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PRACTICAL ACCOUNTING 1 – REVIEW
CASH & CASH EQUIVALENTS
PROF. U.C. VALLADOLID
Multiple Choice Identify the letter of the choice that best completes the statement or answers the question.
- In connection with your audit of John Paul Corporation for the year ended December 31, 2020, you gathered the following: Current account at Metrobank P2,000, Current account at BPI (100,000) Payroll account 500, Foreign bank account – restricted (in equivalent pesos) 1,000, Postage stamps 1, Employee’s post dated check 4, IOU from controller’s sister 10, Credit memo from a vendor for a purchase return 20, Traveler’s check 50, Not-sufficient-funds check 15, Money order 30, Petty cash fund (P4,000 in currency and expense receipts for P6,000) 10, Treasury bills, due 3/30/2021 (purchased 12/29/2020) 200, Treasury bills, due 1/31/2021 (purchased 2/1/2020) 300, Based on the above information and the result of your audit, compute for the cash and cash equivalents that will be reported on the December 31, 2020 statement of financial position. a. P2,784,000 c. P2,790, b. P3,084,000 d. P2,704,
- The controller Cooper Corporation, is attempting to determine the amount of cash to be reported on its December 31, 2020 statement of financial position. The following information is provided:
- Commercial savings account of P1,200,000 and a commercial checking account balance of P1,800,000 are held at PS Bank.
- Travel advances of P360,000 for executive travel for the first quarter of the next year (employee to reimburse through salary deduction).
- A separate cash fund in the amount of P3,000,000 is restricted for the retirement of a long term debt.
- Petty cash fund of P10,000.
- An I.O.U. from a company officer in the amount of P40,000.
- A bank overdraft of P250,000 has occurred at one of the banks the company uses to deposit its cash receipts. At the present time, the company has no deposits at this bank.
- The company has two certificates of deposit, each totaling P1,000,000. These certificates of deposit have maturity of 120 days.
- Cooper has received a check dated January 2, 2021 in the amount of P150,000.
- Cooper has agreed to maintain a cash balance of P200,000 at all times at PS Bank to ensure future credit availability.
- Currency and coin on hand amounted to P15,000. Based on the above data, how much will be reported as cash and cash equivalents at December 31, 2020? a. P3,025,000 c. P2,575, b. P2,825,000 d. P5,025,
- In your cash count of the petty cash fund of Kaila Company as of July 4, 2020, you found the following composition of its petty cash fund: Bills and coins counted 2,450. Approved and signed petty cash vouchers Dated June 2020 3,300. Dated July 1-4, 2020 800. IOU from Joe Santos (Employee) 1,400. A check drawn by Juvy Victoria, an employee, dated July 15, 2020 2,000. The petty cash fund has an imprest balance of 10,000. The company’s reporting period ends on June 30. 1. What is the correct balance of the petty cash fund? a. 3,000.00 c. 3,250. b. 3200.00 d. 3,100. 2. How much is the cash shortage or overage? a. 100 shortage c. 100 overage b. 50 shortage d. 50 overage
- Jeff Incorporated established a petty cash fund of 5,000 for incidental expenses on June 1, 2020. At the end of the month, the count of cash on hand indicated that 670.40 remained in the fund. A review of the petty cash vouchers disclosed the following expenses had been incurred during the month: Office supplies 341.60 Miscellaneous 837. Transportation 1,321.40 Representation 1,000. Postage 780. Question 1: What is the amount of cash shortage? a. P 55.50 c. P 48. b. 45.00 d. P 49.
- On January 1, 2020, Kyle Corporation established a petty cash fund of P400. On December 31, 2020, the petty cash fund was examined and found to have receipts and documents for miscellaneous expenses amounting to P364. In addition, there was cash amounting to P44. What entry would be required to record replenishment of the petty cash fund on December 31, 2020? a. Petty Cash.................... 364 Cash Short and Over......... 8 Cash........................ 356 b. Miscellaneous Expense......... 364 Cash Short and Over......... 8 Petty Cash.................. 356 c. Miscellaneous Expense......... 364 Cash Short and Over......... 8 Cash........................ 356 d. Miscellaneous Expense......... 356 Cash Short and Over......... 8 Cash........................ 364
- The following data pertaining to the cash transactions and bank account of Angel Company for May 2020 are available to you: Cash balance, per accounting records, May 31, 2020 P 51, Cash balance, per bank statement, May 31, 2020 95, Bank service charge for May 327 Debit memo for the cost of printed checks delivered by the bank; the charge has not been recorded in the accounting records 375 Outstanding checks, May 31, 2020 20, Deposit of May 30 not recorded by bank until June 1 14, Proceeds of bank loan on May 30, not recorded in the accounting records, net of interest of P900 17, Proceeds from a customer’s promissory note; principal amount P24,000,
Other bank service charges 3, Outstanding checks 202, Deposit of February 28 placed in night depository 85, Check issued by Axle Company charged to Jerome’s account 20, What was the cash balance per bank statement? a. 1,435, b. 1,532, c. 1,338, d. 1,557,
- Information pertaining to Ana Company appears below. Balance per bank statement July 31 1,240, Balance per ledger, July 31 750, Deposit of July 30 not recorded by bank 280, Debit memo – service charge 10, Credit memo – collection of note by bank for Ana 300, Outstanding checks? An analysis of the canceled checks returned with the bank statement reveals the following: ? Check for purchases of supplies was drawn for P60,000 but was recorded as P90,000. ? The manager wrote a check for traveling expenses of P100,000 while out of town. The checks was not recorded. What is the amount of outstanding checks on July 31? a. 970,000 c. 270, b. 550,000 d. 610,
- Norman Company had the following bank reconciliation on June 30, 2020: Balance per bank statement, June 30 3,000, Add: Deposit in transit 400, Total 3,400, Less: Outstanding checks 900, Balance per book, June 30 2,500, The bank statement for the month of July showed the following: Deposits (including P200,000 note collected for Norman) 9,000, Disbursement (including P140,000 NSF check and P10,000 service charge) 7,000, All reconciling items on June 30 cleared through the bank in July. The outstanding checks totaled P600,000 and the deposit in transit amounted to P1,000,000 on July 31. Q1. What is the cash balance per book on July 31, 2020? a. 5,400, b. 5,350, c. 5,550, d. 4,500, Q2. What is the amount of cash receipts per book in July 2020? a. 9,400, b. 9,600, c. 8,600, d. 9,800, Q3. What is the amount of cash disbursements per book in July 2020? a. 6,550, b. 6,700, c. 7,300, d. 6,850, 11.The following information is shown in the accounting records of a company:
Balances as of January 1, 2020 Cash P93, Merchandise inventory 129, Accounts Receivable 100, Accounts payable 79, Balances as of December 31, 2020 Merchandise Inventory P117, Accounts receivable 136, Accounts payable 72 , Total sales and cost of goods sold for 2020 were P1,197,000 and P874,500, respectively. All sales and all merchandise purchases were made on credit. Various operating expenses of P160,500 were paid in cash. Assume that there were no other pertinent transactions. The cash balance on December 31, 2020 would be a. 162, b. 223, c. 384, d. 457,
- On October 31, year 2, Dingo, Inc. had cash accounts at three different banks. One account balance is segregated solely for a November 15, year 2 payment into a bond sinking fund. A second account, used for branch operations, is overdrawn. The third account, used for regular corporate operations, has a positive balance. How should these accounts be reported in Dingo’s October 31, year 2 classified balance sheet? a. The segregated account should be reported as a noncurrent asset, the regular account should be reported as a current asset, and the overdraft should be reported as a current liability. b. The segregated and regular accounts should be reported as current assets, and the overdraft should be reported as a current liability. c. The segregated account should be reported as a noncurrent asset, and the regular account should be reported as a current asset net of the overdraft. d. The segregated and regular accounts should be reported as current assets net of the overdraft.
- During the year, Jerome issued the following checks pertaining to its petty cash fund: *P5,000 check issued to established the petty cash fund *P2,000 checks issued to replenish the petty cash fund *P2,000 check to increase the pety cash fund All the above checks were correctly recorded. At balance sheet date, the petty cash fund is consisting of the following: *P2,200 paper currencies and coins *P4,300 paid, but unreplenished vouchers To record the adjustment of petty cash fund balance as of balance sheet date, the adjusting entry would have a a. debit to petty cash shortage of P500 c. credit to overage of P1, b. debit to petty cash of P500 d. credit to petty cash of P4, 300
- Jerome Co. was organized on January 2, 2020. The following items are from the company’s trial balance on December 31, 2020. Common stock P1,200, Additional paid-in-capital 50, Merchandise inventory 69, Land 1,000, Building 1,400, Furniture and fixtures 367, Accounts receivable 165, Accounts payable 389, Notes payable-bank 500, Sales 6,235, Operating expenses (including depreciation of P400,000) 1,005, Additional information is as follows:
- Deposits in transit, December 31 P45,
- Service charge for December 2,
b. Customer’s check for P20,000 dated January 2, 2021, received on December 29, 2020. c. Postal money orders received from customers, P30,000. The petty cash fund consisted of the following items as of December 31, 2020. Currency and coins P 2, Employees’ vales 1, Currency in an envelope marked “collections for charity” with names attached 1, Unreplenished petty cash vouchers 1, Check drawn by JP Corporation, payable to the petty cashier 4, P10, Included among the checks drawn by JP Corporation against the BPI current account and recorded in December 2020 are the following: a. Check written and dated December 29, 2020 and delivered to payee on January 2, 2021, P80,000. b. Check written on December 27, 2020, dated January 2, 2021, delivered to payee on December 29, 2020, P40,000. The credit balance in the Security Bank current account No. 2 represents checks drawn in excess of the deposit balance. These checks were still outstanding at December 31, 2020. The savings account deposit in PNB has been set aside by the board of directors for acquisition of new equipment. This account is expected to be disbursed in the next 3 months after the end of the reporting period. Based on the above and the result of your audit, determine the adjusted balances of following:
- Cash on hand a. P410,000 c. P470, b. P530,000 d. P440,
- Petty cash fund a. P6,000 c. P2, b. P7,200 d. P4,
- BPI current account a. P1,000,000 c. P1,080, b. P1,120,000 d. P1,040,
- Cash and cash equivalents a. P2,917,200 c. P3,052, b. P3,074,900 d. P3,066,
- You are attempting to determine an apparent cash shortage that you believe resulted from an employee’s theft. You have assembled the following information for the month of March: Cash balance per books, March 1 115,963. Cash receipts for March, per books 246,475. Cash disbursements for March, per books 334,709. Cash balance, per bank statement, March 31 15,341. Deposit in transit, March 31 9,000. Outstanding checks, March 31 2,703. Bank service charge for March 92. What is the amount of the suspected ash shortage? a. 5, b. 6, c. 6, d. 5,
18. You are auditing the cash in bank account of Pamela Manufacturing Company as of December 31, 2020.
Your examination revealed the following:
From the bank statement:
Balance, December 1, 2020 P 876,
Deposits (20) 9,153,
Check (64) plus debit memos (8,524,300)
Service charges for new checks ( 2,250)
Balance, December 31, 2020 P 1,503,
From the company’s records:
CASH
Nov. 1 652,070 Nov. 30 CD 6,654,
Nov. 30 CR 6,824,290 Dec. 1 – Bank reconciliation 38,
Dec. 31 CR 9,198,720 Dec. 31 CD 8,574,
CD – Cash disbursements
CR – Cash receipts
Your review of last month’s bank reconciliation and the current bank statement reveals the following.
1. Outstanding checks: November 30, 2020 P254,
December 31, 2020 335,
2. Deposit in transit: November 30, 2020 164,
December 31, 2020 209,
3. Check no 359 for Office Repairs was written for P6,950 but recorded in the cash disbursements journal as P9,650. The
bank deducted the check as P6,950. The error happened in November and is not yet recorded as of December 31.
4. A check written on the account of the Pamplona Company for P5,830 was deducted by the bank from the Pamela’s
account.
5. Included with the bank statement was debit memorandum dated December 31 for P24,750 for interest on a note taken
out by the Pamela Manufacturing Company on November 30.
6. The service charge for the new checks has not been recorded.
7. The November 30 bank reconciliation showed as reconciling items a service charge of P3,500 and a customer’s DAIF
check for P34,900.
1. How much is the audit adjusted balance of Receipts as of December 31?
a) 9,198,720 b) 9,918,270 c) 9,891,720 d) 9,189,270 e) none of the above
2. How much is the audit adjusted balance of Disbursements as of December 31?
a) 8,601,610 b) 8,610,601 c) 8,601,601 d) 8,610,610 e) none of the above
3. Which is to be included in the audit adjusting entries?
a) Dr: Cash in Bank 27,000 b) Cr: Cash in bank 2,200 c) Dr: Interest expense 24,750 d) None of the
above
The account should be written off. The merchandise inventory includes goods held on consignment amounting to P150,000 and goods of P200,000 purchased and received on December 31, 2020. Neither of these items have been recorded as a purchase. The prepaid-insurance includes cash surrender value of life insurance of P50,000. The adjusted balance of current assets should be a. 5,400,000 b. 5,100,000 c. 5,300,000 d. 5,200,
- An analysis of Joshtine Company’s liabilities disclosed the following Accounts payable, after deducting debit balances In suppliers’ accounts amounting to P100,000 4,000, Accrued expenses 1,500, Credit balances of customers’ accounts 500, Stock dividend payable 1,000, Claims for increase in wages and allowance by Employees of the company, covered in a pending lawsuit 400, Estimated expenses in redeeming prize coupons Presented by customers 600, How much should be presented as total current liabilities on the balance sheet? a. 6,700,000 b. 6,600,000 c. 7,100,000 d. 7,700,
- The following information pertains to Kaila Company on December 31 of the current year: Property, plant and equipment 35,000, Accounts receivable 20,000, Prepaid insurance 2,500, Short-term note payable 3,000, Cash 5,000, Bonds payable 40,000, Total assets 101,500, Land 20,000, Accounts payable 8,000, Allowance for doubtful accounts 1,000, Merchandise inventory 13,000, Available for sale securities – to be held indefinitely 7,000, Wages payable 2,000, Total liabilities 56,000, Premium on bonds payable 3,000, The December 31 working capital is a. 46,500,000 b. 33,500,000 c. 26,500,000 d. 35,500,
- Kaila Company trial balance reflected the following account balances at December 31, 2020: Accounts receivable 1,600, Trading securities 500, Accumulated depreciation on equipment and furniture 1,500, Cash 1,100, Inventory of merchandise 3,000, Equipment and furniture 2,500, Patent 400, Prepaid expenses 100, Land held for future business site 1,800, In Kaila Company’s December 31, 2020 balance sheet, the current assets total is a. 8,100,000 b. 7,300,000 c. 6,700,000 d. 6,300,
- The trial balance of Joshtine Company reflected the following liability account balances at December 31, 2020: Accounts payable 1,900,
Bonds payable 3,400, Deferred tax liability 400, Dividends payable 500, Income payable 900, Note payable, due January 31, 2021 600, Discount on bands payable 200, The deferred tax liability is based on temporary differences that will reverse equally in 2021 and 2022. In Joshtine’s December 31, 2020 balance sheet, the current liabilities total was a. 7,100,000 b. 4,300,000 c. 3,900,000 d. 4,100,
- The trial balance of Angel Company reflected the following liability account balances on December 31, 2020: Accounts payable 5,000, Bonds payable, due December 30, 2021 10,000, Premium on bonds payable 500, Deferred tax liability 2,500, Dividends payable 4,500, Income tax payable 1,500, Note payable – bank 4,000, The bank note payable matures on June 30, 2021. On March 1, 2021, the entire balance of the bank payable was refinanced on a long- term basis. Angel’s financial statements were issued on March 31, 2021. In its December 31, 2020, Angel Company should report current liabilities at a. 21,500,000 b. 24,000,000 c. 25,500,000 d.28,000,
- Jerome Company’s December 31, 2020 balance sheet reported the following current assets: Cash 4,000, Accounts receivable 7,500, Inventory 4,000, Deferred tax asset 1,200, Equipment used and held for resale 300, 17,000, An analysis of the accounts receivable disclosed the accounts receivable comprised the following Trade accounts receivable 5,000, Allowance for doubtful accounts (500,000) Selling price of Jerome Company’s unsold goods sent to Tar Company on consignment at 150% of cost and excluded from Jerome’s ending inventory 3,000, 7,500, At December 31, 2020, the total current assets should be a. 16,000,000 b. 15,700,000 c. 14,500,000 d. 14,800,
- The following information about Angel Company is available at December 31, 2020: Employee income taxes withheld 900, Cash balance at first state Bank 2,500, Cash overdraft at Harbor Bank 1,300, Accounts receivable with credit balance 750, Estimated expenses of meeting warranties on merchandise previously sold 500, Estimated damages as a result of unsatisfactory performance on a contact 1,500, Accounts payable 3,000, Deferred serial bonds, issued at par and bearing interest at 12%, payable in semiannual installments of P500,000 due April 1 and October 1 of each year, the last bond to be paid on October 1, 2026. Interest is also paid semiannually. 5,000, Stock dividend payable 2,000, The December 31, 2020 balance sheet should report current liabilities at
- Noncurrent assets a. P 655 c. P1,886, b. P1,881,127 d. P1,993,
- Current liabilities a. P11,383 c. P10, b. P 1,130 d. P 605
- Noncurrent liabilities a. P56,641 c. P57, b. P67,419 d. P66,
- The following unadjusted sections of the Statement of Financial Position of the Loeb Inc. as at December 31, 2020 were presented to you. Cash P 85, Accounts receivable 282, Merchandise inventory 92, Deferred charges 8, Current assets P468, Trade accounts payable, net of P5,000 debit balance P125, Interest payable 3, Income tax payable 12, Money claims of Union pending final decision 45, Mortgage payable due in four annual installments 100, Current liabilities P285, A review of the above indicate that the Cash account of P85,000 included a customer’s check returned by the bank marked NSF amounting to P1,250; and employee’s IOU of P2,000; and P10,000 deposited with the courts for a case under litigation. Accounts receivable totaling P282,400 is composed of: Customers, debit balances – P181,400; Advances to subsidiaries – P20,000; Advances to suppliers – P15,000; Receivables from Loeb officers – P18,000; Allowance for Bad Debts – (P8,000); and selling price of merchandise invoiced at 140% of cost but not yet delivered – P56,000 (The goods were not included in Merchandise Inventory). Based on the above information, answer the following:
- The correct total of Current Assets on December 31, 2020 is a. P410,150 c. P413, b. P415,150 d. P418,
- The correct total of Current Liabilities on December 31, 2020 is a. P170,000 c. P145, b. P160,000 d. P215,
- In connection with your audit of the Steven Co. for the year 2020, you were able to gather the following accounts are from the unadjusted trial balance of the company on December 31, 2020: Cash P170, Accounts receivable 525, Allowance for bad debts 4, Notes receivable 180, Prepaid rent expense 10, Trading securities 150, Merchandise inventory 450, Accounts payable 242, Note payable 100, Accrued expenses 22, Bonds payable (due semi-annually in June and December at P30,000) 300, Income tax payable 30,
SSS and HDMF premiums payable 12, Withholding tax payable 9, Mortgage payable, due July 31, 2025 200, Contingent liability 80, Additional information: Cash consists of: Cash in bank per bank statement (outstanding checks, P12,000) P167, Petty cash, including unreplenished petty cash expense vouchers of P150) 500 Customer’s advance deposit in check dated January 15, 2021 2, P170, Accounts receivable includes P125,000 selling price of goods sent on consignment at 125% of cost and not included in the inventory. Notes receivable include notes discounted of P80,000. Accounts payable includes P40,000 cost of purchases in transit FOB destination but not included in the inventory. It also includes customer’s advance deposit in check dated January 15, 2021 of P2,500. The Note Payable is a promissory note dated October 1, 2020, due March 31, 2021 with 18% interest p.a. This is in connection with a loan from a Chubby Bank. Accrued expenses exclude the interest payable on the note. Based on the above data, determine the amounts to be presented in Steven’s statement of financial position as of December 31, 2020 for the following:
- Cash a. P167,500 c. P155, b. P155,350 d. P157,
- Trade and other receivables a. P496,000 c. P576, b. P500,000 d. P498,
- Total current assets a. P1,363,850 c. P1,361,3 50 b. P1,321,250 d. P1,261,
- Trade and other payables a. P243,000 c. P277, b. P247,500 d. P250,
- Total current liabilities a. P437,500 c. P433, b. P440,000 d. P377,
- Brock Corp. reports operating expenses in two categories: (1) selling, and (2) general and administrative. The adjusted trial balance at December 31, year 1, included the following expense and loss accounts: Accounting and legal fees 120,000 Advertising 150,000 Freight-out 80,000 Interest 70,000 Loss on sale of long-term investment 30, Officers’ salaries 225,000 Rent for office space 220,000 Sales salaries and commissions 140,000 One-half of the rented premises is occupied by the sales department. Brock’s total selling expenses for year 1 are a. 480,000 b. 400,000 c. 370,000 d. 360,
- Ortiz Co. had the following account balances: Sales 120, Cost of goods sold 60, Salary expense 10, Depreciation expense 20, Dividend revenue 4, Utilities expense 8, Rental revenue 20, Interest expense 12, Sales returns 11, Advertising expense 13, What amount would Ortiz report as income from operations in its income statement? a. 49,000 b. 30,000 c. 22,000 d. 10,
- Use the following information (in thousands): Revenues 1,200, Income from continuing operations 150, Net Income 135, Income from operations 330, Selling & administrative expenses 750, Income before income tax 300, Determine the amount of discontinued operations. a. (30,000) b. 120,000 c. 150,000 d. (15,000)
- Use the following information: Gross profit 7,800, Loss on sale of investments 20, Interest expense 15, Gain on sale of discontinued operations 60, Income tax rate 20% Compute the amount of discontinued operations to be combined with income from continuing operations on the income statement. a. 60,000 b. 48,000 c. 12,000 d. None of the above.
- During 2020, Lopez Corporation disposed of Pine Division, a major component of its business. Lopez realized a gain of 1,200,000, net of taxes, on the sale of Pine's assets. Pine's operating losses, net of taxes, were 1,400,000 in 2020. How should these facts be reported in Lopez's income statement for 2020? Total Amount to be Included in Income from Results of Continuing Operations Discontinued Operations a. 1,400,000 loss 1,200,000 gain b. 200,000 loss 0 c. 0 200,000 loss d. 1,200,000 gain 1,400,000 loss
- On November 1, year 2, management of Herron Corporation committed to a plan to dispose of Timms Company, a major subsidiary. The disposal meets the requirements for classification as discontinued operations. The carrying value of Timms Company was 8,000,000 and management estimated the fair value less costs to sell to be 6,500,000. For year 2, Timms Company had a loss of 2,000,000. How much should Herron Corporation present as loss from discontinued operations before the effect of taxes in its income statement for year 2? a. 0 b. 1,500,000 c. 2,000,000 d. 3,500,
- Cuticle Company decided on May 1, 2020 to dispose a component of its business. The component was sold on August 28, 2020. Cuticle’s income for 2020 included income of 8,000,000 from operating the discontinued segment from January to the sale date. Cuticle incurred a loss on August 28 sale of 2,500,000. Ignoring income taxes, what amount should be reported in the 2020 income statement as income or loss under “ discontinued operation”? a.4,500,000 loss b.5,000,000 income c.5,500,000 income d.10,500,000 income
- Pink Company has correctly classified its packaging operation as a disposal group held for sale and as discontinued operation. For the year ended December 31, 2020, this disposal group incurred trading loss after tax of P4,000,000 and the loss on remeasuring to fair value less cost to sell was P2,000,000. What total amount of the disposal group’s losses should be included in profit or loss for the year ended December 31, 2020? a. 2,000,000 b.4,000,000 c.6,000,000 d.
- On September 30, 2020, when the carrying amount of the net assets of segment C was 7,000,000, X Company signed a binding contract to sell segment C for P12,000,000. The sale is expected to be completed by January 31, 2021, the sale contract obliges X Company to terminate certain employees of segment C incurring termination costs of P2,000,000 to be paid on June 30, 2021. The company continued to operate segment C throughout 2020. Revenue of segment C throughout 2020 was P 8,000,000, operating costs was P4,000,000. How much income should be reported as income from discontinued segment for 2020, before taxes? a. 0 b.2,000,000 c.7,000,000 d.8,000,
- On September 30, 2019, when the carrying amount of the net assets of a business segment was P70,000,000, XYZ Company signed a legally binding contract to sell the business segment. The sale is expected to be completed by January 31, 2020 at a selling price of expected to be completed by January 31, 2020 at a selling price of P60,000,000. In addition, prior to January 31, 2020, the sale contract obliges XYZ Company to terminate the employment of certain employees of the business segment incurring an expected termination cost of P2,000,000 to be paid on June 30, 2020. The segment’s revenue and expenses for 2019 were P40,000,000 and P45,000, respectively. Before income tax, how much will be reported as loss from the discontinued segment for 2019? a. 17,000,000 b. 12,000,000 c. 15,000,000 d. 7,000,
- On January 1, 2020, Zhang Inc. had cash and share capital of 5,000,000. At that date, the company had no other asset, liability, or equity balances. On January 5, 2020, it purchased for cash 3,000,000 of equity securities that it classified as available-for-sale. It received cash dividends of 400,000 during the year on these securities. In addition, it has an unrealized loss on these securities of 300,000. The tax rate is 20%. Compute the amount of comprehensive income. a. 100,000 b. 80,000 c. 320 ,000 d. 300,
- On January 1, 2020, Zhang Inc. had cash and share capital of 5,000,000. At that date, the company had no other asset, liability, or equity balances. On January 5, 2020, it purchased for cash 3,000,000 of equity securities that it classified as available-for-sale. It received cash dividends of 400,000 during the year on these securities. In addition, it has an unrealized loss on these securities of 300,000. The tax rate is 20%. Compute the amount of other comprehensive income/(loss). a. 240,000 b. (300,000) c. 100,000 d. 80,
- Korte Company reported the following information for 2020: Sales revenue 500, Cost of goods sold 350, Operating expenses 55, Unrealized holding gain on available-for-sale securities 20,
Cost of goods sold P960, Correction of overstatement in last year's income due to error (net of P13, income tax credit) 30, Dividend costs (P4 per share for 8, ordinary shares) 32, Loss due to earthquake 33,600 (1,057,200) Taxable revenues 398, Less: Income tax on income from continuing operations ( 99,840) Net income 298, Miscellaneous deductions Loss from operations of discontinued Segment X44 (net of P7,200 income tax credit) 16, Administrative expenses 134,400 ( 151,200) Net revenues P 146, Kristine Company Retained Revenue Statement For the Year Ended December 31, 2020 Beginning retained earnings P474, Add: Gain on sale of Segment X44 (net of P10,800 income taxes) 25, Recalculated retained earnings 499, Add: Net revenues 146, 646, Less: Interest expense ( 27,200) Ending: retained earnings P619, The preceding account balances are correct but have been incorrectly classified in certain instances. Based on the above and the result of the audit, answer the following:
- The income from continuing operations for the year ended December 31, 2020 is a. P207,760 c. P299, b. P199,360 d. P226, 2 The income (loss) from discontinued operations for the year ended December 31, 2020 is a. P 8,400 c. P25, b. (P16,800) d. P 0
- The profit for the year ended December 31, 2020 is a. P234,960 c. P209, b. P307,600 d. P207,
- The balance of retained earnings as of December 31, 2020 should be a. P619,360 c. P650, b. P646,560 d. P709,
