Cash-to-inventory
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UNION CHRISTIAN COLLEGE City of San Fernando, La Union School of Business and Sciences Accountancy Program MOCK BOARD EXAMINATION SY 2019-2020 Instructions: Kindly encircle the correct letter using black or blue ball pen. Double encircling, erasures, usage of pencil and friction pen in encircling means wrong.
1. On December 31,2019 , Roma Company reported cash of P9,950,000 which comprised the following: Undeposited collections Cash in bank-BDO checking account Undeposited NSF check received from customer, dated December 1,2019 Undeposited check from a customer dated January 15,2020 Cash in bank-BDO fund for payroll Cash in bank-BDO money market instrument 90 days Cash in foreign bank restricted Cash in bank-BDO value added tax account
600,000 4,000,000
Total
9,950,000
150,000 250,000 1,000,000 2,000,000 1,500,000 450,000
On December 31,2019 what total amount should be reported as cash and cash equivalents?
2. Love Company reported the following information in relation to cash on December 31,2019:
Check book balance, P4,000,000 Undeposited collections, P400,000 A customer check amounting to P200,000 dated January 2,2020 was included in the December 31,2019 checkbook balance Another customer check for P500,000 deposited on December 22,2019 was included in the checkbook balance but returned by the bank for insufficiency of fund. This check was redeposited on December 26,2019 and cleared two days later. A P400,000 check payable to supplier dated and recorded on December 30,2019 was mailed on January 16,2020. A petty cash fund of P50,000 compromised the following on December 31,2019: Coins and currencies 5,000 Petty cash vouchers 40,000 Refundable deposit for returnable containers 5,000
50,000
A check of P40,000 was drawn on December 31,2019 payable to Petty Cash.
1. What is the adjusted cash in bank on December 31,2019? 2. Wat total amount should be reported as cash on December 31,2019? 3. Chris Company presented the following bank reconciliation for the month of November: Balance per bank statement, November 30 3,600,000 Add: Deposit in transit 800,000 4,400,000 Less: Outstanding checks 1,200,000 Bank credit recorded in error 200,000 1,400,000 Balance per book, November 30 3,000,000 Data per bank statement for the month of December follow: December deposits including note collected of P1,000,000 for Chris December disbursements, including NSF customer check P350,000 and service charge P50,000
5,500,000 4,400,000
All items that were outstanding on November 30 cleared through the bank in December including the bank credit. In addition, checks amounting to P500,000 were outstanding and deposits of P700,000 were in transit on December 31. 1. What is the adjusted cash in bank on December 31? 2. What is the cash balance per ledger on December 31? 3. What is the amount of cash receipts per book in December? 4. What is the amount of cash disbursements per book in December?
4. Flappable Company began operations on January 1, 2016. The entity provided for doubtful accounts based on 5% of annual credit sales in prior years. On January 1,2019, the entity changed the method of determining the allowance for doubtful accounts using an aging schedule. 2019 2018 2017 2016 15,000,00 Credit sales 0 9,500,000 8,000,000 6,000,000 11,700,00 Collections excluding recovery 0 8,200,000 6,700,000 4,500,000 Accounts written off during year 200,000 120,000 80,000 None Recovery of accounts written off 100,000 40,000 35,000 None
Day accounting outstanding 30 days or less between 31 and 60 days between 61 and 180 days
Amount 3,000,000 1,500,000 1,200,000
Probability of Collection 95% 80% 75%
between 181 and one year over one year- to be written off
1,200,000 100,000
50% 0%
1. What amount should be reported as allowance for doubtful accounts on December 31,2019? 2. What amount should be reported as doubtful accounts expense for 2019? 3. What is the net realizable value of accounts receivable on December 31,2019? 5.During the second year of operation, Shark Company found itself in financial difficulties. The entity decided to use the accounts receivable as a means of obtaining cash to continue operations. On July 1,2019, the entity sold P1,500,000 of accounts receivable for cash proceeds of P1,400,000. No allowance for doubtful accounts was associated with these accounts. On December 15,2019 the entity assigned the remainder of its accounts receivable, P5,000,000 as of that date as collateral on a P2,500,000, 12% annual interest rate loan from Finance Company. The entity received P2,500,000 less a 2% finance charge. None of the assigned accounts had been collected by the end of the year. It is estimated that 10% of accounts receivable would be uncollectible. The entity revealed the following data on December 31,2019: Accounts receivable, excluding factored and assigned accounts 1,000,000 Accounts receivable- assigned 5,000,000 Accounts receivable- factored 1,500,000 Allowance for doubtful accounts before adjustment 100,000 1. What total amount was received from the financing of accounts receivable? 2. What is the net realizable value of accounts receivable on December 31,2019? 3. What amount should be recognized as doubtful accounts expense for 2019? 6. Delicate Company is a wholesale distributor of automotive replacement parts. The entity provided the following information on December 31,2019: Inventory on December 31 based on physical count 1,250,000 Accounts payable 1,000,000 Sales 9,000,000 A. Parts held on consignment from another entity to Delicate, the consignee amounting to P165,000 were included in the physical count on December 31,2019 and in accounts payable on December 31,2019. B. P20,000 of parts which were purchased and paid for in December 2019, were sold in the last week of 2019 and appropriately recorded as sales of P28,000 The parts were included in the physical count on December 31,2019 because the parts were on the loading dock waiting to be picked up by the customer. C. Parts in transit on December 31,2019 to customers shipped FOB shipping point on December 28,2019, amounted to P34,000. The customers received the parts on January 6,2020. Sales of P40,000 to the customers for the parts were recorded by Delicate on January 2,2020. D. Retailers were holding P210,000 at cost and P250,000 at retail, of goods on consignment from Delicate, at their stores on December 31,2019.
E. Goods were in transit from vendor to Delicate on December 31,2019/ The cost of goods was P25,000. The goods were shipped FOB shipping point on December 29,1019. 1. What is the correct amount of inventory? 2. What is the correct amount of accounts payable? 3. What is the correct amount of sales? 7. Quarry Company a manufacturer of small tools, provided the following information for the year ended December 31,2019: Inventory at December 31 based on physical count 1,750,000 Accounts payable at December 31 1,200,000 Net sales 8,500,000 Additional information A. Included in the physical count were tools billed to a customer FOB shipping point on December 31,2019. These tools had a cost of P28,000 and were billed at P35,000. The shipment was in loading dock waiting to be picked up by the common carrier. B. Goods were in transit from a vendor to Quarry Company on December 31,2019. The invoice cost was P50,000 and the goods were shipped FOB shipping point on December 29,2019. C. Work in process inventory costing P20,000 was sent to an outside processor for plating on December 30,2019. D. Tools returned by customers and held pending inspection in the returned goods area on December 31,2019 and had a cost of the physical count. On January 8,2020, the tools costing P26,000 were inspected and returned to inventory. Credit memos totaling P40,000 were issued to the customers on the same date. E. Tools shipped to a customer FOB shipping destination on December 26,2019 were in transit on December 31,2019 and had a cost of P25,000. Upon notification of receipt by the customer on January 2,2020, Quarry Company issued sales invoice for P42,000 F. Goods with an invoice cost of P30,000 received from a vendor at 5:00 PM on December 31,2019 were recorded on a receiving report dated January 2,2020. The goods were not included in the physical count but the invoice was included in accounts payable on December 31,2019. G. Goods received from a vendor on December 26,2019 were included in the physical count. However, the related P60,000 vendor invoice was not included in accounts payable on December 31,2019 because the accounts payable copy of the receiving report was lost. H. On January 3,2020 a monthly freight bill in the amount of P20,000 was received. The bill specifically related to merchandise purchased in December 2019, one-half of which was still in the inventory on December 31,2019. The freight charge was not included in either the inventory or in accounts payable on December 31,2019. 1. What is the correct amount of inventory? 2. What is the correct amount of accounts payable? 3. What is the correct amount of net sales? 8. On April 30, a fire damaged the office of Amaze Company. The following balances were gathered from the general ledger on March 31: Accounts receivable 920,000
Inventory-January 1 Accounts payable Sales Purchases
1,880,000 950,000 3,600,000 1,680,000
An examination of the April bank statement and canceled checks revealed checks written during the period April 1-30 as follows: Accounts payable as of March 31 240,000 April merchandise shipments 80,000 Expenses 160,000 Deposits during the same period amounted to P440,000 which consisted of collections from customers with the exception of P20,000 refund from a vendor for merchandise returned in April. Customers acknowledged indebtedness of P1,040,000 at April 30. Customers owed another P60,000 that will never be recovered. Of acknowledged indebtedness P40,000 may prove uncollectible. Correspondence with suppliers revealed unrecorded obligations at April 30, of P340,000 for April merchandise shipment, including P100,000 for shipments in transit on that date. The average gross profit rate is 40$ Inventory with a cost of P260,000 was salvaged and sold for P140,000. The balance of the inventory was a total loss. 1. What is total amount of sales up to April 30? 2. What is the total amount of purchases up to April 30? 3. What is the inventory on April 30? 4. What is the fire loss to be recognized on April 30? 9. In conducting an audit of Remy Company for the year ended June 30,2019, the entity’s CPA observed the physical inventory at an interim date, May 31,2019. Inventory, July 1,2018 875,000 Physical inventory May 31,2019 950,000 Sales for 11 months ended May 31,2019 8,400,000 Sales for year ended June 30 ,2019 9,600,000 Purchases for 11 months ended May 31,2019 6,750,000 Purchases for year ended June 30,2019 8,000,000
a. Shipments received in May and included in the physical inventory but recorded as June purchases b. Shipments received in unsalable condition and excluded from physical inventory. Credit memos had not been received nor had charge backs to vendors been recorded: Total at May 31,2019 Total at June 30,2019 (including the May unrecorded chargebacks)
75,000
10,000 15,000
c. Deposit made with vendor and charged to purchases in April 2019. Product was shipped in July 2019
20,000
d. Deposit made with vendor and charged to purchases in May 2019. Product was shipped FOB destination, on May 29,2019 and was included in May 31,2019 physical inventory as goods in transit
55,000
e. Through the carelessness of the receiving department a June shipment was damaged by rain. This shipment was later sold in June at the cost of
100,000
1. What is the cost of goods sold for the month of June 2019? 2. What is the inventory on June 30 ,2019? 10. Dairy Company provided the following information for the current year: Cash Trade and other receivables Inventories Dairy livestock-immature Dairy livestock- mature Property, plant and equipment, net Trade and other payables Note payable=long term Share capital Retained earnings-beginning Fair value of milk produced Gains from change in fair value Inventories used Staff costs Depreciation expense Other operations expenses Income tax expense
1. What is the net income for the current year? 2. What is the fair value of biological assets at year-end?
500,000 1,500,000 100,000 50,000 400,000 1,400,000 520,000 1,500,000 1,000,000 800,000 600,000 50,000 140,000 120,000 15,000 190,000 55,000
1. On December 31,2019 , Roma Company reported cash of P9,950,000 which comprised the following: Undeposited collections Cash in bank-BDO checking account Undeposited NSF check received from customer, dated December 1,2019 Undeposited check from a customer dated January 15,2020 Cash in bank-BDO fund for payroll Cash in bank-BDO money market instrument 90 days Cash in foreign bank restricted Cash in bank-BDO value added tax account
600,000 4,000,000
Total
9,950,000
150,000 250,000 1,000,000 2,000,000 1,500,000 450,000
On December 31,2019 what total amount should be reported as cash and cash equivalents?
2. Love Company reported the following information in relation to cash on December 31,2019:
Check book balance, P4,000,000 Undeposited collections, P400,000 A customer check amounting to P200,000 dated January 2,2020 was included in the December 31,2019 checkbook balance Another customer check for P500,000 deposited on December 22,2019 was included in the checkbook balance but returned by the bank for insufficiency of fund. This check was redeposited on December 26,2019 and cleared two days later. A P400,000 check payable to supplier dated and recorded on December 30,2019 was mailed on January 16,2020. A petty cash fund of P50,000 compromised the following on December 31,2019: Coins and currencies 5,000 Petty cash vouchers 40,000 Refundable deposit for returnable containers 5,000
50,000
A check of P40,000 was drawn on December 31,2019 payable to Petty Cash.
1. What is the adjusted cash in bank on December 31,2019? 2. Wat total amount should be reported as cash on December 31,2019? 3. Chris Company presented the following bank reconciliation for the month of November: Balance per bank statement, November 30 3,600,000 Add: Deposit in transit 800,000 4,400,000 Less: Outstanding checks 1,200,000 Bank credit recorded in error 200,000 1,400,000 Balance per book, November 30 3,000,000 Data per bank statement for the month of December follow: December deposits including note collected of P1,000,000 for Chris December disbursements, including NSF customer check P350,000 and service charge P50,000
5,500,000 4,400,000
All items that were outstanding on November 30 cleared through the bank in December including the bank credit. In addition, checks amounting to P500,000 were outstanding and deposits of P700,000 were in transit on December 31. 1. What is the adjusted cash in bank on December 31? 2. What is the cash balance per ledger on December 31? 3. What is the amount of cash receipts per book in December? 4. What is the amount of cash disbursements per book in December?
4. Flappable Company began operations on January 1, 2016. The entity provided for doubtful accounts based on 5% of annual credit sales in prior years. On January 1,2019, the entity changed the method of determining the allowance for doubtful accounts using an aging schedule. 2019 2018 2017 2016 15,000,00 Credit sales 0 9,500,000 8,000,000 6,000,000 11,700,00 Collections excluding recovery 0 8,200,000 6,700,000 4,500,000 Accounts written off during year 200,000 120,000 80,000 None Recovery of accounts written off 100,000 40,000 35,000 None
Day accounting outstanding 30 days or less between 31 and 60 days between 61 and 180 days
Amount 3,000,000 1,500,000 1,200,000
Probability of Collection 95% 80% 75%
between 181 and one year over one year- to be written off
1,200,000 100,000
50% 0%
1. What amount should be reported as allowance for doubtful accounts on December 31,2019? 2. What amount should be reported as doubtful accounts expense for 2019? 3. What is the net realizable value of accounts receivable on December 31,2019? 5.During the second year of operation, Shark Company found itself in financial difficulties. The entity decided to use the accounts receivable as a means of obtaining cash to continue operations. On July 1,2019, the entity sold P1,500,000 of accounts receivable for cash proceeds of P1,400,000. No allowance for doubtful accounts was associated with these accounts. On December 15,2019 the entity assigned the remainder of its accounts receivable, P5,000,000 as of that date as collateral on a P2,500,000, 12% annual interest rate loan from Finance Company. The entity received P2,500,000 less a 2% finance charge. None of the assigned accounts had been collected by the end of the year. It is estimated that 10% of accounts receivable would be uncollectible. The entity revealed the following data on December 31,2019: Accounts receivable, excluding factored and assigned accounts 1,000,000 Accounts receivable- assigned 5,000,000 Accounts receivable- factored 1,500,000 Allowance for doubtful accounts before adjustment 100,000 1. What total amount was received from the financing of accounts receivable? 2. What is the net realizable value of accounts receivable on December 31,2019? 3. What amount should be recognized as doubtful accounts expense for 2019? 6. Delicate Company is a wholesale distributor of automotive replacement parts. The entity provided the following information on December 31,2019: Inventory on December 31 based on physical count 1,250,000 Accounts payable 1,000,000 Sales 9,000,000 A. Parts held on consignment from another entity to Delicate, the consignee amounting to P165,000 were included in the physical count on December 31,2019 and in accounts payable on December 31,2019. B. P20,000 of parts which were purchased and paid for in December 2019, were sold in the last week of 2019 and appropriately recorded as sales of P28,000 The parts were included in the physical count on December 31,2019 because the parts were on the loading dock waiting to be picked up by the customer. C. Parts in transit on December 31,2019 to customers shipped FOB shipping point on December 28,2019, amounted to P34,000. The customers received the parts on January 6,2020. Sales of P40,000 to the customers for the parts were recorded by Delicate on January 2,2020. D. Retailers were holding P210,000 at cost and P250,000 at retail, of goods on consignment from Delicate, at their stores on December 31,2019.
E. Goods were in transit from vendor to Delicate on December 31,2019/ The cost of goods was P25,000. The goods were shipped FOB shipping point on December 29,1019. 1. What is the correct amount of inventory? 2. What is the correct amount of accounts payable? 3. What is the correct amount of sales? 7. Quarry Company a manufacturer of small tools, provided the following information for the year ended December 31,2019: Inventory at December 31 based on physical count 1,750,000 Accounts payable at December 31 1,200,000 Net sales 8,500,000 Additional information A. Included in the physical count were tools billed to a customer FOB shipping point on December 31,2019. These tools had a cost of P28,000 and were billed at P35,000. The shipment was in loading dock waiting to be picked up by the common carrier. B. Goods were in transit from a vendor to Quarry Company on December 31,2019. The invoice cost was P50,000 and the goods were shipped FOB shipping point on December 29,2019. C. Work in process inventory costing P20,000 was sent to an outside processor for plating on December 30,2019. D. Tools returned by customers and held pending inspection in the returned goods area on December 31,2019 and had a cost of the physical count. On January 8,2020, the tools costing P26,000 were inspected and returned to inventory. Credit memos totaling P40,000 were issued to the customers on the same date. E. Tools shipped to a customer FOB shipping destination on December 26,2019 were in transit on December 31,2019 and had a cost of P25,000. Upon notification of receipt by the customer on January 2,2020, Quarry Company issued sales invoice for P42,000 F. Goods with an invoice cost of P30,000 received from a vendor at 5:00 PM on December 31,2019 were recorded on a receiving report dated January 2,2020. The goods were not included in the physical count but the invoice was included in accounts payable on December 31,2019. G. Goods received from a vendor on December 26,2019 were included in the physical count. However, the related P60,000 vendor invoice was not included in accounts payable on December 31,2019 because the accounts payable copy of the receiving report was lost. H. On January 3,2020 a monthly freight bill in the amount of P20,000 was received. The bill specifically related to merchandise purchased in December 2019, one-half of which was still in the inventory on December 31,2019. The freight charge was not included in either the inventory or in accounts payable on December 31,2019. 1. What is the correct amount of inventory? 2. What is the correct amount of accounts payable? 3. What is the correct amount of net sales? 8. On April 30, a fire damaged the office of Amaze Company. The following balances were gathered from the general ledger on March 31: Accounts receivable 920,000
Inventory-January 1 Accounts payable Sales Purchases
1,880,000 950,000 3,600,000 1,680,000
An examination of the April bank statement and canceled checks revealed checks written during the period April 1-30 as follows: Accounts payable as of March 31 240,000 April merchandise shipments 80,000 Expenses 160,000 Deposits during the same period amounted to P440,000 which consisted of collections from customers with the exception of P20,000 refund from a vendor for merchandise returned in April. Customers acknowledged indebtedness of P1,040,000 at April 30. Customers owed another P60,000 that will never be recovered. Of acknowledged indebtedness P40,000 may prove uncollectible. Correspondence with suppliers revealed unrecorded obligations at April 30, of P340,000 for April merchandise shipment, including P100,000 for shipments in transit on that date. The average gross profit rate is 40$ Inventory with a cost of P260,000 was salvaged and sold for P140,000. The balance of the inventory was a total loss. 1. What is total amount of sales up to April 30? 2. What is the total amount of purchases up to April 30? 3. What is the inventory on April 30? 4. What is the fire loss to be recognized on April 30? 9. In conducting an audit of Remy Company for the year ended June 30,2019, the entity’s CPA observed the physical inventory at an interim date, May 31,2019. Inventory, July 1,2018 875,000 Physical inventory May 31,2019 950,000 Sales for 11 months ended May 31,2019 8,400,000 Sales for year ended June 30 ,2019 9,600,000 Purchases for 11 months ended May 31,2019 6,750,000 Purchases for year ended June 30,2019 8,000,000
a. Shipments received in May and included in the physical inventory but recorded as June purchases b. Shipments received in unsalable condition and excluded from physical inventory. Credit memos had not been received nor had charge backs to vendors been recorded: Total at May 31,2019 Total at June 30,2019 (including the May unrecorded chargebacks)
75,000
10,000 15,000
c. Deposit made with vendor and charged to purchases in April 2019. Product was shipped in July 2019
20,000
d. Deposit made with vendor and charged to purchases in May 2019. Product was shipped FOB destination, on May 29,2019 and was included in May 31,2019 physical inventory as goods in transit
55,000
e. Through the carelessness of the receiving department a June shipment was damaged by rain. This shipment was later sold in June at the cost of
100,000
1. What is the cost of goods sold for the month of June 2019? 2. What is the inventory on June 30 ,2019? 10. Dairy Company provided the following information for the current year: Cash Trade and other receivables Inventories Dairy livestock-immature Dairy livestock- mature Property, plant and equipment, net Trade and other payables Note payable=long term Share capital Retained earnings-beginning Fair value of milk produced Gains from change in fair value Inventories used Staff costs Depreciation expense Other operations expenses Income tax expense
1. What is the net income for the current year? 2. What is the fair value of biological assets at year-end?
500,000 1,500,000 100,000 50,000 400,000 1,400,000 520,000 1,500,000 1,000,000 800,000 600,000 50,000 140,000 120,000 15,000 190,000 55,000
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