Problem 1

The summarized general ledger trial balance of Dapitan Corporation, an investment company, includes the following accounts at December 31, 2010

CashDebitCredit

Deposits, at callP 7,000

Dividends receivable 112,869

Interest receivable 15,693

Outstanding Settlements receivable 478

Trading securities 4,900

Listed securities(available for sale) 68,455

deferred Tax 1,880,472

Outstanding settlements payable 655

Interest payable P 10,253

Interest payable 280

Other payables 83

Current tax payable 242

Provision for employee benefits 752

Deferred tax 56,414

Share Capital 1,368,024

Revaluation Reserve - Investments 376,090

Retained Earnings 278,384

2,090,522 2,090,522

Note: Provision for employee benefits includes P525 payable within one year

Required: Compute for the following

1Current assets 209,395

2Noncurrent assets 1,881,127

3Current Liabilities 11,383

4Noncurrent liabilities 56,641

Problem 2The following balance sheet was prepared by the bookkeeper for Perry Company as of December 31, 2007.Perry CompanyBalance Sheetas of December 31, 2007

CashP 80,000Accounts payableP 75,000Accounts receivable (net)52,200Long-term liabilities100,000Inventories57,000Stockholders' equity218,500Investments76,300Equipment (net)96,000Patents 32,000P393,500P393,500

The following additional information is provided:1.Cash includes the cash surrender value of a life insurance policy P9,400, and a bank overdraft of P2,500 has been deducted.2.The net accounts receivable balance includes:(a)accounts receivabledebit balances P60,000;(b)accounts receivablecredit balances P4,000;(c)allowance for doubtful accounts P3,800.3.Inventories do not include goods costing P3,000 shipped out on consignment. Receivables of P3,000 were recorded on these goods.4.Investments include investments in common stock, trading P19,000 and available-for-sale P48,300, and franchises P9,000.5.Equipment costing P5,000 with accumulated depreciation P4,000 is no longer used and is held for sale. Accumulated depreciation on the other equipment is P40,000.

Required: Compute fora. Total current assets 206,300b. Total assets P400,000c. Total current liabilities 81,500d. Total liabilities181,500e. Stockholders' equity 218,500

Problem 3The following data pertain to Ramirez Company on December 31, 2011

Cash, incuding sinking fund of P500,000 with trusteeP 2,000,000

Notes receivable(including P200,000 pledged

and P700,000 discounted 1,200,000

Accounts receivable - unassigned 3,000,000

Accounts receivable -assigned 800,000

Notes receivable discounted 700,000

Equity of assignee in accounts receivable assigned 500,000

Inventory, including P600,000 cost of goods in transit

purchased FOB destination. The goods

were received January 3, 2012 2,800,000

Allowancefor doubtful accounts 100,000

What total amounts of current assets should be reported in the statement of financial position on December 31, 2011?

P7,900,000Problem 4Neuver Company has manufactured a machine specifically to the design of its customers. Any other party could not use the machine. Neuver Company has never manufactured this type of machine before and expects a number of faults to materialize in its operation during its first year of use, which Neuver is contractually bound to rectify at no further cost to customer. The nature of these faults could be well significant. As of December 31, 2014, the machine had been installed. The customer invoice was P500,000 and the cost incurred up to the point of installation was P325,000. What amount of revenue from sales should Neuver Company recognize in December 31,2014?Answer: None/0Problem 5Meyer Corp. reports operating expenses in two categories: (1) selling and (2) general and administrative. The adjusted trial balance at December 31, 2007, included the following expense accounts:Accounting and legal feesP140,000Advertising120,000Freight-out75,000Interest60,000Loss on sale of long-term investments30,000Officers' salaries180,000Rent for office space180,000Sales salaries and commissions110,000One-half of the rented premises is occupied by the sales department.a. How much of the expenses listed above should be included in Meyer's selling expenses for 2007?b. How much of the expenses listed above should be included in Meyer's general and administrative expenses for 2007?Answer: a. P120,000 + P75,000 + P110,000 + P90,000 = P395,000.bP140,000 + P180,000 + P90,000 = P410,000

Problem 6Presented below is an income statement for Morton Company for the year ended December 31, 2007.Morton CompanyIncome Statement For the Year Ended December 31, 2007

Net salesP800,000Costs and expenses:Cost of goods sold640,000Selling, general, and administrative expenses70,000Other, net 20,000Total costs and expenses 730,000Income before income taxes70,000Income taxes 21,000Net incomeP 49,000

Additional information:1."Selling, general, and administrative expenses" included a usual but infrequent charge of P7,000 due to a loss on the sale of investments.2."Other, net" consisted of interest expense, P10,000, and an extraordinary loss of P10,000 before taxes due to earthquake damage. If the extraordinary loss had not occurred, income taxes for 2007 would have been P24,000 instead of P21,000.4.Morton had 20,000 shares of common stock outstanding during 2007.

Net income of Morton Company is:Answer: Net income P 49,000

Problem 7Perry Corp. reports operating expenses in two categories: (1) selling and (2) general and administrative. The adjusted trial balance at December 31, 2011, included the following expense accounts:Accounting and legal feesP140,000Advertising120,000Freight-out75,000Interest60,000Loss on sale of long-term investments30,000Officers' salaries180,000Rent for office space180,000Sales salaries and commissions110,000One-half of the rented premises is occupied by the sales department.How much of the expenses listed above should be included in Perry's selling expenses for 2011?P120,000 + P75,000 + P110,000 + P90,000 = P395,000.Problem 8127.Perry Corp. reports operating expenses in two categories: (1) selling and (2) general and administrative. The adjusted trial balance at December 31, 2011, included the following expense accounts:Accounting and legal feesP140,000Advertising120,000Freight-out75,000Interest60,000Loss on sale of long-term investments30,000Officers' salaries180,000Rent for office space180,000Sales salaries and commissions110,000One-half of the rented premises is occupied by the sales department.How much of the expenses listed above should be included in Perry's general and administrative expenses for 2011?P140,000 + P180,000 + P90,000 = P410,000.Problem 9The following changes in Vel Corp.s account balances occurred during 2010:IncreaseAssetsP89,000Liabilities 27,000Capital stock 60,000Additional paid-in capital 6,000

Except for a P13,000 dividend payment and the years earnings, there were no changes in retained earnings for 2010. What was Vels net income for 2010?Answer: P 9,000

Problem 10Logan Corp.'s trial balance of income statement accounts for the year ended December 31, 2011 included the following: Debit CreditSalesP140,000Cost of salesP 50,000Administrative expenses25,000Loss on sale of equipment9,000Commissions to salespersons8,000Interest revenue5,000Freight-out3,000Loss on disposition of wholesale division12,000Bad debt expense 3,000TotalsP110,000P145,000Other information:Logan's income tax rate is 30%. Finished goods inventory:January 1, 2011P80,000December 31, 201170,000On Logan's income statement for 2011, cost of goods manufactured is

Answer: P50,000 + P70,000 P80,000 = P40,000.

Problem 11Ortiz Co. had the following account balances:SalesP 120,000Cost of goods sold60,000Salary expense10,000Depreciation expense20,000Dividend revenue4,000Utilities expense8,000Rental revenue20,000Interest expense12,000Sales returns11,000Advertising expense13,000What amount would Ortiz report as income from operations in its income statement?

Answer: P34,000 - P8,000 + P20,000 - P11,000 - P13,000 = P22,000.

Problem 12The financial records of Ronalyn Company were destroyed by fire at the end of the current year. However, certain statistical data related to the income statement are available.

Interest expense 20,000

cost of goods sold 2,000,000

sales discount 100,000

the beginning inventory was P400,000 and decreased 20% during the year. Administrative expenses are 25% of cost of goods sold but only 10% of gross sales. 4/5 of the operating rxpenses relate to sale acctivities.

ignoring income tax, what is the net income for the current year?

P380,000Page 1 of 6