P1 review with ans DOCX

Title	P1 review with ans
Author	Glazier Gripo
Pages	7
File Size	46.3 KB
File Type	DOCX
Total Downloads	216
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Review - PRACTICAL ACCOUNTING 1 Identify the letter of the choice that best completes the statement or answers the question. 1. Delta Corporation has applied you with the following list of its bank accounts and cash at December 31, 2007? Checking account (compensating balance of P15, 000with no restriction) P48, 000 Savings account, 2% 30, 000 Certificate of deposit, monthss 10%, due April 20, 2008 0, 000 Money market (30-day certificate), current rate, 9.75% 40, 000 Payroll account 20, 000 Certificate of deposit, 2 years, 12%, due February 15, 2008 75, 000 Petty cash 1,500 Total P 274,500 What should be the balance to be reported as "Cash and Cash Equivalent" in the December 31, 2007 balance sheet of Delta Corporation? a. P 139,500 b. P199, 500 c. P214,500 d. P274,500 2.The December 31,2008 trial balance of Jasmine Company includes the following accounts: Petty Cash Fund 50,000 Current account — PNB 4,000,000 Current account—ONE Bank (250,000) Money market placement-Land Bank 1,000,000 Time deposit — Security Bank 2,000,000 The petty cash fund is composed of the following: Coins and currencies 17,000 Petty cash vouchers - Gasoline 1,000 - Supplies 2,000 - Cash advances to employees 3,000 Employee's check returned by hank marked NSF 4,000 Check drawn by the company payable to the order of the petty cash custodian, representing salary for the month 18,000 A sheet of paper with names of employees together with contribution for a birthday gift of a co-employee in the amount of 5,000 Total 50,000 * A check of P100,000 wash drawn against PNB current account dated and recorded December 29,2008 but delivered to payee on January 15,2009. * Security Bank time deposit is set aside for land acquisition in early January 2009 The December 31, 2008 balance sheet should report "cash and cash equivalents" at a. P5,150,000 b. P5,135,000 c. P5,140,000 d. P7,135,000 3. On July 31, 2010, Elvira's cash book showed a balance on hand of P198,270 compared with a balance of P190,910 shown in his bank statement. He discovered the following: a. Checks drawn by Elvira during July, amounting to P ,350, P9,490 and P7,000, had been entered in the cash book hut had not been presented at the bank by the end of the month. b. Elvira had forgotten to enter in the cash payment book a standing order of P5,000 relating to a trade subscription. c. The bank had incorrectly credited Elvira's account with a dividend receipt, of P2500 relating to another customer. d. Bank charges of P10,500 shown on the bank statement had not yet been entered In the cash book. e. Checks received from customers amounting to P21,100 were entered in the cash book on July 31 but were not credited on the bank statement until August 3. f. Direct credits from customers of P18,000 and P34100 had been paid direct into the bank but no entry had been made in the cashbook. g. The payments side of the cash book for July had been undercast by P10,000 (this means that the total of the payments side is understated by P10,000). h. The statement shows an item "return check P7,200". This has not yet been accounted for in the cash book. What is the correct cash balance? . . a. 173, 70 b. 184,170 c. 191, 70 d. 186,670 4. On December 31,2009, the balance of accounts receivable of Jalena Company was P ,000,000 and the January 1,2009 balance of allowance for doubtful accounts was P800,000. The following data were gathered: Credit Sales Writeoffs Recoveries 200 9,000,000 400,000 30,000 2007 13,000,000 00,000 70,000 2008 15,000,000 700,000 120,000 2009 20,000,000 50,000 150,000 Doubtful accounts are provided for as percentage of credit sales. The accountant calculates the percentage annually by using the experience of the three years prior to the current year. How much should be reported as allowance for doubtful accounts on December 3I 2009? a. 1, 100,000 b. P800,000 c. P1,300,000 d. P1,250,000 5. On October 1,2009, Sandara Company assigned on a nonnotification basis accounts receivable of P ,000,000 to a bank in consideration for a loan 75% of the receivables less a 2% service fee on the accounts assigned. The loan was evidenced by a 12% note payable issued by Sandara to the bank. On December 31, 2009 Sandara collected assigned accounts of P3,500,000, allowing sales discounts of P100,000 and remitted the entire collection to the bank in partial payment for the loan. The bank applied first the collection to the Interest and the balance to the principal. In its December 31, 2009 financial statements, Sandara should disclose its "equity In the assigned accounts" in the amount. a. 1,265,000 b. 1,3 5,000 c. 1,400,000 d. 3,2 5,000 . On February 1, 2010, Henson Company factored receivables with a carrying amount of P300,000 to Agee Company. Agee Company assesses a finance charge of 3% of the receivables and retains 5% of the receivables. Relative to this...