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FIRST PREBOARD (OCTOBER 2022)

MARK ALYSON B. NGINA, CPA, CMA

FIRST PREBOARD
MARK ALYSON B. NGINA, CPA CMA

1. Sandro and Alexa are joining their separate businesses to form a partnership. Property and cash are to be
contributed for a total capital of ₱800,000. The property to be contributed and liabilities to be assumed is as follows:
Sandro Alexa
Book value Fair value Book value Fair value
Accounts receivable ₱ 60,000 ₱ 60,000
Inventories 60,000 90,000 ₱ 160,000 ₱ 180,000
Equipment 100,000 80,000 130,000 190,000
Accounts payable 30,000 30,000 20,000 20,000

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The partners’ capital accounts are to be equal after all contributions and assumptions of liabilities. Profit and loss
ratio is 45% Sandro and 55% Alexa.
The amount of cash Sandro and Alexa must contribute

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a. ₱400,000; ₱400,000, respectively
b. ₱160,000; ₱90,000, respectively
c. ₱10,000, ₱140,000, respectively
d. ₱200,000; ₱50,000, respectively

Gerald, ₱496,750 and Ivana, ₱268,250.

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2. Gerald and Ivana formed the G & I partnership several years ago. Capital account balances on January 1, 20x1 were

The partnership agreement provides Gerald with an annual salary of ₱10,000 plus a bonus of 5% of partnership net
income for managing the business. Ivana is provided an annual salary of ₱15,000 with no bonus. The remainder is
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shared evenly. Partnership net income for 20x1 was ₱30,000. Ivana and Gerald each invested an additional ₱5,000
during the year to finance a special purchase. Year-end drawing account balances were ₱15,000 for Gerald and
₱10,000 for Ivana. Ivana’s capital balances as of December 31, 20x1 should be:
a. ₱280,000
b. ₱500,000
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c. ₱499,375
d. ₱280,625
3. Osang, Pokwang, and Quintin have capital balances of ₱15,000, ₱10,000, and ₱20,000, respectively. Their P/L ratio
is 10% interest on capital balances; Pokwang is entitled to a salary of ₱6,000; Quintin is guaranteed a minimum
share of ₱12,000 and remainder is divided 30:30:40.
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The minimum profit to give an aggregate of ₱10,000 to Pokwang is:

a. ₱30,000
b. ₱26,500
c. ₱28,000
d. ₱24,500
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4. Given:
Home Office Control (Branch Books)
Jan. 1, 20x1 Balance ₱ 60,000
Jan. 3, 20x1 Cash remitted to home office (80,000)
Jan. 5, 20x1 Shipments from home office 120,000
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Jan. 28, 20x1 Expenses from home office 45,200

Jan. 28, 20x1 Cash remitted to home office (30,000)
Jan. 28, 20x1 Merchandise returned to home office (12,000)
Branch Control (Home Office Books)
Jan. 1, 20x1 Balance 60,000
Jan. 3, 20x1 Cash received from branch (80,000)
Jan. 4, 20x1 Shipments to branch 120,000
Jan. 28, 20x1 Expense allocation 52,400
Jan. 28, 20x1 Shipments to branch 24,000
Jan. 28, 20x1 Collection from branch customer 18,000
Jan. 28, 20x1 Supplies purchased for branch and shipped directly to branch 8,000
Except for the error by the branch in recording its share of allocated expenses, all differences are timing differences.
The adjusted balance of reciprocal accounts is:
a. ₱103,200
b. ₱160,400

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MARK ALYSON B. NGINA, CPA, CMA

FIRST PREBOARD (OCTOBER 2021)

c. ₱117,200
d. ₱124,400
5. In the Rexona Company, costs incurred during November were ₱15,000 for materials purchased, ₱40,000 for direct
labor, and ₱50,000 for overhead. Materials inventory decreased by ₱4,000.
If cost of goods manufactured in November was ₱99,000 and beginning work in process inventory was ₱28,000, the
ending work in process inventory is
a. ₱38,000
b. ₱34,000
c. ₱30,000
d. ₱13,000
6. REO Company had 3,000 units in work in process at April 1, 20x1, which were 60% complete as to conversion cost.
During April, 10,000 units were completed. At April 30, 4,000 units remained in work in process, which were 40%
complete as to conversion cost. Direct materials are added at the beginning of the process
How many units were started during April?
a. 9,000
b. 9,800

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c. 10,000
d. 11,000
7. On January 1, 20x1, Pusit Corporation purchased 80 percent of Squid Corporation’s ₱10 par common stock for

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₱975,000. On this date, the carrying amount of Squid’s net assets was ₱1,000,000. The fair values of Squid’s
identifiable assets and liabilities were same as their carrying amounts except for the plant assets (net), which were
₱100,000 in excess of the carrying amount and with a remaining life of 5 years. For the year ended December 31,

In
a.
b.
₱ -0-
₱75,000
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20x1, Squid had net income of ₱190,000 and paid cash dividends totaling ₱125,000.

the January 1, 20x1, consolidated Statement of Financial Position, goodwill should be reported at
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c. ₱95,000
d. ₱175,000
8. On January 1, 20x1, Pusit Corporation purchased 80 percent of Squid Corporation’s ₱10 par common stock for
₱975,000. On this date, the carrying amount of Squid’s net assets was ₱1,000,000. The fair values of Squid’s
identifiable assets and liabilities were same as their carrying amounts except for the plant assets (net), which were
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₱100,000 in excess of the carrying amount and with a remaining life of 5 years. For the year ended December 31,
20x1, Squid had net income of ₱190,000 and paid cash dividends totaling ₱125,000.

In the December 31, 20x1 consolidated Statement of Financial Position, noncontrolling interest should be reported
at
a. ₱200,000
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b. ₱213,000
c. ₱229,000
d. ₱233,000
9. Sandro Corp. has several subsidiaries that are included in its consolidated financial statements. In its December 31,
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20x1 trial balance, Sandro had the following intercompany balances before eliminations:
Debit Credit
Current receivable due from Marcos Co ₱ 32,000
Noncurrent receivable from Marcos 114,000
Cash advance to Alexa Corp. 6,000
Cash advance from Miro Co. ₱ 15,000
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Intercompany payable to Miro 101,000

In its December 31, 20x1 consolidated Statement of Financial Position what amount should Sandro report as
intercompany receivable?
a. ₱152,000
b. ₱146,000
c. ₱36,000
d. ₱-0-
10. Gerald Manufacturing produced 10,000 kitchen clocks in 20x1 for ₱50 each and sold them to Ivana Corp. at ₱150
each. Ivana resold 8,000 units at ₱220 each in 20x1 and held the remaining units in inventory on December 31,
20x1. Ivana owns 70 percent of the stock of Gerald Manufacturing.
How much gross profit must be included in the consolidated income statement for 20x1?
a. ₱1,360,000
b. ₱952,000
c. ₱560,000
d. ₱1,000,000

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FIRST PREBOARD (OCTOBER 2021)

11. Robin, a 90% owner of Padilla, sold merchandise at a sales price of ₱60,000 to Padilla during the 20x1 fiscal year.
This represented a markup of 10% on the selling price. Padilla' ending inventory contained 30% of the merchandise
purchased during the year from Robin.
When preparing the 20x1 consolidated statements the accountant failed to adjust for the intercompany profit in
ending inventory. The impact of this emission on consolidated statement was to
a. Overstate net income, ₱1,800 and understate ending inventory, ₱1,800.
b. Understate net income, ₱6,000 and overstate retained earnings, ₱6,000.
c. Overstate net income, ₱1,800, and overstate ending inventory, ₱1,800.
d. Understate net income, ₱1,800 and overstate ending inventory, ₱1,800.
12. Lola Corporation owns 80 percent of the stock of Remedios Company. At the end of 20x1, Lola Corp. and Remedios
Company reported the following partial operating results and inventory balances:
Lola Corp Remedios
Co.
Total sales ₱ 660,000 ₱ 510,000
Sales to Remedios Company 140,000
Sales to Lola Corporation 240,000

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Net income 20,000
Operating income (excluding income from Remedios Company) 70,000
Inventory on hand, December 31, 20x1
Purchased from Remedios company 48,000

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Purchased from Lola Corporation 42,000
Lola Corporation regularly prices its products at cost plus a 40 percent markup for profit. Remedios Company prices
its sales at cost plus a 20 percent markup. The total sales reported by Lola and Remedios include both intercompany
sales and sales to nonaffiliates.

The consolidated cost of sales for 20x1 must be

a. ₱596,428
b. ₱616,428
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c. ₱576,423
d. ₱536,428
13. Lola Corporation owns 80 percent of the stock of Remedios Company. At the end of 20x1, Lola Corp. and Remedios
Company reported the following partial operating results and inventory balances:
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Lola Corp Remedios

Co.
Total sales ₱ 660,000 ₱ 510,000
Sales to Remedios Company 140,000
Sales to Lola Corporation 240,000
Net income 20,000
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Operating income (excluding income from Remedios Company) 70,000

Inventory on hand, December 31, 20x1
Purchased from Remedios company 48,000
Purchased from Lola Corporation 42,000
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Lola Corporation regularly prices its products at cost plus a 40 percent markup for profit. Remedios Company prices
its sales at cost plus a 20 percent markup. The total sales reported by Lola and Remedios include both intercompany
sales and sales to nonaffiliates.
The controlling interest net income for 20x1 must be:
a. ₱67,600
b. ₱70,000
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c. ₱90,000
d. ₱86,000
14. Hiace Corporation owns 60 percent of the voting common stock of Hilux Corporation. On December 31, 20x3, Hiace
paid Hilux ₱276,000 for dump trucks purchased by Hilux on January 1, 20x1. Both companies use straight-line
depreciation. The eliminating entry included in preparing consolidated financial statements at December 31, 20x3,
was:
Trucks ₱24,000
Gain on sale of Trucks ₱36,000
Accumulated Depreciation ₱60,000
What was the economic life of the trucks on January 1, 20x1?
a. 15 years
b. 12 years
c. 18 years
d. 10 years

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MARK ALYSON B. NGINA, CPA, CMA

FIRST PREBOARD (OCTOBER 2021)

15. Petron Corporation holds 70 percent ownership of Shell Enterprises. On January 1, 20x5, Shell Enterprises paid
Petron Corporation ₱400,000 for a truck that Petron Corporation had purchased for ₱450,000 on January 1, 20x1.
The truck has a 15-year total economic life and no residual value. Both companies use straight-line depreciation.
Give the eliminating entry in the consolidation workpaper prepared as of December 31, 20x5 to remove the effects
of the intercompany sale.
a. Gain on sale ₱ 70,000
Truck ₱ 70,000
b. Investment in S ₱ 63,636
Truck 50,000
Accum. Depreciation ₱ 107,272
Depreciation 6,364
c. Gain on sale ₱ 70,000
Truck 50,000
Accum. Depreciation ₱ 113,636
Depreciation 6,364
d. Gain on sale ₱ 70,000
Truck 50,000

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Accum. Depreciation 20,000
16. Ruby, Saphire, and Emerald have been partners throughout 20x1. Their average balances and their balances at
the end of the year before closing the nominal accounts are as follows:

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Partner Average Balances Balances, 12/31/x1
Ruby ₱ 48,750 ₱ 35,000
Saphire 3,650 5,900
Emerald 2,125

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850 (debit balance)
The income for 20x1 is ₱51,750 before charging partners' salary allowances and before payment of interest on
average balances at the agreed rate of 4% per annum. Annual salary allocations are ₱6,250 to Ruby, ₱4,375 to
Saphire, and ₱3,125 to Emerald. The balance of the profits is to be allocated at the rate of 60% to Ruby, 10% to
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Saphire, and 30% to Emerald.
It is intended to distribute cash to the partners so that, after credits and allocations have been made as indicated
in the preceding paragraph, the balances in the partners' accounts will be proportionate to their residual profit-
sharing ratios. None of the partners is to invest additional cash, but they wish to distribute the lowest possible
amount of cash.
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How much are capital balances of Ruby, Saphire and Emerald, respectively?
a. ₱26,211; ₱4,368.50 and ₱13,105.50
b. ₱64,691.50; ₱14,003 and ₱13,105.50
c. ₱55,080; ₱9,180 and ₱27,540
d. ₱55,080; ₱14,003 and ₱42,009
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17. The following balances as of the end of 20x1 for the partnership of P, Q and R, together with their respective profit
and loss percentages, were as follows:
Assets ₱ 180,000 P, loan ₱ 9,000
P, capital (20%) 42,000
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Q, capital (20%) 39,000

R, capital (60%) 90,000
₱ 180,000 ₱ 180,000
P decided to retire from the partnership. Partners agreed to adjust the assets to their fair market value of ₱216,000
as of December 31, 20x1. P will be paid ₱61,200 for P’s partnership interest inclusive of P loan which is to be repaid
in full. No goodwill is to be recorded. After P’s retirement, what will be the balance of Q’s capital account?
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a. ₱39,000
b. ₱36,450
c. ₱46,200
d. ₱45,450
18. Crown Construction Company started a project with a contract price of ₱40 million. The cost incurred to date is ₱6
million and the estimated cost to complete is still ₱24 million. Under the Cost-to-cost basis, how much is the income
from construction?
a. ₱2 million
b. ₱4 million
c. ₱5 million
d. ₱8 million
19. Prada Corporation purchased 95 percent of the shares of Silicon Company in January 20x1. On that date, the book
value of Silicon’s net assets approximated fair value. As a result of the purchase, Prada recognized ₱600,000
goodwill.

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During 20x1, Silicon sold inventory to Prada. On December 31, 20x1, Silicon had unrealized profits on its books of
₱100,000. By December 31, 20x2, all of the inventory left on Prada's books had been sold to outside parties. During
20x2, Prada sold inventory to Silicon and had ₱150,000 of unrealized profits left on its books at the end of 20x2.
For 20x2, Prada reported operating income of ₱5,000,000, and Silicon reported net income of ₱3,600,000.
What is the consolidated income attributable to shareholders of parent for 20x2?
a. ₱8,550,000
b. ₱8,330,000
c. ₱8,330,500
d. ₱8,365,000
20. Shell. Inc. is a 90%-owned subsidiary of Petron Corp, Summarized income statements for the affiliated companies
for the year ended December 31, 20x1 follow:
Petron Shell
Sales ₱ 1,500,000 ₱ 500,000
Cost of sales (750,000) (200,000)
Operating expenses (550,000) (200,000)
Operating income 200,000 100,000
Dividend Income 10,000 -

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Net income 210,000 100,000
Inventory, 12/31/20x1 220,000 160,000
During 20x1, Petron sold merchandise to Shell for ₱300,000; and Shell sold to Petron, merchandise for ₱30,000.

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The beginning inventory of Petron were all acquired from outside vendors; while the beginning inventory of Shell
contained ₱30,000 of goods acquired from Petron. Twenty percent (20%) of the current year’s intercompany sales
remained in the respective ending inventories of the affiliated companies.
Petron and Shell have uniform margin on all their sales.
Calculate the consolidated cost of goods sold for 20x1.
a. ₱665,000
b. ₱638,600
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c. ₱680,000
d. ₱695,000
21. Global Corporation acquired 85 percent of Local Company's voting shares of stock in 20x1. During 20x2, Global
purchased 50,000 picture tubes for ₱15 each and sold 28,000 of them to Local for ₱20 each. Local sold all of the
units to unrelated entities prior to December 31, 20x2, for ₱30 each. Both companies use perpetual inventory
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systems. Which workpaper eliminating entry is needed in preparing consolidated financial elements for 20x2 to
remove all effects of the intercompany sale?
a. Sales ₱ 560,000
Cost of Goods Sold ₱ 560,000
b. Sales ₱ 650,000
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Cost of Goods Sold ₱ 650,000

c. Cost of Goods Sold ₱ 560,000
Sales ₱ 560,000
d. Cost of Goods Sold ₱ 650,000
Sales ₱ 650,000
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22. Senior Inc. owns 85 Percent of Junior Inc. During 20x1, Senior sold goods with a 25 percent gross profit to Junior.
Junior sold all of these goods in 20x1. How should 20x1 consolidated income statement items be adjusted?
a. No adjustment is necessary.
b. Sales and cost of goods sold should be reduced by 85 percent of the intercompany sales.
c. Net income should be reduced by 85 percent of the gross profit on intercompany sales.
d. Sales and cost of goods sold should be reduced by the intercompany sales.
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23. Parent Corporation owns 90 percent of Subsidiary 1 Company’s stock and 75 percent of Subsidiary 2 Company's
stock. During 20x2, Parent sold inventory purchased in 20x1 for ₱48,000 to Subsidiary 1 for ₱60,000. Subsidiary 1
then sold the inventory at its cost of ₱60,000 to Subsidiary 2. Prior to December 31, 20x2, Subsidiary 2 sold ₱45,000
of inventory to a nonaffiliate for ₱67,000 and held ₱15,000 in inventory at December 31, 20x2.
Based on the information given above, what amount should be reported in the 20x2 consolidated income statement
as cost of goods sold?
a. ₱36,000
b. ₱12,000
c. ₱48,000
d. ₱45,000
24. Parent Corporation owns 90 percent of Subsidiary 1 Company’s stock and 75 percent of Subsidiary 2 Company's
stock. During 20x2, Parent sold inventory purchased in 20x1 for ₱48,000 to Subsidiary 1 for ₱60,000. Subsidiary 1
then sold the inventory at its cost of ₱60,000 to Subsidiary 2. Prior to December 31, 20x2, Subsidiary 2 sold ₱45,000
of inventory to a nonaffiliate for ₱67,000 and held ₱15,000 in inventory at December 31, 20x2.

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Based on the information given above, what amount should be reported in the December 31, 20x2, consolidated
balance sheet as inventory?
a. ₱36,000
b. ₱12,000
c. ₱15,000
d. ₱28,000
25. Parent Corporation owns 90 percent of Subsidiary 1 Company’s stock and 75 percent of Subsidiary 2 Company's
stock. During 20x2, Parent sold inventory purchased in 20x1 for ₱48,000 to Subsidiary 1 for ₱60,000. Subsidiary 1
then sold the inventory at its cost of ₱60,000 to Subsidiary 2. Prior to December 31, 20x2, Subsidiary 2 sold ₱45,000
of inventory to a nonaffiliate for ₱67,000 and held ₱15,000 in inventory at December 31, 20x2.
Based on the information given above, what amount of sales must be eliminated from the consolidated income
statement for 20x2?
a. ₱117,000
b. ₱120,000
c. ₱150,000
d. ₱128,000

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26. Parent Corporation owns 90 percent of Subsidiary 1 Company’s stock and 75 percent of Subsidiary 2 Company's
stock. During 20x2, Parent sold inventory purchased in 20x1 for ₱48,000 to Subsidiary 1 for ₱60,000. Subsidiary 1
then sold the inventory at its cost of ₱60,000 to Subsidiary 2. Prior to December 31, 20x2, Subsidiary 2 sold ₱45,000
of inventory to a nonaffiliate for ₱67,000 and held ₱15,000 in inventory at December 31, 20x2.

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Based on the information given above, what amount of inventory must be eliminated from the consolidated balance
sheet for 20x2?
a. ₱2,400
b. ₱9,000
c. ₱12,000
d. ₱3,000 ev
27. Pungent Corporation purchased a 10% interest in Spicy Company on January 1, 20x1, as a FA@FVTOCI for a price
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of ₱120,000.
On January 1, 20x1, Pungent Corporation purchases 7,000 additional shares of Spicy Company from existing
stockholders for ₱945,000. This purchase increased Pungent interest to 70%. Spicy Company had the following
statement of financial position just prior to Pungent second purchase.
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Assets Liabilities and Equity

Current assets ₱ 495,000 Liabilities ₱ 195,000
Building (net) 420,000 Common stock, ₱30 par 300,000
Equipment (net) 300,000 Retained earnings 720,000
Total assets ₱ 1,215,000 Total liabilities and equity ₱ 1,215,000
On the date of the second purchase, Pungent determines that the equity of Spicy was understated by ₱150,000 and
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had a 5-years remaining life. All other book values approximate fair values. Any remaining excess is attributed to
goodwill.
On January 1, 20x1 consolidated statement of financial position, what is the amount of goodwill to be reported?
a. ₱180,000
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b. ₱45,000
c. ₱75,000
d. ₱120,000
28. Calgary had a receivable from a foreign customer that is payable in the customer's local currency. On December
31, 20x1, Calgary correctly included this receivable for 200,000 local currency units (LCU) in its balance sheet at
₱110,000. When Calgary collected the receivable on February 15, 20x2, the Philippine peso equivalent was ₱95,000.
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In Calgary’s 20x2 consolidated income statement, how much should it report as a foreign exchange loss?
a. ₱0
b. ₱10,000
c. ₱15,000
d. ₱29,000
29. Jolly Jeep Company, a local company, bought furniture from Jubilee Corporation, a US company, for 35,000 US
Dollars in 20x1. Pertinent exchange rates relating to this transaction are as follows:
Buying Rate Selling Rate
Receipt of order ₱ 47.10 ₱ 47.20
Date of shipment 47.25 47.45
Balance sheet date 49.50 49.60
Settlement date 49.45 49.50
What is the foreign exchange gain or loss of Jolly Jeep Company for 20x1?
a. ₱78,750 loss
b. ₱75,250 loss

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c. ₱78,750 gain
d. ₱75,250 gain
30. Exporter Corporation sold handicrafts goods to a US firm for $100,000 in 20x1. Pertinent information on exchange
rate follows:
Buying Selling
Sept. 4, 20x1 Receipts of order ₱ 45.80 ₱ 46.00
Oct. 15, 20x1 Date of shipment 47.00 48.00
Dec. 31, 20x1 Date of balance sheet 47.20 48.50
Jan. 6, 20x2 Date of settlement 46.00 47.00
The sale would appropriately be recorded at:
a. ₱4,700,000
b. ₱4,580,000
c. ₱4,600,000
d. ₱4,800,000

31. Lucky Me, Inc. has several transactions with foreign entities. Each transaction is denominated in the local currency

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unit (LCU) of the country in which the foreign entity is located.
Transaction 1 On November 12, 20x1, Lucky Me, Inc. purchased goods from a foreign company at a price of LCU
40,000 when the direct exchange rate was 1 LCU = ₱4.86 The account has not been settled as of December 31,

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20x1, when the exchange rate has decreased to 1 LCU = ₱5.15
Transaction 2 On November 28, 20x1, Lucky Me, Inc. sold goods to a foreign entity at a price of LCU 20,000 when
the direct exchange rate was 1 LCU = ₱24.56. The account has not been settled as of December 31, 20x1, when
the exchange rate has increased to 1 LCU = ₱23.48.

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Transaction 3 On December 2, 20x1, Lucky Me, Inc. purchased goods from a foreign company at a price of LCU
30,000 when the direct exchange rate was 1 LCU = ₱4.81. The account has not been settled as of December 31,
20x1, when the exchange rate has increased to 1 LCU = ₱4.55.
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Transaction 4 On December 12, 20x1, Lucky Me. Inc. sold goods to a foreign entity at a price of LCU 2,500,000
when the direct exchange rate was 1 LCU = ₱1.15. The account has not been settled as of December 31, 20x1,
when the exchange rate has decreased to 1 LCU = ₱1.24
Determine the December 31, 20x1, year-end balance of accounts receivable.
a. ₱338,700
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b. None of the choices

c. ₱3,366,200
d. ₱3,569,600
32. Lucky Me, Inc. has several transactions with foreign entities. Each transaction is denominated in the local currency
unit (LCU) of the country in which the foreign entity is located.
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Transaction 1 On November 12, 20x1, Lucky Me, Inc. purchased goods from a foreign company at a price of LCU
40,000 when the direct exchange rate was 1 LCU = ₱4.86 The account has not been settled as of December 31,
20x1, when the exchange rate has decreased to 1 LCU = ₱5.15
Transaction 2 On November 28, 20x1, Lucky Me, Inc. sold goods to a foreign entity at a price of LCU 20,000 when
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the direct exchange rate was 1 LCU = ₱24.56. The account has not been settled as of December 31, 20x1, when
the exchange rate has increased to 1 LCU = ₱23.48.
Transaction 3 On December 2, 20x1, Lucky Me, Inc. purchased goods from a foreign company at a price of LCU
30,000 when the direct exchange rate was 1 LCU = ₱4.81. The account has not been settled as of December 31,
20x1, when the exchange rate has increased to 1 LCU = ₱4.55.
Transaction 4 On December 12, 20x1, Lucky Me. Inc. sold goods to a foreign entity at a price of LCU 2,500,000
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when the direct exchange rate was 1 LCU = ₱1.15. The account has not been settled as of December 31, 20x1,
when the exchange rate has decreased to 1 LCU = ₱1.24
Determine the December 31, 20x1, year-end balance of accounts payable.
a. ₱338,700
b. ₱342,500
c. ₱3,366,200
d. None of the choices
33. Lucky Me, Inc. has several transactions with foreign entities. Each transaction is denominated in the local currency
unit (LCU) of the country in which the foreign entity is located.
Transaction 1 On November 12, 20x1, Lucky Me, Inc. purchased goods from a foreign company at a price of LCU
40,000 when the direct exchange rate was 1 LCU = ₱4.86 The account has not been settled as of December 31,
20x1, when the exchange rate has decreased to 1 LCU = ₱5.15

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Transaction 2 On November 28, 20x1, Lucky Me, Inc. sold goods to a foreign entity at a price of LCU 20,000 when
the direct exchange rate was 1 LCU = ₱24.56. The account has not been settled as of December 31, 20x1, when
the exchange rate has increased to 1 LCU = ₱23.48.
Transaction 3 On December 2, 20x1, Lucky Me, Inc. purchased goods from a foreign company at a price of LCU
30,000 when the direct exchange rate was 1 LCU = ₱4.81. The account has not been settled as of December 31,
20x1, when the exchange rate has increased to 1 LCU = ₱4.55.
Transaction 4 On December 12, 20x1, Lucky Me. Inc. sold goods to a foreign entity at a price of LCU 2,500,000
when the direct exchange rate was 1 LCU = ₱1.15. The account has not been settled as of December 31, 20x1,
when the exchange rate has decreased to 1 LCU = ₱1.24
Determine the net gain or (loss) from foreign currency fluctuation to be reported in the income statement of 20x1.
a. None of the choices
b. ₱232,800
c. ₱199,600
d. ₱266,000
34. REO Company, a local company, bought furniture from REP Corporation, a US company, for 70,000 US Dollars in
20x1. Pertinent exchange rates relating to this transaction are as follows:

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Buying Rate Selling Rate
Receipt of order ₱ 94.20 ₱ 94.40

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Date of shipment 94.50 94.90
Balance sheet date 99.00 99.20
Settlement date 98.90 99.00

b. ₱301,000 loss
c. ₱315,000 gain
d. ₱300,000 gain
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What is the foreign exchange gain or loss of REO Company for 20x1?
a. ₱315,000 loss
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35. Prince had the following information:
• Purchased merchandise from a foreign supplier on January 20, 20x1 for the Philippine peso equivalent of ₱60,000
and paid the invoice on April 20, 20x1 at the Philippine peso equivalent of ₱68,000
• On September 1, 20x1, borrowed the Philippines peso equivalent of ₱300,000 evidence by a note that is payable
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in the lender's local currency on September 1, 20x1. On December 31, 20x1, the Philippine peso equivalent of
the principal amount was ₱320,000.
In Prince’s 20x1 Income statement, what amount should be included as a foreign exchange loss?
a. ₱4,000
b. ₱20,000
c. ₱22,000
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d. ₱28,000

36. On December 1, 20x1, Puregold entered into a 120-day forward contract to purchase 250,000 US dollars for
speculative purposes, Puregold fiscal year ends on December 31. The exchange rates are as follows:
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Forward rate
Date Spot rate (3/31/20x1)
December 1, 20x1 ₱ 45.00 ₱ 45.50
December 31, 20x1 46.00 46.50
January 30, 20x2 45.60 45.30
March 31, 20x2 45.10
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How much is the gain or loss to be reported from this forward contract in 20x2?
a. ₱250,000
b. ₱350,000
c. ₱300,000
d. ₱225,000
*

37. On March 1, 20x1, entities SME A and SME B, each acquired 30 percent of the ordinary shares that carry voting
rights at a general meeting of shareholders of entity Z for ₱300,000. Entities A and B immediately agreed to shared
control over entity Z. On December 31, 20x1, entity Z declared a dividend of ₱100,000 for the year 20x1. Entity Z
reported of profit of ₱80,000 for the year ended December 31, 20x1. At December 31, 20x1, the recoverable amount
of each venture’s investment in entity Z is ₱290,000 (calculation; fair value ₱293,000 less costs to sell ₱3,000).
Assuming that entity Z earned its profit evenly through the year. There is no published price quotation for entity Z.
How much will be recognized in profit (loss) by each venture as a result of the investment?
a. ₱30,000
b. ₱16,667
c. ₱20,000
d. ₱38,333

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38. The following information were taken from the statement of realization and liquidation of Liit Kita Company in
receivership for the month ended December 31, 20x1:
Assets Liabilities and Equity
Assets to be realized ₱ 1,900,000 Liabilities to be liquidated ₱ 1,300,000
Assets acquired 100,000 Liabilities assumed 30,000
Assets realized 600,000 Liabilities liquidated 700,000
Assets not realized 840,000 Liabilities not liquidated 637,000
Profit and Loss
Supplementary charges 180,000 Supplementary credits 603,000
How much is the profit or loss for the month of December 20x1.
a. ₱144,000 profit
b. ₱144,000 loss
c. ₱423,000 profit
d. ₱423,000 loss
39. MBN and BPN formed a joint venture on January 1, 20x1 to operate two stores to be managed by each

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venturers/participant. They agreed to contribute cash as follows:
MBN ₱ 30,000
BPN 20,000

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Profits and losses are to be divided in the capital ratio. All venture transactions are for cash. Cash receipts and
disbursements of the business during the 4-month period handled through the participant’s/venturer’s bank
accounts are as follows:

Receipts
Disbursements
MBN BPN
₱ 78,920 ₱ 65,425
62,275 70,695 ev
On April 30, the remaining non-cash venture assets in the hands of the participants/venturers were sold for ₱60,000.
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The venture is terminated and settlement is made between MBN and BPN. The ₱60 000 is divided between the
participants/venturers as follows:
a. MBN, ₱16,180; BPN, ₱43,020
b. MBN, ₱21,905; BPN, ₱38,095
c. MBN, ₱26,180; BPN, ₱33,820
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d. MBN, ₱48,095; BPN, ₱11,905

40. Three joint operators are involved in a joint operation that manufactures ships chandlery. At the beginning of the
year, the joint operation held ₱50,000 in cash. During the year, the joint operation incurred the following expenses:
Wages paid ₱20,000; Overheads accrued ₱10,000. Additionally, creditors amounting to ₱40,000 were paid and the
joint operators contributed ₱15,000 cash each to the joint operation. The balance of cash held by the joint operation
at the end of the year is:
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a. ₱5,000
b. ₱25,000
c. ₱35,000
d. ₱75,000
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41. A partnership begins its first year with the following capital balances:
Arthur, capital ₱ 60,000
Baxter, capital 80,000
Cartwright, capital 100,000
The articles of partnership stipulate that profits and losses be assigned in the following manner:
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• Each partner is allocated interest equal to 10 percent of the beginning capital balance.
• Baxter is allocated compensation of ₱20,000 per year.
• Any remaining profits and losses are allocated on a 3:3:4 basis, respectively.
• Each partner is allowed to withdraw up to ₱5,000 cash per year.
Assuming that the net income is ₱50,000 and that each partner withdraws the maximum amount allowed, what is
the balance in Cartwright's capital account at the end of that year?
a. ₱105,800
b. ₱106,200
c. ₱106,900
d. ₱107,400
42. A, B, and C are partners in an accounting, firm. Their capital account balances at year-end were A, ₱90,000; B,
₱110,000 and C, ₱50,000. They share profits and losses on a 4:4:2. after the following special terms:
1) Partner C is to receive a bonus of 10% at net income after the bonus.
2) Interest of 10% shall be paid on that portion of a partner’s capital in excess of ₱100,000.
3) Salaries of ₱10,000 and ₱12,000 shall be paid to partners A & C, respectively.

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Assuming a net income of ₱44,000 for the year, the total profit share of partner C was:
a. ₱7,800
b. ₱16,800
c. ₱19,400
d. ₱19,800

43. A local partnership was considering the possibility of liquidation since one of the partners (Ding) was insolvent.
Capital balances at that time were as follows. Profits and losses were divided on a 4:2:2:2 basis, respectively.
Ding, capital ₱ 60,000
Laurel, capital 67,000
Ezzard, capital 17,000
Tillman, capital 96,000
Ding’s creditors filed a ₱25,000 claim against the partnership's assets. At that time, the partnership held assets
reported at ₱360,000 and liabilities of ₱120,000. If the assets could be sold for ₱228,000, what is the minimum
amount that Ding's creditors would have received?
a. ₱-0-
b. ₱2,500

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c. ₱36,000
d. ₱38,250
44. Equipment with a book values of ₱120,000 is sold in a liquidation process for cash of ₱110,000. This equipment was

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security for a ₱150,000 bank loan. Any remainder is considered unsecured. This transaction will be reported on the
Statement of Realization and Liquidation (choose the incorrect statement)?
a. A reduction in non-cash assets of ₱120,000
b. A loss reported to owner’s equity of ₱10,000

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c. A disbursement of cash to the bank of ₱110,000, a reduction in partially secured liability of ₱150,000, and an
increase in unsecured without priority liability of ₱40,000
d. A disbursement of cash to the bank of ₱110,000,and an increase in unsecured with priority liability of ₱40,000
45. Kasibu Corporation started operations on January 1, 20x1 selling home appliances and furniture sets both for cash
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and on installment basis. Data on the installment sales operations of the company gathered for the years ending
December 31, 20x1 and 20x2 were as follows:
20x1 20x2
Installment sales ₱ 400,000 ₱ 500,000
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Cost of installment basis 240,000 350,000

Cash collected on installment sales:
20x1 installment sales 210,000 150,000
20x2 installment sales 300,000
Additional information:
On January 5, 20x3, an installment sale on 20x1 was defaulted and the merchandise with an appraised value of
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₱5,000 was repossessed. Related installment receivable balance on January 5, 20x3 was ₱8,000.
Applying the installment sales method under the old US GAAP, the balance of the Deferred Gross Profit controlling
account at December 31, 20x2 was:
a. ₱76,000
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b. ₱130,000
c. ₱160,000
d. ₱72,800
46. Aljur Company sells office equipment. On January 1, 20x1, Aljur entered into an instalment sale contract with AJ
Company for a six-year period expiring January 1, 20x6. Equal annual payments under the installment sale are
₱936,000 and are due on January 1. The first payment was made on January 1, 20x1.
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Additional information is as follows:

• The cash selling price of the equipment, i.e., the amount that would be realized on an outright sale, is
₱4,584,000.
• The cost of sales relating to the equipment is ₱3,825,000.
• The finance charges relating to the installment period are ₱1,032,000 based on a stated interest rate of 9%
which is appropriate. For tax purposes, Aljur appropriately uses the accrual basis for recording finance charges.
• Circumstances are such that the collection of the installment sale is reasonably assured.
• The installment sale qualified for the installment method of reporting for tax purposes.
• Assume that the income tax rate is 30%.
What income (loss) before income taxes should Aljur appropriately record as a result of this transaction for the year
ended December 31, 20x1?
a. ₱154,979
b. ₱483,299
c. ₱759,000
d. ₱1,087,320

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47. Contractor Corp. has a contract to construct a ₱5,000,000 cruise ship at an estimated cost of ₱4,000,000. The
company will begin construction of the cruise ship in early January 20x1 and expects to complete the project
sometime in late 20x4. Contractor Corp. has never constructed a cruise ship before, and the customer has never
operated a cruise ship. Due to this and other circumstances, Contractor Corp. believes there are inherent hazards
in the contract beyond the normal, recurring business risks. Contractor Corp. expects to recover all its costs under
the contract. During 20x1 and 20x2 the company has the following activity:
20x1 20x2
Costs to date ₱ 980,000 ₱ 2,040,000
Estimated costs to complete 3,020,000 1,960,000
Progress billings during the year 1,000,000 1,000,000
Cash collected during the year 648,000 1,280,000
Which of the following will be presented in the statement of financial position on December 31, 20x2 in accordance
with PFRS 15?
a. ₱40,000 receivable.
b. ₱1,020,000 receivable.
c. ₱40,000 contract liability.
d. ₱20,000 contract liability.

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48. On December 31, 20x1, the following information has been collected by Zylie Company’s office and branch for
reconciling the branch and home office accounts.

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• The home office's branch account balance on December 31, 20x1 is ₱590,000. The branch’s home office account
balance is ₱506,700.
• On December 30, 20x1, the branch sent a check for ₱40,000 to the home office to settle its account. The check
was not delivered to the home office until January 3, 20x2.
•

•
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On December 27, 20x1, the branch returned ₱15,000 of seasonal merchandise to the home office for the January
clearance sale. The merchandise was not received by the home office until January 6, 20x2
The home office allocated general expenses of ₱28,000 to the branch. The branch had not entered the allocation
at the year-end.
Branch store insurance premiums of ₱900 were paid by the home office. The branch recorded the amount at
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₱600.
The correct balance of the reciprocal account amounted to:
a. ₱575,000
b. ₱535,000
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c. ₱534,700
d. ₱507,000

49. Fetzler Company's branch in Virginia began operations on January 1, 20x1. During the first year of operations, the
home office shipped merchandise to the Virginia branch that cost ₱250,000 at a billed price of ₱300,000. One-fourth
of the merchandise remained unsold at the end of 20x1. The home office records the shipments to the branch at
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the ₱300,000 billed price at the time shipments are made.

Freight-in of ₱2,000 on the shipments from the home office was paid by the home office. The home office should
make:
a. A year-end adjusting entry debiting the branch account for ₱500
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b. A year-end adjusting entry debiting the branch account for ₱2,000

c. A year-end adjusting entry crediting the branch account for ₱500
d. No year-end adjusting entry for the freight charges
50. Paymaya Corporation sold equipment to its 80%-owned subsidiary. Shoppee Corp., on January 1, 20x1. Paymaya
sold the equipment for ₱110,000 when its book value was ₱85,000 and it had a 5-year remaining useful life with no
expected salvage value. Separate balance sheets for Paymaya and Shoppee included the following equipment and
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accumulated depreciation amounts on December 31, 20x1:

Paymaya Shoppee
Equipment ₱ 750,000 ₱ 300,000
Less: Accumulated depreciation (200,000) (50,000)
Equipment-net ₱ 550,000 ₱ 250,000
Consolidated amounts for equipment and accumulated depreciation at December 31, 20x1 were respectively.
a. ₱1,025,000 and ₱245,000
b. ₱1,025,000 and ₱250,000
c. ₱1,025,000 and ₱245,000
d. ₱1,050,000 and ₱250,000

51. Duck Corporation acquired a 70% interest in Whistle Corporation on January 1, 20x1, when Whistle's book values
were equal to their fair values. During 20x1, Duck sold merchandise that cost ₱75,000 to Whistle for ₱110,000. On
December 31, 20x1, three-fourths of the merchandise acquired from Duck remained in Whistle’s inventory. Separate
incomes (investment income not included) of Duck and Whistle are as follows:

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Duck Whistle
Sales Revenue ₱ 150,000 ₱ 200,000
Cost of Goods Sold 90,000 70,000
Operating Expenses 12,000 15,000
Separate incomes ₱ 48,000 ₱ 115,000
Duck’s investment income for 20x1, assuming dividends paid by Whistle amounted to ₱40,000.
Cost Method Equity Method
a. ₱ 13,750 ₱ 54,250
b. ₱ 28,000 ₱ 80,500
c. ₱ 54,250 ₱ 28,000
d. ₱ 28,000 ₱ 54,250

52. On July 1, 20x1, Bongbong Company borrowed 200,000 foreign currencies (FC’s) from a foreign lender evidenced
by an interest-bearing note due on July 1, 20x2. The note is denominated in Philippine peso. The Philippine peso
equivalent of the note principal is as follows:
Date Amount

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July 1, 20x1 (date borrowed) ₱ 195,000
December 31, 20x1 (Bongbong's year-end) 220,000
July 1, 20x2 (date repaid) 230,000

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In its 20x2 income statement, what amount should Bongbong include as a foreign exchange gain or loss on the
note?
a. ₱35,000 gain
b. None of the choices
c. ₱10,000 gain
d. ₱10,000 loss
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53. Slick Company had a Swiss franc receivable resulting from exports to Switzerland and a Mexican peso payable
resulting from imports from Mexico. Slick recorded foreign exchange losses related to both its franc receivable and
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peso payable. Did the foreign currencies increase or decrease in Philippine peso value from the date of the
transaction to the settlement date?
Franc Mexican Peso
a. Increase Increase
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b. Decrease Decrease
c. Decrease Increase
d. Increase Decrease
54. (PFRS) The third step in the process for revenue recognition is to
a. Determine the transaction price.
b. Identify the separate performance obligations in the contract.
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c. Allocate transaction price to the separate performance obligations.

d. Recognize revenue when each performance obligation is satisfied.
55. Company Techbiz enters into a contract with a customer to sell four computers. In addition, Techbiz has contracted,
for additional cost, to license software for the computers and to provide technical updates to the software for a
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further year. The software is not specifically customized and remains functional without the updates. The technical
updates will add significant new functionality to the software. Which of the following is correct?
a. The contract contains one performance obligation only, because all the three components are highly interrelated
with each other.
b. The contract contains three separate performance obligations (i.e., the sale of the computers, the license of the
software, and the provision of updates) because each component is distinct.
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c. The contract contains two performance obligations. The sale of the computers and the transfer of the software
license form one performance obligation together because the software license cannot be used by the customer
without the computers. The provision of updates is the other performance obligation.
d. The contract contains two performance obligations. The sale of the computers forms one performance obligation.
The transfer of the software license and the software updates comprise another performance obligation because
the software updates are dependent on the customer owning the underlying software.
56. The company X sold a machine to the company Y for ₱200,000. The company Y will pay ₱100,000 upon delivery
and ₱100,000 after 1 year. The discount rate is 5% and the discount factor for 1 year is 0.952. How much is the
transaction price?
a. ₱190,400
b. ₱200,000
c. ₱195,200
d. ₱205,000

57. (PFRS) An entity’s promise in granting a license is a promise to provide a right to access the entity’s intellectual
property should be accounted as a performance obligation satisfied _____ because the customer will simultaneously

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receive and consume the benefit from the entity’s performance of providing access to its intellectual property as the
performance occurs.
a. Over time
b. Point in time
c. Either overt time or point in time
d. Neither overt time nor point in time
58. Robust Choice sell natural supplements to customers with an unconditional right of return if they are not satisfied.
The right of returns extends 60 days. On February 10, 20x1, a customer purchases ₱3,000 of products (cost ₱1,500).
Assuming that based on prior experience, estimated returns are 20%. The journal entry to record the return of ₱200
of merchandise includes a
a. Credit to Refund Liability for ₱200.
b. Credit to Returned Inventory for ₱100.
c. Credit to Estimated Inventory Returns for ₱100.
d. Debit to Estimated Inventory Returns for ₱100.

59. (MBN) An entity’s promise to indemnify the customer for liabilities and damages arising from claims of patent,
copyright, trademark or other infringement by the entity’s products is accounted

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a. Under PFRS 15 as a separate performance obligation
b. Under PFRS 15 as an assurance-type warranty
c. Under PAS 37 as a provision or contingent liability
d. Under PAS 37 as a contingent asset

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60. The first-to-last ranking order of priority of the following:
I. Stockholder claims
II. Unsecured priority claims
III. Secured claims
IV. Unsecured non-priority claims
a.
b.
I, II, IV, and III.
III, II, IV, and I.
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c. III, I, IV, and II.
d. I, III, II, and IV.
61. A review of the assets and liabilities of Babagsak Na Corporation in bankruptcy on Nov. 30, discloses the following:
• A mortgage payable of ₱770,000, is secured by building valued at ₱140,000 more than its book value of
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₱680,000
• Notes payable of ₱390,000 is secured by furniture and equipment with book value of ₱460,000 that is estimated
to be 4/5 realizable.
• Assets other than those referred to have estimated value of ₱250,000, an amount that is ₱60,000 above its
book value
• Liabilities other than those referred to total ₱310,000, which excluded claims with priority of ₱80,000
C

Which of the following statements is true?

a. Actual recovery percentage is 66.27%
b. Total free asset is ₱220,000
c. Estimated deficiency to unsecured creditors is ₱112,000
d. Payment to partially secured creditors amount to ₱368,000
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62. In the liquidation of a stock corporation, which of the following claims shall be settled last by the corporate
liquidator?
a. Capital contribution by preferred stockholders
b. Unsecured liability to corporate suppliers
c. Income tax liability of the corporation
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d. Investment of ordinary shareholders

63. Under PFRS 11, joint arrangements that are joint ventures (which were ‘jointly controlled entities’ under PAS 31)
are accounted for using the
a. Cost method in accordance with PFRS 9.
b. Equity method in accordance with PAS 28.
c. Fair value method in accordance with PFRS 9.
d. Proportionate consolidation method in accordance with PAS 31.
64. Pogi Corporation owns 40% of Sexy Company and uses the equity method. During the year, Pogi sold merchandise
to Sexy costing ₱30,000 for ₱45,000. As of year-end, Sexy sold ₱21,000. The financial statements of Pogi were
prepared without consideration of this transaction. The share in Sexy net income is
a. Overstated by ₱3,200. c. Overstated by ₱8,000.
b. Understated by ₱3,200. d. Understated by ₱8,000.

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65. (Adapted) Applying PFRS for SME in the case of jointly controlled assets, a venture should account for its interest
by
a. Using the equity method.
b. Recognizing the assets and liabilities, expenses and income that relate to its interest in the joint venture.
c. Showing its share of the assets that it jointly controls, any liabilities incurred jointly or severally, and any income
or expense relating to its interest in the joint venture.
d. Using the purchase method of accounting.

66. Which of the following statements is false about the accounting for contingent consideration according to PFRS 3?
a. Measurement period adjustments to contingent consideration in a business combination are accounted for
retrospectively, therefore adjusting the purchase price and goodwill.
b. The acquirer accounts for changes in the fair value of contingent consideration classified as equity and settled,
resulting from events after the acquisition date, such as reaching a specified share price.
c. The acquirer accounts for changes in the fair value of contingent consideration classified as a financial asset or
a financial liability, resulting from events after the acquisition date (such as meeting an earnings target) in profit
or loss under PFRS 9.
d. The acquirer accounts for changes in the fair value of contingent consideration classified as a financial asset or
a financial liability, resulting from events after the acquisition date (such as reaching a milestone on a research

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and development project) in profit or loss in accordance with PAS 37 or other PFRSs as appropriate
67. Abakada has a 49% holding in Angie Bangie Company (ABC), which is located in a foreign country. ABC’s business
is to import goods from the Abakada Group and sell them locally. Local laws do not permit foreign investors to hold

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a majority stake or to have a majority of board members on companies in that country. Thirty-one percent is held
by a local bank, whose investment is funded by a deposit of the same amount lodged by Abakada. This holding is
held in trust by the bank for Abakada as per trust-ship agreement. A local entrepreneur who is also the chief

b. An associate
c. A joint venture ev
executive officer holds the remaining 20%. How should this investment be classified?
a. A subsidiary

d. Probably a jointly controlled entity but possibly an associate

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68. Ellen Corporation acquired the net assets of Honey Company on January 1, 20x1, and made the following entry to
record the acquisition:
Current assets ₱ 600,000
Equipment 900,000
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Land 300,000
Building 1,800,000
Goodwill 600,000
Liabilities ₱ 480,000
Common stock, ₱1 par 600,000
Additional paid in capital 3,120,000
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The agreement further provides that additional cash payments would be made on January 1, 20x3, equal to twice
the amount by which average earnings of Honey Company exceed ₱100,000 per year, prior to January 1, 20x3. Net
income was ₱200,000 in 20x1 and ₱240,000 in 20x2. Assume that the liabilities recorded on January 1, 20x1 include
an estimated contingent liability recorded at an estimated amount of ₱160,000. What should be the amount of
goodwill on January 1, 20x3?
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a. ₱520,000 b. ₱600,000 c. ₱440,000 d. ₱680,000

69. (MBN) The home office in Makati shipped merchandise costing ₱55,500 to Pasig Branch, prepaid the freight
amounting to ₱4,200. The home office transfers inventory to the branch at a 20% markup above cost. Pasig Branch
was subsequently instructed by the home office to transfer the merchandise to Alabang Branch wherein the latter
paid freight of ₱2,800. The freight cost would have been ₱6,200 if the shipment was made directly from Makati to
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Alabang. Which of the following statements is incorrect?

a. The home office will debit excess freight amounting to ₱800 on interbranch shipments.
b. In relation to the interbranch transfer, Pasig Branch and Alabang will prepare journal entries as if they are
transacting with the home office.
c. Alabang Branch will debit Freight-in amounting to ₱6,200 on the interbranch transfers.
d. The home office will debit Branch Current – Alabang amounting to ₱70,800.
70. The Pumapasa Branch of the Kinakaya Corporation submitted the following trial balance as of December 31, 20x1
after its first year of operations.
Debit Credit
Cash ₱ 104,000
Accounts Receivable 632,000
Shipments from Home Office 1,680,000
Expenses 108,000
Sales ₱ 1,344,000
Home Office Current . 1,180,000
Totals ₱ 2,524,000 ₱ 2,524,000

REO CPA REVIEW PHILIPPINES Effectiveness. Efficiency. Convenience

www.reocpareview.ph REAL EXCELLENCE ONLINE CPA REVIEW
(074) 665 6774 0916 840 0661 support@reocpareview.ph OCTOBER 2021 CPA REVIEW SEASON
 Page 15 of 12 | AFAR 1STPB

MARK ALYSON B. NGINA, CPA, CMA

FIRST PREBOARD (OCTOBER 2021)

Merchandise inventory, year-end is ₱504,000. Shipments to branch are billed at 140% of cost. Calculate the true
branch net income.
a. ₱60,000 b. ₱336,000 c. ₱396,000 d. ₱540,000
 -- END OF PREBOARD -- 

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REO CPA REVIEW PHILIPPINES Effectiveness. Efficiency. Convenience

www.reocpareview.ph REAL EXCELLENCE ONLINE CPA REVIEW
(074) 665 6774 0916 840 0661 support@reocpareview.ph OCTOBER 2021 CPA REVIEW SEASON