnounting ic P5,77-0 was not recorCed.B. Deposits in transit and outstanding checks at Decenrber-3i, 20i.3 amilnteC to P89,200 ancj

P132,000, respectively.

9. The cash in bank balance per book orr Decerlber 31, 23i3 is P68i,200.

The Petty cash fl;nri .:f P3-,,090 n-raiirtaineo crt dt ini::ell basis lras countert cn )arutary 2,201"4. Unreplenished erpenses rr,cir,rcle petry, r-ash vr-:uchers i'or

'.,arioL:s expenses totalingP19,30C and entplo',,ees'ed'yances for P5,8Ci aii rlatec December 2013,

San Feiipe purchased sever;ri it't.trket(lbij :,ec,-.ri-i';r:s i1r-.iriirq -,:0i3. ,\t Decernper 3L,2013, the

compan,v had the investmeitts rn equii;r secur;li(:s iiste i b,,:lt',r . i.i.; re i,;:l: i";eid at the lastreporting dale, aild all secr-rrities are consicr:;-r I ;

' l:t I'i " 'r,:i;it,q, -i 1 ., co|- oair,y made an

ir;'evccabie election to present fa,r'.,alue chai-,g:]s in :,,, 'iar r-t -r't-'r :rt,e,r:., te r',rrr;i'1.:'..

San Pliguel "A"Seniorify" BankMultivit

l-ofal

Na.,oI_9lurg2,0c01

^ r',t \

,., .,\; .':r,ci:u

lYi,t,'i,c-;-,,;]-u:ti-f,:ia:. ir".

Your physical count of stock certificates disr..io:;ec1 1,",;i :,...' ,,, :,,.11r;,p;j 1-1,'wei-e not yet i-ecoided,

issueSeniorit'i Banki4ultir;it

Np,gf-SiatrJ50c"l rlii

The unadlusted trial balance of theaccounts:

l\.ccounts receivableAliowance for doubifui accountsSales

compan'/ at DecerrLre r

'rlr:rpr +l:,1i

-";

ar ')rll-.

:i,-i ilrl

F i0,:,'001r,fr20,C1.)0

l,' ,l ,u. I Oi :. : r i.l,; :iU ...

,..',i,C:: .ti. l,'S tCtaling

i,:ra;r' i*dgers, YouYour reriiew of the accounts receivable .

5, A promissory note was issued by a customei' to San Felipe Trading for goods purchasedworth P168,000. The promissory note carries an interest of 12o/o per annum with a term of60 days, value dated November 15, 2013. -ihis was reflected as part of accountsreceivable. No interest was accnled as of ),ear-enci.

6. Bad debts are provided based on 2o/s oi' outstandinq accounts receivable at the end of theyear.

A physical count of merchandise on hand rryes rnade on December 30 and 31, 2013, whichref iected a balance of P3,873,000. Your re,/ieu/ of lhe inventory list disclosed the following:

1. Goods costing P148,000 sl-iiprpsd FOit shipping point c'n December 30, 2013 by a supplier toSan Felipe was received on January':,7C14, The purchase was recorded on December 30,2013.

2. Goods costing P195,000, shipped FOB destinaticn by the supplrer on December 28, 2013,were recorded and received on January 5, ?-A1.4.

3. Goods purchased In cash for P41,700 were returned to the supplier on December 22,2013.These goods were still inc!uded in tht- ip'rqpl6r,, .crl"redule and the refund was received andrecorded on January 10, 2014.

4. Goods consigned to San Felipe totaling P89,500',vere included in the physical count.5. Included in the physical count were qood:; sorci to a customer on FOB shipping point on

December 27,2013. These goods witrr a sal!,ng price of P52,830 and a cost of P35,600r,vere already recorded as sales on acc:rn!: i-:'-ri '3;3 shrpoed only on January 5,2AI4.

Prepaid advertising consists of paymeni 'rr :ir ;rir,,er-tisiflg agency for the design of newspaperad which will run for a period of one year f:onr .uit). 31, 2013.

San Felipe renewed its 5-year lease contract cn t:re office building which expired on October 31,2013. Total advance rental for 3 months yuas rrade amounting to P165,000 was booked asPrepaid rent.

The cornpany books purchaseo office supplies as irventory, The expense is normally taken upafter the physical count is made at year-end. Orr july 9, 7A13, a total of P38,450 worth ofsuppiies was bought and included in the inv:niory. As of year-end, unused suppiies inventoryper physical count amounted to P53,200, l.lo eni:ry lo set up the expense was recorded,

San Felipe's propefty, plant and equipment consist cf lhe following:

Prepayments consist of:Prepaid advertisingPrepaid rentUnusecj office and store supplies

Tolal

Furniture and equipmentDelivery equipmentLeasehold im provementsTotalAccu rn u lated depreciationNet book value

?'114,040165,0110

_

1e9-_QggB3e-080

Pi,045,0001,637,000

__ lsJ-aQ0P3,0.:i5,000_

(916,s00)P2J_Q&lgA

The building under lease was renovated .r a cos[ of P363,000 which was booked as leaseholdimprovements on September 30, 2013. -i'hes: irrrprovements will be amortized over 5 years.No amortizatlon was recorded as at December ii, 2013.On May 3L, 20L3, the company bought new corrii-.'uters totaling p325,000. In addition to thecost, it paid additional charges which were taken Lip as Repairs expense. These are deliverycharges

- P12,500; installation cost

- P11,300; ann testing cost - P6,5?-0. The computers'

Paoe 10 o1' 'i.ri Paces

LyA Ktrvrtrw >LFIULTL Ur I Ht pHtUpplllL5 (CPAR) - I\iANI.A FIN/,.1 PRE BOARD EXAMINATIONAUDffiNG PRoBLEMS IEPIE!1!.E& j5*zll!3 llule4,y I B:00AM - 11:00AMuseful life is 4 years. No ;deprecration was providecl or-i thr,: equiomeni as of December 31,20 13,

San Felipe tradin( opened additional stores in nearby localities. To service more deliveries,additional 3 units of deliver:y equipment were bclught on instailment basis on December 29,2013' The installment price was P1,200,000 i:r-rt the cash price was P1,000,000. The terms areP200,000 down payment and the balance p*yable in four equal quarteriy installments, A non-interest bearing promissory note was issued for the unpaid portion on December 30, 2013. Thedown payment of P200,000 was recorded as a debit t-o Deliverv equiprnent and a credit to Cash.

Included in the company's unacJjusted trial bralance on Lrecerrber:1,20i3 are Accountspayable and Accrued expenses of P523,100 and P63,1.00, respectively. Upon verification, thefoliowinq information was discovei-ed:

1. On December 26,201"3, the company puirchased on account qoccls wortl'l P215,000, but noentry was r.nade in the books. The goods were ejlready inciurleo in the year-end physicalcount,

2. The following items were erronecuslr,r inciuded ii-r accourts pa;,abre:. Accrued expenses totaling p37,4SAn A cash advance from lhe president crf San Felipt_. amouniing to p:15C,000 lc be used as

working capital. This will be repaici within 6 months',r.ithout interest.. A debit balance af PE7,250 represeniing adve nce pavment tbr goods ordered to be

shipped by the supplier on January lZ. ?.A1.4.

3. Your review of subsequent paynignts frorn Ja;ruar5r 2 -

was made on December 3l, 20i3 for the folioir,rirrc;:I

. Light and ,vater for l.;ov. a'rr, Dec. 2J-3

. Telepnone bills for Dec. 20.3

. Representation expenses for Dec. ?01jc Minor repair of a deiivery car on Dec. 25, 2L)1.3o Transportation expenses fc:r 2At4rotal

i

15, 2014 revealed that no accrual

i- 2i,:t( 01c, 1 !0L i,9903.r30

-

1..1[lP-.5i1,|.)&:

i-y liercur"t,ii Bank. As of year-

1, ,i013 maturing on

i;. D748,32.0i

D" -P702,600

ii )9,900

san Felipe Trading was granted a credlt lrmit ci ui tc i)5 r'r ilroend, availments are as follows:

t/alue Date Due Date pfl-n_c_,ksl _h+UeSl_E:r.tig

July 1, 2013 July i, 2015 p S00,fjrl0 1jL,i,Sept, 1, 2013 Sept. 1", 2016 2,3C0,0t10 Liro/cDec. 1, 2013 Dec. 1, 2017

_1,.!e_Ci$j$ iS%P4.qAu]g!

The company issued P1,200,000 face vaiue cf 1lolo bonrjs.rr ,-)ili- orr.'r:l'iJuly 1, 2018 and paying interest seini-ani:uatly or Jar:rijqi 1 find IL;iy 1.36' The cash balance per bank staten"rent on Dorernber.iJ, i(ri3

';A. P984,020 B. ?g^6,i"?_0 i" - ),- n, ,-.ii37. The adjusted Cash in bank baiar"rce at Der_erni.rsr 3.;", jit.L.l rsA, P746,22A R, P7A(],?}"A c. :.-7ltr;,.i2038. The adjusted Petty cash fund Lralance al [.,ecerrrcr 3.1, u].r..r._r i!A. P15,700 B. P?9,200 C. P35,00r139. What is the carrying value of the investnrent li \l/illiarn Lin..s oit iiec,':rrrbei 31, 2013?A, P75,000 B, p59,300 {-. F. 0 , D. pt56,372

_-- SEPTEMBER 15. 2013 / SUNDAY / E:uuAM - 1r:uuAl"r

40. What amount of unrealized loss should be shr:wn in the 2013 statement of comprehensiveincome as component of other comprehensive income? D. P33,300

D. P1,354,990

A, P17,600 B. P32,600 C. PO

41. The Accounts receivable balance at tlecember'31, 2013 should beA. P1,211,330 B. P1,209,3i0 c. PL,249,334

- 42. What is the year-errd acilustment L,: the A.litwancc ior doubtful accou nts?D, P16,900A. P13,987 B, PI4,7Bi c. ?L4,027

- 43. What is the adjusted Inventory on December 31-, 2013? D. P4,084,800

D. P4,816,2L0

D. P|9Z,2A0

A. P3,979,300 B, P3,854,200 c. P3,889,800

44. How much Sales should be reporte| in the 2-013 income statement?A. P4,820,000 B. P4,798,984 c" P4,709,484

45. The total Prepayments at December 31., 201"3 shculd beA. P153,750 B. P257.,2A4 c. P247,200

The total cost of the company's Proper"ty, plant and equipment at December 31, 2"013 isA. P3,868,800 B. P4,A7532A C. P4,238,320 D' P3,875,320What is the net book value of the cornpeny's Fi'operty, plant and equipment at December3t,201,3?A. P2,862,332 B. P2,868,852 C. P3,23L,85?- D' P2,938,820

48, The adjusted balance of Accounts p;ryable at December 31, 2013 is D. P738,900

D. P57,080

A. P437,900 B. P543,900 c. P395,900

46.

47.

49. The adjusted balance of Accrued expenses c'n December 31, 2013 isA. P157,630 B. P54,52i: c. P155,070

50. The Interest oayable at December 31, 2013 sltould be D, P265,000A. P230,500 c. P193,000B. P72,A0A/ ZTUVV \-. r LJJtwww t LvJlooo0OGooo--------

FROBLEM NO.9

presented below are two independenr sicuar-;on:;. Answer the questions at the end of eachsltuation.

you have been assigned to audit the financial statenrents of ZAIDE COMPANY for the yearended December 31, 2013. You discover the fbilr:wing situations.

1. Interest income of P45,000 was not ar.i:ruerJ at the end of 201?-. It was recorded whenreceived in February 2013.

Z. A computer costing P12,000 was expensecj v,rlten purchaseci on juiy I, 2012. It is expectedto have a 4-year life with no resiC:,ai i';,.ltie. The company typicaliy uses straight-linedepreciation for all propefi, plant, aild rql;:1'L31i1.

3, Research costs of P99,000 were incurrt:ri early in 2072. They were capitalized and were tobe amortized over a 3-year periocl. F,nortization of P33,000 was recorded in 2012 andP33,000 for 2013,

4. Cn January 4,2012, Zaide leased a Lrr:iiCing fcr 5 years at a nionthl), renLal of P24,000' Onthat date, the company paid the fnllor,vinE ar-ncunts, which were expensed when paid,

Security depositFirst month's rent

P 60,00024,000

lf-aa l'; :,1 i,1 Dlcae

ororrrnu o*orarr'J '" "'""''tt"t'^^'' - k-2or: r suruonv i g:ooeuLast month's rent

- ?:' !-i-ri:

i ,:LQ!.1":015, The company.received P108,000 from a custonrer aI the beginnii"rg of 2L:12 fcr services that

it is to perform evenly over a 3-year period beqinniiig in 2012. rlcne of the amounf .:received was i'eporteo as urrearned re';enue at il"r:: eild fi'?$:2.

6. Merchandise inventory costrng P54 600 was in il-re v,rarehouse art Dacember 31,2012 butwas incorrectly omitted fronr the phvsical count ;:t thai dete The cornpany uses the periodicinventory rnethod

Assume all amounts are material and ignore iircorne tax effects

51. Zaide's net income in 201? is understatecl byA. P56,100 B. P53,4riC C P54,iC0 D. P89,400

52. Zaide's net income in 20 j3 is cverstatcd byA. P32,4Ci0 B. p]3.61, C" p102,900 D. p30,900

53, The retaineo earnings reuorted on Zaide's statement ct financial position at December 31,201-?. is undersia,,:ad L,;'A. P22,500 B. p28,500 C. p2-4,i100 D. p58,500

LOVEY CORPOMI-ION has used lhe dc,rrudl basis:rt acil'rr,tirq fcr se..,e:'al ycars, A i'eview ofthe records, however, indicates that sorne experrses ani re'lt:niles haye been handled on a cashbasis because of errors made by an inexperienced bookkeep,er.. inccme statements preparedby the bookkeeper reported P870,000 net income for Ztt? and P1,110,000 net income for2013. Furlher examination of the records re\/eals tlrat tfte foiiowing items were handledimproperly.

1. Rent was received from a tenant iri Decenrber 2012 i'he anroil;.t, P30,000, was recorded -..::as income at that time even though the rental pe:'tairi;:o lr: .2.11*,

2. Wages payable on December 31 ll.ive been c,';nsrstr-.r':tll ilr,iirtr,.i frcm tt:e "ecords of thatdate and have been enterecj as exljenses i\i:ci: l:ii.j in :r] ,.j,ir,,/iit( ,cti -{-he amounts ofaccruals recorded in thiis manner \rere:

December 31, 2rJ11December 31, Z0IZDecember 31, 201-?

3. Invoices for office supplies pi;rchaseci lr;v,t ,,rtr,;-, i.",;.:,i 1,:r) '.'r :,. _ Lr-,ri., acccunts whenreceived. Inventories of supplies on hancj ai'.le 1::r f,i i',, r',1r-i1 f i:,:ir l,.i\r(,t reen ignored, andno :ntry has Deen made ior rhe:lt

Ll,."1,''r3b, LlCi28,2C4)

P39, rj ilr28,,iltt,t/").,64C

December 31, 2011December 31,,201-2December 31, 2013

54. What is tne corrected net incorne ior the year ZC1.Z)A, PB26,2AA B. PB{J6,200 C, FB3_1,21(; D. p901,000

55. What is the corrected net inccme fcr 2013?A Pr'162'2a0------:----B---ll:]-']:i!l-oooo**to"l]:-ll:t'l:l -- "- ?--li:113'000i

PROBLEM NO. 10

The following are two (2) unrelated situatioirs. .{nswer :lre question:; at the end of eachsituation,

CPA REVIEW SCHOOL OF THE PHILIPPINES (CPAR) - r,rAli1l- r FINAL PREBOARD EXAMINATIONAUDmNG pROBLEMS __-SfptfNgER t5, 2013 / SUNDAY / 8:00AM - i1:00AM

OMEGA COMPANY sells its products in expensive, reusable containers. The customer is chargeda deposit for each container deliverecj anci receives a refund for each container relurned withintwo years after the year of delivery. Omega accounts for the containers not returned within thetime iimit as being sold at the deposit amount. Information for 2013 is as follows:

Containers held by customers atDecember 3L,20L2,from deliveries in: 2011 85,000

aAL? 240-!0Q 325,000Containers delivered in 2013 430,0C0Containers returned in 2013from deliveries in: 2Al7 57,500

2CL2 140,0002013 152_aq0 3s4,soO

56" How much revenue frorn container sales shcitid be recognized ior 2013?A. P127,500 B. P267,5A0 C. P27,500 D. P85,000

57. What is the total amount of Omega Corrrpairy's liabiliby for retr,rnable containers atDecenrl:er 31, 2C13?A, P373,000 B, P400,500 c. P267,500 D, P430,000

DP, iNC., a dealer of household appliances. seiis u,ashing machines at an average price ofP8,100" The company also offers to eaci-t custorrer a separate 3-year wart'anty contract forPBl"0 that requires the company to provide pei'iodic maintenance services and to replacedefective parts. During 2013, DP sold 300 washing rnachines .rnd 270 warratrty contracts forcash. The company estimates that the rrrarranl'/ r-..,:jts are P1B0 for pats and P360 for labor.

Assume sales occurred on December 31,2013. DP's policy is to recognize income from inewarranties on a straight-line basrs. In 20.14, DP rncurred actual costs relative to 2013 warran0zsales of PlB,000 for parts and P36,000 fcr labcr.

58. What liability relative to these tra:rsarcrion,; r./ould appear on tl^,e December 31,2013,statemeni of financial position and l':otr,r vitould tt be classified?

Current NPfqU[si,lA, P145,800 P72,900B. P72,900 P72,900c. P72,900 P145,800D^ P 0 P218,700

59. What amount of warranty expense lvuuld be shown on the incor;ie statenrent for the yearended December 3L, 20t4?A. P18,000 B. P 0 C. P 36,000 D. P54,000

60. What liability relative to the 2013 r,varr';ini:i:,; rrvculd appear on the December 31,2014,statement of financial position and ''rov'.' r,'i-:,.rrr-1 il re ciassifir'd?

Current Noncurren iA. P145,800 P72,9AAB, P72,gO0 P7Z,9O}c. P72,900 P145,800D. P145,800 P 0

---END CF TXAMINATION---

CPA REVIEW SCHOOL OF THE PHILIPPINESManila

AUDITING PROBTEMSFINAL PRE- BOARD EXAI.{II{ATION

PROBLEI*I ,. -

TGR Company1. F Trade-in

- June 30. 2011

CostAccum. depreciation , L!1,1W - 681fi1(Pl57,200 x20o/o x 2.5 yrs.)Carrying valueTrade-in valueSale-Jan.f,20i2CostAccum depreciation ,Lfil}g - UUl? (P132,000 x?^Qa/o x 3 yrs.)Carryirig vaiueNet proceeclsSE--Adahei 1.20,13

. CostAccum del:reciation , ULl09 * rcfifi3 (P120,000 x20o/o x 4 9lt2)Carrying valueProceedsTotal gain

2. C (Pi80,000 + P6,000) + (P2 ,0,0C0 x 98%) + P279,000

September 15,2013

3. C (P186,000 x20o/ox43/L2) + (P235,200 x}Aa/ox36/t2) + (P279,000 x}Ctr./ax26/LZ) P462.24ODate of

AEgurg.!figl Cost1,/U09 P157,200

120,300132,0009l30lm 186,0o0

6l3O/tO 235,20fi6130/7i_ 279,000

Correct depreciationDepreciation per clientOver (under)statern:rnl

4.8 5.4PROBLEM 2

- hlA$A{xAI; IilC.

20@P3tr,440

24,00026,400

9,3000

_0P97,L4097,440

E5*04

zzuP3l,44A

24,00026,40037,20023,524

0PL42,Sffi

Ls4.7tl? 12.152

2011P15,72024,ff)A26,40037,20047,M027,9N

PL78,zffi1s3i02

(P 24.4s8)

20t2PO

24,W00

37,20047,M055.800

P164,M0108.791

rzus24gJ

PL57,2oO78.60079,6W

129.000

P132,000J92W52,8007L.Z5A

P120,000114.000

6,00024.000

2013PO

18,0000

37,20047,444

__55940P158,040

82.233GJLSOZ)

TotatP 78,600114,00079,204

158,10OL@,640139.s00

P734,A4O597.018

{PJ3ZAZZ)

P50,400

18,450

18,000e86.850

PZ0020a

P94.500Ps75.000P1S1.000

P44.100P525-500

P170,000

370.360540,360

178.400P36i360P 80,000

6.7.8.9.

10.

B Inventory, Juiy 1, 20i.2 (1,75,000 + P1.9,500)D Purchases (P540,000 -

P8,100 +P27,900 + P16,200)A Inventory,, June 3O 2013 (P105,000 + P27,9AA +P11,100)A Accounts payable, June 30, 2013 (P27,900 + P16,200)C P94,500 + P576,000 = P67C,500 - P144,000

PROBLEMS-TANDEMCO.11. A Outstanding checks, Nov, 30

Add: Checks issued in December:tsook disbursementsCost of checkhookError in recording a disbursement (P39,600 - P3,960)

TotalLess: Checks paici L"y bank:

Bank ciisbursernentsDecerrrl.,er banx seruice chargesCustorner': rctt,r ned check

Ourtstandlng clr*cks, Dec. 31

12. C Deposit in tiafl$,t, Nov. 30Add: Collecti+ns:

tio.lk receiptsl'.icte coiiected by barrk in November

P4A7,240(1,200)

(3s.640)

P204,000(1,600)

(24.000)

P735,600(100,000)

CPA REVIEW SCHOOL OFTHE PHIUPPINES (CPAR) - MANILAAUpmNG PROBLEMS I "---__--IIUAL gMeaABD 0(AUJMIISX

I

Note sent to tlrre bank for ctrtlectionTotal ILes: Deposits credited by bank:

Bank receipts lCorrection of erroneous November charge

Deposit in transit, Dec. 31

Nov-30P157,200

100,000(1.200) (1,200)1,500 (1,600)24,000 {?-4,400)

(120,000)_135,$39) __35"6t0

(120,000i

(12L000) 5ts-609595,500

P41S.CI00($.e00) 376.000P219-600

EeeejBS; -DS[ursements Dec-31P735,600 P407,200 P485,600

(i00,000)tsook balancesNote collected by bank in NovemberCost of checkbookService chargesCustomer's returned checkNote with bank recorded as receiptOverstatement of d isbu rsement,Adjusted book balances

Bank balancesErroneous bank chargeDeposits in transit

Novemhr 30December 31.

Outstanding checksNovember 30 :December 31

Adjusted bank balances13. A 74. C

PROBLEM 4- MINA MINING CO.16. C

Mineral property (P323 x 7,500)Building (P80 x 7,50CI)Machinery G/2) (PtZx 7,500)Machinery Glz) (P24 x 7,500)

77. D

Mineral propety (P323 x 15,000)Building (P80 x 15,000)Machinery (112) (P12 x 15,000)Machinery $12) tP24 x 15,000)

18. C

Mineral property (P323 x 15,000)Building (P80 x 15,000)Machinery Glz) (P72 x 15,000)Machinery {U2) (P24 x 7,500)

19. C

Mineral propeflry (P323 x 15,000)Building (P80 x 15,000)Machinery G/2) (P12 x 15,000)Machinery (1/2)

24. D

Mineral property (P323 x 7,500)Building (P80 x 7,5A0)Machinery Ul?) (P12 x 7,500)Machinery (112)

"B25S,gl0Uur-30

F:i(]b,0004C,000

80,u00

(i70,00(})

P515,e00

ik$e195P'+i5,000

i+i),irCIf)

i8!,00u1):i19,fio0

e3S5"96!D;Strtillelnerils

,1204,00{)

.e375.64!Aee* jlP5i8,000

15. AE2:f;"ffiq ffl.I,k*"]

219,600

(r.7c il?())-i,:.l*li.gg .(36L960)]P3,?3300 Pl,-',s,ffo

___yeer_L-

P3fi#i,t00 r,l*Z*0,400-."-

-- - ".,-YeaL(- ----_-_--

DerlcilenP2"4:11.5U0

,5l;ti?"519Va:. E

---

--

----l-se!: r-

-

g--_Ile.ne&or

p4 s, 5 000

[:r.:#etLr"UI:4,84ii,fr00

flf,5#.L.000

pen;ri{bnrr4,b45,0{)0

0egie-tr-rfiP7./t2"?.st-]CI

Yeer 7

-Deeresiatia!

P600,0009C,0fi0

_"r.80"900P,SZSSS{}

Pepieaalim

Pi,200,000180,000

__ie0$00

Dspresratlon

P.:,200,000i.80,000

_.1mgr0P*ks8.CI00

Deprexratiu

rr1,200,000I 90,000

.l=)epreciation

, i00,CI009i,e00

.,'-- .::r$D0,0gl

11*ii*i-{$O P.iJ$0s00-------""---Yea:JL--

l;;i;,.xinI rft!,'trr.,c6)H

24, A Proceeds from sale of EloyCarrying valueLoss on sale

25. D Proceeds from sale of KellyCarrying value (P1,450,000 + P500,000)Loss on sale of KonggaNet realized gain on sale

PROBLEM 6- DOFINA MANUFACTURIilG COMPAHY

cPA REVIEW SCHOOL OFTHE PHILIPPINES (CPAR) - MANILAAUDM- FINAL PREBOARD EXAMINATION

PROBLEM 5.sANTOL CORP.2t. D 22. A ?3, A

P1,600,0001.610.000L10,0@

P350,000(e0.000)

P260.000

P1.q20.000P500,000

P1.s00.000P360.00!

P2.s35.000

RequiredAllowance

P 3,8106,1862,6624,0002.400

P19 058

P77q.9O2a3.ifi

P984.020

BankP984,020(195,000)

AdjustedEatilsc

P380,960309,280

88,7208,000

12.000P7q8.q60

P2,300,0001.950.000

Rate7o/o2o/o3o/o

59o/o20o/o

26.27.28.29.30.

A Patents (P2,550,000 -

P510,000 -

PX.20,000)B Licensing agreement 1 (P1,500,000 - P900,000)D Licensing agreement 2 (P1,470,A00 + P30,000)A Leasehoid improvements (P780,000 * P330,000 - P90,000)A Retained earnings

- debit (n00,000 + P720,000'+ F45,000 + P870,000)

PROBLEM 7 -

SALIIYOT COMPANYNet DebitAge Ealance AdjustmenE

0-1 month P372,960 P8,0001-3 months 307,280 2,0003-6 months 88,724Over 5 months 24,0A0 (4,000)

31. B 12. B33. A (P798,960.- P19,058)34. A P23,640 -'Pt,296 = ?22,34 + P1,295 * P10,2963s. c

PROBLEM 8 -

SAN FELIPE TRADING CORPORATIOil36. A Cash balance per bank statement37. B

Unadjusted balancesErroneous bank creditPostdated checksUnreleased checkUnderstatement of baok disbursement (P21,000 - P12,000)U nrecorded disbu rsernent checksUnrecorded transfer of fundInterest earnedOutstanding cnecks

. Deposit in transit {Pi39,200 - P40,000)Unrecorded cailecliensAdjusted balances

38. D Adjusted peity cash funrl (P35,000 - P19,300 - P5,800)39. A TradrnE securities at FV (William Lines) (P15 x 5,000)40. A Unre.liized ioss (P314,60C Cost - P297,000 FV)4L. C Accounls receivable per books

Postdated checkUnrecorded collectionsCustomer's depositCash advance to an officerUnrecorded salePrornissory note received from custornerUnshipped goodsAdjusted balance

tsootP681,200

(40,000)115,000

(9,000)(4,750)

(59,300)5,720

17.350P706.224

(132,000)49,200

P7A6.220

P9 900

E25,000

817.600Pt,452,7ffi

40,000(17,350)38,000

(75,000)31,810

(168,000)(s2.830)

P1.249.330

P14.78742. B Increase in allowance (P7,249,330 x2o/o = ?24,987 - P10,200)

cpA REVTEW SCHOOL OFTHE PHIIiPPiNES (CPAR) - MANILAAUDmNGPRoBLEMS ,

-

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43. C Adjusted inventory (P3,873,000 + P148,000- P41,700 - Pltil.sCIO)44. B Adjusted sales (P4,820,000 + P31,810 - P52,ti30)45. D Prepayments per books

Adveftising o(pense (P144,000 x SILZ)Rent expense (P165,000 x2l3)ffice supplies expense (P129,000 x P53,200)Prepayments, as adjusted

46. D Total cost of PPE per booksAdditional charges to computers bought (P12,500 + Pi.i.,300 + P6,520iUnrecorded cost of delivery equiprnent (Pl,0m,000 * P200,000)Adjusted cost of PPE

47. B Total cosr of PPEAccumulated depreciaticn per books p93o,500Depreciation

- Leasehold improvements {P363,000/5 x 3,112) 18,150

Depreciation -

Computers t?355,320 4 >