Hi, fCPAs!

J here ;)

Due to (not so) popular demand and as a form of giving back to the studytwt community, I created this compilation of the t
During undergrad, review, and board exam, I was able to use these to answer most, if not all, problems in AFAR (fun fact: I
If you are a resapeep, some of the techniques here might be familiar (shoutout to Sir Aldrin!)
Since these are just guides on how to answer problems, iwan ko na sainyo aralin yung concepts behind every topic (aral din

Just reminding you that you don't need to force yourselves to memorize these, if you know other techniques that you find easier, you may jus

Mastering all of these took a lot of time and practice (!!), so it's okay if hindi mo makabisado 'to agad agad.
I tried my best to add simple problems just to show you how the templates are applied, so please practice on your own para
Pag nakabisado niyo na 'to, AFAR na matatakot sainyo. 😌
Gaya nga ng laging sinasabi ni Sir Aldrin, lalatag niyo lang 'to tapos pitas pitas ka nalang ng amounts, wala na para ka na ti

You might be wondering why some of the topics are missing, but that's just because unfortunately, I have nothing to share
For this part, these topics are specifically:
1. PFRS 15 (aside from revenue from construction contracts)
2. Joint Arrangements
I answer problems under these topics just like how they are taught, no special template or whatsoever.
Again, it just took me a lot of practice to master them.

Short guide: please navigate through the cells and check the formula bar for better understanding sa mga nangyari hehe

If some things are not clear, you can always send me a DM on X (@jdcparkive) I'll try my best to answer them ASAP.
Happy learning! You got this, AFAR gods! 👌💞
 is compilation of the techniques/templates that I used.
ms in AFAR (fun fact: I got 95 in AFAR nung board exam)

nd every topic (aral din kayo ng theories!)

u find easier, you may just opt to use them. ;)

ctice on your own para rin malaman nyo paano sila gamitin in case na pinaikot na yung problem.

, wala na para ka na tinanggalan ng karapatan mag-isip 😂

have nothing to share regarding them.

mga nangyari hehe

wer them ASAP.

Partnership Formation

TCC = TAC - full investment approach

TCC > TAC a. withdrawal of investment (problem should mention who will withdraw)

Example: Partners A and B has a contributed capital of 70,000 and 30,000, re

A will withdraw cash to make his capital proportionate to his P/L rat

TCC TAC Difference

A (60%) 70,000 45,000 25,000 Answer: Partner A should
B (40%) 30,000 30,000
100,000 75,000

Note: The partner not mentioned will be the basis of TAC, in this case, partner B
Therefore, TAC = 30,000/40%

b. IF SILENT as to which partner should withdraw, downward (negative) revalua

Example: Assume same TCC, but the partners agreed to a total capital of 60,0

TCC TAC Difference

A (60%) 70,000 36,000 34,000 Answer: Partners A and B
B (40%) 30,000 24,000 6,000
100,000 60,000

TCC < TAC a. additional investment (problem should mention who will invest)

Example: Partners A and B has a contributed capital of 60,000 and 40,000 res
B will invest cash to make his capital proportionate to his P/L ratio.
 TCC TAC Difference
A (40%) 60,000 60,000 -
B (60%) 40,000 90,000 50,000 Answer: Partner B should
100,000 150,000

Note: Likewise, the partner not mentioned will be the basis of TAC, in this case,
Therefore, TAC = 60,000/40%

b. IF SILENT, upward (positive) revaluation

Example: Assume same TCC, but the partners agreed to a total capital of 180

TCC TAC Difference

A (40%) 60,000 72,000 12,000
B (60%) 40,000 108,000 68,000 Answer: Partners A and B
100,000 180,000

NOTE:
For negative revaluation, since TCC > TAC, bawal may madagdagan na capital.
You can observe sa examples na yung agreed capital ng partners ay either equ
Conversely, kapag positive revaluation naman, bawal may mabawasan na capi
Their agreed capital should either be equal or higher than their contributed cap

Also: I'll leave it to you to practice the computation of the contributed capital since it
No technique really involved with that, just analyzation.
on who will withdraw)

al of 70,000 and 30,000, respectively.

proportionate to his P/L ratio.

Answer: Partner A should withdraw 25,000

f TAC, in this case, partner B.

ownward (negative) revaluation.

eed to a total capital of 60,000

Answer: Partners A and B should withdraw 34,000 and 6,000 respectively

who will invest)

al of 60,000 and 40,000 respectively.

oportionate to his P/L ratio.
Answer: Partner B should invest 50,000

e basis of TAC, in this case, partner A.

eed to a total capital of 180,000

Answer: Partners A and B should withdraw 12,000 and 68,000 respectively

ay madagdagan na capital.
al ng partners ay either equal or less than their contributed capital.
al may mabawasan na capital.
r than their contributed capital.

contributed capital since it is usually dependent on the agreement of partners ;))

Partnership Operation

A B C Total
Salaries xx xx xx xx
Interest xx xx xx xx
Bonus xx xx xx xx
Remainder (SQUEEZE) xx xx xx xx - net income AFTER s
Share in NI/NL xx xx xx xx - net income BEFORE

Application:

Hunt Rob Turman Kelly Total

Salaries 10,000 5,000 15,000
Interest 2,500 2,250 1,000 2,350 8,100
Bonus 1,500 1,000 2,500
Remainder (SQUEEZE) 6,725 6,725 6,725 6,725 26,900
Share in NI/NL 20,725 14,975 7,725 9,075 52,500
 Answer: A

Tip on how to compute average capital balance of partners:

- count the months from the date of change to December 31
- add all amounts then divide by 12
- remember that temporary drawings are not included in the computation
- this is faster to do in calculator if you use the M+/M- and GT/MR functions

Roel: Jekell:
600,000 x 12 7,200,000 660,000 x 12 7,920,000
(100,000 x 10) (1,000,000) 300,000 x 9 2,700,000
200,000 x 6 1,200,000 (80,000 x 4) (320,000)
200,000 x 3 600,000 10,300,000
(150,000 x 2) (300,000)
7,700,000

Average capital 641,667 858,333

net income AFTER salaries, interest, and bonus
net income BEFORE salaries, interest, and bonus

Bonus: Combine first all bonuses, so it should be a total of 5% bonus.

B = 5% (NI - B)
B = 5% (52,500 - B)
B = 5% (NI - B)
B = 5% (52,500 - B)
B = 2,625 - 0.05B
1.05 B = 2,625
B= 2,500

After getting the total bonus, allocate the amount to partners

Hunt (3%) 1,500
Rob (2%) 1,000
Partnership Dissolution

1. Admission of a new partner

a. By purchase of interest

A B Total
Capital xx xx xx
Revaluation (if any) xx xx xx
Share in NI/NL (if not yet allocated) xx xx xx
Total capital xx xx xx
% of capital to be sold x% x%
Capital sold xx xx xx

Application:

80% 20%
XX YY Total
Capital 20,000 10,000 30,000
% of capital to be sold 25% 25%
Capital Sold to ZZ 5,000 2,500 7,500

XX YY ZZ
New balance of capital 15,000 7,500 7,500
Answer: C

Amount to be paid by new partner 10,000

Interest acquired (7,500)
2,500
Divide by: % of interest acquired 25%
Revaluation 10,000

80% 20%
XX YY Total
Capital 20,000 10,000 30,000
Revaluation 8,000 2,000 10,000
28,000 12,000 40,000
% of capital to be sold 25% 25%
Capital Sold to ZZ 7,000 3,000 10,000

XX YY ZZ
New balance of capital 21,000 9,000 10,000
Answer: D
b. By investment TCC TAC Difference
I'll do it step by step so you can A xx xx xx
follow ;) B xx xx xx
xx xx xx
C xx xx xx
xx xx xx

revaluation

BONUS METHOD
STEP 1: Adjust for any revaluation or
In this problem, there is no revaluation or profit allocation.
profit allocation if any.

TCC TAC
STEP 2: Since TCC = TAC, multiply XX 20,000
the capital ratio of new partner to the YY 10,000
TAC. Total 30,000 60% 22,500
Total capital of old partners will be ZZ 7,500 40% 15,000
the balancing figure 37,500 37,500

STEP 3: Compute the difference TCC TAC

XX 20,000
 YY 10,000
Total 30,000 60% 22,500
ZZ 7,500 40% 15,000
37,500 37,500

STEP 4: Allocate the difference to old TCC TAC

partners using their original capital XX 20,000
ratio YY 10,000
Total 30,000 60% 22,500
ZZ 7,500 40% 15,000
37,500 37,500

STEP 5: Adjust the capital balance of TCC TAC

the old partners by the difference XX 20,000 14,000
The difference here is called bonus YY 10,000 8,500
to/from old/new partner Total 30,000 60% 22,500
ZZ 7,500 40% 15,000
37,500 37,500

2. Retirement/Death of a partner

Assume C is the retiring partner

A B C Total
Capital xx xx xx xx
Drawings - - xx xx
Loans - - xx xx
Share in net income xx xx xx xx
Revaluation xx xx xx xx
Capital before retirement/death xx xx xx xx
Payment xx xx xx xx
Bonus/Revaluation xx xx xx xx
Capital after retirement/death xx xx xx xx

Note: Total interest is only computed for the retiring/dead partner.

50% 30% 20%

DD EE FF Total
Capital 70,000 60,000 30,000 160,000
Drawings - - (2,000) (2,000)
Loans - - 3,000 3,000
Share in net income 15,000 9,000 6,000 30,000
Revaluation (2,500) (1,500) (1,000) (5,000)
Capital before retirement/death 82,500 67,500 36,000 186,000
Payment (38,000)
Bonus (1,250) (750) 2,000
Capital after retirement/death 81,250 66,750 -
Answer: A

Revaluation:
a. (5,000)
b 15,000
c. (15,000)
(5,000)

50% 30% 20%

DD EE FF Total
Capital 70,000 60,000 30,000 160,000
Drawings - - (2,000) (2,000)
Loans - - 3,000 3,000
Share in net income 15,000 9,000 6,000 30,000
Revaluation (2,500) (1,500) (1,000) (5,000)
Capital before retirement/death 82,500 67,500 36,000 186,000
Payment (38,000)
Revaluation 5,000 3,000 2,000 10,000
Capital after retirement/death 87,500 70,500 -
Answer: A
OBSERVE:
Bonus method
Bonus to retiring partner is deducted from capital of remai
Bonus from retiring partner is added to the capital of rema
Revaluation method
Positive revaluation to retiring partner is also positive reva
Negative revaluation to retiring partner is also negative re
 Revaluation formula
(if not given):
Amount to be paid by
new partner xx
Interest acquired (xx)
Divide by: % of
interest acquired x%
Revaluation xx
 Answers:
1. D
2. A

REVALUATION METHOD
STEP 1: Adjust for any revaluation or profit
fit allocation. In this problem, there is no revaluation or profit allocat
allocation if any.

TCC
STEP 2: Since TCC is not equal to TAC and
the new TAC is not given, divide the XX 20,000
interest of new partner by his investment YY 10,000
or the total capital of old partners by their Total 30,000 60%
remaining interest. TCC should be lower ZZ 7,500 40%
than TAC if SILENT (positive revaluation)
37,500
No need to divide any if TAC is given.

Difference STEP 3: Compute the difference TCC

XX 20,000
 YY 10,000
(7,500) Total 30,000 60%
7,500 ZZ 7,500 40%
- 37,500

Difference TCC
STEP 4: Allocate the difference to old
(6,000) XX 20,000
partners using their original capital ratio
(1,500) YY 10,000
(7,500) Total 30,000 60%
7,500 ZZ 7,500 40%
- 37,500

Difference STEP 5: Adjust the capital balance of the TCC

(6,000) old partners XX 20,000
(1,500) YY 10,000
(7,500) Total 30,000 60%
7,500 ZZ 7,500 40%
- 37,500
To get total revaluation, divide the revaluation to retiring partner by his capital ratio,
then allocate to other partners
ucted from capital of remaining partners (like in this case)
dded to the capital of remaining partners

partner is also positive revaluation to remaining partners (like in this case)

partner is also negative revaluation to remaining partners
no revaluation or profit allocation.

TAC
Note: in this case, we used the capital of old partners as the basis
This is because 7,500/40% = 18,750, which is lower than the TCC
30,000
20,000
50,000

TAC Difference
30,000 -
20,000 12,500
50,000 12,500

TAC Difference
-
Note: if the basis of TAC is the investment of the new
-
partner, the revaluation will be allocated to the old
30,000 - partners since the AC of the new partner will equal his
20,000 12,500 CC.
50,000 12,500

TAC Difference
20,000 -
10,000 -
30,000 -
20,000 12,500
50,000 12,500
Most students/reviewees find partnership liquidation hard or confusing, and if this technique does not help you, idk what will. This is li

A B C Total Beginning cash bala

Capital xx xx xx xx Proceeds from sale o
Drawings (xx) (xx) (xx) (xx) Payment of liab to o
Loans x(x) x(x) x(x) x(x) Liquidation expense
Total xx xx xx xx Remaining liab to ou
(squeeze) x(x) x(x) x(x) x(x)* Cash withheld for un
Payment to partners xx xx xx xx Cash withheld for liq
Cash available for di
*Amount of total possible loss

Application: Since madali na yung lump-sum, I'll show you how to apply this with installment liquid
JANUARY: Silent: assume all are insolvent
40% 20% 20% 20%
A B C D Total
Capital 26,400 25,800 20,400 16,200 88,800
Loans 6,000 - - 3,000 9,000
Total 32,400 25,800 20,400 19,200 97,800
(squeeze) - - - - -
Payment to partners - - - - -
Answer: None, since cash available is negative

FEBRUARY:
40% 20% 20% 20%
A B C D Total
Capital 26,400 25,800 20,400 16,200 88,800
Loans 6,000 - - 3,000 9,000
Total 32,400 25,800 20,400 19,200 97,800
(squeeze) (37,008) (18,504) (18,504) (18,504) (92,520)
(4,608) 7,296 1,896 696 5,280
Allocate deficiency 4,608 (1,536) (1,536) (1,536)
- 5,760 360 (840)
(420) (420) 840
5,340 (60) -
(60) 60
Payment to partners - 5,280 - - 5,280
Answer: Partner B receives 5,280
Paano kapag pinaikot na yung problem? Ganito lang ;)

30% 20% 50%

AA BB CC Total Beginning cash bala
Capital 40,000 45,000 65,000 150,000 Proceeds from sale o
(69,000) (138,000) Payment of liab to o
Payment to partners (4,000) 12,000 Liquidation expense
Remaining liable to o
Cash withheld for un
Cash withheld for liq
Cash available for di
 what will. This is literally the ultimate shortcut to liquidation problems.

eginning cash balance xx

roceeds from sale of non-cash assets xx
ayment of liab to outsiders (xx)
iquidation expenses (xx)
emaining liab to outsiders (xx)
ash withheld for unrecorded expenses (xx) } For installment liquidation, these two will be the
ash withheld for liquidation expenses (xx) } beginning cash balance next period
ash available for distribution xx

h installment liquidation
Beginning cash balance -
Proceeds from sale of non-cash assets 72,000
Payment of liab to outsiders (66,000)
Liquidation expenses (1,200)
Remaining liab to outsiders (18,000)
Cash withheld for unrecorded expenses -
Cash withheld for liquidation expenses (4,800)
Cash available for distribution (18,000)

Beginning cash balance 4,800

Proceeds from sale of non-cash assets 21,600
Payment of liab to outsiders (18,000)
Liquidation expenses (1,320)
Remaining liable to outsiders -
Cash withheld for unrecorded expenses -
Cash withheld for liquidation expenses (1,800)
Cash available for distribution 5,280
eginning cash balance 8,000
roceeds from sale of non-cash assets 85,000 Answer: A
ayment of liab to outsiders (75,000)
iquidation expenses (6,000)
emaining liable to outsiders -
ash withheld for unrecorded expenses -
ash withheld for liquidation expenses -
ash available for distribution 12,000
Assets
Free Assets
Assets Pledged to FS Creditors - Liab to FS Creditors
xx xx xx
xx xx xx

Other Free Assets

example: cash xx
Total Free Assets xx
Unsec. Liab w/ priority (AST)
Administrative expenses (xx)
Salaries/Wages (xx)
Taxes (xx)
Net Free Assets xx
Estimated Deficiency xx
Total xx

Note: Assets should be valued at estimated realizable value

Expected recovery of PS Net

Creditors (%)
= Totalfree assets
unsec. liab w/o
priority

Estimated payment to PS
Creditors
PS Liab xx
Asset pledged to unsec liab xx *100% = xx
Unsec liab xx *est recovery % = xx
Estimated payment xx

Total payment to creditors

If total assets < total liab = total ERV of all assets
If total assets > total liab = total liab
Estimated gain or loss on
asset realization
Assets @ ERV xx
Assets @ BV (xx)
G/L x(x)

Estimated net gain or loss

G/L on asset realization xx
Unrecorded expenses xx
Net G/L x(x)

Application:
 Free Assets
Land & Bldg Mortgage payable
500,000 - 410,000 90,000
Other free assets
Cash 61,400
AR (250K x 85%) 212,500
Inventory (340k - 50K) 290,000
Machinery & Equipment 53,900
Patent 10,000
TFA 717,800
A (60,000)
S (3,400)
T (16,400)
NFA 638,000
Estimated deficiency (squeeze) 87,000
Total 725,000

Note: Mortgage payable has an unrecorded interest of 10,000 (note b)

638,000
Expected recovery % = = 88%
725,000

Estimated payment to PS Creditors

165,000
 110,000 *100% 110,000
55,000 *88% 48,400
Estimated payment 158,400

Estimated payment to other unsec. liab w/o priority

670,000*88% = 589,600
Note: The 55,000 is not included here since it is already included in the computation of estimated payment to PS

Total estimated payment to creditors (TA < TL)

TFA 717,800
Asset pledged to FS 410,000
Asset pledged to PS 110,000
Total assets @ ERV 1,237,800

Estimated G/L on asset realization

Assets @ ERV 1,237,800
Assets @ BV 1,821,400
Loss in asset realization (583,600)

Estimated Net G/L

Loss on asset realization (583,600)
Unrecorded expenses:
Administrative expenses (60,000)
Taxes (16,400)
Interest on mortgage (10,000)
Net loss (670,000)
Liabilities
Unsec. liab w/o priority
Liab. to PS Creditors Assets Pledged to PS Creditors
xx - xx xx
xx xx xx
Other unsec liab w/o priority
xx xx
Total unsec liab w/o priority xx

*these should be equal

 Unsec. liab w/o priority
Notes Payable (including interest) Investments
165,000 - 110,000 55,000
Other unsec liab w/o priority
Accounts Payable 670,000
Total unsec liab w/o priority 725,000

Answers:
1.C
2.C
3. A
4. C
5. D
 6. D
7. A
8. C

of estimated payment to PS
w/o priority
o priority
SORAL I'm sure memorize niyo na 'tong T-account na ito, so bigay na lang siguro ako ng tips for better memorization ;)

Beg. bal. of asset - normal balance is Dr. Assets to be realized Assets realized
Additions to asset - normal balance is Dr. Assets acquired Assets not realized
Note: assets here are NON-CASH

Deductions to liab - normal balance is Dr. Liabilities liquidated Liabilities to be liquidated

Liab ending bal. Liabilities not liquidated Liabilities assumed

Supplemental debits Supplemental credits

Expense - normal balance is Dr. (expenses) (revenue)
Total debits Total Credits

Normal balance of Loss is Dr. Net Debit (Loss) Net Credit (Gain)

When computing for beginning/ending cash balance: use accounting equation!

Assets = Liabilities + Equity

xx xx** xx***

Cash (squeeze) NCA*

xx xx

*If beg. bal - use assets to be realized; if ending bal. - use assets not realized
**if beg bal - use liabilities to be liquidated ; if ending bal. - use liabilities not liquidated
***if beg.bal - use SHE beg. bal.; if ending bal. use: SHE, beg x(x)
Net G/L x(x) - computed in SORAL
SHE, ending x(x) - if negative, this is also the estim
tips for better memorization ;))

ets realized Deductions to asset - normal balance is Cr.

ets not realized Assets ending bal.

bilities to be liquidated Beg. Bal of liab - normal balance is Cr.

bilities assumed Additions to liab - normal balance is Cr.

plemental credits
venue) Revenue - normal balance is Cr.
al Credits

Credit (Gain) Normal balance of Gain is Cr.

omputed in SORAL
negative, this is also the estimated deficiency
Cost to cost basis formula: Percentage of completion
To date Prior year Current year
Revenue xx xx * POC xx xx
Expenses (xx) (xx) * POC (xx) (xx)
Gross Profit xx xx * POC xx xx

CIP
Costs incurred xx xx Realized gross loss
Realized gross profit xx
CIP ending balance xx

Application:
 2019 To date Prior year Current year
Revenue 500,000 175,000 - 175,000
Expenses (400,000) (140,000) - (140,000)
Gross Profit 100,000 35,000 - 35,000

2020 To date Prior year Current year

Revenue 510,000 377,400 175,000 202,400
Expenses (400,000) (296,000) (140,000) (156,000)
Gross Profit 110,000 81,400 35,000 46,400

2021 To date Prior year Current year

Revenue 510,000 510,000 377,400 132,600
Expenses (392,500) (392,500) (296,000) (96,500)
Gross Profit 117,500 117,500 81,400 36,100

CIP Progress Billings

140,000 187,500
35,000
2019 balance 175,000 187,500
156,000 140,000
46,400
2020 balance 377,400 327,500
96,500 182,500
36,100
2021 balance 510,000 510,000

Answers: OBSERVE:
1. A 1. The given costs incurred are already "to date", if not, you should add
2. B 2. Revenue to date is equal to CIP at year-end
3. B 3. Total revenue is based on the contract price.
Where:
POC = Total costs to date/Total estimated costs to complete
POC = 140,000 / (140,000 + 260,000)
= 35%

POC = 296,000 / (300,000 + 100,000)

= 74%
Note: Costs to date is 300,000 less 4,000 materials to be used the following period

POC = 100% (final year)

CIP = gawa
PB = singil

12,500 Contract liability (singil > gawa)

 49,900 Contract asset (gawa > singil)

CIP and PB should be equal in the final year

, if not, you should add the costs incurred from the current and previous periods.
No template for reconciliation of reciprocal amounts since it highly depends on the given transactions.
But I do recommend to familiarize yourselves with the correct entries para alam nyo kung sino dapat ang mag-adjust, doon lang din a
Also, practice!

Shipments with Deferred Profit

Allowance for branch
@Billed price @Cost inventory
Beg. MI xx xx xx
Shipment xx xx xx
TGAS xx xx xx*
Ending MI (xx) (xx) (xx)
COGS xx xx xx

NOTE:
- Shipments FROM home office - always at billed price
- Shipments TO branch - always at cost
*Beginning balance of allowance for branch inventory (usually given in the balance sheet/trial balance)

Application:
Note: Solving these kinds of problems usually require a lot of working back, so please navigate through the cel
Allowance for branch
@Billed price @Cost inventory
Beg. MI 40,000 32,000 8,000
Shipment 250,000 200,000 50,000
TGAS 290,000 232,000 58,000
Ending MI (60,000) (48,000) (12,000)
COGS 230,000 184,000 46,000 Answer: C

Note: If you are being asked for the combined net income, pwede niyo na sabay i-compute yung sa branch and
Just compute the COGS of home office separately, and use COGS at cost for branch.

Sales 900,000 COGS (Home office)

COGS (404,000) Beg. MI 100,000
GP 496,000 Purchases 350,000
Expenses (170,000) Shipment to Branch (200,000) Note: You might overlook this
Net Income 326,000 Ending MI (30,000)
Answer: B 220,000
mag-adjust, doon lang din ako kumakapit kapag reconciliation problems.

sheet/trial balance)
se navigate through the cells and check the formula bar :)

ompute yung sa branch and home office to save time.

ote: You might overlook this, don't forget to subtract shipment to branch!
I hate to break it to you guys, but I don't have much to share about business combination.
I solve buscomb problems using the same formulas being taught in the undergrad and review, so this might not be value adding.
But since straight computation lang naman dito usually, you can still slay this topic by, again, practicing.
However, I'll show you how I answer problems with intercompany transactions.

Parent NCI
Parent's net income xx -
Dividend income from subsidiary (xx) - RPBI - realized profit in beginning
Subsidiary's net income xx xx UPEI - unrealized profit in ending
Amortization of undervalued assets (xx) (xx) DS - downstream
Amortization of overvalued assets xx xx US - upstream
RPBI (DS) xx - UG/L - DA - unrealized gain/loss -d
RPBI (US) xx xx RG/L - DA - realized gain/loss - de
UPEI (DS) (xx) - UG/L - NDA - unrealized gain/loss
UPEI (US) (xx) (xx) RG/L - NDA - realized gain or loss
UG/L - DA (DS) x(x) -
RG/L - DA (DS) x(x) - Equity in subsidiary net in
UG/L - DA (US) x(x) x(x)
RG/L - DA (US) x(x) x(x) Note: Only upstream transactions
UG/L - NDA (DS) x(x) -
RG/L - NDA (DS) x(x) -
UG/L - NDA (US) x(x) x(x)
RG/L - NDA (US) x(x) x(x)
Gain on bargain
Impairment loss purchase
on goodwill - FV xx -
method (xx) (xx)
Impairment loss on goodwill -
Proportionate method (xx) -
Conso. net income xx xx

Sale of inventory
RPBI/UPEI = selling price * gross profit rate
Sale of fixed asset
Selling price xx
Book value (xx)
Unrealized gain/loss x(x)
Divide by: Remaining useful life xx
Multiply by: depreciation (from xx
month of sale to year-end) xx
Realized gain/loss x(x)

Application:

Sale of inventory
 80% 20%
Parent NCI
Parent's net income 100,000 - Note: no need to deduct dividend from subsi
Subsidiary's net income 24,000 6,000
Amortization of undervalued assets (1,600) (400)
RPBI (DS) 1,050 -
RPBI (US) 800 200
UPEI (DS) (3,600) -
UPEI (US) (1,920) (480)
Conso. net income 118,730 5,320

Downstream
RPBI = 3,000*35% 1,050
UPEI = 60,000*30%*(25/125) 3,600

Upstream
RPBI 1,000
UPEI =40,000*30%*20% 2,400

Investment income 18,730

Sale of fixed asset

 80% 20%
Parent NCI
Parent's net income 300,000 -
Subsidiary's net income 120,000 30,000
Amortization of undervalued assets (2,400) (600)
UG/L - DA (DS) (35,000) -
RG/L - DA (DS) 875 -
UG/L - DA (US) (24,000) (6,000)
RG/L - DA (US) 3,600 900
Conso. net income 363,075 24,300

Downstream
Selling price 75,000
Book value (40,000)
Unrealized gain 35,000
Divide by: Remaining useful life 10
3,500
Multiply by: depreciation (Sep 30-
Dec 31) 3/12
Realized gain 875

Upstream
Selling price 60,000
Book value (30,000)
Unrealized gain 30,000
Divide by: Remaining useful life 5
Multiply by: depreciation (Apr 1- 6,000
Dec 31) 9/12
Realized gain 4,500

Investment income 63,075

 be value adding.

ed profit in beginning inventory

alized profit in ending inventory

unrealized gain/loss -depreciable asset

realized gain/loss - depreciable asset (realized thru depreciation or sale to outsiders)
- unrealized gain/loss - non-depreciable asset
- realized gain or loss - non-depreciable asset (realized thru sale to outsiders)

Equity in subsidiary net income / investment income

upstream transactions affect NCI

ct dividend from subsidiary since it is already from its OWN operations
DM, beginning xx
DM, purchases xx
DM, ending (xx)
DM, used xx
DL xx
OH xx - assume this is the applied OH unless it is stated to use th
Total manuf. cost xx
Beg. WIP xx
Total goods put into process xx
End. WIP (xx)
Cost of goods manufactured xx
Beg. FG xx
Total goods available for sale xx
End. FG (xx)
Cost of goods sold xx

Application:
Total DM 37,000
Total DL 33,500
Total OH 28,320

Additional cost per job:

1001 7,425
1002 21,950
1003 37,900
1004 8,275
1005 17,400
1006 5,870
98,820

Job 1001 1002

Sales 9,000 20,000
Cost 7,870 21,950
1,130 (1,950)

Note:
- If the total manuf. cost, total goods put into process, cost of goods manufac
from the formula para hindi masyadong mahaba
- If the given amounts is not broken down to specific jobs, you can directly us
- You can also solve this using the T-account method (use whichever you fin
But imo, this method is easier especially when working back.

For example:
DM, used 90,305.40 squeeze
DL 60,203.60 OH/0.5
OH 30,101.80
TMC 180,610.80 (DL+OH)/0.5
BWIP 590.00
EWIP 0
CGM 181,200.80
BFG 0
EFG (1,320.40)
COGS 179,880.40
ed OH unless it is stated to use the actual OH
 DM, beginning 2,000
DM, purchases 42,000
DM, ending (7,000) (squeeze)
DM, used 37,000
DL 33,500
OH 28,320
Total manuf. cost 98,820
Beg. WIP 445 Job 1001
Total goods put into pro 99,265
End. WIP (43,770) Job 1003 & 1006
Cost of goods manufactu 55,495
Beg. FG 5,000 Job 1000
Total goods available for 60,495
End. FG (30,675) Job 1000, 1004, 1005
Cost of goods sold 29,820

Answers:
1. A
2.C
3. B
4. C
5. A
6. B
7. B

o process, cost of goods manufactured, and goods available for sale is not specifically asked, you can opt to remove them
haba
o specific jobs, you can directly use the calculator to solve (no need to write so you can save time)
nt method (use whichever you find easier)
hen working back.
Answer: B
can opt to remove them
Beg. WIP xx xx Units completed and transferred ou
Started in process xx xx Ending WIP
xx Normal loss
xx Abnormal loss
xx xx
Units to be Units accounted
accounted for for

Application:

6,000 6,000 (BWIP)

12,000
(squeeze) 14,000 6,000
 8,000 8,000
20,000 20,000

Cost
EUP

Cost/EUP
Total cost/EUP
Current total cost (M + CC)

Cost of units transferred out:

FIFO
BWIP
CurrentCost
cost of
BWIP
Cost of units
started

Units
Cost
completed and transferred out

Answers:
1.A
2.A
3. A
4.C

FIFO WAVE
T-in M CC T-in
0 0 3,000
6,000 6,000 6,000 12,000
 8,000 8,000 6,000 8,000
14,000 14,000 15,000 20,000

29,000 5,500 5,000 41,000

14,000 14,000 15,000 20,000

2.07 0.39 0.33 2.05

2.798
nt total cost (M + CC) 0.726

of units transferred out:

WAVE
15,500 Current Cost
990 Units
16,740
33,230
12,000
2.77
WAVE
M CC

12,000 12,000
 8,000 6,000
20,000 18,000

8,000 6,000
20,000 18,000

0.40 0.33
2.78
0.73

33,360
12,000
2.78
For forward contracts and purchase commitments (hedging instrument)

IMPORT:
12/01 12/31 1/31
Foreign currency receivable (FCR) xx xx xx
Peso Payable (PP) xx xx xx
Derivative asset (liab) xx xx xx
Prev. bal 0 xx xx
Gain (loss) xx xx xx

Note: Peso payable and peso receivable is the locked in price.

Application:

1. B
2. A
3. B
4. D

Hedging instrument
Fx rate 0.9 0.93
12/1 12/31
FCR 180,000 186,000
PP 180,000 180,000
DA (L) 0 6,000
P.B 0 0
G(L) 0 6,000

Hedge item
 12/1 Purchases 178,000.00
AP

12/31 Fx Loss (4,000.00)

0.89 - 0.91 AP

1/31 Fx Loss (2,000.00)

0.91 - 0.92 AP

Note: This is for IMPORT transaction. Same process lang po export but use t
Be careful with analyzing if the transaction is import or export, straight c
pero if mapagpalit niyo yung nasa taas, mamamali yung analysis nyo if

For option contracts

12/1 12/31 1/31
Intrinsic value 0 xx xx
Time value xx xx 0
Fair value xx xx xx

Application:

12/1 12/31
IV 0 6,900
TV 11,900 8,500
FV 11,900 15,400

1. (3,400)
2. 13,800
3. 5,300
4. 3,500
 EXPORT:
<- sample dates 12/01 12/31
Peso Receivable (PR) xx xx
Foreign currency payable (FCP) xx xx
Derivative asset (liab) xx xx
Prev. bal 0 xx
Gain (loss) xx xx

cked in price.

0.92
1/31
184,000
180,000
4,000
6,000
(2,000)
 178,000.00

(4,000.00)

(2,000.00)

ess lang po export but use the other format.

is import or export, straight computation lang ito
mamali yung analysis nyo if asset/liab or gain/loss ang kakalabasan.

<- sample dates

4/1
20,700
0
20,700
1/31
xx
xx
xx
xx
xx