Polytechnic University of the Philippines

ACCO 30093 – Integrating Review Course in Financial Accounting and Reporting

First Integrating Examination
May 15, 2023 (8:00 - 11:00 am)

Name: ________________________________ Score: _________________

Branch: _______________________________
This examination is good for three hours. Please read each problem carefully and select
the best possible answer from the multiple choices. Shade the corresponding letter of
your answer on the answer sheet provided. If your answer is not in the choices, shade E.
No cheating. Any form of cheating will not be tolerated and may result to a score of zero
(0) in this examination.

1.​ Which of the following is not considered cash for financial reporting purposes?
a.​ Bank charges for the period
b.​ Errors made by the company
c.​ Petty cash funds and change funds
d.​ Postdated checks and IOU’s

2.​ Cash and cash equivalents on the statement of financial position includes:
a.​ Check drawn before the reporting date but held for later delivery to creditors.
b.​ 120-day time deposits.
c.​ USD-denominated deposit that is restricted for withdrawal.
d.​ Cash reserved for the acquisition of equipment.

3.​ CPA Company had the following balances on December 31, 2022:
​ Cash in bank ​ ​ ​ ​ ​ ​ P5,200,000
​ Cash on hand​​ ​ ​ ​ ​ 350,000
​ Cash fund set aside for dividend payable in 2023​ 200,000
​ Cash fund set aside for land acquisition in 2023​ 1,500,000
​
The cash in bank included P250,000 compensating balance against short-term borrowing
and is not legally restricted as to withdrawal. The cash on hand included a check of
P100,000 payable to the entity dated January 4, 2023.

What amount should be reported as cash under current assets on December 31, 2022?
a.​ P5,400,000
b.​ P5,750,000
c.​ P5,650,000
d.​ P7,150,000

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 Polytechnic University of the Philippines
ACCO 30093 – Integrating Review Course in Financial Accounting and Reporting
First Integrating Examination
May 15, 2023 (8:00 - 11:00 am)

4.​ CPA Company provided the following account balances on December 31, 2022:
​ Cash in bank ​ ​ ​ ​ ​ ​ ​ 3,125,000
​ Cash on hand​​ ​ ​ ​ ​ ​ 455,000
​ Cash restricted as addition to plant expansion
expected to be disbursed in 2023​ ​ ​ 1,850,000
​ Cash in money market account​ ​ ​ ​ 750,000
​ Treasury bill purchased November 1, 2022
​ ​ maturing January 3, 2023​ ​ ​ ​ 3,500,000
​ Treasury bill purchased December 1, 2022
​ ​ Maturing March 31, 2023​ ​ ​ ​ 2,000,000

Cash in bank included P400,000 of compensating balance against short-term borrowing

arrangement. The compensating balance is not legally restricted to withdrawal.

What total amount should be reported as cash and cash equivalents on December 31,
2022?
a.​ 8.230,000
b.​ 7,830,000
c.​ 9,080,000
d.​ 9,480,000

5.​ The following information has been extracted from the accounting records of CPA Company
at December 31, 2022:
Cash on hand ​ ​ ​ ​ ​ ​ P40,800
Certificate of time deposit with maturity of 3 months​ 1,000,000
Customer’s note receivable ​ ​ ​ ​ ​ 40,000
Reconciled balance in ABC Bank checking account​​ (14,000)
Reconciled balance in DEF Bank checking account ​ 374,000
Balance in XYZ savings account​ ​ ​ ​ 342,400
Customer’s post-dated check​​ ​ ​ ​ 54,000
Cash in bond sinking fund​ ​ ​ ​ 48,000
Postage stamps​ ​ ​ ​ ​ ​ 17,200
What amount should CPA Company report as “Cash and cash equivalents” at December 31,
2022?
a.​ P1,805,200
b.​ P1,757,200
c.​ P1,743,200
d.​ P1,703,200

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 Polytechnic University of the Philippines
ACCO 30093 – Integrating Review Course in Financial Accounting and Reporting
First Integrating Examination
May 15, 2023 (8:00 - 11:00 am)

6.​ On December 31, 2022, CPA Company’s cash account balance per ledger of P3,520,000
includes: Demand deposit, P1,500,000; Certificates of 30-day deposits, P500,000; NSF
check of customer, P20,000; Money market instrument due June 30, 2023, P1,000,000; IOU
from employee, P30,000; Pension fund, P400,000; Petty cash fund, P10,000; Customers
check dated January 31, 2023, P60,000.

How much “cash and cash equivalents” should be shown on the December 31, 2023
balance sheet?
a.​ P2,010,000
b.​ P2,060,000
c.​ P2,100,000
d.​ P2,210,000

7.​ Which of the following is true regarding the imprest petty cash system?
a.​ Entries are made to the Petty Cash account only to increase or decrease the size of the
fund.
b.​ The Petty Cash account is debited when the fund is replenished.
c.​ The imprest petty cash system in effect adheres to the rule of disbursement by check.
d.​ All of these are not true.

8.​ The petty cash fund of CPA Company on December 31 is composed of the following:
​ ​ Coins and currencies​ ​ ​ ​ ​ ​ 14,000
Petty cash vouchers:​
Gasoline payments​ ​ ​ ​ ​ 3,000
Supplies​ ​ ​ ​ ​ ​ 1,000
Cash advances to employees​ ​ ​ 2,000
Employee’s check returned by bank marked NSF​ 5,000
Check drawn by the company payable to the order
of the petty cash custodian, representing
her salary​ ​ ​ ​ ​ 20,000
A sheet of paper with names of employees together
​ with contribution for a birthday gift of a
co-employee in the amount of​ ​ 8,000

The petty cash ledger account has an imprest balance of P50,000.

What is the correct amount of petty cash on December 31?

a.​ P34,000
b.​ P14,000
c.​ P39,000
d.​ P42,000

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 Polytechnic University of the Philippines
ACCO 30093 – Integrating Review Course in Financial Accounting and Reporting
First Integrating Examination
May 15, 2023 (8:00 - 11:00 am)

9.​ CPA Company prepares a four-column bank reconciliation. Check no.77 was written for
P8,980 on the books, but the check was written and cleared the bank for the correct amount
P9,880. The correct treatment on the reconciliation would be:
a.​ on the bank side, add P900 to receipts and add P900 to ending balance.
b.​ on the bank side, deduct P900 from payments and add P900 to ending balance.
c.​ on the book side, add P900 to payments and deduct P900 from ending balance.
d.​ on the book side, deduct P900 from payments and add P900 to ending balance.

10.​For purpose of bank reconciliation, debit memos are:

a.​ Added to the bank balance.
b.​ Added to the book balance.
c.​ Deducted from the book balance.
d.​ Deducted from the bank balance.

11.​CPA Company prepared the following bank reconciliation on June 30:

​ Balance per bank​ ​ ​ ​ 9,800,000
​ Deposit in transit​ ​ ​ ​ 400,000
​ Outstanding checks​​ ​ ​ (1,400,000)
​ Balance per book​ ​ ​ ​ 8,800,000
There were total deposits of P6,500,000 and charges for disbursement of P9,000,000 for
July per bank statement. All reconciliation items on June 30 cleared with the bank on July
31. Checks outstanding amounted to P1,000,000 on July 31.

What is the amount of cash disbursement per book in July?

a.​ 7,600,000
b.​ 8,400,000
c.​ 8,600,000
d.​ 9,400,000

12.​The following was included in the bank reconciliation of CPA Company on May 31 of the
current year:
Total company receipts for May​ ​ ​ P850,000
Total credits per bank in May ​ ​ ​ 800,000
Credit memo for April recorded in May ​ ​ 60,000
Credit memo for May not yet recorded ​ ​ 80,000
Deposit in transit, May 31 ​ ​ ​ ​ 100,000
Erroneous receipt by the company during May,
no correction was made until the following year ​ 10,000
What is the amount of deposit in transit at April 30?
a.​ P32,000
b.​ P40,000
c.​ P42,000
d.​ P50,000

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 Polytechnic University of the Philippines
ACCO 30093 – Integrating Review Course in Financial Accounting and Reporting
First Integrating Examination
May 15, 2023 (8:00 - 11:00 am)

13.​The following information was included in the bank reconciliation for CPA Company for
October.
Checks charges recorded by bank in October,
including October service charge for P30 ​ ​ P17,210
Service charge made by bank in September and
recorded on the books in October ​ ​ ​ 20
Total of credits to Cash in all journals during October ​ 19,802
Customer’s NSF check returned as a bank charge in
October (no entry made on books) ​ ​ ​ 100
Customer’s NSF check returned in September and
redeposited in October (no entry made on books
in either Sept or Oct) ​​ ​ ​ ​ 250
Outstanding checks at October 31 ​ ​ ​ ​ 13,260
Deposits in transit at October 31 ​ ​ ​ ​ 600
How much is the outstanding checks at October 31?
a.​ P10,558
b.​ P10,658
c.​ P10,668
d.​ P15,962

14.​A review of the accounting records reflected an adjusting entry on December 31, 2022 to
reconcile the bank statement balance and the cash balance shown in the company’s
accounting records, as follows:
Cash in Bank ​​ ​ ​ 6,272.60
Accounts Receivable ​​ ​ 15,202.40
Expense ​ ​ ​ ​ 125.00
Notes Receivable​​ ​ ​ 20,000.00
Interest Revenue ​​ ​ ​ 1,600.00

Pre-adjustment cash balance in the accounting records was P76,837. At December 31,
outstanding checks and undeposited collections were P12,075 and P7,280, respectively.

What is the bank statement balance at December 31, 2022?

a.​ P70,564.40
b.​ P78,314.60
c.​ P83,109.60
d.​ P87,904.60

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 Polytechnic University of the Philippines
ACCO 30093 – Integrating Review Course in Financial Accounting and Reporting
First Integrating Examination
May 15, 2023 (8:00 - 11:00 am)

Use below given for 15-16:

CPA Company is engaged in the sale of ladies’ bags that are being distributed in some malls
located in Metro Manila. The company’s accounting assistant prepares monthly bank
reconciliation. At December 31, 2022, cash receipts and cash disbursements per general ledger
(Cash in Bank account) of CPA Company are P321,000 and P265,000, respectively. The bank
statement for the same month indicates that only P302,000 in deposits were received during the
month and checks clearing the bank were P326,000. The November 30, 2022 bank
reconciliation showed deposits in transit of P95,000. Outstanding checks at December 31, 2022
were P125,800.

15.​How much were the deposit in transit at December 31, 2022?

a.​ P62,500
b.​ P79,000
c.​ P114,000
d.​ P127,500

16.​How much were the outstanding checks at November 30, 2022?

a.​ P62,300
b.​ P64,800
c.​ P186,800
d.​ P189,300

17.​ Nontrade receivables are classified as current assets only if they are reasonably expected
to be realized in cash:
a.​ Within one year or within the operating cycle, whichever is longer.
b.​ Within one year or within the operating cycle, whichever is shorter.
c.​ Within one year, the length of the operating cycle notwithstanding.
d.​ Within the normal operating cycle.

18.​Loans and receivables are

a.​ Non-derivative financial assets without fixed or determinable payments that are not
quoted in an active market.
b.​ Non-derivative financial assets without fixed or determinable payments that are quoted in
an active market.
c.​ Non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market.
d.​ Non-derivative financial assets with fixed or determinable payments that are quoted in an
active market.

19.​Which of the following statements is correct concerning notes receivables?

a.​ Long-term interest-bearing notes receivable shall be measured at present value.
b.​ Long-term interest-bearing notes receivable shall be measured at face value.
c.​ Long term non-interest-bearing notes receivable shall be measured at face value.
d.​ Long term receivables, regardless of its nature or period, shall be measured at its face
value.

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 Polytechnic University of the Philippines
ACCO 30093 – Integrating Review Course in Financial Accounting and Reporting
First Integrating Examination
May 15, 2023 (8:00 - 11:00 am)

20.​CPA Company makes use of a single "receivable control" account to account for both receivables
and payables. As December 31, 2022, the receivable control account has a debit balance of
P1,940,000 composed of the following:
Debit​ ​ ​ Credit
Accounts receivable - customer​ ​ 3,040,000
Accounts receivable - officers​​ ​ 200,000
Subscription receivable ​ ​ ​ 320,000
Accounts payable - suppliers​​ ​ ​ ​ 1,680,000
Cash received in advance from customers
for goods to be shipped on 2023 ​ ​ ​ 40,000
Bad debts using percentage of net credit sales​ ​ 60,000

Additional information:
●​ CPA Company recorded the receipt of post-dated checks from customers amounting to
P160,000 on December 28, 2022.
●​ The accounts receivable - customer is net of credit balances in customers' accounts of
P80,000 due to overpayment.
●​ The accounts payable - suppliers account is net of debit balances of creditors amounting
to P120,000.
●​ Upon analysis of the aged accounts receivable, it was determined that the allowance for
doubtful accounts should be P80,000.
How much should be reported as trade and other receivables under the current asset section of the
December 2022 statement of financial position?
a.​ P3,520,000​ ​ ​ ​ ​
b.​ P3,540,000​
c.​ P3,580,000
d.​ P3,440,000

21.​On December 31, 2022, the following were included by CPA Company as current receivables:

Trade Accounts Receivable​ ​ ​ ​ ​ P465,000

Allowance for Bad Debts​ ​ ​ ​ ​ 10,000
Claim Against Supplier for goods lost in transit
(FOB Destination Point)​ ​ ​ ​ 15,000
Selling Price of unsold goods held by consignee
at 130% of cost​ ​ ​ ​ ​ 130,000
Security Deposit on lease of warehouse used for
storage of inventories ​ ​ ​ ​ 150,000
How much is the current receivables, net to be reported in the balance sheet of CPA Company as of
December 31, 2022?
a.​ P470,000
b.​ P600,000 ​
c.​ P620,000​
d.​ P750,000

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 Polytechnic University of the Philippines
ACCO 30093 – Integrating Review Course in Financial Accounting and Reporting
First Integrating Examination
May 15, 2023 (8:00 - 11:00 am)

22.​On December 1, 2022, CPA Company gave AAA a P600,000, 12% loan in exchange for proceeds
of P582,000. The proceeds were net of P18,000 non-refundable loan origination fee. Monthly
installments of P13,350 were due starting January 1, 2023. The effective rate of the note without
loan origination fee is 12% while the imputed rate of the note with loan origination fee is 13.4%.
CPA Company accounts for the note as a receivable.

How much is the accrued interest receivable to be recognized in the December 31, 2022 balance
sheet of CPA Company?
a.​ P5,820
b.​ P6,000
c.​ P6,500
d.​ P6,700

23.​On December 31, 2022, CPA Company finished consultation services and accepted in exchange a
promissory note with a face value of P400,000, a due date of December 31, 2025, and a stated rate
of 5%, with interest receivable at the end of each year. The fair value of the services is not readily
determinable and the note is not readily marketable. Under the circumstances, the note is
considered to have an appropriate imputed rate of interest of 10%. (Round-off present value factors
to 4 decimal places). Determine the present value of the note.
a.​ P336,598
b.​ P400,000
c.​ P365,270
d.​ P350,258

24.​On January 1, 2023, CPA Company sold a machine to ABC, who signed a non-interest-bearing
note requiring payment of P90,000 annually for seven years. The first payment was made on
January 1, 2023. The prevailing rate of interest for this type of note at date of issuance was 10%.
(Round-off present value factors to 4 decimal places). How much should be recorded as sales?
a.​ P481,977​ ​ ​ ​ ​
b.​ P438,156
c.​ P392,400
d.​ P321,300

25.​On January 1, 2023, CPA Company sold a piece of equipment that originally cost P500,000 with
accumulated depreciation of P250,000. CPA Company received a P300,000 note as payment for
this transaction. The note is payable in three annual installments of P100,000 beginning December
31, 2023 plus interest at the rate of 12% based on the outstanding balance. At January 1, 2023, the
prevailing rate of interest for a similar obligation is 10%. (Round-off present value factors to 4
decimal places). How much interest income must be recognized on December 31, 2024 in relation
to the note?
a.​ P31,026
b.​ P20,528
c.​ P12,000
d.​ P10,191

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 Polytechnic University of the Philippines
ACCO 30093 – Integrating Review Course in Financial Accounting and Reporting
First Integrating Examination
May 15, 2023 (8:00 - 11:00 am)

26.​How will you describe the total amount determined by an entity in the series of computations
based on an aging schedule of accounts receivable?
a.​ It is the doubtful accounts expense reported in the income statement.
b.​ It is the ending balance of allowance for uncollectible for the year.
c.​ The amount combined with the accounts written off is the provision for expense for
the period.
d.​ It is the required adjustment in the balance of allowance for uncollectible accounts.

27.​CPA Company uses the statement of financial position approach in estimating uncollectible
accounts expense. The company prepares an adjusting entry to recognize this expense at
the end of each month. During the month of July, the company write-off a P1,000 receivable
and made no recoveries of previous write-offs. Following the adjusting entry for July, the
credit balance in allowance for doubtful accounts was P2,500 larger than it was in July 1.
What amount of uncollectible account expense was recorded for July?
a.​ P1,000
b.​ P1,500
c.​ P2,500
d.​ P3,500

28.​ The following information pertains to an entity’s accounts receivable:

Accounts receivable, beginning P3,800,000

Credit sales 18,000,000
Sales returns 280,000
Collections 15,300,000
Promissory notes received in payment of accounts receivable 2,000,000
Accounts receivable written off as uncollectible 160,000
Collections on accounts previously written off 60,000

The entity’s accounts receivable balance at the end of the period is

a.​ P6,060,000
b.​ P4,060,000
c.​ P3,060,000
d.​ P3,000,000

29.​Statement 1: The equity of the assignee in a financing transaction through receivables is the
difference between the assigned accounts receivable and the liability related to it.
Statement 2: Proceeds from factoring may be computed by getting the difference between
the Net Selling Price and the total losses (Loss from factoring and Loss from recourse
obligation.)
a.​ Only Statement 1 is true.
b.​ Only Statement 2 is true.
c.​ Both statements are true.
d.​ Both statements are false.

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 Polytechnic University of the Philippines
ACCO 30093 – Integrating Review Course in Financial Accounting and Reporting
First Integrating Examination
May 15, 2023 (8:00 - 11:00 am)

30.​CPA Corporation factored receivables amounting to P1,500,000. The factor agreed to lend
80% of the factored amount and 5% of the loan was held back by the factor. Finance and
other charges of P20,000 and P12,000 were also paid in the same day. How much would be
the proceeds from factoring?
a.​ P1,108,000
b.​ P1,140,000
c.​ P1,168,000
d.​ P1,200,000

31.​CPA Company has the following notes receivable in its safe:

​ a. 10% 180-day note for P600,000 dated January 1, 2023
​ b. 8% 90-day note for P250,000 dated December 17, 2022
On February 15, the owner is in need of immediate cash and decided to discount the notes
for 12%. How much is the proceeds from the transaction?
a.​ P818,100
b.​ P845,700
c.​ P849,100
d.​ P870,450

32.​CPA Company has a total accounts receivable of P5,000,000 from its catering customers
whose credit terms are 2/10, n/15. On August 1, 2023, it needed P2,500,000 cash to
purchase equipment for its restaurants and it decided to get a financing by assigning
P3,000,000 receivable to the bank as collateral. ABC Bank provided the loan with 10%
interest.

During August, the company collected P446,000 from the customers of the assigned
receivables, P250,000 of which were payments beyond the discount period. CPA Company
remitted the full amount collected to ABC Bank.

On August 31, 2023, how much is the equity of CPA Company in the assigned accounts
receivable?
a.​ P471,000
b.​ P475,000
c.​ P496,000
d.​ P500,000

33.​Which of the following items is not included in the cost of an inventory item?
a.​ Purchase price
b.​ Import duties
c.​ VAT on purchase
d.​ Freight In on goods in transit, shipped FOB Shipping point

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 Polytechnic University of the Philippines
ACCO 30093 – Integrating Review Course in Financial Accounting and Reporting
First Integrating Examination
May 15, 2023 (8:00 - 11:00 am)

34.​Statement 1: Net realizable value of work-in-process inventory items is computed as

estimated selling price-estimated cost to complete.
Statement 2: Storage cost of a finished product is not part of the inventoriable cost.
a.​ Only Statement 1 is true.
b.​ Only Statement 2 is true.
c.​ Both statements are true.
d.​ Both statement are false.

35.​On August 1, 2023, CPA Company purchased “Marry Me” merchandise light sticks from
Happy International for an amount of ¥12,000,000 if paid within the normal credit period of
30 days. However, payment may be deferred upto 3 months subject to revised invoice
amount of ¥12,200,000. The exchange rate on August 1 was ¥1:P0.40. Import duties and
transport charges of P576,000 and P224,000 were also paid. CPA Company paid the
invoiced amount on October 15, 2023 when exchange rate was ¥1:P0.45.

What amount should the goods be initially recorded?

a.​ P4,800,000
b.​ P5,600,000
c.​ P5,490,000
d.​ P6,290,000

36.​CPA Corporation purchased vatable goods from CMA Company on December 28, 2023
amounting to P435,000, exclusive of VAT. The goods were shipped FOB Shipping Point and
freight was prepaid by the seller amounting to P25,000. For how much should these goods
be recorded in the books of CPA Corporation if it uses perpetual inventory system?
a.​ P435,000
b.​ P460,000
c.​ P487,200
d.​ P512,200

37.​CPA Company conducted an actual physical count on December 31, 2021. The following
items were excluded from the physical count:

Merchandise held by CPA Company on consignment basis P 610,000

Merchandise shipped by CPA Company FOB destination to a
client on December 31, 2021 and was received by the client 380,000
on January 5, 2022
Merchandise shipped by CPA Company FOB shipping point to
a customer on December 31, 2021 and was received by the 460,000
customer on January 5, 2022
Merchandise shipped by a vendor FOB destination on
December 31, 2021 was received by CPA Company on 830,000
January 5, 2022
Merchandise purchased FOB shipping point was shipped by
the supplier on December 31, 2021 and received by CPA 510,000
Company on January 5, 2022
​

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 Polytechnic University of the Philippines
ACCO 30093 – Integrating Review Course in Financial Accounting and Reporting
First Integrating Examination
May 15, 2023 (8:00 - 11:00 am)

​ What amount should be reported as CPA Company’s inventory on December 31, 2021?
a.​ 5,300,000
b.​ 4,690,000
c.​ 3,800,000
d.​ 4,920,000

38.​CPA Company had the following transactions during December 2022:

Inventory shipped on consignment to ABC Company​ ​ P1,800,000
Freight paid by CPA Company​ ​ ​ ​ ​ 90,000
Inventory received on consignment from XYZ Company​ ​ 1,200,000
Freight paid by XYZ Company​ ​ ​ ​ ​ 50,000

No sales of consigned goods were made in December 2022.

What amount should be included in CPA Company’s inventory on December 31, 2022?
a.​ 1,200,000
b.​ 1,250,000
c.​ 1,800,000
d.​ 1,890,000

39.​At the beginning of the year, CPA Realty embarked on a real estate development project
involving single family dwellings. On July 1, 2023, CPA Realty purchased a track of land for
60,000,000. CPA Realty incurred additional cost of P10,000,000 during the remainder of
2023 in preparing the land for sale as follows.
​
Subdivision Phase Number of lots Sales price per lot

1 100 400,000

2 200 300,000

3 400 250,000

What amount of cost should be allocated Phase 1 lots?

a.​ P10,000,000
b.​ P12,000,000
c.​ P13,500,000
d.​ P14,000,000

40.​An entry debiting inventory and crediting cost of goods sold would be made when
merchandise is
a.​ Sold and the periodic system is used.
b.​ Sold and the perpetual system is used.
c.​ Returned and the perpetual system is used.
d.​ Returned and the periodic system is used.

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 Polytechnic University of the Philippines
ACCO 30093 – Integrating Review Course in Financial Accounting and Reporting
First Integrating Examination
May 15, 2023 (8:00 - 11:00 am)

41.​CPA Company sells electric stoves. It uses the perpetual inventory system and allocates
cost to Inventory on a first-in, first-out basis. The company’s reporting date is December 31.
At December 1,2023, inventory on hand consisted of 350 stoves at P820 each and 43
stoves at P850 each. During the month ended December 31,2023, the following inventory
transactions occurred (all purchases and sales transactions are on credit).

2023
Dec​ 1​ Sold 300 stoves for P1,200 each.
​ 3​ Five stones were returned by customers. They originally cost​
​ ​ P820 each and were sold for P1,200 each.
​ 9​ Purchased 55 stoves at P910 each.
​ 10 ​ Purchased 76 stoves at P960 each.
​ 15​ Sold 86 stoves for P1,350 each.
17​ Returned on damaged stove to the supplier. The stove have bee
purchased on Dec 9.
22​ Sold 60 stoves for P1,250 each.
​ ​ ​ 26​ Purchased 72 stoves at P980 each.

What in the FIFO cost of CPA Company’s inventory on December 31,2023?

a.​ P148,930
b.​ P148,980
c.​ P133,607
d.​ P126,280

42.​CPA Company is a wholesaler of photography equipment. The activity for July is shown
below:

Date Transaction Units Cost

July 1 Inventory 200 P3,600
7 Purchase 300 3,700
12 Sales 360
21 Purchase 500 3,788
22 Sales 380
29 Purchase 160 3,811

How much is the Cost of Sales for FIFO?

a.​ P2,739,120
b.​ P2,746,400
c.​ P2,764,640
d.​ P2,750,440

43.​In 2021, CPA Company experienced a decline in the value of inventory resulting in a write
down from cost of P3,600,000 to net realizable value of P3,000,000. CPA Company used
the allowance method to record any necessary adjustment. In 2022, market conditions have
improved dramatically and on December 31, 2022, the inventory had a cost of P5,000,000
and net realizable value of P4,600,000.

13
 Polytechnic University of the Philippines
ACCO 30093 – Integrating Review Course in Financial Accounting and Reporting
First Integrating Examination
May 15, 2023 (8:00 - 11:00 am)

What is included in the adjusting entry on December 31, 2022?

a.​ Debit gain on reversal of inventory write-down P200,000.
b.​ Credit gain on reversal of inventory write-down P400,000.
c.​ Debit allowance for inventory write-down P200,000.
d.​ Credit allowance for inventory write-down P400,000.

44.​Which of the following would cause an increase in the cost ratio as used in the retail
inventory method?
a.​ Lower markdowns
b.​ Sales Returns and allowances
c.​ Higher initial markups
d.​ Higher markup cancellations

45.​CPA Company sold merchandise goods at a gross margin of 30%. On July 01, 2022 all of
the merchandise inventory at the warehouse was destroyed by a huge fire. CPA Company
provided the following information for the six months ended June 30, 2022:

January to June 30,2022 - Net Sales​​ ​ P8,000,000

January 02, 2021 – Inventory​​ ​ ​ 2,000,000
January to June 30,2022 - Net Purchases​ ​ 5,200,000

What amount should be reported as estimated cost of the destroyed inventory on July 01,
2022?
a.​ P800,000
b.​ P1,600,000
c.​ P2,800,000
d.​ P4,800,000

46.​CPA Company reported during the current calendar year:

Inventory – January 1, 2021​ ​ ​ ​ P 500,000

Net Purchases – 2021​ ​ ​ ​ 2,500,000
Net Sales – 2021​ ​ ​ ​ ​ 3,200,000

At year-end, December 31, 2021, the physical inventory count resulted in an ending
inventory of P575,000. The gross profit had remained constant at 25%. CPA Company
suspected that some of its inventory may have been taken by a group of employees. What
amount should be reported as estimated cost of missing inventory at year-end December
31, 2021?​
a.​ P25,000
b.​ P100,000
c.​ P175,000
b.​ P225,000

14
 Polytechnic University of the Philippines
ACCO 30093 – Integrating Review Course in Financial Accounting and Reporting
First Integrating Examination
May 15, 2023 (8:00 - 11:00 am)

47.​CPA Mart uses the average retail inventory method. The following information is available
for the current year:
Cost Retail
Inventory, January 1 P2,200,000 4,400,0000
Purchases 31,600,000 52,600,000
Freight-in 800,000
Purchase returns 1,200,000 2,000,000
Purchase allowances 600,000
Departmental transfer-in 800,000 1,600,000
Markups 1,500,000
Markups cancellation 300,000
Markdowns 2,000,000
Markdowns cancellation 200,000
Sales 49,400,000
Sales returns 700,000
Sales discounts 400,000
Employees discount 1,200,000
Loss from breakage 100,000
What is the Cost Ratio?
a.​ 58.13%
b.​ 60.00%
c.​ 61.07%
d.​ 62.00%

48.​Using the same information in no. 46, what is the estimated Inventory at December 31 at
Cost?
a.​ P 3,387,142
b.​ P 3,587,890
c.​ P 3,600,000
d.​ P 3,664,286

49.​Which statement is incorrect regarding property, plant and equipment (PPE)?

a.​ PPE are tangible items that are held for use in the production or supply of goods or
services, for rental to others, or for administrative purposes; and are expected to be used
during more than one period.
b.​ The cost of an item of PPE shall be recognized as an asset if, and only if, it is probable
that future economic benefits associated with the item will flow to the entity and the cost
of the item can be measured reliably.
c.​ An item of PPE should be measured on initial recognition at its cost.
d.​ PPE are presented in the statement of financial position either as current or noncurrent.

50.​The sum-of-the-years method of depreciation results in:

a.​ Constant charge over the life of the asset
b.​ Decreasing charge over the life of the asset
c.​ Increasing charge over the life of the asset
d.​ Charge based on the expected use of the asset

15
 Polytechnic University of the Philippines
ACCO 30093 – Integrating Review Course in Financial Accounting and Reporting
First Integrating Examination
May 15, 2023 (8:00 - 11:00 am)

51.​PAS 16 requires that revaluation surplus resulting from initial revaluation of property, plant
and equipment shall be treated in one of the following way. Which of the following options
meet the requirements of PAS 16?
a.​ Credited to retained earnings as this is an unrealized gain.
b.​ Released to the income statement at an amount equal to the difference between
depreciation and the revaluation.
c.​ Debited to the class of property, plant and equipment and credited to other income
d.​ Debited to the class of property, plant and equipment and credited to revaluation
surplus

52.​CPA Company bought new machine on a deferred payment basis and paid down payment
of P300,000 while the rest will be paid with four monthly installment of P750,000 to be paid
at the end of each month.

The cash equivalent price of the machine was P2,850,000 and CPA Company incurred
installation costs amounting to P90,000.

What amount should be capitalized as cost of the machine?

a.​ P2,850,000
b.​ P2,940,000
c.​ P3,300,000
d.​ P3,390,000

53.​CPA Company purchased land as a factory site for P1,000,000. Legal fees of P3,480 were
paid for title investigation and making the purchase. Income of P8,000 was earned through
using the land as a car park before construction started. Architect's fees were P41,200. Title
insurance cost P2,400, and liability insurance during construction cost P2,600. Excavation
cost P10,440. The contractor was paid P2,400,000.

The cost of the land is:

a.​ P1,005,880
b.​ P1,008,320
c.​ P1,016,320
d.​ P1,018,920

54.​The December 31, 2022 and 2021 comparative financial statements of CPA Company
showed equipment with an original costs P379,000 and P344,000 with accumulated
depreciation of P153,000 and P128,000, respectively. During 2022, CPA Company
purchased equipment costing P50,000 and sold equipment with a carrying value of P9,000.
What amount should the company report as depreciation expense for 2022?
a.​ P19,000
b.​ P25,000
c.​ P31,000
d.​ P34,000

16
 Polytechnic University of the Philippines
ACCO 30093 – Integrating Review Course in Financial Accounting and Reporting
First Integrating Examination
May 15, 2023 (8:00 - 11:00 am)

55.​CPA Company owns a building on January 1, 2022, with a historical cost of P40,000,000.
The building has a useful life of 40 years with no residual value. CPA Company uses the
revaluation model and has so far revalued the asset twice at fair value on the following
dates: January 1, 2023 – P46,800,000 and January 1, 2025 – P55,500,000.

What is the revaluation surplus to be reported in the 2023 statement of comprehensive

income?
a.​ P7,800,000
b.​ P7,600,000
c.​ P6,800,000
d.​ P4,200,000

56.​On January 15, 2021, an entity paid P5,400,000 for property containing natural resource of
2,000,000 tons of ore. The entity is legally required to restore the site after mining
operations. The estimated cost of restoring the land after the resource is extracted is
P450,000 and the land will have a value of P650,000 after it is restored for suitable use.
Tunnels, bunk houses and other fixed installations are constructed at a cost of P8,000,000
and such expenditures are charged to mine improvements.
Operations began on Jan. 1, 2022 and resources removed totaled 600,000 tons. During
2023, a discovery was made indicating that available resource after 2023 will total 1,875,000
tons. At the beginning of 2023, additional bunk houses were constructed in the amount of
P770,000. In 2023, only 400,000 tons were mined because of a strike.

The entity should report depletion for 2023 at

a.​ P640,000
b.​ P776,000
c.​ P1,040,000
d.​ P1,560,000

57.​On June 30, 2022, an entity purchased a machine that has an expected capacity of 300,000
units and no residual value. The cost of the machine was P450,000 and is to be depreciated
using the units-of-production method. During the six months of 2022, 24,000 units of
product were produced. At the beginning of 2023, engineers estimated that the machine can
realistically be used to produce only another 230,000 units. During 2023, 70,000 units were
produced. The entity would report depreciation in 2023 of:
a.​ P105,000
b.​ P108,000
c.​ P126,000
d.​ P135,230

17
 Polytechnic University of the Philippines
ACCO 30093 – Integrating Review Course in Financial Accounting and Reporting
First Integrating Examination
May 15, 2023 (8:00 - 11:00 am)

58.​If there is a change in useful life, depreciation method, or residual value

a.​ the accountant should compute first the carrying amount of the asset as of the beginning
of the period of change; thereafter, the carrying amount is allocated over the remaining
revised useful life using the new depreciation method or revised residual value
b.​ the accountant should compute the carrying amount of an asset as new depreciation
method, revised useful life or revised residual vali been used all along
c.​ the accountant is in for very complex accounting computations and s consult her college
instructor first before doing anything
d.​ there should be no changes in useful lives, depreciation method residual values because
once selected or determined, they are irrevocable according to accountant's standards

59.​An improvement made to a machine increased its fair value and its production capacity by
25% above the condition originally intended by management but without extending the
machine's useful life. The cost of the improvement should be
a.​ expensed.
b.​ debited to accumulated depreciation.
c.​ capitalized in the machine account.
d.​ allocated between accumulated depreciation and the machine account.

60.​On January 1, 2016, CPA Company purchased a machinery for P600,000, with an estimated
economic useful life of 12 years. Straight line method of depreciation is to be used. On
December 31, 2019, it was properly determined that the estimated fair value less cost of
disposal is P235,000 while the value in use is P240,000. On January 1, 2022, it was
properly computed that the recoverable amount of the asset is P250,000.

How much is the impairment loss on December 31, 2019?

a.​ P0
b.​ P110,000
c.​ P160,000
d.​ P165,000

61.​Using the information in No. 60, how much is the maximum recoverable amount/limit on
recovery on January 1, 2022?
a.​ P70,000
b.​ P120,000
c.​ P180,000
d.​ P250,000

18
 Polytechnic University of the Philippines
ACCO 30093 – Integrating Review Course in Financial Accounting and Reporting
First Integrating Examination
May 15, 2023 (8:00 - 11:00 am)

62.​On January 1, 2019, CPA Company acquired an equipment worth P2,050,000 for its
operations. The equipment has an estimated useful life of 8 years and an estimated salvage
value of P50,000. It’s the company’s policy to depreciate all equipment using the straight-line
basis. On January 1, 2021, CPA Company made a revision of the useful life of the
equipment and determined that the total revised useful life of the equipment is 5 years from
the date of acquisition.

What amount of depreciation expense should the company recognize in 2022?

a.​ P516,667
b.​ P500,000
c.​ P310,000
d.​ P300,000

63.​On April 2, 2017, CPA Company purchased a manufacturing machine for Php2,200,000.
The machine has an 8-year useful life has a salvage value of Php200,000 and is being
depreciated by straight-line method. Assume that on January 1, 2021, the company changes
its method of depreciation from straight-line method to sum-of-the-year’s digits method.
What is the remaining book value and depreciation expense in 2021?
a.​ P480,000; P720,000
b.​ P757,500; P505,000
c.​ P800,000; P400,000
d.​ P837,500; P425,000

64.​CPA Company, which has a calendar year accounting period, purchased a new machine for
40,0000 on April 1, 2017. At that time, CPA Company expected to use machine for nine
years and sell it for Php4,000. The machine was sold for Php22,000 on Sept 30, 2022.
Assuming straight-line depreciation, no depreciation in the year of acquisition, and full year
of depreciation in the year of retirement, the gain to recognized at the time of sale would be:
a.​ P0
b.​ P2,000
c.​ P3,000
d.​ P4,000

65.​CPA Company traded-in an old machine for a new model. Pertinent data are as follows: Old
equipment: Cost 200,000; Accumulated depreciation 80,000; Average published retail value
24,000; New equipment: List price 380,000; Cash price without trade in 280,000; Cash price
with trade in 220,000. How much is the gain (loss) recognized by CPA Company on the
transaction?
a.​ 60,000
b.​ 160,000
c.​ (60,000)
d.​ 0

19