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Problem 1
The summarized general ledger trial balance of Dapitan Corporation, an investment company,
includes the following accounts at December 31, 2010
Cash

Debit

Credit
Deposits, at call

P 7,000
Dividends receivable

112,869
Interest receivable

15,693
Outstanding Settlements receivable

478
Trading securities

4,900
Listed securities(available for sale)

68,455
deferred Tax

1,880,472
Outstanding settlements payable

655

Interest payable


P 10,253
Interest payable

280
Other payables

83
Current tax payable

242
Provision for employee benefits

752
Deferred tax

56,414
Share Capital

1,368,024
Revaluation Reserve - Investments

376,090
Retained Earnings



278,384


2,090,522

2,090,522

Note: Provision for employee benefits includes P525 payable within one year
Required: Compute for the following
1 Current assets 209,395
2 Noncurrent assets 1,881,127
3 Current Liabilities 11,383
4 Noncurrent liabilities 56,641


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Problem 2
The following balance sheet was prepared by the bookkeeper for Perry Company as of December 31, 2007.
Perry Company
Balance Sheet
as of December 31, 2007

Cash P 80,000 Accounts payable P 75,000
Accounts receivable (net) 52,200 Long-term liabilities 100,000
Inventories 57,000 Stockholders' equity 218,500
Investments 76,300
Equipment (net) 96,000
Patents 32,000
P393,500 P393,500

The following additional information is provided:
1. Cash includes the cash surrender value of a life insurance policy P9,400, and a bank overdraft of P2,500 has
been deducted.
2. The net accounts receivable balance includes:
(a) accounts receivabledebit balances P60,000;
(b) accounts receivablecredit balances P4,000;
(c) allowance for doubtful accounts P3,800.
3. Inventories do not include goods costing P3,000 shipped out on consignment. Receivables of P3,000 were
recorded on these goods.
4. Investments include investments in common stock, trading P19,000 and available-for-sale P48,300, and
franchises P9,000.
5. Equipment costing P5,000 with accumulated depreciation P4,000 is no longer used and is held for sale.
Accumulated depreciation on the other equipment is P40,000.

Required: Compute for
a. Total current assets 206,300
b. Total assets P400,000
c. Total current liabilities 81,500
d. Total liabilities 181,500
e. Stockholders' equity 218,500


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Problem 3
The following data pertain to Ramirez Company on December 31, 2011


Cash, incuding sinking fund of P500,000 with trustee P

2,000,000
Notes receivable(including P200,000 pledged

and P700,000 discounted


1,200,000

Accounts receivable - unassigned


3,000,000
Accounts receivable -
assigned


800,000

Notes receivable discounted


700,000
Equity of assignee in accounts receivable
assigned


500,000
Inventory, including P600,000 cost of goods in transit
purchased FOB destination. The
goods
were received January 3,
2012


2,800,000

Allowancefor doubtful accounts


100,000

What total amounts of current assets should be reported in the statement of financial position on December
31, 2011?
P7,900,000
Problem 4
Neuver Company has manufactured a machine specifically to the design of its customers. Any other party could
not use the machine. Neuver Company has never manufactured this type of machine before and expects a
number of faults to materialize in its operation during its first year of use, which Neuver is contractually bound
to rectify at no further cost to customer. The nature of these faults could be well significant. As of December 31,
2014, the machine had been installed. The customer invoice was P500,000 and the cost incurred up to the point
of installation was P325,000. What amount of revenue from sales should Neuver Company recognize in
December 31,2014?
Answer: None/0
Problem 5
Meyer Corp. reports operating expenses in two categories: (1) selling and (2) general and administrative. The
adjusted trial balance at December 31, 2007, included the following expense accounts:
Accounting and legal fees P140,000
Advertising 120,000
Freight-out 75,000
Interest 60,000
Loss on sale of long-term investments 30,000
Officers' salaries 180,000
Rent for office space 180,000
Sales salaries and commissions 110,000
One-half of the rented premises is occupied by the sales department.
a. How much of the expenses listed above should be included in Meyer's selling expenses for 2007?
b. How much of the expenses listed above should be included in Meyer's general and administrative
expenses for 2007?
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Answer:
a. P120,000 + P75,000 + P110,000 + P90,000 = P395,000.
b P140,000 + P180,000 + P90,000 = P410,000

Problem 6
Presented below is an income statement for Morton Company for the year ended December 31, 2007.
Morton Company
Income Statement
For the Year Ended December 31, 2007

Net sales P800,000
Costs and expenses:
Cost of goods sold 640,000
Selling, general, and administrative expenses 70,000
Other, net 20,000
Total costs and expenses 730,000
Income before income taxes 70,000
Income taxes 21,000
Net income P 49,000

Additional information:
1. "Selling, general, and administrative expenses" included a usual but infrequent charge of P7,000 due to a
loss on the sale of investments.
2. "Other, net" consisted of interest expense, P10,000, and an extraordinary loss of P10,000 before taxes due to
earthquake damage. If the extraordinary loss had not occurred, income taxes for 2007 would have been
P24,000 instead of P21,000.
4. Morton had 20,000 shares of common stock outstanding during 2007.

Net income of Morton Company is:
Answer: Net income P 49,000

Problem 7
Perry Corp. reports operating expenses in two categories: (1) selling and (2) general and administrative. The
adjusted trial balance at December 31, 2011, included the following expense accounts:
Accounting and legal fees P140,000
Advertising 120,000
Freight-out 75,000
Interest 60,000
Loss on sale of long-term investments 30,000
Officers' salaries 180,000
Rent for office space 180,000
Sales salaries and commissions 110,000
One-half of the rented premises is occupied by the sales department.
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How much of the expenses listed above should be included in Perry's selling expenses for 2011?
P120,000 + P75,000 + P110,000 + P90,000 = P395,000.
Problem 8
127. Perry Corp. reports operating expenses in two categories: (1) selling and (2) general and administrative.
The adjusted trial balance at December 31, 2011, included the following expense accounts:
Accounting and legal fees P140,000
Advertising 120,000
Freight-out 75,000
Interest 60,000
Loss on sale of long-term investments 30,000
Officers' salaries 180,000
Rent for office space 180,000
Sales salaries and commissions 110,000
One-half of the rented premises is occupied by the sales department.
How much of the expenses listed above should be included in Perry's general and administrative
expenses for 2011?
P140,000 + P180,000 + P90,000 = P410,000.
Problem 9
The following changes in Vel Corp.s account balances occurred during 2010:
Increase
Assets P89,000
Liabilities 27,000
Capital stock 60,000
Additional paid-in capital 6,000

Except for a P13,000 dividend payment and the years earnings, there were no changes in retained earnings for
2010. What was Vels net income for 2010?
Answer: P 9,000

Problem 10
Logan Corp.'s trial balance of income statement accounts for the year ended December 31, 2011 included the
following:
Debit Credit
Sales P140,000
Cost of sales P 50,000
Administrative expenses 25,000
Loss on sale of equipment 9,000
Commissions to salespersons 8,000
Interest revenue 5,000
Freight-out 3,000
Loss on disposition of wholesale division 12,000
Bad debt expense 3,000
Totals P110,000 P145,000
Other information:
Logan's income tax rate is 30%. Finished goods inventory:
January 1, 2011 P80,000
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December 31, 2011 70,000
On Logan's income statement for 2011, cost of goods manufactured is

Answer: P50,000 + P70,000 P80,000 = P40,000.

Problem 11
Ortiz Co. had the following account balances:
Sales P 120,000
Cost of goods sold 60,000
Salary expense 10,000
Depreciation expense 20,000
Dividend revenue 4,000
Utilities expense 8,000
Rental revenue 20,000
Interest expense 12,000
Sales returns 11,000
Advertising expense 13,000
What amount would Ortiz report as income from operations in its income statement?

Answer: P34,000 - P8,000 + P20,000 - P11,000 - P13,000 = P22,000.


Problem 12
The financial records of Ronalyn Company were destroyed by fire at the end of the current
year. However, certain statistical data related to the income statement are available.
Interest expense 20,000

cost of goods sold 2,000,000

sales discount 100,000

the beginning inventory was P400,000 and decreased 20% during the year. Administrative
expenses are 25% of cost of goods sold but only 10% of gross sales. 4/5 of the operating
rxpenses relate to sale acctivities.
ignoring income tax, what is the net income for the current year?
P380,000