cad ey ) peek CPA REVIEW SCHOOL OF THE PHILIPPINES he MANILA ADVANCED FINANCIAL ACCOUNTING AND REPORTING Sunday, February 12, 2017 First Preboard Examination 3:00 p.m £0 6:00 p.m. Charlie and Delta formed a partnership. Charlie invested cash worth P85,000 and a machine. On the other hand, Delta contributed cash worth P55,000 and an equipment which has a mortgage of P35,000 ‘hich the partners agreed to assume. The total capital ater forrmation was P360,000. ‘They also further agreed to reflect 55:45 ratio as to their capital balances respectively. Churlic invested an additional 8,000 cash to be in conformity with their capital ratio agreement. On the other hand, Delta withdrew certain amount of cash also to conform to their capital ratio agreement. No other investment or withdrawal occurred other than mentioned to reflect their capital ratio agreement. 1. How much is the fair value of the machine? a 113,000 b. 105,000 ” ©. 107,000 4. 115,000 2. How much is the fair value of the equipment? a. 115,000 ~ —b. 107,000 150,000 4. 142,000 Juliet and Kilo have capital balances of P200,000-andP220,000 respectively before admission. of Lima. Their profit and-loss agreement was 35:65. Lima was to be admitted for 40% interest in the partnership’ and.20% in‘the profits and losses by contributing a used machine which had a cost of P205,000 and an appraised value of P180,000. After admission of Gime, let and Kilo agreed to share profits and losses equally/ At the end of the year the new partnership-generated net income of 130,000. 3, How much is th€ capital balaneg of Kilo after admission of Lima? 174,500 | 259,000 181,000 ~~ 240.000 okie ¢ 241) { F . us + . @yrow much is the capital balance of Juliet at(the end of the year? ‘a, 231,000 Lf Ge 2yv ) b. 21,0004, . c. 224,500 ee Uo Go 4 d. 247,000 wy leq 2 fy) en os lat 5, Assuming there is an implied undervaluation or overvaluation of an asset; how much is the undervaluation or overvaluation of the asset? (kindly indicate if under or over) a. 300,000 b. (150,000) c. (300,000) d_ 150,000 6. Assuming there is an implied undervaluatidn or overvaluation of an asset, how much is the capital balance of Kilo at thetnd of the year? o a. ~4g7.000 A k b. 7H aw (mn < 1°¢ \y ©. 369,500 eter ait Figs y fr d. 174,500.»Mike and November were partners before they admitted Oxeas. The ah ‘was admitted into the partnership by contributing cash for 35% interest in the partnership and 15% share in the profits and losses. The capital balances of Mike and November combined was 390,000 after admission of Oscar. Upon admission, Oscar had a capital oredit in the amount of P60,000 in addition to his eo cer 7. How much is the oxy ontribution of| Oscar? + wv v9g24 OS - 270,000 mem Ut 150,000 E 196,500 5 {ye ZL % ° “ pose following balances were ascertained in NOMONEY Corp. which is experiencing insolvency: Round recovery percentages to two decimal places (ex. .12345 = NR35%) ) Yad vk “ eer ai . - ns Cash 8,000 6 4uAccounts payable ‘4 — 80,000" _ q Notes receivable 120,000 ‘@ ‘Accrued expenses 2 -30,000 “ FR Inventories |% AL ¢ 80,000 46 \// Salaries payable 15,000~ ov eye Prepaid expense 10,000 Mortgage payable 155,000 ~ (4g Equipment, net 150,000- 4’ — Ordinary shares 100,( ap jp Deficit TOTAL 368,000 TOTAL 4. ae ¥ Additional information: ! e gy Estimated net realizable value of the notes receivable was P105,000 and was pledged to the # ‘mortgage payable + 80% of the book value of the inventories can be sold at P45,000 and was pledged to’ 60% of the accounts payable ‘The remait ing book value of the inventories have an estimated fair valtfe of P20,000, 80% ofthe remaining unpaid accounts payable were secured by the equipmisi having a €timaleh, ir Value of P60,000--—— gee) ‘© > Liquidation and administration expenses were estimated in the amount of P8,000 © Income tak payable had been accrued in the amount of P2,000 Interést on the-notes receivable and-marigage payable have not becn accrued in the amount of (S P10,000 shi Fespectively \/ 8, Hw much are the nei}free assets? , MS2.400 co Py 4 +d 40 ty - 8 9, How much is the esimited payment to the mortgage payable? f 'g. 137,264 75, 146,191 7 « 133,453 \ 142,379 \e oer much is the estimated to! 97.29% b, 95.85% c, 96.28% 4. 96.86% tal recovery percentage to the partially secured accounts payable?Page 3 On January 1, 2017, ACJ P : this 2017, ACJ Partnership entered {nto liquidation. The partners’ capital balances on date Were-as follows: A (25%) P2,500,000 Yeas P5,400,000 ; 3 (40%) P3,700,000. The partnership has liabilities amounting to P4,400,000, including a loan from C.P600,000. Cash on hand before the start of liquidation is P800,000. 1. Noncash assets amounting to P7,400,000 were sold at book value and the rest of the noncash assets ‘were sold at a logs of P4,200,000. How much cash will be distributed to the partners? a, 8,000,000 b b. 4,400,000 h c. 7,400,000 d. 11,800,000 more than their personal liabilities. How much cash must be invested by the partners to satisfy the _AAlaims of the outside creditors and to pay the amount due to the partner's? a. 3,680,000f a = r b. 4,480,000 | w Ky ¢. 4,360,000 Id aor 4. 3,800,000 ( 12, After exhausting the noncash assets of the partnership, assuming all partners bas personal assets received P2,255,000, How much was the loss frort the realization of themoneash assets? 5,255,000) k @ Gc \) %. 10,790,000 Ave RAN I dn dey 7) c 10,525,000 ‘ a B WY a 9ossi00 = Fat de> rs, CD, oe —Aqy ‘The partnership of Cruz, Amistoso, and Galicia decided to liquidate their partnership on May 31, 2016. Before liquidating and sharing of net income, their capital balances are as follows: Cruz (30%) 875,000, Amistoso (30%) P630,000, and Galicia (40%) P770,000. Net income from January 1 to May — 31 is P420,000. Liabilities of the partnership amounted to P735,000 and its total assets include cash amounting to P245,000, Se Unsettled liabilities are P385,000. Criz invested additional cash enough-to settle their partnership's indebtedness. Amistoso is. personally solvent, Galicia is personally insolvent, and Cruz becomes insolvent after investing the eash needed by the partnerslip. 14, How much were the partnership's non-cash sold for? a. 137,300 B b. _ 105,000 94 cc. 3,080,000 d. $25,000 15, How much cash will Ar a. 315,000 » b. 168,000 ce. 294,000 4. 70,000 vest in the partnership? 16. How much will Cruz receive as a result of their liquidation? a. 385,000 b. 0” ¢ ©. 315,000 d. 462,000Page 4 The partnership of Donato, Tamago, original 000: Tamago P5,400,000; tmoto, P8,100,000. According Fe a Pa ae BeoME oF loss will be divided among the respective partners as sae 200.000 for Donato, P1,050,000 for Tamayo, and F730, 000 ior Imoto. (2) ‘on the original capital balance foreach parmer. (3) Remainder is deinen equally follows: (1) sal Interest of 9% 500 as his share inthe profit ofthe partnership, how much is the net Benerated by the partnership? “815.000 as his share inthe profit of the partnership, how much isthe net ‘generated by the partnership? ‘ % moto to receive B594,000 as his share in the loss of the partnership, how much is the net loss ned by the partnership? b 1 2 mu cn &y & ' 1 uu yan bt (Zoa (2 (a) (CoM? JL 2 1 Finish Corporation has been undergoing liquidation since January 1. Its condensed ‘Statement of ‘realization and liquidation for the month of June is presented below: Interest on investment P 10,500 — Purchases on account 105,000 — Liabilities liquidated 2,450,000 ~~ Assets realized 2,100,000 Payment of expenses of trustee 525,000 Liabil ies to be liquidated, June | 4,574,500 Sales on Account 50,000 Assets to be realized, July | ———— 2,940,000 1A» liabilities not liquidated, June 30 2,229,500 Sales for cash 1,750,000 Assets not realized, May 31 6,650,000 va ( 20,/The net gain (loss) on realization and liquidation is: ja. 1,225,000” bb. (479,500) A (1,225,000) ¥ 479,50021. Which of the or flowing SEnamen's conceing the dso lution of partnership business is co : rect? spit ofa Y Purchasing a portion of iting partnership, the capital a than the amount contributed by cs if there is Positive asset revaluation without any bonus. it E ting partnership, the contributed ‘capital credited to him if there is evaluation at the time of his admission: Zetiring partner receives less than his capital balance before retirement. 7 inn STship net loss prior wo the retirement ofthe said partner us tothe retiring partner. | 23. 1n accounting for corporate liquidation, which ofthe following statements is {ngorrect? ” * Trbtienctted editors no longer share inthe remaining fice aot afe eof unsecured liabilities without priority, > Tad. Security for Partially secured liabilities are offieted to their secured debts and can no longer be used to pay unsecured libilties. a © Unsecured credits with priority such as liabilities co ly recovered by the said creditors in unsecured portion of the liabi {credits without priority in the computa ‘without priority employees and taxes due to government every corporate liquidation. “ to partially secured creditors are added to unsecured ion of recovery percentage of the unsecured creditors zr Ine. accepted a long-term construction project with original Conger peer the company records, the cumulative constriction cost ifeurred aso 000 while the construction cost inc | g 3 ? S Gy r S 8 a z i E [ outcome of construction can be estimated reliably, what isthe reelized gross profiloss) to be os oes parce for the year ended December 31° D020 Round se percentage of ‘completion to nearest percent) ae 125,000 OR jw (550,000) ~¢ an ass . 146,000 io hi we (350,000) a SRN a oe eee soD Page 6 ‘Ark In. is one of the leading construction companies in he Philippines. On Jy 1, 2031, it receives ‘project to build @ condominium at a contract price of P2-600,000. It is the polity of the company to use Percentage of completion (cost to cost method) to account its project. The accounting department of ‘the company provided the following data for two years of construction of the said project December 31, 2031 December 31,2032) Percentage of completion as of 30% 80% Estimated cost to complete on 1,050,000 420,000 25. What is the balance of Construction in Progress on December 31, 20322 @ 1,600,000 lon is b. 1,580,000 oe ¢. 1,730,000 4 1,630,000 December 31,2001 December 31,2002 ». 840,65: / c. 597,391 d. 992,284Page 9 On Jan eas fee pray an Jeszie's Grill ne, entered into a contract witha franchisee for an initial franchise the agreement was sine Of 10 years. OF this amount P600,000 (not refundable) was paid when and December 31. pene and the balance payable in four equal semi-annual instalments every June 30 credit rating indicate jemehisee signed a non-interest bearing note for the balance. The franchisee's Seid: note ay Basalt that it can borrow money at 12% fora loan of this type. The present value of the Fee's -P865.276. The contract also provides for continuing franchise fee equal to 10% ot ichisee’s sales revenue. On December 31, 2016, the initial services required of the franchisor are substantially performed at a eet cost of P879,766, Jeszie's Grill also incurred indirect cost amounting lo PSO.00D, For the year ‘ended December 31, 2016, the franchisee reported sales revenue {0 P1,500,000. 33. If the collection of the non-interest bearing note ee much is the net income to be reported by Jeszie's Gril Inc. forthe year endsd December 31,2016? 8. 686,510 b. 790,463 ©. 78,5827 638,487 34. Under IFRS 15, what is the recognition principle of revenue arising ff 2 The revenue shall be recognized by the entity when the contract price has already been received and the period of refund has already expired ¥ ‘The revenue shall be recognized by the entity when or as the entity satisfies the performance obligation by transferring the promised goods or services to the customer. © The revenue shall be recognized by the entity when it is probable that there will be inflow of future economic benefits to the entity and the revenue can be measured reliably. 4. The revenue shall be recognized by the entity at the time of perfection of the contract with the customer, 35. A long-term construction company useg percentagd of completion in accounting forts project. It employs cost-c-cost method in thedetaiention of the percentage of complcion: Aste end of — \e7/ second year, the total estimated cost at completion of one of its projects exceeds the corresponding © contract price. The said project report gross profit in the first year. How shall the company account forthe said difference in the second yeas? a. The change in the total estimated cost shall be treated retrospectively by adjusting the beginning retained earnings end beginning construction in progress in the second year b. The difference in the second yeer shall be trated prospectively by proportionately recognizing it based on the percentage of completion as of the end of the second year after deducting the gross profit inthe first year. Cc ¢. The difference in the second year shall be treated prospectively by fully recognizing it on the ) second year Income Statement after deducting the gross profit in the first yea. \ 4 The difference in the second year shall be fully recognized as the realized gross loss for the second year based on the principle of prudence or conservatism without any propo deduction, \f — Ko 36. Under JAS 18, Avhat is the proper measurement of even hed of its rec va. of the consideration received or revelVabTe. fh b. Book value of the consideration received or receivable. ©. Historical cost oF the consideration received or receivable, 4. Amortized or depreciated cost of the consideration received or receivable.| | D a Page 10 XYZ Corp. has a branch in Manila. At December 31, 2017, the home office shows a P 342,000 balance in its branch current account. The following information has been gathered during the reconciliation . The branch sent by mistake a credit memo amounting to P12,000 to the home office. The home office did not record it. 'b. Accredit memo sent by the branch to the home office amounting to P3,000 was recorded by the hhome office twice. ¢. A credit memo sent by the home office to the branch amounting to P6,000 was not recorded by the branch, d. A credit memo sent by the home office to the branch amounting to 30,000 was not recorded by the branch. ©. A debit memo sent by the branch to the home office amounting 16 P50,000 was recorded by the home office as PS00,000. mM £. A debit memo sent by the home office to the branch amounting to P10,00 was recorded by the branch, fos is the unadjusted balance of home office account? q! 4° / 731,000 Lyd. pore 801,000 ei : ¢ { oe «. 751,000% me 837,000 b : Ses 38. The net adjustment in the home office books is a: @ 453,000 debit . 447,000 debit ¢. 437,000 debit 4. 450,000 debit 7 The home office bills its branch af 120%%6f cost. In turn, the branch sells the shipments to customers at 12594 of the billed price. On August 2017, all-of the merchandise of the branch were destroyed by fire: The information was available: Inventory beginning, at billed price (24,0907 Shipments from home office during the month 240,000 Sales — 264,000 a Sales returns r3200 720 Sales discounts 6,600 39, What is the amount of inventory at cost destroyed by fire? a. 57,200, b. 52,800 © 193360 ar) ‘A home office ships inventory to its branch af 1358) of cost. ‘The required balance of the Deferred > Profit account is\P236,250; During the year, the- ‘Office sent merchandise to the branch costing 2,352,000. At the start of the year, the branch's balance sheet shows P945,000 of inventory on hand that was acquired from the home office. a 4 40. What is the ahersatemght ofthe costo gods sol? a ; g Ke - 540,750" \_ aoe IM \_b. 777,000 \\c. 236.250 7 4. 189,000Page IL A , feeeeat -thips lnventofy to its boat at amark-up of 125% on cost. The required balance of the oaeee. fr comin aluation account isPt:425,000. During the year, the home office sent werchending Shows PL B00 eats P9.000,000. At the start of the year, the branch's Statement of Finehelat Position 800,000 of inventory on hand that was acquired from the home office | 41. What is the amount that will be debited in the Allowance for Unrealized Gross Margin in Branch | Inventory account at the end of the year? 12,250,000 cee MUO - . 10,825,000 : & 1,185,000 qon’ 7700 4. 2'610,000 2 ‘The following information are available from the books ofthe home and branch, | HOB BB | Cash 2,200,000 132,000 Accounts Receivable 360,000 200,000 Inventory beginning 600,000 Shipment from home office = 912,000 Purchases 2,400,000 80,000 Freight in 64,000 36,000 Shipment to branch 760,000 Investment in branch 1,200,000 Allowance for mark up 152,000 Equipment 1,440,000 800,000 Accumulated depreciation 144,000 80,000 | Accounts payable * 144,000 80,000 Share capital 4,000,000 Retained Eamings beginning 304,000 Home office 1,200,000 Sales 3,200,000 1,000,000 Operating expenses 440,000 200,000 Inventory end ~ From outside purchases 920,000 20,000 + From home office 480,000, 42. What is the combined fit income? a. 1,756,000 b. 1:720,000¢ ), © 1,748,000 VY). 1,648,000 oN 43. What is the ending inventory jn the combined financial statement? 920,000 1,420,000 1,320,000 1,340,000 44, What is the home office account in the books of the branch? a 0 b. 1,472,000 y ©. 1,544,000 . 1,000,000B 45, What is the cost of goods sold of the home office? 1,384,000 b. 1,320,000 © 2,144,000 | 4. 2904/00 j 46 The net income reported by the branch in its separnte income statement is different from the me reported by the home office in the combined income statement of the company. In the absence of other errors, the mainly difference is due to the f,_ Presence of inventory acquired from outsiders in the branch’s beginning and ending inventory. 1b. Understatement of total | a Boods available for sale reported by the branch in its separate income | statement ¢- Overstatement of net income reported by the branch in its separate income statement. 4 Overstatement of cost of sales reported by the branch in its separate income with respect to ‘goods coming from home office. / 47. The freight on shipments to branch paid by the branch is recorded by the home office as Credit to investment account Credit freight in —» ‘ | Debit freight in Not recordeg. f aege ‘TFC Manufacturing Company had the following account balances as of August 1 Raw Materials (direct and indirect) Inventory P 7,250 ‘Work in Process Inventory 11,400 Finished Goods Inventory 2,300 During August, the company had the following transactions. Factory overhead is applied based on | direct labor costs, a. Purchased raw materials, P50,000; terms 1/50, 1/60. b. Materials requisitioned for the month + P45,000; 20% for Job #10; 25% for Job #11; 40% for Job #12; balance for indirect materials. ©. The time tickets of payroll summaries indicated: Production Department Supervision and Others Cost Hof hours Job# 10 P15,000 5,000 P 500 Jobs 11 21,000 7,000 1,500 | Job# 12 30,000, 10,000, 2,000 d. Recorded the applied overhead. Additional factory overhead incurred wag P38,5f ‘ ©. Only Job Ws 10 and 11 were completed and sold. Cash was collected for the price of cost plus 15%. £ On August 1, there were two jobs in process: Total Cost Direct Materials Direct Labor Applied FOH: 0 6,500 P2,900 Pp? Pp? fom? ” Pasion mi. > 48, The balance of work in Process Invenoryas(t ‘August 31: a. 60,000 = b. 72,000 ©. 74,000 4. 83,400 49. What is the Cost of Goods Sold during August: 96,450 fb, 84,000 ©, 82,150 i 4, 98,450 jThe STU Com Page 1 pat Wes to \ following cos per tai at 1078. One order from Mr. ABC for 5.000 units showed the Direct materials ema P3.30 iz Direct labor P15 fam o ae mop at 140% of direct labor cost if defected work is charged to the job, 150% it ble tion revealed that 250 of the units were improperly manufactured. ‘These sie Were disassembled, and Properly manufactured. The per unit cost of correcting the defective products prensts Of PO.IS for materials, PO25 for dicer labor; and manufacturing overhead at the termined rate. 50. jon the cost per unit produced, assuming that the rework costs are ‘charged to the customer, Mr, & 6.5375 ( ca eae um \ Ce boas XS 4d. 7.2500 \% . Fie i \ St What isthe cos per produced, assuming thatthe fewtik cost are charged t/Facto) ovechead Control? >) = 6.8250 _t eres 6.6250 4 653757 . Wy j 1¢ 7.4000 b. c 4 Produce 1 bottle of perfume. ‘52. What is the material price variance? ~~ a 20,000F \b& IT S00F ¢ © 20,0000 7 4. 175000 ‘53. What is the material quantity vanance? a 130625U f b. 83,125 U + ©. 130,625 F 4. 83,125 F Breakout Co, produces two products which go through a single process. The same amouat of disposal Costs incurred whether the products are soldat spli-off or after further processing, On May 2016 the Joint cost of the production process amounted tyP 105,000. IU +f f Products ~ [Units produced Net realizable value A | 4000 os P5 TI" B 72,000 P2.50 Ls [Remnants 4000 Pd =3 Remnants are considered a by-product of the process and are sold to other factories, 54, Ifthe company accounts forthe ly-product sing the NRV method, and if it costs the company an D ‘additional P1.50/anit to process product A, how much is the total cast of producing product A? a 35,600 ay \ b. 59,400 ye \) ©. $3,400 5 ae 41,600Page 14 Nakima Manufacturing purchases trees from Cascade Lumber and processes them up tothe splitott point where two products (paper and penal esings) we Donn casings) are obsined. The products ar Wee eid independent company that markets and distributes them to retail outle followi was collected for the month of November; ‘ae Trees processed: SO tes (yield is 30,000 sheets of paper and 30,000 pencil casings and no scrap) | Production: paper 30,000 sheets | Pencil casings 30,000 Sales: paper 29,000 at PO.04 per sheet Pencil casings 30,000 at PO.10 per casing Cost of purchasing 50 trees and processing them up tothe splitoff point to yield 30,000 sheets of paper and 30,000 pencil casings is P1,500, aE, Corea: ‘Yakima’s accounting department reported no beginning inventories and ending inventory of 1,000 sheets of paper. 55 If the sales value at spitoff method is used, what isthe approximate production cost for each pen casing a. 0.02504 b. 0.0255 ©. 000335 | 4. 00357 | Tropical Company manufactures three products in a joint process which costs P25,000. Each product | can be sold at split-off or processed further and then sold. 10,000 units of each product are ‘manufactured. The following information is available forthe three products: Sales Value] Separable Processing Sales Value Product atSplit-off | Costs after Split-off at Completion \ A PI PO P21 { B 10 4 17 (Py A —— o 15 6 19 56. To maximize profits, which products should Tropical process further? a. Product A only ) b. Proc B ot? \ ¢. Product C d. Product A, B, and C JKLM Company buys Antcle G for PO.80 unit. At the end of processing in Department 1 Article G split into products D, E and F. Product Dis soldat splt-off point with no further processing, E and F require further processing before they can be sold; E is processed in Department 2; and F is processed in Department 3. The following is a summary of costs and other related data for the year ended July 31, 2016. Department 1 Department 2 Department 3 Cost of Anticle G i rf P 1,440,000 - » oe ed P- 210,000 P 675,000 P975,000 Panny pratoad P_ 150,000 P 315,000 735.000 Product D Product E Product F , 300,000 450,000 675,000 Unit sold ; or 0 : 150,000 = 5. Peco. eS ae P 450,000 1,440,000 P2,126250 es JKLM uses the estimated net realizable value method to allocate joint cost. 57, What is the cost of Products E sold for the year ended July 31, 2016 a 1,470,000 b. 1,440,000 ec. 990,000 4. 1,350,000D> Page 15 Marlan Manu molding doxinet’ 18 produces a product that passes through two departments. The units from the by adding the rant ae completed inthe assembly department, The units are completed in assembly costs, The ita naining direct materials when the units are 60% complete with respect to conversion follotts, iar retustion activity in the assembly department for the current month is presented as farlan uses the FIFO method. Beginning inventory units (25% complete with respect to conversion costs) 8,000 Units transferred in from the molding department during the month 42,000 Units to account for 50,000 Units completed and transferred to finished goods inventory 38,000 Ending inventory units (40% complete with respect to conversion costs) _12,000. Units accounted for 58. How many units were transferred out from the molding department? 38,000 units YP5 b 42,000 units ¥ “ ¢. 30,000 units d. 40,800 units 59. What are the equivalent units in Marlan’s assembly department for direct materials for the current month? a. 40,800 units B b b. 38,000 units J » Ww yy 42,000 units d. 30,000 units Travis Petroleum is a small company that acquires crude oil and manufactures it into three intermediate products, differing only in grade. The products are Grade One, Grade Two, and Grade Three. No beginning inventories of finished goods ot work-in-process existed on November 1. The production costs for November were as follows: Crude oil acquired and put into production 4.000.000 Joint direct labor and related costs 2,000,000 Joint manufacturing overhead 3,000,000 ‘The output and sales for November were as follows: Grade One Grade Two Grade Three Barrels produced ko’ >300,000, ~ 240,000. 120,000 Barrels sold sont | 120,000 120,000 Prices per barrel sold P3 P40 P50 60, What isthe portion of Travis" joint production costs assigned to Grade One based upon the relative sales value of output? 4,091,000 Sun’ b. 3,512,000 my Aun © c. 3,292,683 90 ‘ 4. 1,636,000 2 14059 yu {is joint production costs assigned to Grade Two based upon the relative 61. What is the portion of Tr sales value of output? a. 4,091,000 b. 3,512,195 ¥ ) © 3,293,000 d. 1,636,000Page 16 Reed Company. has the following information for November: Beginning Work in Process Inventory (70% complete as to conversion) 6,000 units Started 24,000 units Ending Work in Process Inventory (10% complete as to conversion) 8,500 units Beginning WIP Inventory Costs: Material P23,400 Conversion $0,607 Current Period Costs: Material P31,500 : Conversion 76.956 All material is added atthe start of the process and all finished products are transferred out. 62, How many units were transferred out in November? a 15,500 ~ — ». 18,000 a Ny ie alisoore G 4. 24,000 63, Assume that weighted average process costing is used. What isthe cost per equivalent unit for material? a 0.55 8 tos eo V eu d. 1.83» 64. Assume that FIFO process costing is used. What is the cost per equivalent unit for conversion? a 344 = b. 4247 © 571 a 7.03 The Action Corporation manufactures eleerical meters. For May, there were no beginning inventories of raw materials and no beginning and ending work-in-process. Action uses a JIT manufacturing System and backilush costing with three trigger points for making entries in the accounting system, * Purchase of raw materials ~ debited to Raw and In Process account Completion of finished goods — debited to Finished Goods account © Sale of finished goods Action’s May standard cost per meter are direct materials, P25; and conversion costs, P20. The following data apply to May manufacturing: Raw materials and components purchases 550,000, Conversion costs incurred 440,000, Number of finished 21,000 ‘Number of finished units sold 20,000 65. How much isthe balance of Raw in Provess account atthe end of May’? a. 25,000 i a (\_ b. $50,000 C 25,0004 d. 50,000 66. How much is the balance of Finished Goods inventory account atthe end of May? a. 945,000 Yb $0,000 45,000 7 d. 905,000se a wean ihe tion eye of the in Naruto blending d Ele. Insp ling department, the first stage of the z Ae Points a{ the st ofthe process. The following ifeence available ce pce Aut 31 (end), S096 complete “ ms 175,000 ansferred to next department "7 foes * Aug. | (beg), 60% complete 8 10 conversion cast 150,000 Lost in production 75,000 67. What are the EUP for conversion? AVE & 362,500 72,500 ® b 272500 362'500 & 437500 347's00 i 4 347500 437500 f 4 68. Which of the following will increase the cost of ood sold of a manufacturing concem during the £ pulusing entry for insignificant over-applicaton of factory overhead. > b. Decrease in the salary ofthe factory workers during the year } __ & Increase in the work in process inventory during the year \ 2 Decrease in the finished goods inventory during the year, by aworntts y AYO 69. The journal entry to record the usage and -Aebit to direct material efficiency variance. @ The actual direct inatesial-used Tn should have been used. b. The actual direct material used i i should have been used, & The actual purchase price of direct material is higher than the standard price of direct material, 4 The actual purchase price of direct material is lower than the standard price of direct material. Purchase of direct materials during the year includes a_ Which of the following statements is cortect? ,__ production is higher than the standard direct material that in production is lower than the standard direct materials that 70. Process Inc. employs process costing method to account for operation and production of the company, during the first year if coniputed under aver method? a. The cost of goods manufactured computed under either methods will be the same, t b. The cost of goods manufactured computed under either method will only be the same if there is 10 work in process ending inventory. oP The cost of goods manufactured computed under averay materials are added at the end of the process 4. The cost of goods manufactured computed under FIFO process costing will be higher when ‘materials are added at the beginning of the process. its inventory. If this is the first year of which is true as to the cost of goods manufactured Tage process costing method or FIFO process costing ge process costing will be higher when END \