CHAPTER 1: CHANGES IN ACCOUNTING ESTIMATES, POLICIES AND ERRORS

THEORIES
1 B. Consistency
2 C. Error in the financial statements
3 A. . Accounting Policies
4 a. Applying a new accounting policy to transactions as if that policy had always been applied.
5 b. A change to a different method of depreciation
6 b. II only
7 c. Either I and II
8 a. Beginning retained earnings for the earliest period presented
9 b. Is a change in accounting policy
10 a. I, II, V
11 c. Understated, Overstated DR Insurance exp CR payables CAPITALIZED YUN INSURANCE COST SA INVENTO
12 c. From cash basis of accounting to accrual basis of accounting
13 d. The gain or loss recognized on the outcome of a contingency which previously could not be estimated reliably constitu
14 d. I, II and III only
15 b. the after tax-difference between prior periods income and current income under the old method

PROBLEMS
16
JAN 1 AVE 4,000,000
JAN 1 FIFO 4,800,000
INCREASE IN BEG INV 800,000
TAX EFFECT 0.75
INCREASE IN BEG RE 600,000 INCREASE

INVENTORY, BEG 600,000

RE, BEG 600,000

17
COST 4,000,000
ACCUM DEP 900,000 3,600,000 180,000
CV BEG 2026 3,100,000
RV (200,000) SYD 10
REM DEPRECIABLE AMOUNT 2,900,000
SYD 0.40
DEPRECIATION FOR 2026 1,160,000

18
Estimated warranty obligation 200,000
Warranty expense 60,000
Cash 260,000
 Estimated liability on litigation 400,000
Cash 360,000
Gain on settlement 40,000

Warranty expense 60,000

Gain on settlement 40,000
Net effect of settlement on P/L (20,000) decrese

19 errors NI 2021 NI 2022 RE 2021

unadjusted balances 4,000,000 8,000,000 8,800,000
understated inv 2021 200,000 (200,000) 200,000
erroneous revenue expence 1,200,000 1,200,000
unrecorded depreciation (240,000) (240,000) (240,000)
corected balances 5,160,000 7,560,000 9,960,000
#20 #19

21 NI 2021 NI 2022 RE 2021

unadjusted balances 1,600,000 2,400,000 6,400,000
overstated prepaid supplies (80,000) 80,000 (80,000)
understated salaries payable (160,000) 160,000 (160,000)
erroneous capital expenditures (400,000)
recorded depreciation 100,000 100,000 (300,000)
corrected balances 1,060,000 2,740,000 5,860,000
#21
23
NI 2021 NI 2022 RE 2021
unadjusted balances
understated ei 2021 9,600 (9,600) 9,600
overstated ei 2022 (CA) (8,100)
understated dep expense 2021 (2,300) - (2,300)
overstated insurance exp 44,000 (22,000) 44,000
unrecorded gain on sale 2022 15,000
total effect in balances 51,300 (24,700) 51,300

overstated insurance exp 22,000

total ei (8,100)
unrecorded cash 2022 (CA) 15,000
total effect in nwc 2022 28,900 understated
24
CA NCA CL
unadjusted balances 700,000 2,000,000 250,000
1 unrecorded dep (16,000)
2 understated ei 2020
 3 overstated ei 2021 (42,500)
4 unrecorded collection
5 overstated accu dep 110,000
overstated equip (91,500)
6 unrecorded provisions 625,000
7 unrecorded unrealized loss (26,000)
8 overstated salaries payable (11,400)
9 erroneous revenue expense 1,600,000
unrecorded depreciation (200,000)
10 unrecorded prepaid insurance (18,750)
11 unrecorded amortization (50,000)
adjusted balances 612,750 3,352,500 863,600

unadjusted balance of re 1,550,000

1 unrecorded dep (16,000)
2 understated ei 2020 -
3 overstated ei 2021 (42,500)
4 unrecorded collection -
5 overstated accu dep
overstated equip 18,500
6 unrecorded provisions (625,000)
7 unrecorded unrealized loss (4,000)
8 overstated salaries payable 11,400
9 erroneous revenue expense 1,600,000
unrecorded depreciation (200,000)
10 unrecorded prepaid insurance 46,875
11 unrecorded amortization (100,000)
correct balance of SHE 2,239,275

1,000,000 0.87719298 877,193

100,000 0.8771930 87,719
FV DEC 31 2023 964,912

4,000,000 1 3,508,772
400,000 1 350,877
3,859,649
964,912

DISCUSSION QS
2,020 2,021
2,000 (2,000)
2,100
ND ERRORS

D YUN INSURANCE COST SA INVENTORY, THEN ONCE SOLD, UNDERSTSTATED YUN COGS

uld not be estimated reliably constitute a correction of a prior period error

the old method

 RE 2022
16,800,000
-

720,000
17,520,000

Beg RE 2021 4,800,000

RE 2022 correct ni 2021 1,060,000
8,800,000 RE, end 2021 5,860,000
- Correct NI 2022 2,740,000
- RE, end 2022 8,600,000

(200,000)
8,600,000
#22

RE 2022

-
(8,100)
(2,300)
(22,000) cash 15,000
15,000 accu dep 200,000
(17,400) equip 200,000
gain 15,000

NCL SHE
900,000 1,550,000
(16,000)
cash
 (42,500) a/r
cash 18,500
- equip 18,500
18,500
(625,000) cash 18,500
(26,000) accu dep 110,000
11,400 equip 110,000
1,600,000 gain 18,500
(200,000)
(18,750)
(50,000) salaries payable
900,000 2,201,650 salaries exp

june 30 2020-2021
2021-2022
2022-2023
2023-2024

46,875 3,704,600
18,750
65,625
2,022 RE 2021 RE 2022

(2,100) 2,100 UNDERSTATED

3,900 3,900
AUDIT PLANNING AND CONSIDERATION OF MISSTAEMENTS IN FINANCIAL S

CASE 3 ERRORS NI 2022

UNADJUSTED BALANCE 1,350,000

OVERSTATED INVENTORY (60,000)

UNDERSTATED INVENTORY
ACCRUED SALARIES (280,000)

ACCRUED INTERST INCOME 156,000

PREPAID INSURANCE 199,000

ADVANCES FROM CUSTOMERS (350,000)

ERRONEOUS REVENUE EXPENDITUES 400,000

DEPRECIATION (20,000)
ERRONEOUS REVENUE EXPENDITUES
DEPRECIATION
ADJUSTED BALANCE 1,395,000

PROPOSED JOURNAL ENTRY

UNDERSTATED LIABILITY:
RETAINED EARNINGS 320,000
ADVANCES FROM CUSTOMERS

ERRONEOUS REVENUE EXPENDITURES:

MACHINERY 400000
RETAINED EARNINGS
ACCUMULATED DEPRECIATION

MACHINERY 500000
RETAINED EARNINGS
ACCUMULATED DEPRECIATION

COMPOUNDED ENTRY:
MACHINERY 900000
RETAINED EARNINGS
ACCUMULATED DEPRECIATION

CASE 4 ERRORS NI 2022

UN ADJUSTED BALANCE 510000
UNRECORDED SALES 250000
UNRECORDED PURCHASES -200000
 UNDERSTATED INVENTORY
ADJUSTED BALANCE 560000

RE, BEG 2022 -

ADJUSTED NET INCOME 2023 560000
DIVIDENDS PAID 2022 -110000
ADJUSTED RE, END 2022 450000
ADJUSTED NI 2023 515000
DIVIDENDS PAID 2023 -230000
ADJUSTED RE, END 2023 735000

CASE 5

RE, BEG 2021

UNADJUSTED BALANCE 405000

OVERSTATED INVENTORY
UNDERSTATED INVENTORY
SALES COMMISSION PAYABLES

SUPPLIES ON HAND

ERRORNEOUS REVENUE EXPENSE 180000

UNRECORDED DEPRECIATION EXPENCE -12000

ADJUSTED BALANCE 573000

ADJUSTED RE, BEG 2021 573000

ADJUSTED NET INCOME 2021 472000
DIVIDENDS DECLARED 2021 -48000
ADJUSTED RE, END 2021 997000
ADJUSTED NET INCOME 2022 380000
DIVIDENDS DECLARED 2022 -48000
ADJUSTED RE, END 2022 1329000
ADJUSTED NET LOSS 2023 -119500
DIVIDENDS DECLARED 2023 -
ADJUSTED RE, END 2023 1209500

CASE 6
ERRORS NI 2022
OVERSTATED INVENTORY -100000
UNDERSTATED INVENTORY
OVERSTATED DEPRECIATION EXP 20000
PREPAID INSURANCE PREMIUM -30000
 SALE OF MACHINERY

NET EFFECT OF ERRORS -110000

CUMMULATIVE EFFECT IN NI 2022 -110000

CUMMULATIVE EFFECT IN NI 2023 480000
TOTAL EFFECT IN RE, END 2023 370000

CASE 7 2022
UNADJUSTED BALANCE

AUDIT OF CASH AND CASH EQUIVALENTS

CASE 1 CASH AND CASH EQUIVALENTS PRESENTATION

CASH IN BANK-METROBANK
BALANCE PER BOOK 2,120,000
 COMPENSATING

2,120,000
ADJUSTED BALANCE 1,820,000

CASH IN BANK-METROBANK 1,820,000

CASH IN BANK-BDO 695,000
CASH IN BANK-BPI 4,130,000
CASH EQUIVALNETS 750,000
TOTAL CASH AND CASH EQUIVALENTS 7,395,000

CASE 2 CASH AND CASH EQUIVALENTS PRESENTATION

CASH:
CA SAVINGS ACCOUNT-EASTWEST 3,180,000
CA CHECKING ACCOUNT-SEC BANK 2,120,000
CA OVERDRAFT-SEC BANK (220,000)
CA PAYROLL ACCOUNT 1,750,000
CA UNITED BANK (FOREIGN ACCOUNT) 3,346,200
R SAVING DEPOSIT-RURAL (BANKRUPT)
CA POSTDATED CHECKS TO SUPPLIER 120,000
CA TRAVELER'S CHECK 425,000
CA MONEY ORDER 150,000
CA PETTY CASH FUND 10,150
CA CHANGE AND TAX FUNDS 520,000
CE TIME DEPOSIT-BDO 350,000
CE MONEY MARKET PLACEMENT 320,000
CE T-BIILS 480,000
CACETOTAL CASH AND CASH EQUIVALENTS

CASE 3 CASH AND CASH EQUIVALENTS PRESENTATION

CASH ON HAND PER BALANCE 250,000
NSF CHECK (25,000)
POSTDATED CHCEK (45,000)
1 CORRECT BALANCE OF CASH ON HAND 180,000

PETTY CASH FUND BALANCE:

CURRENCY AND COINS 2,750
REPLENISHED CHECKS 2,810
2 CORRECT PETTY CASH FUND BALANCE 5,560

CASH IN BANK-ASIAN DEV. PER BAL 2,220,000

UNDELIVERED CHECKS 110,000
 POST DATED CHECKS 270,000
3 CORRECT CASH IN BANK-ASIAN DEV 2,600,000

CASH IN LAND BANK PER BALANCE-1 2,500,000

CASH IN LAND BANK PER BALANCE-2 (300,000)
4 CORRECT CASH IN LAND BANK BALANCE 2,200,000

5 METROBANK-CASH EQUIVALENTS: 400,000

METROBANK-SAVINGS ACOOUNT FOR PPE

6 TOTAL CASH AND CASH EQUIVALENT 5,385,560

CASE 4 PETTY CASH FUND AND CASH COUNT

TOTAL ACCOUNTABILITY:
PETTY CASH FUND BALANCE 10,000.00
COLLECTIONS+ACCOM CHECK 5,145.75
OTHER COLLECTIONS 1,450.00

TOTAL ACCOUNTED FOR:

BILLS AND COINS 3,543.25
IOU FROM EE 1,400.00
CHECKS+ACCOM. CCHECK 5,145.75
ALL UNREPLENISHED CHECKS 4,266.95
OTHER FORM OF COLLECTIONS 1,450.00
2 CASH SHORTAGE

ACCOMODATION CHECK
BILLS AND COINS
UNREPLENISHED VOUC NOT YET EXPENSE
1 TOTAL AMOUNT OF PETTY CASH FUND

CASE 5 PETTY CASH FUND AND CASH COUNT

TOTAL ACCOUNTABILITY:
PCF BALANCE 50,000
UNDEPOSITED COLLECTIONS WITH OR 198,500
COLLECTIONS WITHOUT OR 56,000
ACCOMODATION CHECKS 6,800
UNCLAIMED SALARIES 11,000

TOTAL ACCOUNTED FOR:

BILLS AND COINS 24,230
CHECKS COLLECTED+REPLENISHEMENT 175,800
ACTUAL UNCLAIMED SALARIES 10,000
UNREPLENISHED VOUCHERS 37,100
CASH SHORTAGE
 1 PAJE:
3 SUPPLIES EXPENSE 400
ADVANCES TO EE 25,000
POSTAGE STAMPS 6,500
TRANSPORTATION EXPENSE 700
REPAIRS EXPENSE 4,500
PETTY CASH FUND
ADJUSTMENT FOR UNREPLENISHED VOUCHERS

CASH 11,000
SALARIES PAYABLE
UNCLAIMED SALARIES

TRAVEL EXPENSES* 16,800

PETTY CASH FUND 6,800
ADVANCES TO EE
LIQUIDATION OF ADVANCES

RECEIVABLE FROM CASH CUSTODIAN 75,170

PETTY CASH FUND
CASH
TO RECORD CASH SHORTAGE**

REPLENISHED CHECK 5,000

ACCOMODATION CHECK 6,800
3 CORRECT BAL OF PETTY CASH FUND 11,800

CASE 6 REVIEW OF BANK RECONCILIATION

DEPOSITS IN TRANSIT, NOV 30 2023 123,200

ADD: DECEMBER DEPOSITS BY BOOK 464,800
TOTAL DEPOSITS IN TRANSIT 588,000
LESS: DEPOSITS RECOGNIZED BY BANK (400,000)
1 DEPOSITS IN TRANSIT, DEC 31, 2023 188,000

OUTSTANDING CHECKS, NOV 3O, 2023 160,000

ADD: DECEMBER CHECKS BY BOOK 248,000
TOTAL OUTSTANDING CHECKS 408,000
LESS: DECEMBER CHECKS BY BANK (320,000)
2 OUTSTANDING CHECKS, DEC 31, 2023 88,000
 BALANCE PER BANK DEC 31, 2023 692,000
ADD: DEPO. IN TRANSIT, DEC 31, 2023 188,000
LESS: OUTS. CHECKS, DEC 31, 2023 (88,000)
3 ADJUSTED CASH BAL. DEC 31, 2023 792,000

CASE 7 REVIEW OF BANK RECONCILIATION

OUTSTANDING CHECKS, NOV 3O, 2023

ADD: DECEMEBER BOOK CREDITS 327,165
UNRECORDED CHECKS CLEARED BY B 15,900
LESS: DEBIT MEMO NOV -
TOTAL OUTSTANDING CHECKS
LESS: CHECKS PAID BY BANK 354,225
LESS: BANK ERROR CHARGE (5,940)
1 OUTSTANDING CHECKS, DEC 31, 2023

ALTERNATIVE COMPUTATION
CHECKS OUTS. ON NOV NOT CLEARED IN DEC:
OUTSTANDING CHECKS, NOV 3O, 2023 26,130
CHECKS CLEARING OUTS NOV (25,380)

CHECKS ISSUED IN DEC NOT YET CLEARED

CHECKS TO BE CLEARED IN DEC 327,165
CHECKS CLEARED IN DEC DISBURSEME (307,005)
1 OUTSTANDING CHECKS, DEC 31, 2023

DEPOSITS IN TRANSIT, NOV 30 2023

ADD: BOOK RECEIPTS
TOTAL DEPOSITS IN TRANSITS
LESS: DEPOSITS RECOGNIZED BY BANK
2 DEPOSITS IN TRANSIT, DEC 31 2023

BOOK
UNADJUSTED BALANCES 124,840
DEPOSITS IN TRANSIT, DEC 31 2023
OUTSTANDING CHECKS, DEC 31, 2023
CHECK ERRONEOUSLY CHARGED BY BANK
BANK SERVICE CHARGE (1,305)
NOTE PAID BY BANK (91,500)
DAUD CHECK (4,665)
UNRECORDED CHECK IN BOOK (15,900)
ADJUSTED BALANCES 11,470
CASH SHORTAGE

PAJE:
CASH SHORTAGE 1,000
 CASH IN BANK

CASE 8 PROOF OF CASH

DEPOSIT IN TRANSIT NOV 30, 2023
ADD: BOOK RECEIPTS DECEMBER 2,078,260
LESS: CREDIT MEMO NOV -
TOTAL DEPOSITS IN TRANSIT
LESS: BANK CREDITS DECEMBER* 2,018,310
LESS: CREDIT MEMO DEC -
BANK ERROR CHARGED TO -
1 DEPOSIT IN TRANSIT DEC 31, 2023

PROOF OF CASH BEG BALANCE

UNADJUSTED BALANCES 803,115
DEPOSIT IN TRANSIT:
NOV 65,100
DEC
OUTSTANDING CHECKS:
NOV (72,400)
DEC
BANK CREDIT ERROR:
NOV (45,000)
CHECK ERRONEOUSLY CHARGED BY BANK
ADJUSTED BALANCES PER BANK 750,815
LESS: CREDIT MEMO
NOV (280,310)
DEC
ADD: DEBIT MEMO
NOV-BANK SERVICE CHARGE 700
NSF CHECK 12,500
DEC-BANK SERVICE CHARGE
NSF CHECK
BOOK ERROR - DEC
BOOK ERROR RECEIPTS-NOV 20,000
BOOK ERROR-DEC
UNADJUSTED BALANCES PER BOOK 503,705

CASE 9 PROOF OF CASH

BOOK NOV. 30, 2023

UNADJUSTED BALANCES 542,520
CREDIT MEMO-NOV 40,000
BANK CHARGE-NOV (160)
NSF CHECK-TONYO-DEC
NSF CHECK-LEA-DECNOT REDEPOSIT IN DEC
 UNRECORDED PAY CHECKS
ADJUSTED BALANCES 582,360

BANK NOV. 30, 2023

UNADJUSTED BALANCES 688,840
DEPOSIT IN TRANSIT-NOV 70,000
OUTSTANDING CHECKS-NOV (176,480)
BANK ERROR-CHECK 900
DEPOSITS IN TRANSIT-DEC
OUTSTANDING CHECKS-DEC
DEPOSITS IN TRANSIT-JAN 12
OUTSTANDING CHECKS-JAN 12
ADJUSTED BALANCES 582,360

MULTIPLE CHOICE CASE ANALYSIS

CASE 1
1 TOTAL ACCOUNTABILITY:
PETTY CASH FUND BALANCE 10,000.00
COLLECTIONS
OTHER COLLECTIONS

TOTAL ACCOUNTED FOR:

BILLS AND COINS 1,500.00
IOU FROM EE
CHECKS
UNREPLENISHED CHECKS 8,120.00
OTHER FORM OF COLLECTIONS
A CASH SHORTAGE

2 UNADJUSTED BALANCE PER BANK-UCPB

DEPOSIT IN TRANSIT
OUTSTANDING CHECKS
A ADJUSTED BANK BALANCE-UCPB

3 ADJUSTED BALANCE-BPI

4 BDO-PESO ACCOUNT
BDO-DOLLAR ACCOUNT
D TOTAL LONG TERM INVETSMENTS

5 PETTY CASH FUND

ADJUSTED BANK BALANCE-UCPB
ADJUSTED BALANCE-BPI
BDO-AGGREGATE AMOUNT (LTI)
A TOTAL CASH
CASE 2

case 8

1
2
3
INITIAL PV OF NOTE

JAN 1 23
DEC 31 23
DEC 31 24
DEC 31 25

FACE VALUE ON NOTE

PV OF NOTE
DISCOUNT ON N/R

INITIAL PV OF NOTE
LESS: CV OF LAND
GAIN ON SALE OF LAND

PAJE:
DICOUNT ON NOTES RECEIBALE
INTEREST INCOME

INTEREST INCOME FOR 2023

4. OVERSTATEMENT OF PROFIT
RECORDED:
GAIN ON SALE OF LAND
INTEREST INCOME

SHOULD BE:
GAIN ON SALE OF LAND
INTEREST INCOME FOR 2023
OVERTSTATEMENT

GAIN ON SALE
INTEREST INCOME
DISCOUNT ON N/R
CASE 3 60 DAYS AND U
UNADJUSTED BALANCES 540,000
WRITE OFF IN SEPT
CREDIT BALANCE IN 61-90 DAYS
SALES INVOICE RECORDED TWICE (65,000)
OVERSTATEMENT IN PRICE
WRITE OFF OF ACCOUNTS UNCOLLECTIBLE
TOTAL GROSS A/R BALANCES 475,000
% OF UNCOLLECTIBLE 0.025
ALLOWANCE FOR UNCOOLECTIBLE ACCO (11,875)
NET REALIZABLE VALUE 463,125

ADA, BEG
PROVISONS
1Q 11,100
2Q (10,200)
3Q 11,600
4Q 19,800
WRITE OFF IN SEPT
WRITE OFF OF ACCOUNTS UNCOLLECTIBLE
ADJUSTMENTS (UNCOLLECTIBLE ACCOUNT EX)
ADA,END

PROVISONS
1Q 11,100
2Q (10,200)
3Q 11,600
4Q 19,800
ADJUSTMENTS (UNCOLLECTIBLE ACCOUN 48,675
UNCOLLECTIBLE ACCOUNTS EXPENSE 80,975

QUIZ MCQ CASES

CASE 1
ACCOUNST RECEIVABLE, BEG
CREDIT SALES
COLLECTIONS FROM CUSTOMER
ACCOUNST WRITTEN OFF
RECOVERY OF ACCOUNTS
INVOICE RECORDED FOD DESTINATION
OVERSTATEMNT OF PRICE
CORRECT RECORDED FOR NAGHIHITAY
ADJUSTED BALANCE OF GROSS A/R

A/R PER SL 30 DAYS AND L

ADJUSTED BALANCES PER SL 1,986,600
% OF UNCOLLECTIBLE 0.04
 ALLOWANCE FOR UA, END (79,464)
NRV 1,907,136

ADA, BEG 50,000

ACCOUNST WRITTEN OFF (30,000)
RECOVERY OF ACCOUNTS 5,000
ADJUSMENTS(UNCOLLECTIBLE ACCO EXP 352,454
ADA, END 377,454

CASE 2 A/R, BEG

SALES CREDIT
COLLECTIONS FROM CUSTOMER
WO
CUSTOMER NOTE IN PAYMENT OF A/R
RECOVERY (NO EFFECT)
SALES RETURNS
GROSS A/R

0-30 DAYS
BALNCES PER SL 287,370
% OF UNCOLLECTIBLE 0.02
ADA,END (5,747)
NRV 281,623

ADA, BEG 42,300

WO (41,400)
RECOVERY 11,500
PROVISIONS 12,000
ADJUSTMENTS (ADDTL BDE) 21,260
ADA, END 45,660

CASE 3
A. FV 250,000
PVF 0.797194
PV OF N/R 199,298
EFFECTIVE INTEREST 19,930
CV AS OF DEC 219,228

B. FV 200,000
STATED INTEREST 0.05
INTEREST INCOME 2,500

CV AS OF DEC 219,228

C. INTEREST
1 YR 30,000
 2ND YR 20,000
3RD YR 10,000
INITIAL PV OF N/R

PRINCIPAL
JAN 1 2023
DEC 31 2023 100,000
DEC 31 2024 100,000
DEC 31 2025 100,000

A. INTEREST INCOME 19,930

B. INTEREST INCOME 2,500
C. INTEREST INCOME 39,287
TOTAL INTEREST INCOME FOR 2023 61,716

A. ACRUED INTEREST INCOME

B. ACRUED INTEREST INCOME 2,500
C. ACRUED INTEREST INCOME 30,000
TOTAL ACRUED INTEREST INCOME FOR 2 32,500

CASES 4

0.909091
0.826446
0.751315
0.683013

AUDIT OF INVENTORIES

CASE 6 LCNRV
A
BEG INEVNTORY 70,000
PURCHASES 140,000
SOLD UNITS (115,000)
END INVENTORY 95,000

FIFO COST:
A : 40K AT 8 320,000
55K AT 6.5 357,500
B : 55K AT 10.50
 C: 10K AT 1.50
END INVENTORY AT COST 677,500

NRV 654,075
LCNRV PRESENTED AT SFP 654,075
REQUIRED ALLOWANCE

BEG INVENTORY A
AT COST 490,000
NRV 535,500
LCNRV 490,000
ALLOWANCE AT BEG
ALLOWANCE AT END
LOSS ON INVENTORY WRITE DOWN

DIRECT-LCNRV
BEG INVENTORY 952,500
PURCHASES 1,742,500
END INVENTORY (1,089,825)
COST OF GOODS SOLD 1,605,175
HIGHER COGS
3
ENTRY:
LOSS ON INVENTORY WRITE DOWN 155,175
ALLOWANCE FOR INVENTORY WRITEDOWN

CASE 7 LCNRV
FGI PRE-STARTER
COST 500,000
NRV 800,000
LCNRV 500,000
ALLOWANCE

WIP PRE-STARTER
COST 105,000
NRV 110,000
LCNRV 105,000
ALLOWANCE

FG-COST
RM PRE-STARTER
COST 215,000
NRV -
LCNRV 215,000
ALLOWANCE
 FGI
ALLOWANCE AT END 150,000
ALLOWANCE AT BEG 60,000
LOSS ON INVENTORY WRITEDOWN(REVER 90,000

AUDIT OF FIXED ASSET AND INVESTMENT

CASE 5
1 ACTUAL INTEREST:
SPECIFIC 500,000
GENERAL
10% NOTE 160,000
12% NOTE 240,000
TOTAL ACTUAL-GB 400,000

2 WAR
TOTAL ACTUAL-GB 400,000
TOTAL GENERAL BORROWINGS 3,600,000
WAR 0.11

3 WAAE
JANUARY 5,000,000
MARCH 31 9/12 2,250,000
JULY 1 6/12 2,250,000
SEP 30 3/12 500,000
DEC 31 0/12 -
TOTAL WAAE 10,000,000
LESS: SB (5,000,000)
TOTAL WAAE-GB 5,000,000
TIMES: WAR 0.1111
POTENTIAL INTEREST IN 2023 555,556
ACTUAL INTEREST-GB 2023 400,000

4 CAPITALIZED INTEREST
SPECIFIC 500,000
GB 400,000
TOTAL CAPITALIZED INTERST-2023 900,000

ACTUAL INTERST 400,000

POTENTIAL INTEREST 555,556
INTEREST EXPENSE -

5 TOTAL EXPENDITURES 16,000,000

 CAPITALIZED INTEREST-2023 900,000
TOTAL COST OF BUILDING 16,900,000

CASE 6

LEASEHOLD IMPROVEMENT: RL:

COST 3,000,000
ACCU DEP 2,400,000
CV BEG 2023 600,000
LESS: DEP EXP JAN-FEB 100,000
CV FEB 28 2023 500,000
ADD: LHI 2023 1,000,000
CV MAR 1 2023 1,500,000
UL 5.00
REVISED ANNUAL DEP EXPENSE 300,000
DEP EXP AFTER IMPROVEMENT 250,000
DEP EXP BEFORE IMPROVEMENT 100,000
DEP EXPENSE-LHI 2023 350,000

ACCU DEP BEG 2023 2,400,000

ADD: DEP EXP 2023 350,000
ACCU DEP END 2023 2,750,000

BUILDING
REVISED UL 20
USED LIFE 19-22 4
REMAINING LIFE 16

DOBOL 2
RL 16
DEP RATE 12.50%

COST 8,000,000
ACCU DEP (2,268,856)
CV BEG 2023 5,731,144
DEP RATE 12.50%
DEP EXP-BLDG 2023 716,393

ACCU DEP BEG 2,268,856

DEP EXP 2023 716,393
ACCU DEP END 2,985,249
OU
CASE 8
STAEMENTS IN FINANCIAL STATEMENT AUDIT

NI 2023 RE 2022 RE 2023

1,780,000 1,350,000 3,130,000

60,000 (60,000) -
80,000 80,000
280,000 (280,000) -
(310,000) (310,000)
(156,000) 156,000
175,000 175,000
(199,000) 199,000 -
201,000 201,000
350,000 (350,000) -
(320,000) (320,000)
400,000
(40,000) (20,000) 340,000
500,000
(25,000) 475,000
2,376,000 1,395,000 3,771,000

320,000

340000
60000

475000
25000

815000
85000

NI 2023 RE 2022
480000 400000
-250000 250000
200000 -200000
 85000
515000 450000

UNADJUSTED NI 2022 510000

LESS: UNADJUSTED RE, 2022 -400000
DIVIDENDS PAID 2023 110000

RE, 2022 400000

UNADJUSTED NI 2023 480000
RE, BEFORE DIVIDENDS 880000
LESS: UNADJUETED RE, 2023 -650000
DIVIDENDS PAID 2023 230000

NI 2021 NI 2022 NI 2023

510000 362000 -85500

-20000 20000
25000 -25000
-12000 12000
-5000
3000 -3000
5000

-18000 -18000 -18000

472000 380000 -119500

NI 2023 RE 2022 RE 2023

100000 -100000 -
90000 90000
- 20000 20000
-30000
 320000 320000

480000 -80000 430000

2023

SH IN BANK-METROBANK CASH IN BANK-BDO

1,900,000
 300,000 CE 600,000
STI 200,000
PPE 400,000 1,100,000
OVERDRAFT 295,000
300,000 - 2,595,000 1,900,000
695,000

225,000 receivable

11,401,350

1,150,000
12,551,350

SHOULD BE BAL OF PCF

ACTUAL AMOUNT
CASH SHORTAGE

TOTAL ACCOUNTABILITY:
10,000 PCF BALANCE
EE ADVANCES
COLLECTIONS FROM CHARITY
TOTAL ACCOUNTED FOR:
BILLS AND COINS
UNREPLENISHED VOUCHER
REPLENISHED VOUSCHER
 ACTUAL AMOUNT IN ENVELOPE
EE ADVANCES
CASH SHORTAGE

450,000 LTI

16,595.75

15,805.95
789.80

95.00
3,543.25
375.50
4,013.75

3,638
CASH COLLECTION CHECK COLLECTIONS
90,500 164,000

322,300

included here the cash collections

247,130
75,170
 PREPAID POSTAGE 1,500
POSTAGE EXEPNSE

CASH 56,000
A/R

37,100

11,000
*TRAVEL EXPENSES:
HOTEL ACCOMO 15,000
AIR FARE 1,000
CASH TO SALES 800
23,600 TOTAL TRAVEL EX 16,800

**SHOULD BE BAL OF PCF

7,900 CASH COLLECTIONS
67,270 TOTAL CASH ON HAND
ACTUAL COUNTED
TOTAL CASH SHORTAGE
2.A PCF SHORTAGE
2.B CASH SHORTAGE

TOTAL UNDEPOSITED CASH COLLECTIONS

ACTUAL BAL OF BILLS AND COINS (24230-1000 UN
CASH SHORTAGE

SHOULD BE BAL OF PCF

ACTUAL COMPOSITION
PCF SHORTAGE
 26,130

343,065
369,195

348,285
20,910

750

20,160
20,910

9,000
381,840
390,840
(375,840)
15,000

BANK
10,440
15,000
(20,910)
5,940

10,470
(1,000)
 1,000
CASH RECEIPTS PER BOOK
ADD: CM DEC
65,100 LESS: CM NOV
BOOK ERROR 2
2,078,260 BOOK ERROR 4
2,143,360 ADJUTED CASH RECEIPTS PER B

2,018,310
125,050

RECEIPTS DISBURSEMENTS END BALANCE

2,018,310 1,787,798 1,033,627

(65,100)
125,050 125,050

(72,400)
66,320 (66,320)

(45,000)
(22,000) 22,000
2,078,260 1,714,718 1,114,357 1,114,357

280,310
(309,440) (309,440)

700
12,500
(300) 300
(19,600) 19,600
5,000 5,000
20,000
(21,000) 20,100 (41,100)
2,033,130 1,753,118 783,717 783,717

RECEIPTS DISBURSEMENTS DEC. 31, 2023 RECEIPTS

1,926,460 2,016,960 452,020 585,000
(40,000)
(160)
6,540 6,540
13,460 (13,460) 13,460
 1,893,000 2,036,800 438,560 598,460

RECEIPTS DISBURSEMENTS DEC. 31, 2023 RECEIPTS

1,882,020 2,020,820 550,040 642,980
(70,000)
(176,480)
(2,000) 2,000 (2,000)
80,980 80,980 (80,980)
194,460 (194,460)
38,460

1,893,000 2,036,800 438,560 598,460

10,000.00

9,620.00
380.00

350,000
25,000
(150,000)
225,000

430,000 C

100,000
45,000
145,000

1,500
225,000
430,000
- 145,000 LTI
656,500
 P I COLLECTION PVF
200,000 24,000 224,000 0.8771930
200,000 16,000 216,000 0.7694675
200,000 8,000 208,000 0.6749715
L PV OF NOTE

PRINCIPAL NI (4%) EI (14%) AMORTIZATION

200,000 24,000 70,433 46,433

200,000 16,000 48,933 32,933
200,000 8,000 25,544 17,544

VALUE ON NOTE 600,000

503,090
OUNT ON N/R 96,910

L PV OF NOTE 503,090
CV OF LAND 400,000
ON SALE OF LAND 103,090

UNT ON NOTES RECEIBALE 46,433

EREST INCOME 46,433

REST INCOME FOR 2023 70,433

ERSTATEMENT OF PROFIT

N ON SALE OF LAND 200,000

EREST INCOME 24,000 224,000

N ON SALE OF LAND 103,090

EREST INCOME FOR 2023 70,433 173,523
TSTATEMENT 50,477

ON SALE 96,910
EREST INCOME 46,433
SCOUNT ON N/R 50,477
61-90 DAYS 91-120 DAYS OVER 120 DAYS PER GL
310,000 90,000 50,000 990,000

30,000 30,000
(65,000)
(10,000) (10,000)
(20,000) (20,000)
340,000 80,000 30,000 925,000
0.050 0.150 0.500
(17,000) (12,000) (15,000) (55,875)
323,000 68,000 15,000 869,125

6,500

32,300
(11,600)
(20,000) 7,200 ADA
48,675 10,200
55,875 11,600
20,000

41,800

1,200,000 CASH SALES

3,150,000 1,350,000
(1,000,000)
(30,000)
5,000
(10,000)
(4,000)
-
3,311,000

31-60 DAYS 61-90 DAYS OVER 90 DAYS PER SL

662,200 496,650 165,550 3,311,000
0.10 0.30 0.50
 (66,220) (148,995) (82,775) (377,454)
595,980 347,655 82,775 2,933,546

25,000

377,454

672,000
2,620,000
(2,500,000)
(41,400)
(106,000)
-
(6,000)
638,600

31-60 DAYS 61-90 DAYS OVER 90 DAYS PER GL

191,580 95,790 63,860 638,600
0.05 0.15 0.25
(9,579) (14,369) (15,965) (45,660)
182,001 81,422 47,895 592,940

PROVISIONS DURING THE YR 12,000

ADJUSMENTS 21,260
BAD DEBTS EXPENSE 33,260
24,400

45,660

INTEREST INCOME 19,930 NON CURRENT :

NO ACCRUED INTEREST A 219,228
B -
C 96,491
NCA TOTAL N/R-NCA 315,720

FOR 10 MONTHS B 200,000

8,333 C 93,413
TOTAL N/R-C 293,413

CA

PRICIPAL COLLECTION PVF PV

100,000 130,000 0.877193 114,035
 100,000 120,000 0.769468 92,336
100,000 110,000 0.674972 74,247
280,618

NI EI AMORTIZATION CV
280,618
30,000 39,287 9,287 189,905
20,000 26,587 6,587 96,491
10,000 13,509 3,509 -

A. ACRUED INTEREST INCOME

B. ACRUED INTEREST INCOM -
C. ACRUED INTEREST INCOM 74,247
TOTAL ACRUED INTEREST I 74,247

1 0.909091 2,600,000 2,363,637

2 0.826446 1,860,000 1,537,190
3 0.751315 1,180,000 886,552
4 0.683013 560,000 382,487

5,169,865

UNITS
B C TOTAL
50,000 25,000 145,000
65,000 60,000 265,000
(60,000) (75,000) (250,000)
55,000 10,000 160,000

577,500
 15,000
577,500 15,000 1,270,000 1

420,750 19,125
420,750 15,000 1,089,825 6
180,175 4

B C TOTAL
450,000 37,500 977,500
425,000 53,125
425,000 37,500 952,500
25,000
180,175
155,175 5

ALLOWANCE-COST DIFFERENCE
977,500
1,742,500
(1,270,000)
1,450,000 155,175 5
LOWER COGS CREDIT ADJUSTMENT TO ALLOWANCE
2

155,175

STARTER CRUMBLE
1,200,000 800,000 2,500,000
1,050,000 1,080,000
1,050,000 800,000 2,350,000 1
150,000

STARTER CRUMBLE
150,000 180,000 435,000
115,000 176,000
115,000 176,000 396,000 2
39,000

FG-NRV
STARTER CRUMBLE
295,000 215,000 725,000
278,000 215,000
278,000 215,000 708,000 3
17,000
WIP RM TOTAL
- - 150,000
70,000 -
(70,000) - 20,000

206,000

INVESTMENT INCOME:
SPECIFIC: 1,250,000
JAN-MAR 28,125
APR-JUN 37,500
JULY-SEP 28,125
OCT-DEC -
TOTAL 1,343,750

LOWER

LOWER, NO INTEREST EXPENSE

MACHINERY:
COST 10,000,000
ACCU DEP (4,000,000)
CV BEG 2023 6,000,000

OLD MACHINE
COST 1,100,000
ACCU DEP 440,000 110,000
ACCU DEP JAN-JUN 23 45,833 485,833
CV MAY 31 614,167

FV OF ASSET GIVEN 870,000

CASH PAID 150,000
FV OF ASSET RECEIVED 1,020,000

FV OF ASSET GIVEN 870,000

CV OF ASSET GIVEN UP 614,167
GAIN IN EXCHANGE 255,833

TOTAL COST 10,000,000

LESS: DISPOSED (1,100,000)
COST RETAINED 8,900,000
UL 10
ANNUAL DEP RETAINED 890,000
DEP EXP DISPOSED 45,833
DEP EXP OF NEW 59,500
TOTAL DEP EXP-MACHINE 20 995,333

ACCU DEP BEG 4,000,000

ADD: DEP EXP 2023 995,333
LESS: DISPOSED (485,833)
ACCU DEP END 4,509,500
CASH IN BANK-BPI CASH EQUIVALE
3,500,000 400,000
 750,000 120,000 CE-BDO 600,000

- 4,250,000 120,000 - 1,000,000

4,130,000 750,000

9,050
5,560
3,490

10,000
1,000
1,200 12,200

2,750
950
2,810
1,200
1,000 8,710
3,490
 1
1,500

2
56,000

19,700
90,500
110,200
35,030
75,170
7,900
67,270

CASH COLLECTIONS 90,500

AND COINS (24230-1000 UN 23,230
67,270

19,700
11,800
7,900
 2,033,130
309,440
(280,310)
(5,000)
21,000
2,078,260

*
BANK BAL, BEG 803,115
DEPOSITS 2,018,310 SQUUEZED
DISBURSEMENT (1,787,798)
BAL. PER BANK 1,033,627

DISBURSEMENTJAN. 12, 2024

355,140 681,880
 11,000 (11,000)
366,140 670,880

DISBURSEMENTJAN. 12, 2024

460,360 732,660

(194,460)
38,460
100,240 (100,240)
366,140 670,880
PV
196,491
166,205
140,394
503,090

CV
503,090
349,523
182,456
-
ADA
6,500
11,100
11,600
19,800
49,000
7,200
48,675
55,875
2,933,546
FURNIRUTRE AND FIXTURE
COST 800,000 SYD 55
ACCU DEP 494,545.45
ACCU DEP-DISPOSED 43,636 538,182
CV 261,818
SP 320,000
GAIN ON SALE 58,182

NEW: F AND F
INSTALLMENT 800,000
PVF 2.486852
PV OF ASSET 1,989,482
FREIGTH 10,518
TOTAL COST NEW 2,000,000
SYD 0.076
DEP EXP 151,515

ORIG COST 4,000,000

DISPOSED (800,000)
COST RETAINED 3,200,000
SYD 0.11
DEP RETAINED 349,091
DEP DISPOSED 43,636
DEP NEW 151,515
DEP EXP-MACH 2023 544,242

ACCU DEP BEG 2,472,727

DEP EXP 2023 544,242
LESS: DISPOSED 538,182
ACCU DEP END 2,478,788
CASH EQUIVALENTS
 50,000
200,000

250,000
B
ASSET BASED
Post-class homework: Asset-based valuation (1SAY2324 Valuations BSA 3-1)

NET SALES 15,000,000 ATOR

DIVIDE: ASSET TURN OEVR RATIO 3 DEBT-EQUITY
TOTAL ASSETS 5,000,000

TOTAL SHE 2,000,000

WAVE OUTS. SHARES 200,000
BOOK VALUE PER SHARE 10

NO. 5
CURRENT ASSETS 750,000
NON CURRENT ASSETS 1,400,000 2,150,000

LESS: CURRENT LIABILITIES 400,000

NON CURRENT LIABILITIES 500,000 900,000
1 BOOK VALUE AS OF DEC 31, 2019 1,250,000

BOOK VALUE AS OF DEC 31, 2019 1,250,000

DIVIDE: OUTSTANDING SHARES 1,000,000
2 BOOK VALUE PER SHARE 1

CURRENT ASSETS 937,500

LESS: CURRENT LIABILITIES 440,000
3 NET WORKING CAPITAL 497,500

CURRENT ASSETS 937,500

NON CURRENT ASSETS 1,680,000 2,617,500

LESS: CURRENT LIABILITIES 440,000

NON CURRENT LIABILITIES 250,000 690,000
BOOK VALUE AS OF DEC 31, 2019 1,927,500

BOOK VALUE AS OF DEC 31, 2019 1,927,500

DIVIDE: OUTSTANDING SHARES 1,250,000
4 BOOK VALUE PER SHARE 2

N0.6
TOTAL ASSETS 3,430,000
TOTAL LIABILITIES
ACCOUNTS PAYABLE 420,000
LONG TERM BONDS PAYABLE 900,000 1,320,000
A BOOK VALUE 2,110,000

PROPERTY AND PLANT 1,500,000

 EQUIPMENT 1,080,000
B REPLACEMENT COST OF PPE 2,580,000

CASH 160,000
TRADE RECEIVABLES 580,000
INVENTORY 340,000
PPE-REPLACEMENT VALUE 2,580,000
TOTAL REPLACEMENT VALUE OF ASSETS 3,660,000
LESS: TOTAL LIABILITIES 1,320,000
C REPLACEMENT VALUE 2,340,000

NO. 7
TOTAL ASSETS 2,900,000
LESS; TOTAL LIABILITIES
ACCOUNTS PAYABLE 200,000
SHORT TERM NOTES PAYABLE 200,000 400,000
A BOOK VALUE 2,500,000

INTANGIBLE ASSETS 500,000

REPRODUCING COST PERCENTAGE 1
B REPRODUCING COST INTANGIBLE ASSETS 600,000

TOTAL ASSETS:
CASH 350,000
TRADE RECEIVABLES 800,000
EQUIPMENT 1,250,000 2,400,000
INTAGIBLE ASSETS-REPRODUCTION 600,000 3,000,000

LESS; TOTAL LIABILITIES

ACCOUNTS PAYABLE 200,000
SHORT TERM NOTES PAYABLE 200,000 400,000
C REPRODUCTION VALUE 2,600,000

no. 8
ASEETS LIQUIDATED VALUE 800,000
TOTAL LIABILITIES 270,000
LIQUIDATED VALUE 530,000
DIVIDE BY OUTS. SHARES 20,000
8 LIQUIDATED VALUE PER SHARE 27

NO. 9
OUTSTANDING SHARES 1,000,000
LIQUIDATION VALUE 10
LUQUIDATION VALUE as per kristine 10,000,000 100,000,000
Pre-work assignment for Week 4: Income-based valuation (1SAY2324 Valuations BSA 3-1)
no. 4
WACC 0 RF=RM-BETA(RM-RF)
RM 0 RF=8%-1.5(8%-RF)
B 2 RF=8%-12%+1.5RF
.5RF=4%
RF 0
NO.5
WACC = (Equity Ratio * Cost of Equity) + (Debt Ratio * Cost of Debt * (1 - Tax Rate)

COST OF EQUITY=RISK FREE RATE + BETA (RM-RF)

COST EQUITY= 5%+1.5(8%-5%)
= 5%+1.5*(3%)
= 0

COST OF DEBT = RF + CREDIT SPREAD

= 5% + 3%
= 0 E D E+D
WACC = (30%*9.5% + 70%*8%)*70% 0 0 0
WACC =

no.6
COST OF EQUITY 0
COST OF DEBT 0
A WACC 0

EVA=NI AFTER TAX-(CAP INVESTED*WACC)

NI AFTER TAX 100,000,000
CAP INVESTED*WACC 62,500,000
B EVA 37,500,000

NO.7
COST OF EQUITY 0
COST OF DEBT 0
A WACC 0

B EVA 57,500,000
ADD:CAP INVESTED*WACC 62,500,000
PROJECTED EARNINGS 120,000,000 10,000,000

no.8
40*4=160K/4M
0
NO.9
64,000
640,000
end

DISCOUNTED CASH FLOW METHOD

EXERCISES
4
REVENUE 125,000
EBITDA MARGIN 56,250
CAPITAL EXPENDITURE (1,500)
INCOME TAX (16,875)
NET CASH FLOWS 37,875

5
YEAR 2 REVENUE
REVENUE 1,200,000 COGS
COGS (650,000) GROSS MARGIN
GROSS MARGIN 550,000 OPEX
OPEX (200,000) EBIT
EBITDA 350,000 INCOME TAX
INCOME TAX (105,000) NET INCOME
NET INCOME 245,000
ADD: DEPRECIATION 200,000
LESS: CAPITAL EXPENDITURE (150,000) REVENUE
WORKING CAPITAL EXPENDIT (40,000) COGS
NET CASH FLOWS 255,000 GROSS MARGIN
OPEX
NET INCOME
ADD: DEPRECIA
EBITDA

6 PRIOR YEAR YEAR 1 YEAR 2

REVENUE 1,500,000 1,575,000 1,653,750
VARIABLE COGS (450,000) (472,500) (496,125)
FIXED COGS (400,000) (400,000) (400,000)
 GROSS MARGIN 650,000 702,500 757,625
OPEX (300,000) (315,000) (330,750)
EBIT 350,000 387,500 426,875
INCOME TAX (105,000) (116,250) (128,063)
NET INCOME 245,000 271,250 298,813
ADD: DEPRECIATION 200,000
LESS: WORKING CAPITAL INVESTMENT (25,000)
NET CASH FLOW 473,813

7
2020 2021 2022
REVENUE 10,000,000 12,000,000
COGS 5,000,000 6,000,000
GP 5,000,000 6,000,000
S AND D EXP 1,000,000 1,200,000
ADMIN EXP 400,000 400,000
DEP EXP 2,000,000 2,000,000
OPERATING INCOME 1,600,000 2,400,000
INTAX EXP 480,000 720,000
NET PROFIT 1,120,000 1,680,000

REQ. ANNUAL CAPITAL INVESTMENT 1,000,000 1,000,000

TAX RATE 0

REVENUE 10,000,000 12,000,000

LESS: CASH OPEX 6,400,000 7,600,000
TAX PAYMENTS 480,000 720,000
LESS: INVESTMENT -
ENTERPRISE VALUE 3,120,000 3,680,000
LESS: CAPITAL INVESTMENT 1,000,000 1,000,000
ADD: TERMINAL VALUE
NET CASH FLOW TO THE FIRM 2,120,000 2,680,000
DISCOUNT RATE 0 1 1
DISCOUNTED CFTF 1,927,273 2,214,876
TOTAL DCF 59,468,971
LESS: LIABILITIES 10,000,000
DISCOUNTED EQUITY VALUE 49,468,971
0
SP OF 20% OF TOTAL EQUITY VALUE 9,893,794 9,893,794

8
Year 0 Year 1
REVENUE 50
DEP EXP 5
 LEE: CASH OPEX 30
TOTAL 15
INTAX EXP 0 5
LESS CAP EXP 2
DEP EXP 5
NET CASH FLOW 14
LESS: INVESTMENT CAPITAL 50
ADD: TERMINAL VALUE
NET CASH FLOW TO THE FIRM (50) 14
DISCOUNT RATE 0 1 1
DCF TO THE FIRM (50) 12
TOTALENTERPRISE VALUE 367.78 368
LESS: LIABILITY 16.62
EQUITY VALUE 351 368

Year 1
Year 0 Year 1
REVENUE 50
DEP EXP 5
LEE: CASH OPEX 30
TOTAL 15
INTAX EXP 0 5
LESS CAP EXP 2
CHANGE IN WORKING CAP 5
NET CASH FLOW 14
LESS: INVESTMENT CAPITAL 50
ADD: TERMINAL VALUE
NET CASH FLOW TO THE FIRM (50) 14
DISCOUNT RATE 0 1 1
DCF TO THE FIRM (50) 12
TOTALENTERPRISE VALUE 808 808
LESS: LIABILITY
EQUITY VALUE 807.992 807.992

1,000,000
A 601,202,699
B 367,775,261
C 351,155,261
D 367,775,261
E 807,992,345

MARKET APPROACH
4
EBITDA MULTIPLE MV PER SH 7.25
EBITDA PER SH
MV
REVENUE 30,000,000
EBITDA % 0.25
EBITDA 7,500,000
OUTSTANDING SHARES 1,000,000
EBITDA PER SHARE 7.50

DOT 8.00
PERIOD 7.50
EXCLAMATION 6.25
AVERAGE EBITDA MULTIPLE 7.25

5
MV PER SH 22.50
P/E RATIO EPS 4 EPS

EPS 5.63

EARNINGS NI
EPS OUTS SH 6 1,500,000

NI 8,437,500

NET INCOME 8,437,500

DIVIDE: NI % 0.25
REVENUE 33,750,000

6
PLAYER MV PER SH EPS P/E RATIO
A 46.50 5.00 9.30
B 45.24 6.03 7.50
C 16.25 2.18 7.45
D 25.11 3.72 6.75
E 34.32 4.29 8.00

9.75 1.25 7.80

MV PER SH 9.75
P/E RATIO EPS
7
OPERATING INCOME 300
ADD: DEP EXP 50
EBITDA 350

EBITDA MULTIPLE MV PER SH 2.75

EBITDA PER SH

MV

MV 962.50
% OWNERSHIP TO SELL 0.50
MV 481.25
SP 500
GAIN 18.75 YES. WITH A GAIN OF 18.75

MARKET APPORACH

4 YEAR
1 250 0.909091 227
2 300 0.826446 248
3 450 0.751315 338
4 900 0.751315 676
TOTAL NET CASH FLOW 1,489
LESS: INVESTMENT (1,000)
NPV 489

YEAR 1 YEAR 2
5 SALES 93,750 105,000
DIVIDE: SP 125
PROJECTED UNITS SOLD 840

6 YEAR
1 2,000,000
2 2,500,000
3 2,320,000
4 2,700,000
5 3,100,000 11.6%

7 YEAR 1 YEAR 2 YEAR 3

UNITS SOLD 60.00 69.00 79.00
REVENUE 3,000.00 3,450.00 3,950.00
 OPERATING INCOME 750.00 862.50 987.50
GROWTH RATE 15.02%

PRE TAX COST OF DEBT 4% `

POST TAX RATE 0.80

8 COST OF DEBT 3%
WDEBT 60%
COST OF EQUITY 9%
WEQUITY 40%

WACC 5.52%

2,021 2,022 2,023

B OPE INCOME 287,500 562,500 837,500
INTEREST EXPENSES
EBI 287,500 562,500 837,500
INTAX 57,500 112,500 167,500
NET INCOME 230,000 450,000 670,000

C
REVENUE 2,250,000 2,750,000 3,250,000
LESS: CASH OPEX (1,362,500) (1,587,500) (1,812,500)
INCOME TAX EXP (57,500) (112,500) (167,500)
CAPITAL INVESTMENT (200,000) (200,000) (200,000)
NCF 630,000 850,000 1,070,000
ADD: TERMINAL VALUE
NET CASH FLOW TO THE FIRM 630,000 850,000 1,070,000
PVF DISCOUNT RATE 0.95 0.90 0.85
DISCOUNTED CASH FLOW 597,043 763,395 910,709

ENTERPRISE VALUE 100,919,474

LESS: DEBT (2,000,000)
EQUITY VALUE 98,919,474

ENTERPRISE VALUE 77,515,500

LESS: DEBT (2,000,000)
EQUITY VALUE 75,515,500
15%
SP 11,327,325

YR 1 YR 2 YR 3
REVENUE 1,000,000 1,500,000 2,000,000
COGS (500,000) (700,000) (1,100,000)
OPEX (300,000) (500,000) (700,000)
OPERATING INCOME 200,000 300,000 200,000
INTAX 60,000 90,000 60,000
NET INCOME 140,000 210,000 140,000
DEP EXP 250,000 250,000 250,000
WC (50,000) (50,000) (50,000)
CAP INV (120,000) (120,000) (120,000)
NCF 220,000 290,000 220,000
ADD TERMINAL VALUE
NCFF 220,000 290,000 220,000
DISCOUNT RATE 0.93 0.86 0.79
DCFF 203,704 248,628 174,643

NCFF 6,739,483
DEBT (1,000,000)
NCFE 5,739,483
SALES/ASSET
DEBT/TOTAL SHE
0

3 1
1

4
YEAR 3
1,600,000
(900,000)
700,000
(300,000)
400,000
(120,000)
280,000

YEAR 1
750,000
(400,000)
350,000
(150,000)
200,000
200,000
400,000

YEAR 3
1,736,438
(520,931)
(400,000)
 815,506
(347,288)
468,219
(140,466)
327,753

2023 2024 A. Net Cash Flow

14,000,000 15,000,000 B. 20%, reasonable price they should pay
7,000,000 7,500,000
7,000,000 7,500,000
1,400,000 1,500,000
400,000 400,000
2,000,000 2,000,000
3,200,000 3,600,000
960,000 1,080,000
2,240,000 2,520,000

1,000,000 1,000,000

14,000,000 15,000,000
8,800,000 9,400,000
960,000 1,080,000
- -
4,240,000 4,520,000
1,000,000 1,000,000
73,920,000 TERMINAL VALUE:
3,240,000 77,440,000 3,696,000
1 1 0
2,434,260 52,892,562 73,920,000

Year 2 Year 3 Year 4 Year 5

55 61 67 73
5 5 5 5
 33 36 40 44
17 19 22 24
5 6 6 7
2 2 2 2
5 5 5 5
15 16 18 20

- 601.20
15 16 18 621
1 1 1 1
11 11 11 323 TERMINAL VALUE:
22
GROWTH RATE 0 0
REQ RATE 0 601

Year 2 Year 3 Year 4 Year 5

Year 2 Year 3 Year 4 Year 5
55 61 67 73
5 5 5 5
33 36 40 44
17 19 22 24
5 6 6 7
2 2 2 2
5 5 5 5
15 16 18 20

- 1,321
15 16 18 1,341
1 1 1 1
12 12 12 761 TERMINAL VALUE:
22
GROWTH RATE 0 0
REQ RATE 0 1,321
MV
7.50

54.38

9.3000
7.5025
7.4541
6.7500
8.0000
MV
350

962.50

YEAR 4 YEAR 5
91.00 105.00
4,550.00 5,250.00
 1,137.50 1,312.50

2,024 2,025 TERMINAL VALUE

975,000 1,250,000

975,000 1,250,000
195,000 250,000
780,000 1,000,000

3,500,000 4,000,000
(1,925,000) (2,150,000)
(195,000) (250,000) GROWTH RATE 4.00%
(200,000) (200,000) GR-WACC 1.52%
1,180,000 1,400,000
95,789,474 NCF AT CURRENT
1,180,000 1,400,000 95,789,474 MUTIPLE 1.GR
0.81 0.76 0.76 TV NEXT
951,794 1,070,173 73,222,386 DIVIDE WACC
TERMINAL VALUE
TV

WACC 8%
GR 5%
WACC-GR 3%

TERMINAL VALUE 7,700,000

7,700,000
7,700,000
0.79
6,112,508
revenue 125,000
opex 50,000
interst 500
income after interes 74,500
TAX 22,350

OPI 75,000
DEP 5,000
less:TAX 22,350
less: CAP INV 1,500
ncf 56,150

1,400,000
104%
1,456,000
1.52%
95,789,474
Part 2: Case analysis (2 points each)
NAME: CHRISTIAN DAVE HERCE TADIFA BSA 3-1
CASE 1: Misstatement in Financial Statement Audit
NI 2021 NI 2022
UNADJUSTED BALANCES 1,270,000 1,500,000
UNDERSTATED INVENTORY 20,000 (20,000)
OVERSRATED INVENTORY (24,000)
OVERSRATED INVENTORY
OVERSTATED PURCHASES 150,000
UNRECORDED SALES 25,000 (25,000)
30,000

UNRECORDED ACCRUED SALARIES (50,000) 50,000

(64,000)

PREPAID INSURANCE 300,000

RECOREDED DEPRECIATION 35,000 35,000
UNRECORDEDE GAIN 75,000
ADJUSTED BALANCE 1,375,000 1,932,000

CASE 2: Misstatement in Financial Statement Audit

NI 2022 NI 2023
2,250,000 2,510,000
OVER BEG INVENTORY 200,000 -
UNDER BEG INVENTORY 180,000 (180,000)
DEPRECIATION 35,000 -
(85,000)
PREPAID INSURANCE (30,000)
UNRECORDED GAIN 200,000 (200,000)
ACCRUED INCOME 25,000 (25,000)
32,000
ADJUSTED BALANCES 2,890,000 2,022,000

CASE 3: Misstatement in Financial Statement Audit

RE, BEG 2021 NI 2021

UNADJUSTED BALANCE 405,000 510,000

OVERSTATED INVENTORY
UNDERSTATED INVENTORY
SALES COMMISSION PAYABLES

SUPPLIES ON HAND

ERRORNEOUS REVENUE EXPENSE 300,000

 UNRECORDED DEPRECIATION EXPENCE 20,000 (30,000)

ADJUSTED BALANCE 725,000 480,000

ADJUSTED RE, BEG 2021 725,000

ADJUSTED NET INCOME 2021 480,000
DIVIDENDS DECLARED 2021 (48,000)
ADJUSTED RE, END 2021 1,157,000
ADJUSTED NET INCOME 2022 303,000
DIVIDENDS DECLARED 2022 (48,000)
ADJUSTED RE, END 2022 1,412,000
ADJUSTED NET LOSS 2023 (61,500)
DIVIDENDS DECLARED 2023 -
ADJUSTED RE, END 2023 1,350,500

CASE 4: Audit of Cash and Cash equivalents (Analytical Procedure)

UNREPLESHED VOUCHERS AFTER END 1,600
CURRENCIES AND COINS 1,200
REPLENISHMENT CHECK 2,200
PCF BALANCE 5,000

IMPREST PETTY CASH FUND 15,000

LESS: UNREPLESHIED VOUCHERS (6,400)
SHOULD BE BALANCE OF PCF 8,600
ACTUAL COMPOSITION 3,400
CASH SHORTAGE 5,200

CASH ON HAND 750,000

DAUD CHGECK (50,000)
POST DATED CHACEK (20,000)
TOTAL; CASH ON HAND 680,000

CASH IN BANK 2,300,000

POSTV DATED CHECK 130,000
UNDELIVERED CHCEK 100,000
TOTAL CASH IN BANK 2,530,000

CASH EQUIVALENTS 1,320,000

STI (300,000)
,ONEY ,MARKET (150,000)
CASH EQUIVALNETS (620,000)
 CORRECT CASH EQUIVALENTS 250,000

CASE3 5

DIT, BEG 110,000

DEPOSIT PER BOOK 1,180,000
DEPOSITS BY BANK ADJUSTED BY ERROR (1,275,000)
DIT, END 15,000

OCS BEG 85,000

CHECK DISBURSEMENTS BY BOOK 1,000,000
CHECK CLEARED BY BANK (1,055,000)
OCS, END 30,000

BOOK NOVEM,BER 30 RECIPTS

1,210,000 1,180,000
BANK SC
NOTES COLLECTED 120,000
NSF CHECK
BOOK ERROE
ADJUSTED BALANCE 1,210,000 1,300,000

BANK ERROR RECEIPTS NOVEM,BER 30 RECIPTS

UNADJUSTED 1,185,000 1,440,000
DIT NOV 110,000 (110,000)
DIT DEC 15,000
OCS NOV (85,000)
OCS DEC
BANK ERROR RECEIPTS (45,000)
CHARGE
ADJUSTED BALANCES 1,210,000 1,300,000

CASE 6
BANK NOV RECEIPTS
UNADJUSTED 803,115 2,018,310
DIT NOV 65,100 (65,100)
DIT DEC 125,050
OCS NOV (72,400)
OCS DEC
BANK CHARGE ERROR NOV (45,000)
BANK DEBIT ERROR DEC
ADJUSTED BALANCES 750,815 2,078,260
 PURCHASES 11 MOS PURCHASES 12 MOS
UNADJUSTED BAL 1,296,000 1,536,000
1 12,000
2 (4,000) (4,000)
3
4
5
AJUSTED BALANCES 1,304,000 1,532,000

BEG INVENTORY 170,200

ADJUSTED PURCH 11 MOS 1,304,000
LESS: ADJUSTED EI MAY 31 2023 (268,000)
COGS FOR 11 MOS 1,206,200

SALES FOR 12 MOS 1,843,000

LESS: SALES W/OUT GP (56,000.00)
SALES WITH GP 1,787,000
COST RATIO 0.74
COGS FOR 12 MOS WITH GP 1,322,380
SALE WI/OUT GP AT COST 56,000
TOTAL COGS FOR 12 MOS 1,378,380
COGS FOR 11 MOS 1,206,200
COGS FOR MONTH OF JUNE 172,180

BEG INVENTORY 170,200

ADJUSTED PURCH FOR 12 MOS 1,532,000
TGAS 1,702,200
LESS: TOTAL COGS FOR 12 MOS 1,378,380
EST EI AS OF JUNE 30 323,820
NI 2023
1,280,000

24,000 INSURANCE
(23,000) 360,000
(150,000) 120,000 PER YR
60,000 JULY-DEC
(30,000)
22,000 CV 175,000
PROCEEDS 250,000
64,000 GAIN (75,000)
(34,000)
(120,000) CASH 250,000
35,000 ACCU DEPR 275,000 DEPR RECORDED
EQUIPMENT 450,000
1,068,000 GAIN 75,000

RE 2023
4,760,000 INSURANCE
- PER YR OCT-DEC
- 120,000 30,000
35,000
(85,000)
(30,000)
(200,000)

32,000
4,512,000 (248,000)

NI 2022 NI 2023
362,000 (85,500)

(20,000) 20,000
25,000
(12,000) 12,000
(5,000)
3,000 (3,000)
5,000
(30,000) (30,000)

303,000 (61,500)

PCF 5,000
CASH ON HAND 680,000
CASH IN BANK 2,530,000
CASH EQUIVALENTS 250,000
TOTAL CC 3,465,000
DISBURSE DECME 31
990,000 1,400,000
5,000 (5,000)
120,000
15,000 (15,000)
10,000 (10,000)
1,020,000 1,490,000

DISBURSE DECME 31
1,085,000 1,540,000

15,000
(85,000)
30,000 (30,000)
(45,000)
(10,000) 10,000
1,020,000 1,490,000

DISBURSE DEC
1,787,798 1,033,627

125,050
(72,400)
66,320 (66,320)
(45,000)
(22,000) 22,000
1,714,718 1,114,357
EI MAY 31 2023 SALES 11 MOS SALES 12 MOS
264,000 1,615,000 1,843,000
-

(26,000) 75,000
30,000 (60,000)
268,000 1,630,000 1,843,000

SALES FOR 11 MOS 1,630,000

COSG FOR 11 MOS 1,206,200 0.74
GP 423,800 0.26

SALES FOR 12 MOS 1,843,000

SALES FOR 11 MOS 1,630,000
SALES FOR JUNE 213,000
LESS W/OUT GP (56,000)
SALES FOR 12 W/ GP 157,000
COST RATIO 0.74
COGS W/ GP 116,180
COGS W/OUT GP 56,000
COGS FOR JUNE 172,180
35,000
CASE 1
SL GL
BALANCES 4,000,000 4,303,000
GOODS IN CONSIGNMENT (200,000) -
FOB SHIPPING POINT 50,000 -
FOB DESTINATION (60,000) -
FOB DESTINATION (20,000) -
SUBSCRIPTION RECEIVABLE (120,000)
DEPOSITS ON LT CONTRACT (400,000)
CREDIT BAL ON CUSTOMER ACC 90,000
SALES RETURNS (12,000)
SALES RETURNS (100,000)
CASH ADVANCES TO AFFILATES (350,000)
WO OF A/R (135,000)
ADJUSTED BALANCES 3,523,000 3,523,000

PER SL CURRENT 60 DAYS 1-60 DAYS

BALANCES PER SL 1,650,000 1,100,000
GOODS IN CONSIGNMENT (200,000)
FOB SHIPPING POINT 50,000
FOB DESTINATION (60,000)
FOB DESTINATION (20,000)
SUBSCRIPTION RECEIVABLE
DEPOSITS ON LT CONTRACT
CREDIT BAL ON CUSTOMER ACC
SALES RETURNS
SALES RETURNS (100,000)
CASH ADVANCES TO AFFILATES
WO OF A/R
ADJUSTED BALANCES 1,420,000 1,000,000
% OF UNCOLLECTIBLE 0.06
ADA, END - (60,000)
NRV 1,420,000 940,000

ADA, BEG 120,500

PROVISIONS 75,000
RECOVERY 25,000
WO (135,000)
ADA BEFORE ADJUSEMENTS 85,500
ADJSUMENTS(BDE) 150,660
ADA, END 236,160

CASE 2
AR , BEG 350,000
CREDIT SALES 2,470,000
 COLLECTIONS FROM CUSTOMER (2,300,000)
WRITE OFF (15,000)
RECOVERY 30,000
ADJUSTED BALANCE OF A/R 535,000

SL 0-30 DAYS 31-60 DAYS

BALANCES PER SL 267,500 144,450
*% OF UNCOLLECTIVILTY 0.03 0.12
ADA, END (8,025) (17,334)
NRV 259,475 127,116

ADA. BEG 50,000

WO (15,000)
RECOVERY 30,000
ADA BEFORE ADJUSTMENTS 65,000
ADJUSMENTS (BDE) 6,637
ADA, END 71,637

CASE 3

CREDIT SALES 2,227,500

COLLECTIONS ON ACCOUNT (1,559,250)
WO-PROPERLY RECORDED (15,000)
ADJUSTED BALANCE OF A/R 653,250

WO (15,000)
PROVIONS 89,100
ADA, END 74,100

GROSS AR 653,250
ADA, END 74,100
NRV 579,150

CASE 4

N/R FROM SALE OF BLDG

FV 6,000,000
 PVF 0.83961928
INITIAL PV OF NOTE 5,037,716

EI (6%) CV
AUG 1 2020 5,037,716
DEC 31 2020 125,943 5,163,659
AUG 1 2021 176,320 5,339,979
DEC 31 2021 133,499 5,473,478
AUG 1 2022 186,899 5,660,377
DEC 31 2022 141,509 5,801,887
AUG 1 2023 198,113 6,000,000

N/R FROM SALE OF MACHINE BALANCE OF NR INTEREST

15,000,000
1ST 11,000,000 1,800,000
2ND 7,500,000 1,320,000
3RD 4,500,000 900,000
4TH 2,000,000 540,000
5TH 2,000,000 240,000
INITIAL PV OF NOTE (PREMIUM)

PRINCIPAL NI 12%
JAN 1 2021
DEC 31 2021 4,000,000 1,800,000
DEC 31 2022 3,500,000 1,320,000
DEC 31 2023 3,000,000 900,000
DEC 31 2024 2,500,000 540,000
DEC 31 2025 2,000,000 240,000

CASE 5

CASE 1
WO
ASSIGNED TRADE A/R 675,000
TRADE A/R FROM OFFICERS 55,000
TRADE A/R POST DATED 175,000
OTHER TRADE UNASSIGNED 850,000
TRADE INSTALLEMENT 400,000
TOTAL TRADE RECEIVABLES 2,155,000

ADA (107,750)
 TOTAL TRADE RECEIVABLES 2,155,000
Advanced payment to creditors 85,000
Interest receivable on bonds 75,000

TRADE AND OTHER RECEIVABLES 2,315,000

NRV 2,207,250
CASE 2

0-30 days 31-60 days

balances 88,000 56,000
75,000 67,000
balances per sl 163,000 123,000
sr (5,000)
wo
adjusted balance 158,000 123,000
% of uncollectioble 0.01 0.05
ada, end (1,580) (6,150)
nrv 156,420 116,850

ada beg 25,000

wo (50,000)
recovery 7,500
ada before adj (17,500)
adjusmets 53,530 bde
ada, end 36,030

CASE 3

NR FROM PARK SHIN HYE BAL

0ST 2,500,000
1ST 500,000 2,000,000
2ND 500,000 1,500,000
3RD 500,000 1,000,000
4TH 500,000 500,000
5TH 500,000 -
INITIAL PV OF NOTE 2,500,000
PV OF NOTE 2,379,078
DICOUNT ON NR 120,922

PV OF NOTES 2,379,078
CASH DOWNPAYMENT 400,000
TOTAL CONSIDERATION 2,779,078
CV OF MACHINE 1,800,000
 GAIN ON SALE OF MACHINE 979,078

PRINCIPAL NI
JAN 1 2023
DEC 31 2023 500,000 200,000
DEC 31 2024 500,000 160,000
DEC 31 2025 500,000 120,000
DEC 31 2026 500,000 80,000
DEC 31 2027 500,000 40,000

NOTE FROM KYU HYE SUN

fv of note 2,000,000 0.816298
pvf 0.816298
initial pv of note 1,632,596
discount on nr 367,404

cash downpayment 750,000

pv on note 1,632,596
total 2,382,596
cv of machine 1,860,000
gain on sale of machine 522,596

RECODED GAIN 1,990,000

CORRECT GAIN 1,501,674
OVERSTATEMENT IN GAIN 488,326

RECORDED INTEREST INCOME 360,000

CORRECT INCOME 191,699
OVERSTATMENT IN INTERST INCOM 168,301 656,627

CASE 4

0ST 4,000,000
1ST 1,000,000 3,000,000
2ND 1,000,000 2,000,000
3RD 1,000,000 1,000,000
4TH 1,000,000 -
INITIAL PV OF NOTE

PRINCIPAL NI
MAR 31 2023
DEC 31 2023 180,000
MAR 31 2024 1,000,000 60,000
DEC 31 2024 135,000
MAR 1 2025 1,000,000 45,000
DEC 31 2025 90,000
MAR 1 2026 1,000,000 30,000
DEC 31 2026 45,000
MAR 1 2027 1,000,000 15,000

RECORDED GAIN 1,500,000

CORRECT GAIN 1,328,032
OVERSTAMENT IN GAIN 171,968

RECODED INTEREST INCOME -

INTERST INCOME IN 2023 229,682
UNDESTATEM,ENT IN INTEREST IN 229,682 57,714
61-120 DAYS MORE THAN 120 PER SL
750,000 500,000 4,000,000
(200,000)
50,000
(60,000)
(20,000)
- -
- -
-
(12,000) (12,000)
(100,000)
-
(135,000) (135,000)
738,000 365,000 3,523,000
0.12 0.24
(88,560) (87,600) (236,160)
649,440 277,400 3,286,840

PROVISIONS 75,000
ADJSUMENTS(BDE) 150,660
BAD DEBTS EXP 225,660
61-90 DAYS OVER 90 DAYS PER SL
90,950 32,100 535,000
0.35 0.45
(31,832) (14,445) (71,637)
59,118 17,655 463,364

PURCHASES 3,000,000
END INVENTORY (250,000)
COGS 2,750,000
MU ON COST 1.35
SALES 3,712,500
CREDIT SALES 2,227,500
CASH SALES 1,485,000

RECODED ADA 33,250

SHOUL BE BAL 74,100
UNDESTATED BY (40,850)

INTEREST INCOME IN 2022: CURRENT PORTION IN 2023

 BLDG 328,409 BLDG
MACHINE 1,232,665 MACHINE
TOTAL 1,561,074 TOTAL NR-CURRENT
TOTAL NR-NCA
INTEREST INCOME IN 2023: TOTAL NR 2023
BLDG 198,113
MACHINE 838,059
TOTAL 1,036,172

PRINCIPAL COLLECTION PVF PV

4,000,000 5,800,000 0.9009009 5,225,225

3,500,000 4,820,000 0.8116224 3,912,020
3,000,000 3,900,000 0.7311914 2,851,646
2,500,000 3,040,000 0.6587310 2,002,542
2,000,000 2,240,000 0.5934513 1,329,331
15,320,765

EI 11% AMORTIZATION CV
15,320,765
1,685,284 114,716 11,206,049
1,232,665 87,335 7,618,714
838,059 61,941 4,556,773
501,245 38,755 2,018,018
221,982 18,018 -

ADA BEG 20,000

WO (40,000)
PROVISIONS 184,250
ADA BEFORE ADJ 164,250
ADJUSMENTS (56,500)
ADA, END 107,750

TOTAL A/R 3,685,000

ADVANCE PAY TO CREDITORS (85,000)
ACCOUNTS WORTHLESS (40,000)
ADVTO AFFILIATES (665,000)
CUSTOMER CREDIT BAL 125,000
INTEREST RECEIVABLE (75,000)
SUBSCRIPTION RECEIVABLE (750,000)
INTEREST ON INSTALLMENT (40,000) (1,530,000)
TOTAL AR 2,155,000

61-90 days 91-120 days over 120 per sl

48,000 35,000 62,000 289,000
77,000 219,000
125,000 35,000 62,000 508,000
(5,000)
(40,000) (40,000) (45,000)
125,000 35,000 22,000 463,000
0.10 0.20 0.40
(12,500) (7,000) (8,800) (36,030)
112,500 28,000 13,200 426,970

INTERST COOLLECTION PVF PV

200,000 700,000 0.909091 636,364 0.909091
160,000 660,000 0.826446 545,454 0.826446
120,000 620,000 0.751315 465,815 0.751315
80,000 580,000 0.683013 396,148 0.683013
40,000 540,000 0.620921 335,297 0.620921
2,379,078

PAJE:
CASH 400,000
NR 2,500,000
ACCU DEPR 1,200,000
MACHINERY 3,000,000
DISCOUNT ON NR 120,922
 GAIN ON SALE OF MACHINERY 979,078

EI AMORTIZATION CV PAJE
2,379,078 CASH
237,908 37,908 1,916,986 DISCOUNT ON NR
191,699 31,699 1,448,685 NR
144,868 24,868 973,553 INTEREST INCOME
97,355 17,355 490,908
49,091 9,091 (1)

correct entry:
cash 750,000
NR 2,000,000
accu depr 1,240,000
machinery 3,100,000
discount on nr 367,404
gain on sale of machine 522,596

TOTAL INTEREST 2024

NR FROM PARK SHIN HYE 191,699
NOTE FROM KYU HYE SUN 114,282
TOTAL INTEREST 2024 305,980

TOTAL CURRENT PORTION TOTAL NON CURRENT PROTION

NR FROM PARK SHIN HYE 475,132 NR FROM PARK SHIN HYE
NOTE FROM KYU HYE SUN NOTE FROM KYU HYE SUN
TOTAL NR-CURRENT 475,132 TOTAL NR-NON CURRENT

DISCOUNT ON NR 488,326
AMORTIZATION 183,888
DISCOUNT ON NR TO RECORDED 304,438

INTERST COOLLECTION PVF PV

240,000 1,240,000 0.925926 1,148,148 0.925926
180,000 1,180,000 0.857339 1,011,660 0.857339
120,000 1,120,000 0.793832 889,092 0.793832
60,000 1,060,000 0.735030 779,132 0.735030
3,828,032

EI AMORTIZATION CV
3,828,032
 229,682 49,682 3,877,714 306,243
76,561 16,561 2,894,274
173,656 38,656 2,932,931 TOTAL INTEREST INCOME
57,885 12,885 1,945,816 TOTAL CURRENT PORTION
116,749 26,749 1,972,565 TOTAL NON CURRENT
38,916 8,916 981,482
58,889 13,889 995,371
19,630 4,630 0

DSICOUNT 171,968
AMORTIZATION 104,899
CREDIT TO DISCOUNYT 67,069
X
URRENT PORTION IN 2023
 -
2,538,755
OTAL NR-CURRENT 2,538,755
OTAL NR-NCA 2,018,018
OTAL NR 2023 4,556,773
 700,000
SCOUNT ON NR 37,908
500,000
TEREST INCOME 237,908

EI CV
jan 1 2024 1,632,596
dec 31 2024 114,282 1,746,878
dec 31 2025 122,281 1,869,159
dec 31 2026 130,841 2,000,000

OTAL NON CURRENT PROTION

R FROM PARK SHIN HYE 1,746,878
OTE FROM KYU HYE SUN 973,553
OTAL NR-NON CURRENT 2,720,431

FV OF NOTE 4,000,000
PV OF NOTE 3,828,032
DISCOUNT 171,968

CASH DP 500,000
PV OF NOTE 3,828,032
TOTAL 4,328,032
CV OF LAND 3,000,000
GAIN ON SALE 1,328,032
OTAL INTEREST INCOME 250,217
OTAL CURRENT PORTION 987,115
OTAL NON CURRENT 1,945,816
REVIEW

1 Which of the following statements concerning the identification of the acquirer and acquiree in a business combination is
In business combination effected primarily by transferring assets or by incurring liabilities or issuing shares, the acquir

2 At the beginning of the year, Parent Co. acquired 70% interest in Subsidiary Co
How much is the consolidated profit attributable to owners of the parent?

P S
NI 400,000 80,000
COGS (10,000)
DEPR (16,000)
DIVIDEND-S (35,000)
ADJ 365,000 54,000
SHARE OF P 37,800 (37,800)
CNI 402,800 16,200

3 How much is the Non-Controlling Interest at December 31, 2022? SH ISSUE

P S PP
NI 300,000 200,000 NCI
COGS (50,000) FVINA
DEPR 10,000
DIVIDEND-S (18,000)
ADJ 282,000 160,000
SH OF P 144,000 (144,000)
IMP LOSS (27,000) (3,000)
CNI 399,000 13,000
NCI BEG 400,000
DIVIDEND-S (2,000)
NCI, END 411,000

4 P Corporation acquired a 70% interest in S Company on January 1, 2022 fo

How much is the NCI at December 31, 2022? SH ISSUE
P S CT
NI 560,000 300,000 NCI
COGS 120,000
DEP 40,000
DEIVIDEND (175,000)
ADJ 385,000 460,000
SH OF P 322,000 (322,000)
IMP LOSS
CNI 707,000 138,000
NCI BEG 4,800,000
DIVIDEND-S (75,000)
NCI, END 4,863,000
 5 On January 1, 2021, Parent Company purchased 80% of Subsidiary Company’

CT 980,000
NCI 220,000 1,200,000
FVINA 1,100,000
GW 100,000

6 Consolidated financial statements prepared as of the date of acquisition

The share in the adjustment of net identifiable assets to fair value.

7
CT 4,800,000
NCI 4,800,000
FVINA 3,360,000
GW 1,440,000

LEGAL COS 48,000

DUE DILIGENCE 480,000
GEN AND ADMIN COST 90,000
COST REGISTERING PREV SHARE 24,000
TOTAL CHARGE TO P/L 642,000

8 Statement 1: In a business combination achieved in stages, the resulting gain or

Statement 2: An acquirer cannot obtain control of an acquiree without
True, False

9 If initial accounting for business combination is incomplete by the end of the

Shall report in its financial statement provisional amounts for the item for which accounting is
incomplete and finalized the accounting for a maximum period of one year form the date of combination.

10 Parent Company acquired Subsidiary Company in two stages:

NCI is measured at their share of net assets. What is the amount of goodwill from the step acquisition?

CT 750,000
PHS 400,000
NCI 184,000 1,334,000
FVINA 920,000
GW 414,000

11 Subsidiary Company had common stock of P350,000 and retained earnings of

Immediately after the combination, what was the consolidated net assets?
SH ISSUE 832,000
FVINA 840,000
GBP (8,000)
 NETR ASSETS-P 1,650,000
NETR ASSETS-S 840,000
GW -
CASH PAID TO DAC AND SIS -
TOTAL COMBINED ASSETS 2,490,000

12 Under IFRS 10, it refers to the term used to describe the ownership of the
De facto control

13 Parent Company acquired 75% of outstanding ordinary shares of Subsidiary

Non-Controlling Interest in Net Assets of Subsidiary at the end is:
P S
NI 300,000 100,000 COST
DIVIDEBD (30,000) CV
INTRY 40,000 ACC DPE
DEPR (18,000) ASSET HELD
ADJU 270,000 122,000 ANNUAL DEP
SH OF P 91,500 (91,500) UL
IMP LOSS (13,500) (1,500)
CNI 348,000 29,000
NCI BEG 275,000
DIVIDEND (10,000)
NCI,END 294,000

14 In a business combination (net asset acquisition), an acquirer's interest in the

Recognize the excess as an asset CT>FVINA

15 On September 1, Parent Company acquired Subsidiary Company. The

How much is the total consideration transferred recognized as a result of the business combination?
PP 2,000,000
CC(FV AT DATE OF ACQ) 500,000
TOTALCONSIDERARTION 2,500,000

16 Statement 1: At the acquisition date, the acquirer shall classify or designate the identifiable assets acquired and liabilities
Statement 2: The acquirer shall make those classifications or designations on the basis of the contractual terms, econom
TRUE, TRUE

17 Which of the following statements is/are true about contingent consideration under the revised IFRS 3?
Statements II and III only.
1 Contingent consideration in a business acquisition that is classified as equity is subsequently measured at fair value throu
2 Contingent consideration can be measured using the discounted value approach in estimating its acquisition-date fair va
3 Contingent consideration obligations are recognized when the contingency could be measured reliably

18 IFRS 3 requires that the contingent liabilities of the acquired entity should be recognized in the balance sheet at fair valu
 Increase the value attributed to goodwill, thus increasing the risk of impairment of goodwill

19 Which of the following events would be accounted for under IFRS 3?

CAF Company, an engineering firm, acquired 35% of BSA Construction Ltd. CAF Company has an existing 25% equity int
STEP ACQUISITION

20 The following are indicators that an investor may have power over the investee except
the investor holds protective rights of the investee

21 Parent Company acquired 80% of the outstanding shares of Subsidiary Company for 5,000,000 on January 2, 2021 and p
The NCI in the consolidated balance sheet on December 31, 2021 is:
P S
NI 640,000 CT
COGS (312,000) NCI
DEPR (65,000) FVINA
DIVIDEND-S EXCESS
ADJUSTED 263,000 UNDER INVTRY
SH OF P (210,400) UNDER FA
IMP LOSS - GW
NI-S 52,600
NCI BEG 990,000
DIVIDEND-S (26,250)
NCI,END 1,016,350

22 When the parent corporation elects to account its investment in subsidiaries in its separate financial statements using co
The dividends from a subsidiary shall be recognized as dividend income as part of profit or loss of separate statement o

23 On July 1, 2020, Parent Company acquired the net assets of Subsidiary Company for a consideration transferred of P32,0
What amount should the surviving company present for goodwill in its separate statement of financial position at Decem

CT AT JULY 1 2020 32,000,000

FVINA AT MAR 31 2021 29,500,000
GW 2,500,000

24 Under IFRS 3, contrary to IAS 37, what is the recognition principle of contingent liability assumed in a business combinati
The acquirer shall recognize as of the acquisition date a contingent liability assumed in a business combination if it is a pr
that arises from past events and its fair value can be measured reliably even only reasonably possible

25 Parent Company acquires Subsidiary Company on June 30, 2022. Parent seeks an independent valuation for an item of p
What is the increase in goodwill as a result of the measurement period adjustment during 2023?
P0

26 Parent Company acquired 80% of the outstanding shares of Subsidiary Company for 5,000,000 on January 2, 2021 and p
The net income attributable to NCI is
P S CT
 NI 600,000 NCI
COGS (290,000) FVINA
DEPR (116,000) EXCESS
DIVIDEND-S UNDER INTORY
ADJUSTED 194,000 UNDER FA
SH OF P (155,200) GW
IMP LOSS (15,000)
NI-S 23,800

27 Subsidiary Company was merged with Parent Corporation on December 31, 2021. In the business combination, Parent C
The retained earnings immediately after the combination is:

SH ISSUED 5,080,000
FVINA 5,790,000
GBP (710,000)

RE, P 4,080,000
DAC (20,000)
GBP 710,000
COMBINED RE 4,770,000

28 A merger is different from consolidation because

A merger dissolves one of the combining entities, but consolidation dissolves all of the combining entities.

29 Statement I. The non-controlling interest is presented in the consolidated financial statements as an equity separately fro
Statement II. If the ownership interest in a subsidiary changed but did not result to loss of control, the parent should reco
Statement I is true; Statement II is false NO GAIN OR LOSS/ IT IS EQUITY TRANSAC

30 On January 1, 2021, Parent Company purchased 70% of Subsidiary Company’s stock for P980,000. On this date, the carry
Parent opted to measure NCI at fair value. Of the goodwill recognized, how much is attributable to the non-controlling in

CT 980,000
NCI 420,000
FVINA 1,100,000
GW 300,000
ATTRIBUTABLE TO NCI 90,000

31 In a business combination in which there is an exchange of cash for all the outstanding shares of the acquiree, how does
The acquirer stockholders become the acquiree stockholders

32 How much is the Consolidated Retained Earnings at December 31, 2022?

P S
NI 300,000 200,000
DIVIDEND (18,000)
COGS (50,000)
 OVER BPPE 10,000
ADJU 282,000 160,000
SH OF P 144,000
IMP LOSS (27,000)
CNI 399,000
RE, BEG 5,500,000
DIVIDEND-P (50,000)
RE, END 5,849,000

33 How many is the Number of Shares Issued?

CT 771,000
NCI 168,000
FVINA 840,000 939,000 FVINA+GW
GW 99,000

CT 771,000
FV OF SHARES 12
SHARES ISSUED BY P 64,250

34 On January 2, 2021, D Corporation purchased 80% of the outstanding shares of C Company for P4,750,000. At that date,
How much is the consolidated retained earnings attributable to controlling interest in 2021?
P S
NI 1,100,000 510,000
DIBIDEND (104,000)
DEP (76,000)
ADJ 996,000 434,000
SH OF P 347,200
IMP LOSS -
CNI 1,343,200
RE, BEG 3,540,000
DIVIDEND-P (390,000)
GBP 34,000
RE, END 4,527,200

35 Entity Job has a 90% controlling interest in Entity Work. On December 31, 2022, the carrying value of Entity Work’s net a
Determine the gain on disposal (deconsolidation).

FV OF CONSI RECEIVED 44,200

CV OF NCI 3,800
FV OF INTEREST RETAINED] 5,200 53,200
TOTAL
CV OF NET ASSETS OF S 37,500
CV OF GW - 37,500
GAIN ON DISPOSAL 15,700
36 Refer to the given data
CT 136,800
NCI 36,600
FVINA 183,000
GBP (9,600)

OS 150,000
APIC 450,000
RE 810,000
GBP 9,600
NCI 36,600
CONSO EQUITY 1,456,200

37 At the date of acquisition, business combination resulting in a parent-subsidiary relationship, the difference between cur
Reflected in the working paper elimination entry.

38 On January 02, 2021, Parent Corporation purchased 80% of SUBSIDIARY Company’s ordinary shares for P648,000.
What is the non-controlling interest in profit of SUBSIDIARY Company on December 31, 2021?
P S
NI 285,000 105,000 CT
DIVIDEND-S TO P - NCI
UNDER PPE (12,000) FVINA
ADJUSTED 285,000 93,000 GW
SHAER PF P 74,400 (74,400) UNDER PPE
IMP LOSS (10,000) (2,500)
CNI 349,400 16,100
NCI BEG 162,000
DIVIDEND-S (7,200)
NCI,END 154,800

39 Parent Corporation acquired 80% of the outstanding shares of Subsidiary Company on June 1, 2021 for P3,517,500.
How much is the non-controlling interest in net assets on December 31, 2021?

P S NET ASSETS AT END

NI 450,000 255,000 INCOME
COGS 66,000 DIVIDEND DECLARED
DEP (13,125) NET ASSETS AT ACQ
DIVIDEND (64,000)
ADJSUTED 386,000 307,875 CT
SHARE IN P 246,300 (246,300) NCI
IMP LOSS (82,068) (3,282) FVINA
CNI 550,232 58,293 GW
NCI BEG 705,000
 DIVIDEND (16,000)
NCI,END 747,293

40 Parent Corporation acquired 80% of the outstanding shares of Subsidiary Company on June 1, 2021 for P3,517,500. Subs
How much is the goodwill on the December 31, 2021 consolidated statement of financial position?

GOWILL RESULTED IN BC 863,500

IMPAIRMENT LOSS (85,350)
GOODWILL DEC 31, 2021 778,150

41 Which of the following transactions will affect both the consolidated net income attributable to the parent and the non-
Dividend declared but not yet paid by the subsidiary.

42 On January 1, 2021, Parent Co. acquired 80% of Subsidiary Inc.’s outstanding stocks for P1,600,000 cash. Subsidiary Inc.’
How much is the total assets in the consolidated balance sheet after the stock acquisition?

CT 1,600,000
NCI 400,000
FVINA 1,200,000 1,300,000
EXCESS 800,000 700,000 GW
UNDERVALUE PPE 100,000
TOTAL ASSETS-S 3,000,000
TOTAL ASSETS-S AT FV 3,100,000
TOTAL ASSETS-P 6,000,000
GOOWILL 700,000
CASH PAID TOE XEPENSES -
LESS: INVESTMENT IN SUBSIDIARY -
CONSO ASSETS 9,800,000

43 The following steps are necessary when consolidating on the date of acquisition except
Eliminate dividends declared or paid by the subsidiary to the parent
THIS TRANSACTION HAPPENS SUBSEQUENT TO DATE OF ACQ

44 Parent Company acquired 75% of outstanding ordinary shares of Subsidiary Company for P900,000. Book value of Subsid
Net income attributable to Parent Company is
P S
NI 300,000 100,000
DIVIDEND (30,000)
COGS OVER 40,000
DEP (18,000)
ADJUSTED 270,000 122,000
SHARE OF P 91,500 (91,500)
IMP LOSS (13,500) 1,500
CNI 348,000 32,000
 INITIAL
SHARE IN PS
SHARE IN GW

45 Which of the following statements is correct?

The dividends received by the parent from the subsidiary should be eliminated in full to correct/adjust the understateme
If the fair value of a depreciable asset is higher than its book value, the difference will have an impact in the subsequen

46 The following are statements related to the subsequent accounting of contingent consideration:
Statement 1: Changes that are the result of the acquirer obtaining additional information about facts and circumstances
Statement 2: Changes resulting from events after the acquisition date are not measurement period adjustments. Such ch
S1-TRUE, S2-True

47 Parent Company’s stockholders’ equity as of December 31, 2020 is P7,380,000. On January 1, 2021, Parent acquires 30%
Immediately after the business combination, how much is the consolidated total equity?

CT 3,942,000
PHS 1,971,000 COST OF INVESTMENT
NCI 1,152,000 NET LOSS
FVINA 11,520,000 CV OF INVESTMENT
GBP (4,455,000) FV OF INVESTMENT
GAIN ON REMEASUREMNT
SHE-P DEC 31 2020 7,380,000
SHARE ISSUED IN JAN 1 2021 1,350,000
GBP 4,455,000
DAC (952,200)
SIC (19,800)
GAIN OR LOSS ON REAMEASUREMENT 351,000
CONSO EQUITY 12,564,000

48 How much is the consolidated equity

CT
OS 600,000 NCI
SHARE ISSUED 771,000 FVINA
SHARE PREMIUM 450,000 GW
RE 260,000
DAC (28,700) CT
SIC (5,000) FV OF SHARES
GBP - SHARES ISSUED
NCI 168,000
CONSO EQUITY 2,215,300

49 According to IFRS 10, a business combination occurs and control was established when a company acquires an equity int
 Control over the entity, irrespective of the percentage owned

50 Statement I. In a stock acquisition, gain on bargain purchase is recognized in profit or loss of the acquirer (after reassessm
Statement II. Costs incurred in public offering of shares are charged to share premium. *
Both statements are true.

51 On March 31, 2022, Parent Company purchased 80% of Subsidiary Company’s stock for P975,000. On this date, the carry
In the December 31, 2022 consolidated balance sheet, NCI should be reported at:
P S
NI 240,000 CT
DIVIDEND (120,000) NCI
DEP (15,000) FVINA
ADJUSTED 225,000 GW
SHARE OF P 180,000 (180,000)
IMP LOSS - -
CNI 45,000
NCI, BEG 220,000
DIVIDEND TO MINORITY (30,000)
NCI,END 235,000

52 The goodwill in the consolidated balance sheet at December 31, 2021 is

CT 425,000
NCI 106,250
FVINA 210,000
GW 321,250
IMPAIRMENT LOSS (3,000)
GOODWILL DEC 31 2021 318,250

53 WHICH OF THE FF STATEMNT IS CORRECT

IFRS 3 (Revised) is applied prospectively to business combinations occurring in the first accounting period beginning on

54 Parent Company acquired 80% of the outstanding shares of Subsidiary Company for 5,000,000 on January 2, 2021 and p
The amount of goodwill to appear in the consolidated financial Statements on December 31, 2021 is:

CT 5,000,000
NCI 1,250,000
FVINA 4,800,000
EXCESS 1,450,000
UNDER IVNETORY 435,000
UNDER PPE 580,000
GW 435,000
IMPAIRMENT (25,000)
GOODWILL DEC 31 2021 410,000
55 On April 1, 2022, Parent Co. acquired 80% of the issued share capital of Subsidiary for P5,000,000. At that time Subsidiar
How much must be recognized as change in depreciation expense during the consolidation for the year ended Decembe

CT 5,000,000
NCI 1,250,000 UNDER BY
FVINA 4,700,000 700,000
GW 1,550,000

ANNUAL DIFFERENCE IN DEP 70,000

56 WHICH OF THE FOLLWONG STSTEMNTS IS TRYE

57 On January 02, 2021, Parent Corporation purchased 80% of SUBSIDIARY Company’s ordinary shares for P648,000. P30,00
What is the consolidated profit attributable to parent’s shareholders on December 31, 2021?

P S
NI 285,000 105,000 CT
DIVIDEND-S TO P - NCI
UNDER PPE (12,000) FVINA
ADJUSTED 285,000 93,000 GW
SHAER PF P 74,400 (74,400) UNDER PPE
IMP LOSS (10,000) (2,500)
CNI 349,400 16,100
NCI BEG 162,000
DIVIDEND-S (7,200)
NCI,END 154,800

58 The non-controlling interest in net assets of a partially owned subsidiary is

Decreased by the NCI’s share of subsidiary’s dividends and increased by the NCI’s share of subsidiary’s adjusted net inc

59 When there are differences in the accounting policies adopted by the parent and its subsidiaries, the consolidated financ
be adjusted to reflect the accounting policy adopted by the group entity

60 A business combination resulting to a goodwill is accounted using acquisition method. The acquirer incurred and paid bu
RE in the consolidated financial position is lower than the RE of the parent

61 Parent Corporation issued on March 31, 2021 500,000 shares of its P10 par ordinary shares, P40 market value per share,
On March 31, 2021, immediately before the combination, the stockholders’ equities were:
The total goodwill to be recognized by Parent Corporation as a result of the business combination is

SUBSIDIARY A SUBSIDIARY B
SHARES ISSUE 20,000,000 4,000,000
FVINA 17,660,000 4,700,000
 GW/(GBP) 2,340,000 (700,000)

62 A business combination resulting to a gain on bargain purchase is accounted using acquisition method. In the consolidat
RE in the consolidated financial position is higher than the RE of the parent

63 Refer to the given data:

P S CT
NI 285,000 105,000 NCI
DIVDEND - FVINA
DEP (12,000) XCESS
ADJUSTED 285,000 93,000 GW
SHARE OF P 74,400 (74,400) UNDER PPE
IMPAIRMENT LOSS (4,800) (1,200)
CNI 354,600 17,400
NCI, BEG 162,000
DIVIDEND-S (9,000)
NCI,END 170,400

64 Provisional amounts recognized in a business combination is

Adjusted retrospectively for the information obtained during the measurement period.

65

CT 425,000
NCI 106,250
FVINA 210,000
GW 321,250
P S
NI 105,000 31,500 DIVIDEND DECLARED-S
DIVIDEND (13,600) DIVIDEND DECLARED-P
ADJUSTED 91,400 31,500
SHARE OF P 25,200 (25,200)
IMP LOSS (2,400) (600)
CNI 114,200 5,700
RE, BEG 380,000
DIVIDEND DECLARED-P (74,500)
RE, END 419,700
n a business combination is correct?
issuing shares, the acquirer is usually the entity that transfers the cash, incurs the liabilities or issues the shares.

1,200,000
2,400,000 3,600,000
400,000

11,200,000
4,800,000
combination.
 INITIAL
576,000 FV 1,050,000 SH IN PS
360,000 450,000 90,000
216,000
3
72,000
8

TM-P 260,000
TM-S 250,000
FV ADJUSTMENT 48,000
CUMMULATIVE. AMORT DIFF SWAAAAAAAAh2
CONSO TM 558,000

900,000
530,000
(300,000)
230,000

sets acquired and liabilities assumed as necessary to apply other PFRSs subsequently
ontractual terms, economic conditions, its operating or accounting policies and other pertinent conditions as they exist subsequent to the

easured at fair value through profit or loss.

g its acquisition-date fair value.

e balance sheet at fair value. T

 an existing 25% equity interest over BSA Construction Ltd.

0 on January 2, 2021 and paid P50,000 for direct

5,000,000
990,000 1,156,400
4,950,000 5,782,000
1,040,000 208,000
312,000
520,000
208,000

nancial statements using cost model, how shall it recognize its dividend from a subsidiary?
ss of separate statement of comprehensive income when its right to receive dividend is established

ration transferred of P32,000,000. A

financial position at December 31, 2021?

ed in a business combination?
ess combination if it is a present obligation

t valuation for an item of property, plant and equipment acquired in the combination, and the valuation was not complete by the time Par

0 on January 2, 2021 and paid P50,000 for direct acquisition related costs.

5,000,000
 1,250,000
4,800,000 5,670,000
1,450,000 580,000
290,000
580,000
580,000

ess combination, Parent Corporation issued 40,000 shares of its P100 par value ordinary shares, with market price of P127 per share.

ining entities.

as an equity separately from the equity of the parent.

rol, the parent should recognize a gain or loss associated with the transaction
OSS/ IT IS EQUITY TRANSACTION

000. On this date, the carrying amount of Subsidiary Company’s net assets were P1,000,000.
le to the non-controlling interest?

of the acquiree, how does the ownership structure of the acquiree change?
 A B
SHARES ISSUE 20,000,000 4,000,000
FVINA 17,660,000 4,700,000
GW/(GBP) 2,340,000 (700,000)

r P4,750,000. At that date, C had P4,000,000 of ordinary shares outstanding and retained earnings of P1,600,000

1,187,500
380,000 1,196,000

CT 4,750,000
NCI 1,196,000
FVINA 5,980,000
GAIN ON BP (34,000)

alue of Entity Work’s net assets in Entity Job’s consolidated

he difference between current fair values and carrying amounts of the subsidiary’s net assets is:

hares for P648,000.

648,000
162,000
780,000
30,000
120,000

2021 for P3,517,500.

P NCI
T ASSETS AT END 3,510,000 INITIAL 3,517,500 705,000
(255,000) SHARE IN PS 2,687,200 671,800
IDEND DECLARED 80,000 SHARE IN GW 830,300 33,200
T ASSETS AT ACQ 3,335,000 0.9616 0.0384

3,517,500 AT PS AT FV GIVEN
705,000 CT 3,517,500 3,517,500
3,359,000 NCI 671,800 705,000
863,500 FVINA 3,359,000 3,359,000
GW 830,300 863,500
 PARENT SHARE IN GW 0.9616
NCI SHARE IN GW 0.0384

2021 for P3,517,500. Subsidiary Company’s stockholder’s equity components at the end of this year are as follows: Ordinary shares, P100

o the parent and the non-controlling interest in net assets of subsidiary (NCINAS)?

0,000 cash. Subsidiary Inc.’s balance sheet shows P3,000,000 identifiable assets and P1,800,000 liabilities.

0,000. Book value of Subsidiary Company’s net assets is P1,000,000. Upon re-measurement of acquires net assets, it shows that inventory

FV 450,000
COST 576,000 90,000
CV 360,000
ACCUM DEP 216,000 NCI AT FV GIV
YEAR HELD 3 CT 900,000
ANNUAL DEP 72,000 NCI 275,000
USEFUL LIFE 8 FVINA 1,050,000
REMAINING UL 5 GW 125,000
P SHARE IN GW 112,500
 P NCI NCI SHARE IN GW 12,500
900,000 275,000
787,500 262,500
112,500 12,500 125,000
0.90 0.10

t/adjust the understatement of consolidated net income.

n impact in the subsequent computation of the consolidated net income.

t facts and circumstances that existed at the acquisition date, and that occur within the measurement, are recognized as adjustments aga
eriod adjustments. Such changes are therefore accounted for separately from the business combination.

2021, Parent acquires 30% of Subsidiary Company’s ordinary shares for P540,000 cash and by issuing its own shares with a fair value of P1

1,890,000
(270,000)
1,620,000
1,971,000
351,000

771,000
168,000
840,000 939,000 FVINA+GW
99,000

771,000
12
64,250

pany acquires an equity interest in another entity and has:

he acquirer (after reassessment) if the consideration transferred, previously held interest, and non-controlling interest are less than the fai

000. On this date, the carrying amount of Subsidiary Company’s net assets were P1,000,000.

975,000
220,000
1,100,000
95,000

nting period beginning on or after 1 July 2009. It can be applied early but ONLY to an accounting period beginning on or after 30 June 20

0 on January 2, 2021 and paid P50,000 for direct acquisition related costs.
000. At that time Subsidiary’s balance sheet showed net assets of P4,000,000.
r the year ended December 31, 2023?

hares for P648,000. P30,000 of the excess is attributable to goodwill and the balance to an equipment with an economic life of ten years.

648,000
162,000
780,000
30,000
120,000

bsidiary’s adjusted net income

es, the consolidated financial statements must

quirer incurred and paid business combination expenses in relation to the acquisition. In the consolidated balance sheet at the date of acq

40 market value per share, to acquire all of the outstanding P25 par value ordinary share of Subsidiary A Company and 100,000 shares of t
method. In the consolidated balance sheet at the date of acquisition, which of the following statement about retained earnings (RE) is TRU

648,000
162,000
660,000
150,000
30,000
120,000

IDEND DECLARED-S 17,000

IDEND DECLARED-P 74,500
es the shares.
 P NCI
900,000 275,000
787,500 262,500
112,500 12,500 125,000
0.90

tions as they exist subsequent to the acquisition date

on was not complete by the time Parent authorized for issue its financial statements for the year ended December 31, 2022.
market price of P127 per share.
863,500
are as follows: Ordinary shares, P100 par, P1,500,000, Share premium P675,000 and Retained Earnings P1,335,000.

s net assets, it shows that inventory has a fair value lower by P40,000 than its book value and equipment held for 3 years has a fair value a

NCI AT PS
900,000
262,500
1,050,000
112,500
0.90
 0.10

t, are recognized as adjustments against the original accounting for the acquisition (and so may impact goodwill).

its own shares with a fair value of P1,350,000.

ntrolling interest are less than the fair value of net assets acquired.

riod beginning on or after 30 June 2007. IFRS 3 (Revised) and IAS 27 (Revised) are applied at the same time.
t with an economic life of ten years.

ted balance sheet at the date of acquisition, which of the following statement about retained earnings (RE) is TRUE?

y A Company and 100,000 shares of the same P10 par ordinary shares of all the outstanding P55 par value ordinary shares of Subsidiary B C
nt about retained earnings (RE) is TRUE?
mber 31, 2022.
d for 3 years has a fair value and book value of P450,000 and P360,000, respectively
dinary shares of Subsidiary B Company.
2 On January 7, 2022, ABC Co. acquired a 40% interest in XYZ Co. for P4,800,000.
How much is the goodwill to be recognized as a result of business combination?
NCI AT FV NCI AT PS
CT 4,800,000
PSH 1,920,000
NCI 2,900,000
FVINA 8,000,000
GW 1,620,000

6 CT 1,600,000
NCI 400,000
FVINA 1,200,000 1,300,000
EXCESS 800,000 700,000
UNDERVALUE PPE 100,000
TOTAL ASSETS-S 3,000,000
TOTAL ASSETS-S AT FV 3,100,000
TOTAL ASSETS-P 5,100,000
GOOWILL 700,000
CASH PAID TOE XEPENSES -
LESS: INVESTMENT IN SUBSIDIARY
CONSO ASSETS 8,900,000

7 CT 4,000,000
SH ISSUED 2,500,000
NP 1,773,000 (3.54595) 3.5460
NCA 240,000
FVINA 6,000,000
GW 2,513,000

GAIN ON EXCAHE 40,000

BC COST 30,000
P/L 10,000

11 GO BACK

13
CT 150,000,000
NCI 40,000,000

FVINA 200,000,000
GAIN (10,000,000)
 PS
15 CT 600,000 FV
NCI 142,500
FVINA 560,000
GW 182,500

19 CT 200,000,000
CC 10,000,000

FVINA 116,000,000
GW 94,000,000

20 GO BACK
21

22

23
SH ISSUED 780,000

FVINA 840,000
GBP (60,000)

P NET ASSETS 1,680,000

S NET SSETS
ISSUED SHARES 780,000
DAC (150,000)
GBP 60,000
CONSO NET ASSETS 2,370,000

34 CT 352,000
PS 308,000
NCI 220,000
FVINA 800,000
GW 80,000

35 SS DOVE
CT 1,420,000 300,000
NCI 360,000 224,000

FVINA 1,200,000 640,000

 GW/GBP 580,000 (116,000)

36 GO BAK

37 CT 160,000,000 CHARGE TO SP

FVINA 135,000,000
GW 25,000,000

39 SH ISSUE 3,540,000
FVINA 3,646,720
GBP 106,720
FEE CONS (180,000)
SIC IN EXCESS PF SP (8,000) 60,000
legal fees (12,000) 48,000
CHARGE TO ACCUM PROFITS (93,280)

53 CT 180,000,000
CC 15,000,000
NCI 12,000,000
FVINA 120,000,000
GW 87,000,000
IMPAI LOSS (500,000)
GW DEC 31 2021 86,500,000

56
CT 300,000 PS
NCI 71,250 FV

FVINA 350,000 INITIAL

GW 21,250 SH IN PS
SH OF NCI UN GW 1,250
4,250

57 SH ISSUED 353,100
DAC (47,500)
INCXRESE IN SHE 305,600

59
CT 3,942,000 CT
PSH 1,971,000 PHS
 NCI 1,152,000 NCI
FVINA
FVINA 11,520,000 GBP
(4,455,000)
SHE-P DEC 31 2020
SHARE ISSUED IN JAN 1 2
GBP
DAC
SIC
GAIN OR LOSS ON REAM
CONSO EQUITY

68 70,000
43,000
113,000

69 SH ISSUED 3,850,000
CC 150,000
CT 4,000,000

CT 2,160,000 FV
PSH 540,000 PS
NCI 900,000

FVINA 3,200,000
GW 400,000
P4,800,000.
combination?
112,000
142,500 712,500
 40,000

12,000

70,000
71,250 356,250
P NCI
300,000 71,250
280,000 70,000
20,000 1,250
0.9412 0.0588

3,942,000
1,971,000 COST OF INVESTMENT 1,890,000
 1,152,000 NET LOSS (270,000)
11,520,000 CV OF INVESTMENT 1,620,000
(4,455,000) FV OF INVESTMENT 1,971,000
GAIN ON REMEASURE 351,000
7,308,000
1,350,000
4,455,000
(952,200)
(19,800)
351,000
12,492,000

900,000
800,000
 P S
2 NI 200,000 40,000 CT
DIVIDEND (16,000) NCI
SH OF P 32,000 FVINA
CNI 216,000
DIVIDENS (50,000)
RE, BEG 500,000
RE,,END 666,000

3 P S CT 900,000
NI 300,000 100,000 NCI 275,000
COGS 40,000 FVINA 1,050,000
DEP (18,000) GW 125,000
DIVIDEND (30,000)
ADJSUTED 270,000 122,000
SHARE OF P 91,500 (91,500)
IMAPA LOSS (13,500) (1,500)
CNI 348,000 29,000
NCI, BEG 275,000
DIVIDEND (10,000)
NCI,END 294,000
2,019 2,020
4 P S P S
NI 900,000 340,000 1,100,000 510,000
DIBIDENS (56,000) (104,000)
PPE (76,000) (76,000)
ADJSUTED 844,000 264,000 996,000 434,000
SHARE OF P 211,200 (211,200) 347,200 (347,200)
IMP LOSS - -
CNI 1,055,200 52,800 1,343,200 86,800
NCI BEG 1,196,000
DIVIDENS (14,000)
NCI, END 2019 1,234,800
NCINIS 2020 86,800
DIVIDEBNS (26,000)
NCI,END 2020 1,295,600

NI 200,000 CT
COGS (290,000) NCI
DEPR (116,000) FVINA
DIVIDEND-S (206,000) EXCESS
ADJUSTED UNDER INVTRY
 SH OF P (41,200) UNDER FA
IMP LOSS (1,000) GW
NI-S (42,200)
NCI BEG 1,250,000
DIVIDEND-S (26,250)
NCI,END 1,181,550

7
CT 990,000
NCI 330,000
FVINA 1,150,000
GW 170,000
IMP LOSS (20,000)
GW END 150,000

8 P S CT
NI 400,000 80,000 NCI
COGS (10,000) FVINA
BDLG (16,000)
ADJUSTED 400,000 54,000
SH OF P 37,800 (37,800)
CNI 437,800 16,200

11 CT 4,800,000
48,000
480,000
96,000

12 P S
NI 200,000 40,000
COGS (5,000)
BDLG (8,000)
ADJUSTED 200,000 27,000
SH OF P 18,900 (18,900)
CNI 218,900 8,100

100,000
520,000
14 P S
NI 300,000 100,000 CT
COGS 40,000 NCI
DEP (18,000) FVINA
DIVIDEND (30,000) GW
ADJSUTED 270,000 122,000
SHARE OF P 91,500 (91,500)
IMAPA LOSS (13,500) (1,500)
CNI 348,000 29,000
NCI, BEG 275,000
DIVIDEND (10,000)
NCI,END 294,000

15 SH ISSUED 1,350,000 105,600

CC 750,000 320,400
FVINA 1,895,000 35,000
GW 205,000 49,000
TOTAL SSETS-S 2,860,000 50,000
TOATL ASSETS=P 5,000,000 14,000
CASH PAID TO BC COST (574,000) 574,000
TOTAL ASSETS 7,491,000

16 CT 3,600,000
1,200,000
NCI 1,280,000
FVINA 6,400,000
GBP (320,000)

18 GOWILL RESULTED IN BC 863,500

IMPAIRMENT LOSS (85,350) NET ASSET END
GOODWILL DEC 31, 2021 778,150 NI
D
CT 3,517,000 NET ASSET JUN
NCI 705,000 INVOTY
FVINA 3,359,000 PPE
GW 863,000 FVINA
IMP LOSS (85,350)
GW AT END 777,650

19
S NET ASSETS 850,000 (70,000)
P NA 1,680,000
ISSUED SH 780,000
 DAC (75,000)
GBP 70,000
TOTAL NET ASSTS 2,455,000

21 CT 8,400,000
FVINA 6,000,000
GW 2,400,000

P NET ASSETS 16,320,000

SH ISSUED 8,400,000
(120,000)
(80,000)
(50,000)
TOTAL EQUITY 24,470,000

22 187,300
135,000
161,000
90,400 (172,000)
115,300 74,000
172,000 163,000
89,000 (89,000)
950,000

23,438 (93,750)
2,362,500
2,268,750
567,188
(170,625)
984,375 2,351,250 1,826,250
587,813 290,625
2,641,875

24

25 SH ISSUED 875,000
CC 18,151
893,151

26 CT 5,000,000
 NCI 1,250,000
FVINA 4,800,000
EXCESS 1,450,000
GW 580,000
IMPAIMEN (5,000)
575,000

27
CT 4,750,000 PS 1,187,500
NCI 1,196,000 5,946,000 FV 1,196,000
BVINA 5,600,000
PPE 380,000 5,980,000
GBP (34,000)

P S
NI 1,100,000 510,000
DIBIDENDS (104,000)
PPE (76,000)
ADJUSTED 996,000 434,000
SH OF P 347,200 (347,200)
GBP 34,000
CNI 1,377,200 86,800
RE BEG 3,540,000
DIBIDENS 2021 (390,000)
RE, END 4,527,200

31 CT 986,000
NCI 246,500
FVINA 1,105,000
GW 127,500

P S
NI 295,000
(112,000)
COGS 15,000
DEP (20,000)
ADJSUSTED (112,000) 290,000
IM LOSS (4,000)
SH (232,000)
NCINIS 54,000
NCI BEG 246,500
DIVIDEND (28,000)
NCI END 272,500
33 CT 3,517,500

P S
NI 450,000 255,000 NET ASSET END
DIVIDE 66,000 NI
(13,125) D
ADJUSTED 307,875 NET ASSET JUN
IMP LOS (3,282) INVOTY
SH OF P (246,300) PPE
CNI 58,293 FVINA
NCI B EG 705,000 CT
DIVIDEN (16,000) NCI
NCI END 747,293

34 CT 4,900,000 U INVTYR 220,000

NCI 2,100,000 U PPE 880,000 5,900,000
FVINA 4,800,000 GW 1,100,000 1,100,000
GW 2,200,000

S
NI 850,000
COGS 220,000
DEP (176,000)
ADJSUTED 894,000
CNI 268,200
IM LOSS (66,000)
NCINIC 202,200
NCI BEG 2,100,000
DIDI (60,000)
NCI END 2,242,200

35 S
NI 213,333
(20,000)
ADJSUTED 193,333
SH IN IN 48,333
 IMP LOSS (5,000)
NCINIC 43,333
DIBIDEND (38,333)
NCI BEG 330,000
NCI END 335,000

40 CT 420,000
NCI 180,000
FVINA
S
NI 160,000 210,000
(50,000)
(18,000) (18,000)
92,000 192,000
NCINIS 27,600 57,600
NCI BEG 180,000 189,600
DIVIDENS (18,000) (24,000)
NCI END 189,600 223,200

CT 11,200,000
NCI 4,800,000
FVINA

NI 300,000
COGS 120,000
DEP (40,000)
ADJSUTED 380,000
NCINIS 114,000
NCI BEG 4,800,000
DIV (75,000)
NCI END 4,839,000

1,680,000 1,680,000
780,000 840,000
(150,000)
2,310,000
 P NCI
450,000 INITIAL 900,000 275,000
262,500 360,000 PS 787,500 262,500
90,000 GW 112,500 12,500
112,500 0.900 0.100
576,000
360,000
216,000
72,000
8

PS 1,196,000
CT 4,750,000 FV 1,187,500
NCI 1,196,000 5,946,000
BVINA 5,600,000
PPE 380,000 5,980,000
GBP (34,000)

1,430,000

5,000,000
1,250,000 6,250,000
4,800,000 5,670,000
1,450,000 580,000
290,000
580,000
580,000
 900,000
275,000
1,050,000
125,000

3,510,000
(255,000)
80,000
3,335,000
(66,000)
90,000
3,359,000
32
 3,510,000
(255,000)
80,000
3,335,000
(66,000)
90,000
3,359,000 PS 671,800
3,517,500 FV 879,375
705,000 4,222,500
GW 863,500

INITIAL 3,517,500 705,000

PS 2,687,200 671,800
GW 830,300 33,200 863,500
0.96 0.04
125,000
5 NRA Exclusive conjugal total
ex prop 5,600,000 5,600,000
conjugal pro 4,200,000 4,200,000
-
-
gross estate 5,600,000 4,200,000 9,800,000
lit (1,470,000) (1,470,000)
transfer to lgus (1,800,000) (1,800,000)
net conjugal est 930,000 6,530,000
sd (500,000)
sh of s (465,000)
taxable net est 5,565,000

700,000
150,000
30,000
100,000
980,000

acp
ex community total
lan in manila 6,000,000 6,000,000
land in bataan 8,000,000 8,000,000
houz 4,000,000 4,000,000
cash in bank 3,000,000 3,000,000
land in makati 2,800,000 2,800,000
fruits 1,700,000 1,700,000
land in bulacan 1,100,000 1,100,000
total gross estate 11,500,000 15,100,000 26,600,000
ordinary deduction 1,600,000 1,100,000 2,700,000
vanishing deduct 503,158 - 503,158
net community estate 9,396,842 14,000,000 23,396,842
stand deduct (5,000,000)
net estate 18,396,842
share of spous (7,000,000)
net taxable estate 11,396,842
estate tax due 683,811
 conjugal
2,000,000
580,000
1,850,000
54,000
4,484,000
2,242,000

800,000
300,000
500,000
1,500,000
2,300,000
400,000
1,200,000
7,000,000

8,000,000
900,000
80,000
70,000
90,000
120,000
4,000,000
gross estate 13,260,000
unpaid mortg (1,000,000)
(180,000)
loss
12,080,000 gross etstse
(5,000,000) allow dedduct
7,080,000 net estate
sd
taxable net estat
estate tax due
ftc
estate tax pay
 ex acp total;
14,000,000 14,000,000
6,000,000
2,500,000
2,300,000
1,200,000
gross estste 6,000,000 20,000,000 26,000,000
orddeductions (600,000)
(1,600,000)
(952,000)
net conjugal estate 5,048,000 17,800,000 22,848,000
(7,000,000)
(5,000,000)
(8,900,000)
1,948,000

15-Jan 250,000
(25,000)
225,000

12-Jun 100,000
-
100,000
prior net gift 225,000
total 325,000
exempt (250,000)
75,000
tax due 4,500

20-Aug 200,000
200,000
(50,000)
net gift 350,000 350,000
prior net g 325,000 b
total net gift 675,000 350,000
exept (250,000) (250,000)
tax net g 425,000 100,000
tax due 25,500 6,000
prior tax paid (4,500)
tax payable 21,000
 79,000 40
67,500
150,000
400,000
120,000
816,500

50,000
150,000
150,000
900,000 200,000
90,000 550,000
120,000

1,110,000
2,960,000
1,300,000
670,000
2,500,000
7,430,000

initila value 2,000,000 3,000,000

paid mortgage 2,000,000
initial basis 2,000,000 500,000
pop deductions (200,000) 700,000 1,500,000
fina; basis 1,800,000 7,000,000
van rate 0.80
vd 1,440,000

850
4,250,000
 PHIL ABROAD WO
5,600,000 18,200,000 23,800,000
4,200,000 4,200,000
-
-
9,800,000 18,200,000 28,000,000

1,000,000
1,500,000
1,700,000
4,200,000

ex community total
unpaid mort 600,000
claims 1,000,000
tpp 1,100,000
total 1,600,000 1,100,000 2,700,000

land in makati 2,800,000

paid mort
initial basis 2,800,000
pro deduction 284,211
final basis 2,515,789
vanish deduct 0.20
vanishinh deduction 503,158
 3,000,000
400,000
400,000
500,000
900,000
oct 5 2011
oct 5 2012
initial value 1,800,000 oct 5 2013
paid mortg (468,750) oct 5 2014
initial basis 1,331,250
pro deduction 152,539
final basis 1,178,711
vanishing rate 0.20
vanishi deduct 235,742

50,000
150,000
150,000
200,000
550,000

18,750,000
3,000,000
4,500,000
6,000,000 ftc
32,250,000 specific china 1,500,000 30,000 30,000
24,750,000 paid 37,500
7,500,000 usa 3,750,000 75,000 75,000
(5,000,000) 18,750,000 180,000
2,500,000 3,000,000 total 105,000
150,000 4,500,000
105,000 6,000,000 105,000.00
45,000 32,250,000
24,750,000
 7,500,000
(5,000,000)
2,500,000
ex 150,000 total
1,300,000 105,000
pai mortg - 45,000
initial basis 1,300,000
pro dedudtc 110,000
final basis 1,190,000
1
952,000
ex conjugal total
20,000,000 50,000,000 70,000,000
25,000,000 25,000,000
 (13,000,000) (13,000,000)
45,000,000 37,000,000 82,000,000
(5,000,000)
(10,000,000)
net estate 67,000,000
(18,500,000)
taxable net estate 48,500,000
 CASE 3
11 RE, END 2020
12 RE, END 2021
13 RE, END 2022
14 NET DEBIT
15 NET CREDIT ACCUM

CASE 4
16 NI 2020
17 NI 2021
180,000 18 NI 2022
19 ADJ TO RE 2022
20 CORRECT DEP

CASE 6
26 DIT
27 OCS
28 ADJ DISBUSREMENT
29 ADJ RECEIPTS
30 CORRECT CASH BAL

CASE 3 NI 2020 NI 2021 NI 2022

UNADJUSTED 450,000 660,000 540,000
SALES COMMISSIONS 20,000
(23,000) 23,000
(27,000) 27,000
(30,000)
FOB DESTINATION
SUPPLIES ON HAND 4,500 (4,500)
3,800
UNRECCORDED DEP (500,000) (500,000)
INSURANCE 250,000 (100,000)
ADJUSTED BALANCES 447,000 410,500 (63,700)

UNADJUSTED RE BEG 2019 1,250,000

UNRECORDED SALES COM EXP (20,000)
DIVIDENDS DECLARED (80,000)
ADJUSTED RE BEG 2019 1,150,000 ACCUMULATED DEP
NI 2020 447,000
DIVIDENS (80,000)
ADJUSTED RE END 2020 1,517,000
NI 2021 410,500
DIVIDENDS 2021 (80,000)
ADJUSTED RE END 2021 1,847,500
NI 2022 (63,700)
LESS: DIVIDENDS 2022 (86,000)
ADJUSTED RE END 2022 1,697,800

CASE 4 NI 2020 NI 2021 NI 2022

UNADJUSTED 1,500,000 1,750,000 2,000,000
SALARIES 95,000
(110,000) 110,000
(100,000) 100,000
(140,000)
INVENTORY (190,000) 190,000
PURCHASES (150,000)
150,000
INSURANCE (75,000)
100,000 (100,000)
115,000 (115,000)
120,000
INTEREST INCOME 20,000 (20,000)
25,000 (25,000)
30,000
OVERSTATED GAIN (160,000)
ERRORNOEUYS EXP 750,000
UNRECORDED DEP (46,875) (93,750) (93,750)
ADJUSTED NI 2,233,125 1,496,250 1,906,250
C
C
CASE 6 89
BANK NOV 30 2023 RECEIPTS DISBURSEMENTS
UNADJ 550,000 1,890,000 1,665,000
DIT NOV 54,000 (54,000)
OCS NOV (28,000) (28,000)
BANK DR ERROR NOV 23,000 (23,000)
BANK DR ERROR DEC NO EEFECT
DIT DEC 116,000
OCS DEC 170,500
ADJUSTED BALANCE 599,000 1,929,000 1,807,500

BOOK NOV 30 2023 RECEIPTS DISBURSEMENTS

UNADJ 503,000 1,770,000 1,890,000
BSC NOV (2,000) (2,000)
NSF CHECK (36,000) (36,000)
NOTES NOV 134,000 (134,000)
BSC DEC 2,500
NSF CHECKS 28,000
NOTES DEC 225,000
BOOK ERROR (9,000)
BOOK ERROR 77,000 (75,000)
ADJUSTED 599,000 1,929,000 1,807,500

CASE 7
PCF:
BILLS AND COINS 3,000
SALARIES COMBINED IN B/C (200) 2,800
FUTURE UNREPLENISHED VOUCH 1,000
ACCOMODATION CHECHK 1,000
PETTY CASH FUND 4,800

UNDEPOSITED RECEIPTS 274,000

CASH IN BANK-BDO 1,000,000

UNDELIVERED CHECK 70,000
BOOK ERROR 54,000
ADJUSTED CASH IN BANK BDO 1,124,000

CASH IN BANK SEC

DIT BEG 110,000

DEPOSITS BY BOOK 1,180,000
TOTAL 1,290,000
DEPOSITS BY BANK 1,320,000
BANK ERROR (45,000) 1,275,000
DIT END 15,000

OCS BEG 85,000

DISBURSEMENTS BY BOOK 990,000
BOOK ERROR 10,000 1,000,000
TOTAL 1,085,000
DISBURSEMENTS BY BANK 1,065,000
BANK ERROR - 1,065,000
OCS END 20,000

CASH EQUIVALENTS 735,000

PCF 4,800
UNDEPOSITED COLLECTIONS 175,000
CASH IN BANK BDO 1,124,000
CASH IN BANK SEC 1,490,000
TOTAL CASH AND CASH EQUIVALENTS 3,528,800
 CASE 7
1,597,000 31 PCF 4,800
1,927,500 32 BDO 1,754,000
1,947,800 33 SEC
(626,200) 34 CASH EQUIVALENTS 735,000
1,000,000 35 CA AND CE

CASE 9
2,233,125 41 CORRECT A/R 533,100
1,496,250 42 ADA END 59,370
1,906,250 43 BAD DEBTS EXP 17,920
365,265 44 NRV 473,730
328,125 45 NET CREDIT 76,900

CASE 10
116,000 46 INTEREST INCOME 1,120,110
170,500 47 UNDERSTATED INCOME 1,363,935
1,807,500 48 CURRENT N/R 3,204,309
1,929,000 49 NON CURRENT NR 6,504,699
720,500 50 NET DEBIT TO INTEREST INCOME 2,798,890

RE 2020 RE 2021 RE 2022

1,620,000 2,200,000 2,660,000

(23,000) -
(27,000) -
(30,000)

4,500 -
3,800
(500,000) (500,000) 5,000,000
250,000 (100,000) 100,000
1,597,000 1,927,500 2,033,800

ULATED DEP -
RE 2022

-
-
(140,000)
-

120,000

30,000
(160,000)

515,625
365,625 328,125
< R DEDUCT
> R NO EFFECT
98 (9)
DEC 31 2023
775,000 775,000

720,500

DEC 31 2023
383,000
 (2,500)
(28,000)
225,000
(9,000)
152,000
720,500

BANK BOOK
1,540,000 1,500,000
DIT 15,000
OCS (20,000)
BANK ERROR (45,000)
BOOK ERROR (10,000)
NOTES 120,000
BSC (5,000)
NSF (15,000)
1,490,000 1,590,000
SHORTAGE 100,000
CORRECT BALANCE 1,490,000 1,490,000