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    ACCTG 16 FAR W2 Problems PDF

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    LabLab Chatto
    1. The document contains 11 accounting problems providing financial information in the form of account balances, transactions, and bank reconciliation details. Readers are asked to calculate amounts for items like total assets, liabilities, income, cash, and adjusted net income based on the information provided. 2. The problems cover the preparation of basic financial statements and calculations related to revenues, expenses, assets, liabilities, and equity. Bank reconciliation questions are also included to test the summarization of cash account information from accounting records and bank statements. 3. Answering the problems requires understanding accounting concepts like inventory cost flow assumptions, accounts receivable and payable calculations, as well as adjusting and closing entries.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    ACCTG 16 FAR W2 Problems PDF

    Uploaded by

    LabLab Chatto
    102 views5 pages
    1. The document contains 11 accounting problems providing financial information in the form of account balances, transactions, and bank reconciliation details. Readers are asked to calculate amounts for items like total assets, liabilities, income, cash, and adjusted net income based on the information provided. 2. The problems cover the preparation of basic financial statements and calculations related to revenues, expenses, assets, liabilities, and equity. Bank reconciliation questions are also included to test the summarization of cash account information from accounting records and bank statements. 3. Answering the problems requires understanding accounting concepts like inventory cost flow assumptions, accounts receivable and payable calculations, as well as adjusting and closing entries.

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    ACCTG 16 FAR W2 problems PDF

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    1. The document contains 11 accounting problems providing financial information in the form of account balances, transactions, and bank reconciliation details. Readers are asked to calculate amounts for items like total assets, liabilities, income, cash, and adjusted net income based on the information provided. 2. The problems cover the preparation of basic financial statements and calculations related to revenues, expenses, assets, liabilities, and equity. Bank reconciliation questions are also included to test the summarization of cash account information from accounting records and bank statements. 3. Answering the problems requires understanding accounting concepts like inventory cost flow assumptions, accounts receivable and payable calculations, as well as adjusting and closing entries.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    102 views5 pages

    ACCTG 16 FAR W2 Problems PDF

    Uploaded by

    LabLab Chatto
    1. The document contains 11 accounting problems providing financial information in the form of account balances, transactions, and bank reconciliation details. Readers are asked to calculate amounts for items like total assets, liabilities, income, cash, and adjusted net income based on the information provided. 2. The problems cover the preparation of basic financial statements and calculations related to revenues, expenses, assets, liabilities, and equity. Bank reconciliation questions are also included to test the summarization of cash account information from accounting records and bank statements. 3. Answering the problems requires understanding accounting concepts like inventory cost flow assumptions, accounts receivable and payable calculations, as well as adjusting and closing entries.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 5

    ACCOUNTING 16

    FINANCIAL ACCOUNTING AND REPORTING


    PROBLEMS – PART 1

    PROBLEM 1

    Killua Inc. provided the following information on December 31, 2021:

    Cash in Bank, net of bank overdraft P500,000 5,000,000


    Petty Cash, unreplenished petty cash expenses P10,000 50,000
    Notes Receivable 4,000,000
    Accounts Receivable, net of customers’ accounts with credit 6,000,000
    balances P1,500,000
    Inventory 3,000,000
    Bond Sinking Fund 3,000,000
    Total Current Assets 21,050,000

    Accounts Payable, net of suppliers’ accounts with debit balances of 7,000,000


    P1,000,000
    Notes Payable 4,000,000
    Bonds Payable due June 30, 2022 3,000,000
    Accrued Expenses 2,000,000
    Total Current Liabilities 16,000,000
    1. What amount should be reported as total current assets on December 31, 2021?
    2. What amount should be reported as total current liabilities on December 31, 2021?

    PROBLEM 2

    Montecarlo Company provided the following account balances at year-end which had been adjusted
    except for income tax expense:

    Cash 600,000
    Accounts Receivable 3,500,000
    Cost in excess of billings on long-term contracts 1,600,000
    Billings in excess of cost on long-term contracts 700,000
    Prepaid Taxes 450,000
    Property, plant, and equipment, at carrying amount 1,510,000
    Note payable- non-current 1,620,000
    Share Capital 750,000
    Share Premium 2,030,000
    Retained earnings unappropriated 900,000
    Retained earnings restricted for note payable 160,000
    Earnings from long-term contracts 6,680,000
    Costs and expenses 5,180,000
    All receivables on long-term contracts are considered to be collectible within 12 months. During the year,
    estimated tax payments of P450,000 were charged to prepaid taxes. The entity has not recorded income
    tax expense. The tax rate is 30%

    At the year end, what amount should be reported as:

    1. Total Retained Earnings


    2. Total noncurrent Liabilities
    3. Total current assets
    4. Total Shareholders’ equity
    PROBLEM 3

    HXH Company provided the following information for the current year:

    Beginning Inventory 400,000


    Freight in 300,000
    Purchase returns 900,000
    Ending inventory 500,000
    Selling Expenses 1,250,000
    Sales Discount 250,000
    The cost of goods sold is six times the selling expenses.

    What is the amount of gross purchases?

    PROBLEM 4

    Vash Inc. provided the following information for the current year:

    Net accounts receivable at January 1 900,000


    Net accounts receivable at December 31 1,000,000
    Accounts receivable turnover 5 to 1
    Inventory at January 1 1,100,000
    Inventory at December 31 1,200,000
    Inventory turnover 4 to 1

    What is the gross income for the current year?

    PROBLEM 5

    Thor Inc. reported net income of P7,500,000 for the current year which included the following amounts:

    Unrealized loss on foreign currency translation (500,000)


    Gain on early retirement of bonds payable 2,200,000
    Adjustment of profit of prior year for error in depreciation, net of (750,000)
    tax effect
    Loss from fire (1,400,000)

    What amount should be reported as adjusted net income?

    PROBLEM 6

    Rizuka Inc. had the following events and transactions during 2020:

    • Depreciation for 2018 was understated by P300,000.


    • A litigation settlement resulted in a loss of P250,000.
    • The inventory on December 31, 2018 was overstated by P200,000.
    • The entity disposed of a recreational division at a loss of P600,000.
    • The income tax rate is 30%.
    1. What is the effect of these events on the income from continuing operations for 2020?
    2. What is the effect of these events on net income for 2020?

    PROBLEM 7

    Eugene Inc. reported the following information at year-end:

    •Share investments of P1,000,000 that are very actively traded in the stock market.
    •Government treasury bills of P2,000,000 with a 10-year term but purchased on December 31 at
    which time they had two months to go until maturity.
    • Cash of P3,400,000 in the form of coin, currency, savings account and checking account.
    • Commercial papers of P1,500,000 with term of nine months but purchased on December 31 at
    which time they had three months to go until maturity.
    1. What total amount should be reported as cash?
    2. What total amount should be reported as cash equivalents?
    PROBLEM 8

    Raiku Inc. reported the checkbook balance on December 31, 2020 at P5,000,000 and held the following
    items on same date:

    Check payable to Raiku, dated January 2, 2021 in payment of a sale made in 2,000,000
    December 2020, not included in December 31 check book balance
    Check payable to Raiku, deposited December 15 and included in December 31 500,000
    checkbook balance, but returned by bank on December 30 stamped “NSF”. The check
    was redeposited on January 2, 2021 and cleared on January 9, 2021
    Check drawn on Raiku’s account, payable to a vendor, dated and recorded in Raiku’s 300,000
    books on December 31, 2020 but not mailed until January 10, 2021
    Certificate of time deposit 1,000,000
    What amount should be reported as cash on December 31, 2020?

    PROBLEM 9

    • Geiger Company showed a cash account balance of P4,500,000 at the month-end.


    • The bank statement did not include a deposit of P230,000 made on the last day of the month.
    • The bank statement showed a collection by the bank of P94,000 for the depositor and a
    customer check for P32,000 returned because it was NSF.
    • A customer check for P45,000 was recorded by the depositor as P54,000, and a check written
    for P79,000 was recorded as P97,000.

    What amount should be reported as cash in bank?

    PROBLEM 10

    Ash Company kept all cash in a checking account. An examination of the accounting records and bank
    statement for the month of June revealed the following information:

    • The cash balance per book on June 30 was P8,500,000.


    • A deposit of P1,000,000 that was placed in the bank’s night depository on June 30 did not
    appear on the bank statement.
    • The bank statement showed that on June 30 the bank collected note for the entity and credited
    the proceeds of P950,000 to the entity’s account, net of collection charge P50,000.
    • Checks outstanding on June 30 amounted to P300,000 including certified check of P100,000.
    • The entity discovered that a check written in June for P200,000 in payment of an account
    payable had been recorded in the entity’s records as P20,000.
    • Included with the June bank statement was NSF check for P250,000 received from a customer
    on June 26.
    • The bank statement showed a P20,000 service charge for June.
    1. What amount should be reported as cash in bank on June 30?
    2. What is the balance per bank statement on June 30?
    3. What is the net adjustment to cash in bank on June 30?

    PROBLEM 11

    Leorio Company had the following bank reconciliation on June 30:

    Balance per bank statement, June 30 3,000,000


    Deposit in transit 400,000
    Total 3,400,000
    Outstanding checks (900,000)
    Balance per book, June 30 2,500,000
    The bank statement for the month of July showed the following:

    Deposits, including P200,000 note collected for Leorio 9,000,000


    Disbursements, including P140,000 NSF customer check and P10,000 7,000,000
    Service charge
    All reconciling items on June 30 cleared through the bank in July. The outstanding checks totaled
    P600,000 and the deposit in transit amounted to P1,000,000 on July 31.

    1. What is the adjusted cash in bank on July 31?


    2. What is the cash balance per book on July 31?
    3. What is the amount of cash receipts per book in July?
    4. What is the amount of cash disbursements per book in July?

    PROBLEM 12

    Recca Inc. provided the following information relating to accounts receivable for the current year:

    Accounts Receivable on January 1 1,300,000


    Credit sales 5,400,000
    Collections from customers, excluding recovery 4,750,000
    Accounts Written off 125,000
    Collection of accounts written off in prior year 25,000
    (customer credit was not reestablished)
    Estimated uncollectible receivables per aging of receivables at 165,000
    December 31

    What is the balance of accounts receivable, before allowance for doubtful accounts on December 31?

    PROBLEM 13

    GRINGO INC. provided the following transactions affecting accounts receivable during the current year:

    Sales – cash and credit 5,900,000


    Cash received from credit customers, all of whom took advantage of the 3,024,000
    discount feature of the credit term 4/10, n/30
    Cash received from cash customers 2,100,000
    Accounts receivable written off as worthless 50,000
    Credit memorandum issued to credit customers for sales returns and 250,000
    allowances
    Cash refunds given to cash customers for sales returns and allowances 20,000
    Recoveries on accounts receivable written off as uncollectible in prior 80,000
    periods not included in cash received from customers stated above

    BALANCES ON JANUARY 1

    Accounts Receivable 950,000


    Allowance for doubtful accounts 100,000
    The entity provided for uncollectible account losses by crediting allowance for doubtful accounts in the
    amount of P70,000 for the current year.

    1. What is the balance of accounts receivable on December 31?


    2. What is the balance of allowance for doubtful accounts on December 31?

    PROBLEM 14

    Orochimaru Inc. prepared an aging of accounts receivable on December 31 and determined that the net
    realizable value of the accounts receivable was P2,500,000.

    Allowance for doubtful accounts on January 1 280,000


    Accounts written off as uncollectible 230,000
    Accounts receivable on December 31 2,700,000
    Uncollectible accounts recovery 50,000
    What amount should be recognized as doubtful accounts expense for the current year?

    PROBLEM 15

    DVariant Inc. sold goods to wholesalers on terms 2/15, net 30. The entity had no cash sales but 50% of
    the customers took advantage of the discount.
    The entity used the gross method of recording sales and accounts receivable.

    An analysis of the trade accounts receivable at year-end revealed the following:

    Age Amount Collectible


    0-15 days 2,000,000 100%
    16-30 days 1,400,000 95%
    31-60 days 400,000 90%
    Over 60 days 200,000 50%
    4,000,000
    1. What amount should be reported as allowance for sales discount at year-end?
    2. What amount should be reported as allowance for doubtful accounts at year-end?
    3. What is the net realizable value of accounts receivable at year-end?

    PROBLEM 16

    On December 1, 2020, Bambini Company assigned specific accounts receivable totaling P4,000,000 as
    collateral on a P3,000,000, 12% note from a certain bank. The entity will continue to collect the assigned
    accounts receivable.

    In addition to the interest on the note, the bank also charged a 5% finance fee deducted in advance on
    the P3,000,000 value of the note.

    The December collections of assigned accounts receivable amounted to P2,000,000 less cash discounts
    of P100,000. On December 31, 2020, the entity remitted the collections to the bank in payment for the
    interest accrued on December 31, 2020 and the note payable.

    The entity accepted sales returns of P150,000 on the assigned accounts and wrote off assigned accounts
    of P200,000.

    1. What amount of cash was received from the assignment of accounts receivable on December
    31, 2020?
    2. What is the carrying amount of note payable on December 31, 2020?
    3. What is the balance of accounts receivable- assigned on December 31, 2020?

    PROBLEM 17

    Zylus Inc. factored P6,000,000 of accounts receivable to a finance entity at the end of current year.
    Control was surrendered by Zylus Company.

    The factor assessed a fee of 3% and retained a holdback equal to 5% of the accounts receivable.

    In addition, the factor charged 15% interest computed on a weighted average time to maturity of the
    accounts receivable of 54 days.

    1. What is the amount of cash initially received from the factoring?


    2. If all accounts are collected, what is the cost of factoring the accounts receivable?

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