1.

ABC Company reported the following data for the year ended December 31, 2020:
Raw materials used in production P800,000
Total overhead costs 900,000
Direct labor 700,000
Ending work in process inventory 400,000
Cost of goods manufactured 2,500,000

Compute for the beginning work in process inventory.

A. P 100 000 C. P 500 000
B. P 300 000 D. P 1 300 000

2. ABC Corp. has two service departments and two producing departments. The following are date availablefor theyear 2020:

Maintenance Utilities Cutting Assembly

Factory overhead cost 129,000 105,000 416,000 380,000 Estimated Labor hours 2,900 1,100 2,000 1,600 Space
Occupied 1,200 1,500 1,900 3,200

The maintenance costs are allocated based on estimated labor hours and utilities are allocated based onspaceoccupied. The
producing department uses machine hours with 50,000 for cutting and 25,000 for assembly to determine the factory overhead rate.
The maintenance department supports the greatest number of departments.

Using step method, what is the factory overhead rate of cutting department?
A. 10.54 C. 20.35
B. 8.32 D. 10.43

3. Which of the following statements is(are) true?

I. Scrap is an incidental output in a joint processing, a residual of the production process that has limitedsales value
II. Waste created by a production process is accounted for in the same manner as defective units III. The primary distinction
between by by-products and scrap is the difference in volume produced IV. Joint costs are allocated to by-products using their
relative net realizable value

A. All statements are true

B. Only 3 statements are true.
C. Only 2 statements are true
D. Only 1 statement is true
E. All statements are false

4. The ABC Company uses a job order cost accounting system. Overhead applied to production is at a predeterminedrate of 80%
based on direct labor costs. The following postings appear in the ledger accounts of the companyforthe month of September
2020:

Debit
Work-in-process, September 1 P30,000
Direct materials 60,000
Direct labor 50,000
Factory overhead 45,000

On September 30, 2020, finished goods completed from the work-in-process costing P160,000. Job 327 was theonly job not
completed in September and has been charged P4,600 for factory overhead.

Direct materials charged to Job No. 327 was:

A. P10,350 C. P20,000
B. P14,650 D. P25,000

5. Bebe Corporation has an EUP of 248,750 units. Beginning inventory units of 22,500, 40% incomplete; ending inventory units of 24,000
60% complete. Conversion costs of beginning inventory of P9,800; current period conversion costs of P204,125. The company elects
to use weighed average method.

What is the total units started in process?

A. 249,350 C. 258,350
B. 235,850 D. 234,350

6. URBANDUB manufactures lifting equipment. One order from OX Co. for 3,000 lifting equipment showedthefollowing costs per unit:
Materials P3.5; Labor P2; and FOH applied at 150% of direct labor cost (125%incasesinwhich any defective unit costs are to be
charged to a specific order or a 25% allowance for reworking defectiveunits). Final inspection showed that 250 units were not
properly produced. Correction of each defectiveunitrequires P.35 for materials, P.40 for Labor and FOH at the appropriate rate.
 Assuming the defective units are the result of internal failure how much is the unit cost for eachunitmanufactured?
A. P 8 C. P 8.10
B. P 8.61 D. P 8.50

7. During April, Chris Corp incurred the following cost of Job 123 for the 200 motors:

Original cost accumulation:

Direct materials P1 320
Direct labor 1 600
Factory overhead 2 400

Direct cost of reworking 10 units:

Direct materials P200
Direct labor 320

The rework costs were attributable to the exacting specification of the job.

The cost per finished unit of Job 123 is:

A. P31.20 C. P26.60
B. P31.60 D. P27

8. ABC Company manufactures product X. It adds materials in the beginning of the process in Department A, whichis the first of two
stages of its production cycle. The following are the information concerning the materials usedin Department A in September 2020:
Units Material Costs

Work-in-process, September 1, 2020 4,000 P2,000

Units started during September 48,000 23,480

Units completed and transferred to next department B during September 30,000

Using the weighted-average method, the materials cost of the work-in-process in the September 30, 2020is: A. P5,390 C.
P11,000
B. P10,780 D. P14,700

9. Wilson Company produces product X in a production cycle which begins in the Grinding Department. Conversioncosts for this
department were 80% complete as to the beginning work-in-process and 50% complete as totheending work-in-process. Data as to
conversion costs in the Grinding Department for December 2020 are as follows:
Units Conversion

Work-in-process, December 1, 2020 20,000 17,600

Units started and costs incurred 108,000 114,400

during the month

Units completed and transferred to January 80,000

the Mixing Department in

Costs

Using the FIFO method, what was the conversion costs of the work-in-process in the Grinding Department atDecember 31, 2020?
A. P36,000 C. P30,480
B. P31,200 D. P26,400

10. Harris Company has the following information for July:

Units started 100,000 units

Beginning Work in process (35% complete) 20,000 units
Normal spoilage (discrete) 3,500 units
Abnormal spoilage 5,000 units
Ending Work in process (70% complete) 14,500 units
Transferred out 97,000 units
Beginning Work in process costs:
Material P15,000
 Conversion P10,000

All materials are added at the start of the production process. Harris Company inspects goods at 75 percentcompletion as to
conversion.

Assume that the costs per EU for material and conversion are P1.00 and P1.50, respectively. Using FIFO, what isthe total cost
assigned to the transferred-out units (rounded to the nearest peso)? A. P245,750 C. P237,000
B. P244,438 D. P224,938

11. The following information is available for James Taylor Corporation for the current year:

Beginning Work in Process Cost of Beginning Work in Process (1/4 to be done) 14,500 units Material P25,100
Started 75,000 units Conversion 50,000 Ending Work in Process Current Costs:
(2/5 incomplete) 16,000 units Material P120,000 Spoilage beyond expectation 2,500 units Conversion 300,000
Total spoilage (continuous) ? units
Transferred out 66,000 units

All materials are added at the start of production.

What is the cost assigned to normal spoilage using weighted average?

A. P 31 000 C. P 30 850
B. P 15 500 D. None of the responses are correct

12. Moonpools Corporation’s standard wage rate is P12.20 per direct labor hour (DLH) and according to the standards, each unit of
output requires 3.9 DLHs. In April, 5,200 units were produced, the actual wage rate was P12.10perDLH, and the actual hours were
24,150 DLHs.

The Labor Rate Variance for April would be recorded as a

A. credit of P 2 028 C. debit of P 2 028
B. credit of P 2 415 D. debit of P 2 415

13. Warp Manufacturing Corporation uses a standard cost system to collect costs related to the production of its ski lift chairs. Warp uses
machine hours as an overhead base. The variable overhead standards or each chair are1.2machine hours at a standard costs of P18
per hour.

During the month of September, Warp incurred 34,000 machine hours in the production of 32,000 ski lift chairs. The total variance
overhead cost was P649,400.

What is Warp’s variable overhead spending variance for the month of September? A. P37 400 unfavorable
C. P79 200 favorable
B. P41 800 favorable D. P84 040 favorable

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14. Forrest Company uses a standard cost system for its production process and applies overhead based ondirectlabor hours. the
following information is available for August when Forrest made 4,500 units: Standard:
DLH per unit 2.50
Variable overhead per DLH P1.75
Fixed overhead per DLH P3.10
Budgeted variable overhead P21,875
Budgeted fixed overhead P38,750
Actual:
Direct labor hours 10,000
Variable overhead P26,250
Fixed overhead P38,000

Using the two-variance approach, what is the controllable variance?

A. P5,812.50 U C. P4,375.00 U
B. P5,812.50 F D. P4,375.00 F

15. Cheeta Company has materials cost in the June 1 Raw and In Process of P10,000, materials received duringJuneof P205,000 and
materials cost in the June 30 Raw and In Process of P12,500. The amount to be backflushedfromRaw and In Process to Finished
Goods at the end of June would be:
 A. P215,000 C. P207,500
B. P202,500 D. P217,500

Numbers 16 and 17
Ratcliff Company produces two products from a joint process: X and Z. Joint processing costs for this productioncycleare
P8,000.
Sales price
Disposal cost
Further
per yard at
per yard at
processing
Final sale
Yards
split-off
split-off
price per yard
per yard
X 1,500 P6.00 P3.50 P1.00 P7.50 Z 2,200 P9.00 P5.00 P3.00 P11.25

If X and Z are processed further, no disposal costs will be incurred or such costs will be borne by the buyer.

16. Using approximate net realizable value at split-off, what amount of joint processing cost is allocated to X(roundto the nearest peso)?
A. P3,090 C. P4,000
B. P5,204 D. P2,390

17. Using net realizable value at split-off, what amount of joint processing cost is allocated to X (round to the nearestpeso)?
A. P3,090 C. P4,000
B. P5,204 D. P2,390

18. A company has identified the following overhead costs and cost drivers for the coming year:

Overhead Item Cost Driver Budgeted Budgeted

Cost Activity

Machine Setup Number of setups P20,000 200

Inspection Number of Inspections P130,000 6,500

Material handling Number of Material moves P80,000 8,000

Engineering Engineering Hours P50.000 1,000

P280,000

Level

The following information was allocated on three jobs that were completed during the year:

Job 101 Job 102 Job

Direct materials P5,000 P12,000

Direct labor P2,000 P2,000

Units completed 100 50

Number of setups 1 2

Number of inspections 20 10

Number of material moves 30 10

Engineering hours 10 50

103
P8,000 P4,000 200 4 30 50 10

Budgeted direct labor cost was P100,000 and budgeted direct material cost was P280,000.

Compute the cost of each unit of Job 102 using Activity-Based Costing:
A. P340 C. P440
B. P392 D. P520

19. ABC, Inc., a motor dealer, sold a vehicle to a customer on 14 November 2020. The contract showed anagreedprice of ₱400,000 and a
delivery date of 3 January 2021. The customer paid a 20% non-refundable deposit on14November 2020. The vehicle was delivered
on 10 January 2021 and the balance due was paid by the customer onthat date.

How much revenue should be recorded for the year ended December 31, 2020? A. ₱0
B. ₱80,000
C. ₱320,000
D. ₱400,000
E. Some other amount

20. Under IFRS 15, which of the following criteria shall be considered as satisfaction of performance obligationorrecognition of
revenue from contracts with customers over a period of time?
A. The customer simultaneously receives and consumes all of the benefits provided by the entity as theentity performs the
obligation.
B. The customer has the significant risk and rewards related to the ownership of the asset at a particulardate.
C. The entity has transferred physical possession, control and title of the asset at a specific time. D. The customer
has accepted the asset at the moment of satisfaction.

21. ABC Inc. awarded its franchise to DEF Co. in Cebu for a total fee of ₱100,000. Of said amount, ₱50,000waspayable upon the signing of
the franchise agreement and the balance, payable in two annual payments of ₱25,000 each.

ABC had been very successful in Metro Manila with 100 franchisees, but Cebu was the first outside MetroManila. ABC’ agreement
with DEF provided that in the event the first year of operations would result to an operatingloss, the franchising agreement may be
cancelled without need of returning any portion of paid franchise feeandthere would be no need to pay any balance of the unpaid
franchise fee.
The entry to record the granting of the franchise to DEF was

A. Cash ₱50,000
Notes receivable 50,000
Unearned franchise fee ₱100,000

B. Cash 50,000
Notes receivable 50,000
Revenue from franchise fee 50,000
Unearned franchise fee 50,000

C. Cash 50,000
Deposit liability 50,000

D. Cash 50,000
Notes receivable 50,000
Revenue from franchise fee 100,000

22. On January 1, 20x1, Dev’t Corp. accepted a long-term construction project to build a condominiumat afixedcontract price of 140
million. The outcome of performance obligation in connection with this contract cannot bemeasured reasonably as of year-end. The
following data are provided by the accountant and project manager:

Estimated cost to complete construction project as of January 1, 20x1, 90,000,000 Actual costs incurred as of
December 31, 20x1, P45,000,000

How much is Dev’t Corp.’s gross profit for the year ended December 31, 20x1?
 A. 30,000,000
B. 10,000,000
C. 25,000,000
D. 0

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23. The Republic of the Philippines contracted with a SLEX Incorporated to develop, operate and maintainthegrantor's skyway connecting
North Luzon Expressway and South Luzon Expressway. SLEX Incorporatedhasreceived the license or right to charge users of the
skyway that it constructs and then must operate and maintainfor a period of 50 years.

How shall SLEX Incorporated account its interest in the said skyway?
A. It shall be accounted under PAS 38: Intangible Asset.
B. It shall be accounted under PFRS 9: Financial Asset classified as debt instrument.
C. It shall be accounted under PAS 16: Property, Plant and Equipment.
D. It shall be accounted under PAS 40: Investment Property.

24. The freight on shipments to branch paid by the branch is recorded by the home office as A. credit to investment
account
B. credit freight in
C. debit freight in
D. not recorded

25. The Ventures Corporation decided to open a branch store in Manila. Shipments of merchandise to the branchtotaled P108,000 which
included a 20% mark-up on cost. All accounting records are to be kept at the homeoffice. The branch submitted the following report
summarizing its operations for the period ended December 31, 20x4.

Sales on account......................................................................... P148,000 Sales on cash

basis...................................................................... 44,000 Collections of
accounts............................................................... 120,000 Expenses
paid............................................................................. 76,000 Expenses
unpaid......................................................................... 24,000 Purchase of merchandise for
cash.............................................. 52,000 Inventory on hand, December 31 (80% from home office.........
60,000 Remittances to home office....................................................... 110,000

The branch operations, in so far as the home office is concerned, resulted in a net income (loss) of: A. P1,600 C.
P8,000
B. P2,000 D. None of the above

26. The Melanie Corporation owns Ching Company and the JC branch. During 2020, the home office shippedtothebranch supplies
costing P360,000 at a billed price of 20% above cost. The inventories of supplies at thebranchwere as follows: January 1, 2020,
P270,000, December 31, 2020, P324,000. On December 31, 2020, thehomeoffice holds inventories of P481,500 which includes
P31,500 held on consignment.

How much is the inventories in a combined statement of financial position as of December 31, 2020?

27. Under IAS 27, if the parent corporation prepares separate financial statements, which of the followingstatements concerning the
threealternative methods of accounting for investment in subsidiary is true? A. Under fair value model, dividend income from
subsidiary shall not be recognized by the parentcorporation because it shall be eliminated.
B. Under cost model, share in net income of subsidiary shall be recognized by the parent corporation. C. Under equity
method, dividend income from subsidiary shall be recognized at the date of declarationbythe subsidiary corporation’s
board of directors
D. Under equity method, gain on bargain purchase shall be recognized by the parent corporationat thedate of acquisition if
the consideration given up is less than the fair value of net asset acquired.

28. Given the following scenario: Company A owns 15% of the voting shares of Company B, a listed company. Inaddition, Company C,
one of Company A's subsidiaries, which is 60% owned, has a further holding of 45%of theshares in Company B. Based on PFRS
10, determine the total interest (in percentage, format xx%) of CompanyAin Company B. 60%

29. ● ABC Company, a holding company whose shares of stocks are not publicly traded in Philippines StockExchange owns 90% of ordinary
shares of San Miguel Corporation, a company whose shares of stocks arepublicly traded in Philippines Stock Exchange.
∙ DEF Corporation owns 80% of ordinary shares of SLEX Corporation, a company whose shares of stocks arenotpublic traded in
Philippine Stock Exchange.
∙ GHI Corporation owns 70% of ordinary shares of JKL Incorporated.

Which of the abovementioned parent corporations may be exempted from preparing consolidated financial statements under IFRS
10?
 A. ABC Company and GHI Corporation
B. ABC Company, DEF Corporation and GHI Corporations
C. GHI Corporation
D. None of the them

30. Jiminez Limited acquired 80% of the share capital and reserves of Mustang Limited for P180,000. Sharecapital was P100,000 and
reserves amounted to P50,000. All assets and liabilities were recorded at fair valueexceptbuildings which was recorded at P10,000
below fair value. The fair value of the NCI at the date of Jiminez’sacquisition was P35,000. The goodwill recorded to this business
combination amounts to:

Partial Goodwill Full Goodwill

A. P52,000 P55,000
B. P54,400 P58,000
C. P54,400 P68,000
D. P52,000 P58,000

31. Metrobank and PS Bank entered into business combination wherein Metrobank will issue ordinary shares totheincumbent
stockholders of PS Bank. As a result of business combination, PS Bank will be dissolved. Whichof thefollowing statements
concerning the acquisition method under IFRS 3 is correct?
A. The ordinary shares issued by Metrobank will be recognized and journalized at par value at theacquisition date.
B. All the assets and liabilities of Metrobank will be measured at fair value in the preparation of financial statements after the
business combination.
C. If the fair value of the net assets of PS Bank is more than the fair value of shares issued by Metrobank, the difference shall
be recognized in profit or loss of Metrobank.
D. If the fair value of shares issued by Metrobank is higher than the fair value of net assets of PS Bank, thedifference shall be
amortized over the assumed maximum period of 10 years.

32. ABC Corporation owns an 80% interest in Shell Corporation acquired several years ago. DEF Corporation regularlysells merchandise to
its parent at 125% of DEF cost. Gross profit data of ABC and DEF for the year 2020areasfollows:

ABC

Sales P1,00 P800,000

0,000

Cost of goods sold 640,000

800,0
00

Gross profit P160,000

P200,0
00

DEF

During 2020, ABC purchased inventory items from DEF at a transfer price of P400,000. ABC’s December 31, 2019and 2020
inventories goods acquired from DEF of P100,000 and P125,000, respectively.

Consolidated cost of goods sold of ABC Corporation and Subsidiary for 2020 was:
A. P1,024,000 C. P1,052,800
B. P1,045,000 D. P1,056,000

33. Banks A and B agreed to combine their corporate, investment banking, asset management and service activitiesby establishing a
separate vehicle (Bank X). Both parties expect the arrangement to benefit themin different ways.

The assets and liabilities held in Bank X are the assets and liabilities of Bank X and not the assets and liabilitiesof the parties. Banks A
and B each have a 40 percent ownership interest in Bank X, with the remaining 20 percentbeing listed and widely held. The
stockholders’ agreement between Bank A and Bank B establishes joint control over the activities of Bank X.

Transactions for the year 2019 and 2020 as follows:

2019 2020

Investments : Bank A P50M

Bank B 50M

Revenues 10M

Cost and Expenses 6M

Dividends paid – Bank X - 4M

What is the interest of Bank B in the joint arrangement at December 31, 2020?

12M 7M

A. 52.0m C. 54.5m B. 52.4m D. 50.5m

Numbers 34 and 35
ABC Company, a local company, bought raw materials as ingredients in its products from DEF Corporation, aUScompany, for 35,000 US
Dollars in 2020. Pertinent exchange rates relating to this transaction are as follows:

Buying Rate Selling

Receipt of order P47.10 P47.20

Date of shipment 47.25 47.45

Balance sheet date 47.50 49.60

Settlement date 49.45 49.50

Rate

34. What is the foreign exchange gain or loss of ABC Company for 2020?
A. P78,750 loss C. P78,750 gain
B. P75,250 loss D. P75,250 gain

35. What is the value of the inventory, assuming it’s not yet sold, as of settlement date? A. 1,652,000 C. 1,732,500
B. 1,660,750 D. 1,653,750

36. ABC Inc. imports machinery from a foreign supplier 350,000 foreign currencies (FCs). ABC paid 50,000 FCat thetime of placing the
order, with the balance due in 60 days after delivery. Title to the machinery transfers toABCupon completion of inspection and test
run.

As specified by IFRIC 22, what is date of the foreign currency transaction for the purpose of determiningtheexchange rate
to use on initial recognition of the related asset, expense or income? A. date of placing the order
B. date it received delivery
C. date it completed the inspection and test run
D. date it paid the balance

37. Under IAS 21, which of the following statements is true when translating entity’s financial statement in functional currency into
entity’s presentation currency?
A. Monetary assets and liabilities are translated at closing rate while nonmonetary assets and liabilities aretranslated at
transaction rate
B. Equity accounts such as ordinary shares, share premium and treasury shares are translated at closingrate.
C. Retained earnings are translated at closing rate.
 D. Income and expense accounts are translated at transaction rate.

38. Psalm was admitted to a partnership. She contributed P25,000 cash plus equipment she purchased for P50,000and which had a
accumulated depreciation for tax purposes of P20,000. The fair value of the equipment wasP35,000. She also assumed 1/3 of
partnership debt of P15,000. Her beginning capital balance was P48,000.

For tax purposes her partnership interest should be initially valued at

A. 65,000 C. 50,000
B. 48,000 D. 60,000

39. Saint Paul Hospital, a nonprofit hospital affiliated with Saint Paul University, received the followingcashcontributions from
donors during the year ended December 31, 2019:

Contributions restricted by donors for research P50,000 Contributions restricted by donors for capital
acquisitions 250,000

Neither of the contributions was spent during 2019, however, during 2020, the hospital spent the entire P50,000contribution on
research and the entire P250,000 contribution on a capital asset which was placed intoserviceduring the year. On the hospital’s
statement of operations for the year ended December 31, 2020, what total amount should be reported for “net assets released from
restrictions?”
A. P 0 C. P250,000
B. P50,000 D. P300,000

40. The following data pertained to Banana Company’s construction jobs, which commenced during 2020: PROJECT PROJECT

BLUE GREEN
Contract Price 420,000 310,000 Cost incurred during 2020 240,000 280,000 Estimated cost to complete 120,000
40,000 Billed to customers during 2020 150,000 270,000 Received from customers during 2020 120,000 250,000

If Banana Company used the percentage of completion method, what amount of gross profit (loss) would BananaCompany report in
its 2020 income statement?
A. ₱40,000
B. ₱31,250
C. ₱30,000
D. None

END OF EXAMINATION
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