LONG QUIZ - INTERMEDIATE ACCOUNTING 1: STRAIGHT PROBLEMS AND

THEORIES
The petty cash fund of Vermillion Company
was counted on January 3, 2025. The Transactions and other information relating to
following items were found: Nekoma Company’s Notes Receivable were as
Total Bills and Coins P4,000 follows:
Certified check of general manager 2,000 ●​ On May 1, 2024, Nekoma received a
Petty cash vouchers not yet 2-year, P2,000,000 face value note from
replenished: Karasuno Company in exchange for Land.
Postage stamps, 12/28/24 500 The note bears interest at 12%. The note is
Supplies, 1/2/25 1,000 payable in 2 equal annual installments
Advances to employees, 900 beginning May 1, 2025. The first principal
12/30/24 and interest payment were made on May
Collections from customers on 1, 2025.
12/29/24:
Checks 2,500 ●​ On July 1, 2025, Nekoma Company
Bills and Coins 500 received a 3-year, P3,000,000 face value
Replenishment check 6,000 note from Shiratorizawa Company in
Unused postage stamps 150 exchange for Machinery. Equal annual
Disbursement check for payment payments of P1,000,000 are due on July 1
of utilities 1,600 of each year, beginning July 1, 2026. The
An envelope containing note bears interest at 10% and the market
contributions of employees for the interest rate of similar notes on July 1,
death of a fellow employee (no 800 2025 was 12%. The present value of the
money when opened) note on July 1, 2025, was P2,900,390.
The petty cash fund was established at Interest is payable every July 1.
●​ Nekoma received a 4-year, P5,000,000
P15,000. face value note from Inarizaki Company in
1.​ How much is the correct petty cash fund exchange for Building. The notes
on December 31, 2024? receivable is dated January 1, 2024, has a
2.​ How much is the petty cash shortage or contract rate of 12% compounded
overage? annually. The note matures on January 1,
2028.
Use the following information in answering the 5.​ How much is the carrying value of the
next two items: notes receivable on December 31, 2025
The following accounts on December 31, 2024 related to notes receivable from Karasuno
were taken from the books of Zoldyck Company?
Company: 6.​ How much is the current portion of the
Receivable from sale of goods P1,000,000 notes receivable on December 31, 2025
Receivable from the officer related to notes receivable from
due in 2025 200,000 Shiratorizawa Company?
Claims against shipping 7.​ How much is the interest receivable on
company due in 1 yr. and December 31, 2025 related to notes
2 months 150,000 receivable from Inarizaki Company?
Installment trade receivables
due in 18 months 500,000 On January 1, 2021, Spring Company
Advances to employees 300,000 purchased Browny Corporation, 9% bonds
Interest receivable on notes 100,000 with a face value of P4,000,000 for
Advances from customers 250,000 P3,756,000. The debt investments are carried
Receivable from sale of at amortized cost. The effective interest rate at
building due in 2 years 2,000,000 that time is 10%. The bonds are dated
Subscriptions receivable for January 1, 2021 and mature on December 31,
ordinary shares due in 24 2030. The bonds pay interest annually on
months 600,000 December 31. Market quotation for the debt
Subscriptions receivable for
preference shares due in 400,000 securities at December 31, 2021 is 99.
2025
8.​ How much is the revenue for the year
3.​ How much is the correct Trade 2021?
Receivables on December 31, 2024? 9.​ How much is the carrying amount of the
4.​ How much should be presented in the debt investment at amortized cost at
Statement of Financial Position as “Trade December 31, 2021?
and Other Receivables” on December 31,
2024?

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 LONG QUIZ - INTERMEDIATE ACCOUNTING 1: STRAIGHT PROBLEMS AND
THEORIES
Use the following information in answering the Additional information:
next item(s): • The petty cash fund included unreplenished
Momonosuke Company conducted a physical petty cash vouchers of P10,000.
inventory count for all the inventory items in • The cash on hand included a customer check
its warehouse. The count resulted in of P 200,000 received on December 15 ,2024,
P6,241,000 unadjusted inventory balance. The but dated January 15,2025.
Company also summarized the following • The sinking fund is restricted for the
information, all stated at cost: payment of bonds payable that is due on July
31,2025.
Goods displayed in retail store P256,000
Goods in the receiving department 94,000 11.​ What amount of cash and cash
Goods sent out on consignment 328,000 equivalents should be reported on
Goods received on consignment December 31,2024?
counted in the warehouse 187,000
Goods counted in the warehouse 12.​ Ericah Company established a petty cash
covered by bill-and-hold sale 62,000 fund of P10,000 on July 1, 2023. At the
Goods sold on trial 218,000 end of the month, the count of cash on
Goods in transit purchased FOB hand indicated that P3,557.40 remained
shipping point 73,000 in the fund. A review of the petty cash
Goods in transit sold FOB shipping vouchers disclosed the following
point 114,000 expenses had been incurred during the
Goods in transit purchased FOB month: Office Supplies – P841.60;
buyer 129,000
Goods in transit sold FOB seller 86,000 Postage – P780.00; Representation –
Goods in transit sold FOB buyer 97,000 P1,000.00; Transportation – P1,321.40;
Goods sold but required to be and Miscellaneous – P837.60, Other
repurchased in the future 554,000 items found in the petty cash drawer
Goods counted in the warehouse were a sympathy envelope containing
covered by layaway sale 183,000 P3,500, representing employees’
Goods sold on installment but contributions for the death of mother of
already transferred to the the Company’s messenger.
customer 416,000
Goods purchased and counted in How much is the cash
the warehouse but the seller is shortage/overage?
required to repurchase next
year 194,000 13.​ Jee Company is engaged in the sale of
Goods sent out to a creditor as ladies’ accessories hat are being
collateral for borrowed funds 275,000 distributed in some malls located in
Metro Manila. The company’s accounting
10.​ How much is the adjusted inventory assistant prepares monthly bank
balance as of December 31, 2025? reconciliation. At August 31, 2022, cash
receipts and cash disbursements per
9. JuRy Company provides the following data general ledger Cash in Bank account of
on December 31,2024: Jee Company are P321,000 and
P265,000, respectively. The bank
statement for the same month indicates
that only P302,000 in deposits were
Petty cash fund P 25,505 received during the month and checks
clearing the bank were P326,000. The
Cash on hand 550,000 July 31, 2022, bank reconciliation
showed deposits in transit of P95,000.
Current account – Metrobank 1,255,000 Outstanding checks on August 31, 2022,
were P125,800.
Bond sinking fund 1,550,000
Money market placement 1,000,000 How much is the deposit in transit?

Savings deposit – set 250,000 14.​ How much is the outstanding checks?
aside for dividend 15.​ The statement of financial position of
payable on June 30,2025 Louie Company shows cash of P237,390.
The following items were found to
comprise this amount: Cash in
Metrobank, per bank statement
(outstanding checks as of year-end total

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LONG QUIZ - INTERMEDIATE ACCOUNTING 1: STRAIGHT PROBLEMS AND
THEORIES
P5,200) – P99,320; Savings account at proportionately with the change in the gross
Far East Bank – P30,800; Petty cash carrying amount of the asset.
fund (including expense receipts of P250)
– P1,500; Cash on hand (undeposited 20.​ How much is the revaluation surplus to
sales receipts) – P4,200; Sinking fund be recognized on January 1, 2021?
cash – P20,000; Cash in foreign bank (in 21.​ How much is the annual depreciation
equivalent pesos) – P62,000; Customer’s after revaluation?
checks on hand: Traveler’s checks – 22.​ If no further revaluation was recorded
P4,450 and certified check – P3,120; and the asset was sold on January 1,
90-day BSP treasury bills – P12,000. 2025 for P13,500,000, what is the
amount (gain/loss) to be recognized by
​ How much is cash and cash David upon disposal of the asset?
equivalents?
On December 31.2021. Winnie Company has
A tract of land with a building was acquired an item of machinery with a cost of
for The Closing statement indicated that the P4,500,000 and an accumulated depreciation
land value was P5,000,000 and the building of P1,800,000. On this date, the machinery is
value was P 1,000,000. Shortly after found to be impaired due to obsolescence
acquisition, the building was demolished at a and a major physical damage. The entity
cost of P200,000. A new building was made an assessment and test for
constructed for P3,000,000 plus the following recoverability of the asset and determined
costs: Excavation fees P 120,000; that the machinery's estimated selling price
Architectural design fees – P160,000; is P2,500,000 and estimated disposal cost is
Building permit fee — P40,000; Payment for P250,000. The entity expects net future
insurance premium of construction workers undiscounted cash flows related to the
during the construction period — P 75,000. continued use and eventual disposal of the
machinery of P2,600,000. The net future
16.​ How much is the cost of land? discounted cash flows related to the
17.​ How much is the cost of the new continued use and eventual disposal of the
building? machinery using a discount rate of 10% is
P2,180,000.
Ellie Company has some old equipment that 23.​ How much is the impairment loss to be
cost P700,000 with an accumulated recognized in 2021?
depreciation of P400,000. The equipment was 24.​ The depreciation expense during 2022
traded in for a new machine from a dealer will be-
company that had a list price of P800,000;
however, the new machine could be The Calvin Company self-constructed an
purchased without trade in for P750,000 asset for its own use. Construction started on
cash. Ellie Company paid P500,000 cash in January 1, 2021 and the asset was
the exchange. completed on December 31, 2021. Costs
incurred during the year were as follows:
18.​ How much is the cash price of the January 1, P400,000; April 1, P500,000;
machine? August 1, P480,000; December 1, P180,000.
19.​ How much is the gain/loss on the
exchange? 25.​ How much is the average accumulated
expenditure for the self-constructed
On January 1, 2016, David Corporation asset?
acquired a building at a cost of P22 million. 26.​ If the company had a two-year, 18% loan
The building has been depreciated using of P500,000, specifically obtained to
straight-line on the basis of a 20-year life, finance the asset construction, what is
with a residual value of P2 million. On the capitalized interest added to the cost
January 1, 2021, an appraisal of the building of the self-constructed asset?
by professional and competent appraisers 27.​ Assuming that in addition to the specific
reported a fair value of P 20 million with an borrowing, prior to the construction. The
estimated residual value of p3 million and a company had a general borrowing
remaining useful life of 10 years. It is the amounting to P600,000 with interest of
company's policy to transfer a portion of the 20% and a five-year term that was used
revaluation surplus to retained earnings in part in the self-construction. What is
while the asset is being used by the the total cost of the self-constructed
company. Assume that the accumulated asset?
depreciation of the revalued asset is restated 28.​ Assuming that the total construction
costs of P1,560,000 were incurred evenly

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LONG QUIZ - INTERMEDIATE ACCOUNTING 1: STRAIGHT PROBLEMS AND
THEORIES
during the construction period, and the A.​ Investment in associates
company has the following outstanding B.​ Equity investment at fair value
obligations prior to the start of the through other comprehensive
construction: Specific Borrowing, income
P700,000, 16%, due on January 1, 2023; C.​ Equity investment at fair value
General Borrowing, P500,000, 18%, due through profit or loss
on January 1, 2022, what is the D.​ Debt investment at amortized
capitalized interest added to the cost of cost
the self-constructed asset?
33.​ A merchandising company uses an
The following properties are in the list of automated accounting system in which
Admiral Company: Warehouse that serves as the serial number of each item of
storage of merchandise inventory, P300,000; inventory in the system is entered. This
Farm land with potential for rice planting in allows the company to keep track of
the future. Admiral is yet to decide on the each item’s movement. Which inventory
final purpose of the property whether for system is the most likely to be adopted
farming or for sale to generate profit, by the company?
P1,500,000; Land and building used as office a. Periodic inventory system
building, P3,000,000; Office unit leased to a b. Perpetual inventory system
subsidiary, P1,200,000; Machinery and c. Advanced accounting system
equipment leased out by Admiral under an d. Either A or B.
operating lease, P500,000; Construction in
progress (building) to be leased out once 34.​ An impairment loss that relates to an
finished, P7,500,000; Land in Muntinlupa asset that has been revalued should be
City situated beside a mall being constructed recognized in
acquired for potential capital appreciation,
P500,000; Commercial units being a.​ Revaluation reserve that relates to all
constructed on behalf of a client, P1,000,000; revalued assets
A condominium building with ten (10) units b.​ Revaluation reserve that relates to
valued at P100,000 per unit, half is occupied the revalued asset.
by the company as office of executives while c.​ Share premium because it shall be
the remaining units are being leased out to the first priority in charging
unrelated parties, P1,000,000 impairment loss
d.​ None of the foregoing
29.​ How much is the investment property to
be presented in the statement of financial
position? Provide the measurement of the following
30.​ How much is the total Property, Plant assets (initial and subsequent):
and Equipment to be classified and
presented in the statement of financial 35. Cash Equivalents
position? 36. Patents
37. Investment Property
38. Loans Receivable
39. Inventories
31.​ Equity investments acquired by a 40. Equity Securities
corporation which are accounted for by
recognizing unrealized holding gains or 41. How many years is the life of Copyright?
losses as other comprehensive income 42. What shall be the formula to get Bond
and as a separate component of equity Premium?
most likely are? 43. How shall an air conditioning unit be
A.​ non-trading where a company classified if it was installed after construction
has holdings of less than 20%. of the building?
B.​ trading investments where a
company has holdings of less
than 20%.
C.​ Investments where a company
has holdings of between 20% and
50%.
D.​ investments where a company
has holdings of more than 50%.
32.​ Which securities are purchased with the
intent of selling them in the near future?