Intermediate Aactg.1

Intermediate aactg.
INSTRUCTIONS:
o Write the letter of your choice on the space provided before each item number
and show your solutions on the space provided;
o Submit the hard copy of activity on or before September 20, 2022.
MULTIPLE CHOICE
On December 31 2018, the cash and cash equivalent items of H company show the
following composition:
Petty cash fund* 5,000
Cash in bank- W bank** 90,000
Savings account- C bank*** 200,000
Travelers check 10,000
Manager’s check 23,000
Postage stamps 1,000
Checking account in G bank, per book (outstanding 90,000
checks as of year end totaled P10,0000)
Postal money order 20,000
Treasury bill, due 3/30/18 (purchased 12/31/17) 70,000
Treasury bill, due 1/31/18 (purchased 5/1/17) 40,000
Demand deposit- T bank (overdraft) (20,000)
Cash set aside for the acquisition of equipment to be 30,000
disbursed 4 months after BS date
Bond sinking fund 45,000
*including expense receipts of 1,000, IOUs of 500, employee’s PDC of 200 and bills
and coins of 2,800
**net of undelivered check payable to creditors of 30,000
***cash in savings account includes 100,000 of compensating balances. It was noted
that 40% of that amounts are legally restricted as to withdrawal.
1. How much is the amount of cash and cash equivalents to be presented in the
balance sheet on December 31 2018?
a. 458,800
b. 525,800
c. 496,300
d. 495,800
The books of S service Inc. disclosed a cash balance of 48,757 on June 30. The bank
statement as of June 30 showed a balance of 54,780. Additional information that
might be useful in reconciling the two balances follows:
 Check payable to creditors for 3,000 was erroneously recorded on the books as
P4,500
 The deposit of June 24 was recorded on the books as P2,895, but it was actually a
deposit of P2,700
 Outstanding checks totaled P9,885 as of June 30
 There were bank service charges for June of P210 not yet recorded on the books
 S company account had been charged on June 26 for a customer’s NSF check for
P1,296
 S company account had been credited by the bank P600. This amount should have
been credited to ES company account
 Receipts of June 30 for P13,425 were recorded by the bank on July 2
 A bank memo stated that a customer’s note for P9,000 and interest of P164 had
been collected on June 27
2. How much is the correct cash balance at the end of the month?
a. 57,720
b. 57,270
c. 58,920
d. 58,290
On January 1 2018, T company sold a building for P5,000,000 to B company. B
company paid P500,000 down and signed a noninterest bearing note for the balance
which is payable in 3 equal annual installments every December 31 of each year. The
carrying value of the building is P4,200,000. Assume prevailing interest rate for a note
of this type is 12%. The present value of an ordinary annuity of 1 for three periods is
2.4018.
3. How much is the interest income for the year 2019?
a. 304,203
b. 492,324
c. 432,324
d. 540,000
P Company factored receivables with a face amount of P600,000 (with existing

provision for uncollectible amount of P12,000) to A bank. A bank advances P490,000
to P company and retains 5% f the face amount of receivables. The factoring was done
on a without recourse basis, thus transferring all significant risk and reward related to
the receivables to A bank.
4. How much is the loss on factoring that should recognized in profit or loss?
a. 0
b. 98,000
c. 80,000
d. 68,000
The following transactions affecting the accounts receivable of S company took place
during the year 2018:
Sales (cash and credit) P 600,000
Cash received from cash customers 200,000
Cash received from credit customers (P237,650 was received from 400,000
customers who took advantage of the discount feature of the
company’s credit terms 3/10, n/30
Accounts receivable written off as worthless 5,000
Credit memoranda issued to credit customers for sales returns 25,000
Cash refunds given to cash customers for sales returns 15,000
Recoveries on accounts receivable written off as uncollectible in 8,500
prior periods (not included in cash collections above)
An aging of receivables indicate that P7,500 of the accounts receivable balance are
deemed uncollectible.
The following balances were taken from the December 31 2017 balance sheet:
accounts receivable- P90,000; allowance for bad debts- P1,400
5. What is the accounts receivable ledger balance at December 31 2018?
a. 60,000
b. 61,150
c. 52,650
d. 45,150
6. How much is the bad debts expense reported in the income statement for the year
ended December 31 2018?
a. 4,900
b. 2,600
c. 7,500
d. 11,100
Z company included the following items in its inventory on December 31 2018:
Merchandise out on consignment to Hera, at sales price P 3,000,000
Goods purchased in transit, FOB shipping point 2,000,000
Good held on consignment from Ars company 1,000,000
Goods sold in transit FOB shipping point at sales price 4,500,000
Freight paid by Z on consigned goods to Hera 100,000
Freight paid by Ars company 50,000
Freight paid by Z on goods purchased 10,000
Freight paid by Z on goods sold to customer 20,000
 Mark-up on cost is 25%. Consigned goods were still unsold at December 31 2018.
7. How much should be included in Z’s correct cost of inventory on December 31
2018?
a. 5,010,000
b. 4,510,000
c. 4,410,000
d. 5,000,000
During 2018, T company signed a noncancellable contract to purchase 500 sacks of
rice at P900 per sack with delivery to be made in 2019. On December 31 2018, the
price of rice had fallen to P850 per sack. On may 9 2019, T company accepts delivery
of rice when the price is P880 per sack.
8. In December 31 2018 income statement, what amount of loss on purchase
commitment should be recognized?
a. 15,000
b. 10,000
c. 25,000
d. 0
9. What amount of recovery of loss on purchase commitment should T recognized on
May 9 2019?
a. 10,000
b. 15,000
c. 25,000
d. 0
On December 31 2018, a typhoon damaged a warehouse of I corporation. The entire
company and many accounting records stored in the warehouse were completely
destroyed. Through the use of microfilmed records, the following data were gathered:
Inventory January 1 P450,000; purchases P2,100,00; sales P2,336,000; sales returns
P36,000; sales discounts P14,000; purchase returns P60,000; purchased discounts
P12,000; freight in P5,000; salvage value of damaged inventory P90,000 while an
undamaged inventory that were marked to sell at P150,000 were recovered. Gross
profit percentage on sales 30%.
10. Ho much is the value of inventory loss?
a. 633,000
b. 687,800
c. 873,000
d. 678,000
An entity budgeted the following sales.
June July August
Sales on account 1,800,000 1,840,000 1,900,000
Cash sales 180,000 200,000 260,000
All merchandise is marked up to sell at invoice cost plus 20%. Merchandise inventory
at the beginning of each month is 30% of that month's projected cost of goods sold.
11. What is the amount of anticipated purchases for July?
a. 1,632,000
b. 2,076,000
c. 1,700,000
d. 1,730,000
A group of twenty 2 year old cattle was held at January 1 2017 by F company. Five 2
year old cattle were purchased on January 2 2017 for P13,000 each and 5 calves were
born on January 2 2017. No cows or calves were disposed of during the period. Per
unit fair values less cost to sell were as follows;
January 1 2017
2-year old cattle P12,000
New born cattle 4,000
December 31 2017
3-year old cattle 15,000
New born cattle 5,000
12. How much shall be taken to 2017 income statement as a gain arising from change
in fair value due to physical change?
a. 30,000
b. 60,000
c. 80,000
d. 110,000

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Intermediate aactg.

P Company factored receivables with a face amount of P600,000 (with existing

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