University of the Philippines Visayas

Tacloban College
Junior Philippine Institute of Accountants
Basic Accounting Quiz Bee Preliminary Examination

PART 1: THEORIES
Answer as required. (1 pt each)
1. True or False. Writing off a customer’s account using allowance method decreases net income and the net realizable value of
the Accounts Receivable.
2. An entry debiting inventory and crediting cost of goods sold would be made when
a. Merchandise is sold and the periodic inventory system is used
b. Merchandise is sold and the perpetual inventory system is used.
c. Merchandise is returned and the perpetual inventory system is used.
d. Merchandise is returned and the periodic inventory system is used.
3. A debit balance in the Allowance for Doubtful Accounts
a. Should never occur
b. Is against PFRS 9
c. May occur after the end-of-period adjustment for uncollectible accounts.
d. None of the above choices
4. Bank statements provide information about all of the following except:
a. Checks cleared during the period
b. Bouncing checks
c. Bank charges for the period
d. Errors made by the depositor
5. What do you call the excess of the sum of the principal and the accrued interest of a discounted Note Receivable over the net
proceeds from the discounting?
6. In order to calculate the depreciation of an asset for the third year using the straight-line method, which of the following must
be known about the asset?
a. Residual value, acquisition cost, useful life
b. Residual value, carrying amount, useful life
c. Acquisition cost, carrying amount, useful life
d. Acquisition cost, residual value, carrying amount, useful life
7. A reversing entry cannot be made for the following adjustments except for;
A. A debit to Insurance Expense and a credit to Prepaid Insurance
B. A debit to Depreciation Expense and a credit to Accumulated Depreciation
C. A debit to Prepaid Supplies and a credit to Supplies Expense
D. A debit to Unearned Service Revenue and a credit to Service Revenue
8. A machine with a ten-year useful life and an estimated 12% salvage value was acquired on January 1, 2013. Accumulated
Depreciation as of June 30, 2016 using straight-line method should be equal to:
a. [(Acquisition cost ÷ 10) – 12%(Acquisition cost)] × 3 ½
b. [3 ½ (Acquisition cost) – 12%(Acquisition cost)] ÷ 10
c. Acquisition cost × 30.8%
d. [(Acquisition cost × 308%) ÷ 10] × 3 ½
9. One who is not really a partner, not being a party to the partnership agreement, but is made liable as a partner for the
protection of innocent third persons.
10. True or False. Only the Doubtful Accounts Expense and not the write-off of Accounts Receivable affects working capital.
The effect thereof is a negative.
11. Which of the following is/are mean/s of achieving a fair division of income among the partners based on the time and talent
devoted to the partnership business?
I. Partner Salary Allowances
II. Interest Allowances on Capital Balances
III. Use of P/L ratios
a. I only b. I and II c. II and III d. I, II and III
12. True or False. When a new partner is admitted through the purchase of interest and the interest is purchased at a price greater
than its book value, the excess payment is ignored since the transaction is personal in nature
13. True or False. Assuming the Gross Profit (GP) rate is set at the same percentage whether it is based on cost or on sale, the
cost ratio under the “GP on sale” assumption will always be set at a percentage that is less than that under the “GP on cost.”
14. If the entity is profitable during a period, the total of the statement of financial position credit column will be
a. Larger than the total of its debit column c. Larger than the total of the income statement debit column
b. Smaller than the total of its debit column d. Larger than the total of the income statement credit column
15. Conducting an actual physical count of goods to be sold rather than making just an estimate results to a tradeoff between
a. Verifiability, Consistency b. Timeliness, Consistency c. Verifiability, Timeliness d. All of the above
16. Sales where the goods are delivered only when the buyer makes final payment are called __________.

1 PREPARED BY: BATCH SEXYLOVE (BSA-III)

 PART II: COMPUTATION
Answer as required. If necessary, round final figures to two decimal places.
EASY (2 pts each)
1. Net income is 153,000. Operating expenses is equal to three-fourths of the gross profit. If cost of goods sold is twice the
gross profit, what is the amount of sales?

2. The ending A/R balance amounted to 52,000. Net decrease in A/R during the period amounted to 17,000. If the company
observes policy that 95% of A/R is deemed collectible, what is the beginning balance of Allowance for Doubtful
Accounts?

3. A note was discounted at a bank for 490,000, 3 months before its maturity. The discount on the note amounted to 4,820. The
note was originally issued at 12% for 10 months. How much is the note’s maturity value?

4. Baguio Company purchased an asset with a useful life of 10 years on January 1, 2014 for 7,000,000. On December 31, 2014,
the amount the entity would receive from the disposal of the asset if it was already of the age and in the condition expected at
the end of its useful life was estimated at 650,000. What is the depreciation charge for 2014?

5. The information below is taken from the records of SexyLove Enterprises at 12/31/14. Find the net income.
Salary Expense 173,000 SexyLove, Drawings 40,000
Rent Expense 48,000 Utilities Expense 80,000
Consulting Revenues 500,000 Prepaid Supplies 50,000
Unearned Revenue 8,000 Other expenses accrued 5,000

6. The capital account of My Company at year-end is 251,000 lesser than its beginning balance. Expenses are 156,000 greater
than revenues. Additional investment consists of contributing equipment with fair value of 30,000. Salary expense amounted
to 50,000, and interest expense to 89,500. If I, the owner, withdrew supplies from the company for home use, how much
supplies did I withdraw?

7. Gel has a 30% participation in the Pagwapo partnership profit and loss. His capital account had a net decrease of 200,000
during the calendar year 2014. During the year, Gel permanently withdrew 350,000. What was the net income (loss) of the
partnership?

8. Using the imprest fund system, Ipin Company established a petty cash fund on December 1, 2014 at an initial amount of
10,000. Petty cash expenses for the period December 1-31 were as follows:
Postage 1,500 Transportation 1,200
Supplies 5,500 Miscellaneous 800
The Petty cash fund was replenished and increased by 5,000 on January 2, 2015. At what amount should the Petty Cash
Fund be shown on the December 31, 2014 balance sheet of Ipin Company?

9. In preparing the bank reconciliation on December 31, 2014, Grey’s Fifty Shades Co. provided the following:
Balance per bank statement 2,800,000
Deposits in Transit 620,000
Erroneous credit by bank 40,000
Service charges for the month 8,000
Checks outstanding 575,000
On December 31, 2014, what is the adjusted cash in bank?

10. The Voice Co. expects to receive a total amount of 813,130.08 which includes interest, on July 31, 2014, as payment for a
12% one-year note issued by Jason Dy. The income statement of Jason Dy for the period ended December 31, 2013
understated interest expense by 7,314.25. Find the erroneous amount recorded by Jason Dy as interest expense.

AVERAGE (5 pts each)

1. Savvy’s Bets is in the business of video games @ a 12.50 per half-hour charge. The related amount of operating costs is
estimated to be 12.00 per hour of use of the video gaming machine. To attract prospective customers, a promo allowing free
additional 10 minutes to every gamer who rents the computer for every full hour is given. For the day, the revenue book
showed the following consumption by customers:
Niel Eulysis 4 hours
Luigi 210 minutes
Rolf Nikko 2 hours and 15 minutes
Rommel Rodrigo 1 ½ hours
Joseph Brian 1.25 hours

Find the profit (loss).

2 PREPARED BY: BATCH SEXYLOVE (BSA-III)

 2. SavvyLove Co. reported that the operating expenses, other than interest expense, for the current year amounted to 40% of
cost of sales but only 20% of sales. Interest expense is 5% of sales. The amount of purchases is 120% of cost of sales. Ending
inventory is twice as much as the beginning inventory. The income after tax of 30% for the current year is P560,000. What is
the amount of sales for the current year?

3. Sexy and Loving Accountants provided the following information for the current year-end.
Accounts Receivable, 1/1 8,600,000
Sales (80% was on credit) 11,750,000
Sales Returns and Allowances 800,000
Sales Discounts 210,000
ADA, before adjustment for DAE (@ abnormal balance) 35,000
A/R written-off 190,000
A/R recovered 105,000
Including the cash sales, the entity collected a total of 10,250,000 from customers. Per policy, it sets up a 5% uncollectibility
rate on its net credit sales. Sales returns indicated above represent goods returned only by credit customers. Find the net
realizable value of A/R.

4. Two months after its issue, a 12%, 5 month, 100,000 note was discounted for P101,062.50 cash. How much was the rate
used in discounting?

5. Equipment A, with a residual value of 5,000, will be depreciated over 9 yrs. It was purchased at the beginning of 2001.
Annual depreciation for this equipment is set at 10% of its acquisition cost. On October 1, 2006, the company acquired
Equipment B for 1,000,000. Unlike Equipment A, depreciation on Equipment B is not computed on a time basis, but on a
unit-of-output basis. Having a scrap value of 341,475, Equipment B is estimated to produce 26,500 units over its entire life.
In 2006, Equipment B produced 4,800 units and in 2007, it produced 1,525 units every month. How much should the total
book value of equipment be on the March 31, 2007 SFP?

6. May and Forever formed May Forever Partnership by combining their separate business proprietorships. May and Forever
had capital balances of 150,000 and 200,000 in their respective businesses. The following adjustments are to be observed:
 ADA is to be increased by 250 for May. Forever recovered bad debts amounting to 15,500. Forever is using the
allowance method.
 May's equipment is underdepreciated by 3,500 while Forever's machine is overdepreciated by an amount 25%
higher than May's underdepreciation.
 Interest expense of 375 was carelessly charged to depreciation by Forever.
 May forgot to record collection of sales on account amounting to 13,750.
How much inventory should May contribute to equal Forever's capital contribution?

7. While examining the year-end financial statements of Team Sarah Company, you discovered the following:
a) Excluded from the year-end inventory count are goods held on consignment by Team Sarah at a sales price of 28,000,
including sales commission of 20% of the sales price.
b) Also excluded from the count are goods in transit sold to Coach Leah under terms FOB Destination, invoiced for 28,650,
which includes 2,000 freight, recorded on December 29.
c) Consignment of goods to Kamp Kawayan was inventoried as of year-end at selling price of 37,700.
d) Mark-up on cost for all sales is 30%.
Compute for the adjustment to ending inventory.

8. The Coffee-Mate partnership was established on April 1, 2014. On September 1, Coffee invested an additional 50,000 to his
April 1 capital balance of 40,000. At the same time, Mate’s capital balance was 60,000 on April 1. Capital withdrawals on
October 1 were 12,000 and 20,000 by Coffee and Mate, respectively. Coffee and Mate allow respective monthly salaries of
1,000 and 1,100, a 10% credit based on the average capital balances and share residual income equally. If the partnership’s
income for the year ended December 31, 2014 is 50,000, how much would Coffee’s year-end capital balance be?

9. SexyLove Company sold 120 units of merchandise with a list price of P44 per unit. Trade discount is 30% if a customer
purchases 50 units or more and 20% if a customer purchases 30 to 49 units. Of the units sold, 50% was purchased by buyer
A, 30% was bought by buyer B, and the rest was not availed with the trade discount. Cost of sales is at 75% of the catalog
price. How much would the total operating expenses be if net income is 20% of the gross profit?

10. Several data were assembled in the course of reconciling the cash balance of Marine Co. with that of the bank for June. The
bank erroneously credited Marine for P2,150 on June 19. During the month, the bank charged NSF checks amounting to
P2,340 of which P800 had been redeposited on the 24th of June. Collection for June 30 totaling P10,330 was deposited the
following month. Checks outstanding as of June 30 were P30,205. Notes collected by the bank for Marine were P8,150 and
the corresponding bank charges were P50. The unadjusted cash balance per book on June 30 was P345,027. The bank
statement for June would show an ending balance of how much?

3 PREPARED BY: BATCH SEXYLOVE (BSA-III)

DIFFICULT (7 pts each)
1. Per The Voice Company’s policy, 5.25% of Accounts Receivable will be uncollectible. Credit sales of the company are under
terms 3/10, 1/20, n/30. During the year, the company wrote off 7,500 of A/R. It collected a total of 1,296,100, of which
368,600 was paid within 10 days, 247,500 was paid beyond 10 days but within 20 days, and the rest of the payment, which
included recoveries of 4,000, was paid beyond 20 days. Total sales for the year amounted to 3,071,875, of which 20% was
made on cash. As of year-end, the net realizable value amounted to 2,842,500. Find the Doubtful Accounts Expense for the
year.

2. The net income of Jason Dy during 2015 is 12,800 greater than his additional investment but is 278,000 lesser than his
beginning capital. His additional investment exceeds the amount of withdrawal by 35,700. His ending capital, compared to
the beginning balance, increased by 99,700. Additional information regarding income for the two years ended December 31,
2015 and 2014 follows:
2015 2014
Freight-out 8,700 10,300
Total selling & admin expenses 514,200 610,000
Depreciation on office building 125,600 125,600
Sales Discount (33 1/3% of returns for 2015) 120,200 N/A
Sales returns ? 302,000
Purchases 1,085,000 1,450,000
Contra-purchase accounts N/A 260,000
Freight-in 12,500 11,720
Gross Profit Rate on Cost 35% 35%

The operations manager was also informed that gross sales for 2015 has decreased by 642,000 compared to that of 2014’s.
How much is 2014’s net income?

3. The following information below had been gathered from the books of Jung-copy Co.
12/31/10 1/1/10
Accounts Receivable ? 129,600
Supplies ? 41,390
Cash ? 50,010
Prepaid Expense ? 19,000
Land 650,000 650,000
Equipment 1,050,000 950,000
Accounts Payable 70,000 ?
Notes Payable – Short Term 60,000 ?
Notes Payable – due 2015 ? 580,000
Working capital of 93,700 remained unchanged as of the beginning and ending of 2010. Revenues for 2010 amounted to
103,100 while expenses to 39,200. There were no other changes in owner’s capital. Comparing the ending and beginning
balances of noncurrent liability(ies), what is the amount of increase or decrease (Indicate if increase or decrease.)?

4. In preparing the Statement of Financial Position as of end of 2015, the accountant of 6cLab Inc. gathered the following
information relating to its machine purchased on September 1, 2010.

Carrying amount as of Oct 1, 2015 3,362,800

Residual value 3,850 times the useful life in years
Other costs incurred on acquisition:
Installation 50,800 Transportation 12,300
Testing 38,400 Repairs due to negligent hauling 10,200
Salary of laborers during trial run 15,500 Repairs due to breakage during installation 9,450

As of end of 2015, the asset’s remaining life is expected at 66 2/3% of its original useful life. How much is the carrying
amount of the machine 6 years after acquisition?

5. Quali Takers Inc. has 4 outstanding notes receivable that are to mature within the current year. Due to dire need for cash to
sustain its operations, it decided to discount all of them. Information pertaining to the discounting transaction of the 4 notes
receivable follows:

Note Principal Date Date Date to Interest Discount Discount Gain C/A as of date
Received Discounted mature rate Rate (loss) discounted
A 5,000,000 April 1 May 31 Sep 1 ? 10% 125,000 ? 5,000,000
B 12,000,000 Jan 1 Jan 31 June 30 ? 12% 630,000 (130,000) 12,100,000
C ? June 30 June 30 Dec 31 10% 8% 42,000 8,000 ?
D 6,600,000 Feb 1 June 1 Oct 31 10% ? 354,750 (79,750) ?
How much is the total proceeds from the discounting of the notes receivable?

4 PREPARED BY: BATCH SEXYLOVE (BSA-III)

 6. You were given the following after-closing balances of Totally Spies Partnership.
December 31, 2013 December 31, 2014
Cash 200,000 223,500
Accounts Receivable-@NRV 105,000 ?
Inventory 10,000 30,000
Office Equipment-@CA ? 19,500
Accounts Payable 15,000 42,000
Accrued Liabilities 22,000 5,000
Changes in the capital balances of partners occurred during 2014. On April 1, Sam additionally contributed 3,600. On
September 30, Alex withdrew 1,300. Chloe withdrew 4,100 on March 31. Withdrawals were all charged to the capital
accounts. Furthermore, Alex additionally invested 4,800 on June 30.
The partners have the following profit and loss sharing agreement:
 10% interest on average capital balances
 Monthly salary of 500 to Alex
 10% bonus to Sam based on income after the interest but before salaries and bonuses
 20% bonus to Alex based on income after interest, salaries and bonuses to Sam and Alex
 Residual balance: ratio of 4:3:2 to Sam, Alex and Chloe, respectively
The interest of the partners as of January 1, 2014 were 30%, 25% and 45% of total capital, respectively to Sam, Alex and
Chloe. Per partnership policy, Allowance for Doubtful Accounts is estimated at 20% of ending A/R. During the year, changes
in ADA included write-offs totaling 8,750, Doubtful Accounts Expense of 5,000 and recoveries amounting to 7,500. Also,
the office equipment is 22% depreciated as of end of 2014. Having no residual value, the company expects to use it over 50
years. Determine the capital balance of Sam after distribution of the 2014 income (loss).

7. KOYAH<3 is selling barbecue. His purchases for the day were as follows:
Isau P30.00 Tenga P27.50 Hotdog P57.00
Pork P84.00 Chicken Wings P95.00
Out of the purchases, KOYAH<3 was able to make the following:
Isau 10 sticks Tenga 11 sticks Hotdog 12 sticks
Pork 12 sticks Chicken Wings 10 sticks
KOYAH<3 still had the following goods left from yesterday’s purchases:
Isau 5 sticks Tenga 3 sticks Hotdog 4 sticks
Pork 2 sticks Chicken Wings 5 sticks
KOYAH<3 purchased the same number of items as purchased yesterday only that the price for today’s purchases differ from
that of yesterday. Yesterday’s purchases for Isau, Pork and Chicken Wings were more expensive by P0.25 per stick.
Yesterday’s purchase for Tenga was P0.25 per stick cheaper while that for Hotdog was cheaper by P0.50 per stick.
KOYAH<3 sells the barbecue at the following prices per stick:
Isau P5.00 Tenga P5.50 Hotdog P7.00
Pork P6.50 Chicken Wings P12.00
To increase the daily sales, each stick sold comes with a glass of free orange juice costing P1.00 per glass. Unsold sticks as at
end of the day were as follows:
Isau 2 sticks Tenga 1 stick Hotdog 5 sticks
Pork 1 stick Chicken Wings 4 sticks
If KOYAH<3 pays P20.00 per day for stall rental, calculate his net income (loss) for the day assuming FIFO.

8. The following information is shown in the accounting records of CostAcc Co.

January 1 December 31
Cash P186,000 ?
Accounts Receivable P201,000 P273,000
Merchandise Inventory P258,000 P234,000
Accounts Payable P159,000 P144,000
Total sales and cost of goods sold for the year were P2,394,000 and P1,749,000, respectively. All sales and purchases were
made on credit. Various operating expenses of P321,000 were paid in cash. Assuming that there were no other pertinent
transactions, find the increase in working capital of CostAcc Co. for the year.

5 PREPARED BY: BATCH SEXYLOVE (BSA-III)

 God Bless!    

6 PREPARED BY: BATCH SEXYLOVE (BSA-III)