QUIZ1 - Finacc3

1.
The accounts and balances shown below were gathered from Easy Corporation's
trial balance on December 31, 2015. All adjusting entries have been made.
Wages Payable ...........................................
Cash ....................................................
Mortgage Payable ........................................
Dividends Payable .......................................
Prepaid Rent ............................................
Inventory ...............................................
Sinking Fund Assets .....................................
Short-Term Investments ..................................
Premium on Bonds Payable ................................
Stock Investment in Subsidiary ..........................
Taxes Payable ...........................................
Accounts Payable ........................................
Accounts Receivable .....................................
P 25,600
17,700
151,600
14,000
13,600
81,800
52,400
15,200
4,600
102,400
22,800
24,800
36,600
The amount that should be reported as current assets on Easy Corporation's

balance sheet is?
2. See information for Easy Corporation above. The amount that should be reported as
current liabilities on Easy Corporation's balance sheet is?
3. TAMA Electronics Inc. reported the following items on its December 31, 2015, trial
balance:
Accounts Payable ........................................
Advances to Employees ...................................
Unearned Rent Revenue ...................................
Estimated Liability Under Warranties ....................
Cash Surrender Value of Officers' Life Insurance ........
Bonds Payable ...........................................
Discount on Bonds Payable ...............................
Trademarks ..............................................
P108,900
4,500
28,800
25,800
7,500
555,000
22,500
3,900
The amount that should be recorded on TAMA's balance sheet as total

liabilities is?
4. TIWALA LANGCo. prepared a draft of its 2015 balance sheet. The draft statement
reported current liabilities totaling P200,000. However, none of the following items
were included in this preliminary total at December 31, 2015:
Accounts payable ........................................
Bonds payable, due 2016 .................................
Discount on bonds payable, due 2016 .....................
Dividends payable on January 31, 2016 ...................
Notes payable, due 2017 .................................
P30,000
50,000
6,000
16,000
40,000
At which amount should TIWALA LANG's current liabilities be correctly

reported in the December 31, 2015, balance sheet?
5. The December 31, 2015, balance sheet of Madugo To Inc., reported total assets of
P1,050,000 and total liabilities of P680,000. The following information relates to the
year 2016:
Madden Inc. issued an additional 5,000 shares of common stock at
P25 per share on July 1, 2008.
Madden Inc. paid dividends totaling P80,000.
Net income for 2008 was P110,000.
No other changes occurred in stockholders' equity during 2016.
The stockholders' equity section of the December 31, 2016, balance sheet
would report a balance of?
6. IYAKKANA Company's adjusted trial balance at December 31, 2015, includes the
following account balances:
Common Stock, P3 par ....................................
Additional Paid-In Capital ..............................
Treasury Stock, at cost .................................
Net Unrealized Holding Loss on Available-For-Sale
Securities ............................................
Retained Earnings--Appropriated for Uninsured Earthquake
Losses ................................................
Retained Earnings--Unappropriated .......................
P300,000
400,000
25,000
10,000
75,000
100,000
What amount should IYAKKANA report as total owners' equity in its December
31, 2015, balance sheet?
7. The following expenses were recognized by WAWAYOU Company, a retailer, during
2016:
Interest expense .....................................
Telephone expense ....................................
Loss on sale of store equipment ......................
Legal fees ...........................................
Officers' salaries ...................................
P120,000
95,000
47,000
74,000
115,000
What should WAWAYOU report as general and administrative expenses for

2008?
8. The books of the OKAYLANG YAN Company for the year ended December 31,
2016, showed pretax income of P360,000. In computing the taxable income for
federal income tax purposes, the following timing differences were taken into
account:
Depreciation deducted for tax purposes in excess of

depreciation recorded on the books ...................
Income from installment sale reportable for tax purposes
in excess of income recognized on the books ..........
P16,000
12,000
What should OKAYLANG YAN record as its current income tax liability at
December 31, 2016, assuming a corporate income tax rate of 30 percent?
9. PATAWAD Corporation's income statement for the year ended December 31,
2016, shows pretax income of P1,000,000. The following items are treated
differently on the tax return and in the accounting records:
Tax
Accounting
Return
Records
Rent income ...........................
P 70,000
P120,000
Depreciation expense ..................
280,000
220,000
Premiums on officers' life insurance ..
-90,000
Assume that PATAWAD's tax rate for 2016 is 30 percent. What is the amount of
income tax payable for 2016?
10.NOBONUS Corporation's income statement for the year ended December 31,
2016, shows pretax income of P300,000. The following items are treated
differently on the tax return and in the accounting records:
Warranty expense ......................

Depreciation expense ..................
Premiums on officers' life insurance ..
Tax
Return
P170,000
150,000
--
Accounting
Records
P185,500
100,000
60,000
Assume that NOBONUS' tax rate for 2016 is 40 percent. What is the current
portion of NOBONUS' total income tax expense for 2016?
LONG PROBLEM
HINGA KA MUNA CORPORATION provided the following information on December 31,
2015:
Cash
800,000
Accounts Receivable
750,000
Allowance for Doubtful Accounts
50,000
Prepaid Expenses
160,000
Inventory
1,000,000
Financial assets at fair value
690,000
Land
500,000
Building in process
5,000,000
Patent
200,000
Machinery and Equipment
1,500,000
Accumulated Depreciation
300,000
Discount on Bonds Payable
200,000
Accounts Payable
900,000
Accrued Expenses
150,000
Note Payable
250,000
Bonds Payable
2,000,000
Share Capital
3,000,000
Retained Earnings
4,000,000
Retained Earnings appropriated for contingencies 150,000
Additional Information:
a. The financial assets at fair value include:
SUKO NAKO Company 1,000 shares
400,000
HINGA KA MUNA CORP. share capital, 2,000 shares
250,000
Dividend receivable on SUKO NAKO Company share capital
40,000
b. The balance of building in process account represents the costs expended to
date on a building in the process of construction. The entity rents factory
space at the present time. The land on which the building is being
constructed is acquired at a cost of P500,000 and now has a market value of
P1,000,000.
c. The note payable represents bank loan due July 1, 2017. No interest is
accrued on the loan.
d. The bonds pay 10% interest semiannually on April 1 and October 1 and
mature on April 1, 2018. No interest has been accrued on the bonds.
e. Forty thousand shares, P100 par, are authorized, of which 30,000 shares are
issued including 2,000 shares in the treasury.
f. The retained earnings appropriation balance of P150,000 was created in
anticipation for the result of a pending lawsuit against the entity. Shortly after
the end of reporting period, the suit was amicably settled, the entity paying
P100,000.
Required: Prepare Statement of Financial Position.

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1.

The amount that should be reported as current assets on Easy Corporation's

The amount that should be recorded on TAMA's balance sheet as total

At which amount should TIWALA LANG's current liabilities be correctly

What should WAWAYOU report as general and administrative expenses for

Depreciation deducted for tax purposes in excess of

Warranty expense ......................

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