Polytechnic University of the PhilippinesCOLLEGE OF ACCOUNTANCYSta. Mesa, Manila

Special Qualifying Examination for FreshmenFundamental Accounting, Parts 1 and 2

Multiple Choice Problems. Choose the letter of the correct amount. Each item is credited at 2.5 points each.

31The accountant was not able to adjust the following: P 200 of service revenue was not accrued; P 300 of unearned revenue had been earned, but no entry was made. What should be the amount of net income if the incorrect net income was P 19,000?AP 19,250CP 19,500 BP 19,410DP 18,300

32A trial balance has debit and credit totals of P 7,000. The purchase of P 4,000 of office supplies on account was omitted from the original journal entries. After recording and posting this transaction, the new debit and credit totals for the trial balance would beAP 11,000CP 9,000BP 7,000DP 3,000

33From this list of account balances, calculate the total credit column for the post-closing trial balance: Cash, P 15,000; Accounts Receivable, P 3,000; Prepaid Rent, P 2,000; Building, P 30,000; Accumulated Depreciation, P 13,000; Accounts Payable, P 6,000; Unearned Revenue, P 1,000; Jiyeon Park, Capital, P 30,000.AP 69,000CP 45,000BP 50,000DP 20,000

34The Balance Sheet of You Are My World Company shows that capital is P 540,000 that is equal to 1/3 of its total assets. How much are the total liabilities?AP 180,000CP 1,080,000 BP 720,000DP 1,620,000

35The assets of Sharmaine Company amounted to P 810,000 on December 31, 2008, but increased to P 1,305,000 by December 31, 2009. During the same period, liabilities increased by P 270,000. Owners equity on December 31, 2008 amounted to P 495,000. What was the amount of the Owners Equity on December 31, 2009?AP 585,000CP 1,035,000BP 720,000DP 1,080,000

36Hillsong Company has P 60,000 in revenues, P 132,000 in expenses, P 36,000 in owner investment, P 9,000 in owners withdrawals, and P 45,000 in liabilities paid off. Owners equity changes byA+ P 48,000C+ P 36,000B- P 45,000D- P 3,000

37LPCA Company purchased P 1,450,000 of land with a P 500,000 cash down payment and the balance taken as a note payable. How much did the total assets change?A+ P 1,450,000C- P 930,000B+ P 950,000D+ P 500,000

38Coleen Garcia joined a partnership by contributing the following: cash, P 20,000; accounts receivable, P 4,000; land, P 240,000 at cost and P 400,000 at fair value; and accounts payable, P 16,000. What will be the initial amount recorded in Coleens capital account?AP 408,000CP 424,000BP 248,000DP 20,000

39Troy and Lana are combining their separate businesses to form a partnership. Cash and non-cash assets are to be contributed for a total capital of P 600,000. The non-cash assets to be contributed and the liabilities to be assumed are as follows. TroyLanaBook ValueFair Market ValueBook ValueFair Market ValueAccounts ReceivableP 40,000P 40,000Merchandise InventoryP 60,000P 100,000P 40,000P 50,000EquipmentP 120,000P 90,000P 80,000P 100,000Accounts PayableP 30,000P 30,000P 20,000P 20,000The partners capital accounts are to be equal after all the contributions of assets and the assumption of liabilities. The amount of cash to be contributed by Troy isAP 200,000CP 100,000 BP 300,000DP 210,000

40Using the information in item 39, the total assets of the partnership isAP 630,000CP 360,000BP 650,000DP 340,000

41Sunny and Jessica are partners who share profits equally and losses in a 2:1 ratio. If they have beginning capital balances of P 120,000 and P 118,000 respectively, made no additional investments nor withdrawals, and suffered an unprofitable year with a loss of P 48,000, their capital balances will be Sunny JessicaA P 40,000 P 30,000B 120,000 118,000C 88,000 102,000 D 152,000 134,000

42Bucao, Basco, and Blanco share profits and losses in the ratio of 2:3:5 respectively. Their partnership realized a profit of P 1,800,000 during the year. Bucao, with a beginning capital balance of P 1,000,000, withdrew P 200,000 during the year. Bucaos ending capital balance isAP 1,000,000CP 560,000BP 1,160,000 DP 1,400,000

43Darlene Zschechs interest in the partnership is P 110,000. Joel Houston buys Darlenes interest for P 120,000. How much is the capital balance of Joel after the purchase?AP 140,000CP 110,000 BP 120,000DP 130,000

44CM and CB formed a partnership and have capital balances of P 100,000 and P 200,000 respectively. If they agreed to admit CJ into the partnership, how much will CJ have to invest to have a 1/4 interest?AP 75,000CP 200,000BP 50,000DP 100,000

45Daza, Diaz, and Ditas are partners with capital balances of P 80,000, P 120,000, and P 160,000 respectively. They share profits and losses in the ratio of 30:40:30. Diaz decides to withdraw from the partnership. Diaz receives P 160,000 in the settlement of his interest. If the bonus method is used, what is the capital balance of Ditas immediately after the retirement of Diaz?AP 140,000CP 180,000BP 160,000DP 200,000

46Using the information in item 45, and assuming bonus method is used, what is the total partnership capital immediately after the retirement if Diaz?AP 280,000CP 200,000 BP 240,000DP 320,000

47A partner retired from a partnership and received an amount which exceeds his capital interest by P 40,000. The remaining partners have profit and loss ratio of 3:2. Under the bonus method, the excess payment will be shared by the remaining partners as

AP 48,000 and P 32,000CP 36,000 and P 24,000BP 12,000 and P 8,000DP 24,000 and P 16,000

48Kim, Coleen, and Sue are partners who share profits and losses in the ratio of 2:3:5. The partners have decided to liquidate the partnership. Their capital accounts show the following balances: Kim, P 60,000 credit; Coleen, P 90,000 credit; and Sue, P 30,000 debit after the sale of non-cash assets and the payment of liabilities. What is the amount of cash available for distribution?AP 120,000CP 160,000BP 180,000DP 150,000

49Hunger Games Corporation was organized on January 1, 2009 with authorized capital of 100,000 ordinary shares, P 20 par value. During 2009, Hunger Games Corporation had the following transactions affecting the shareholders equity: January 10, issued 25,000 shares at P 22 per share; March 25, issued 1,000 shares for legal services when the fair value was P 24 per share; September 30, issued 5,000 shares for an equipment when the value was P 26 per share. How much is the balance of the Ordinary Share Capital account as of September 30?AP 700,000CP 634,000BP 620,000DP 704,000

50Using the information in item 49, what amount should be reported as Premium on Ordinary Shares?AP 84,000CP 50,000BP 54,000DP 34,000

51Dream High Corporation has the following classes of share capital outstanding as of December 31, 2009: Ordinary Share Capital, P 20 par value, 20,000 shares outstanding; 6% Preference Share Capital, P 100 par value, cumulative, 2,000 shares outstanding. No dividends were paid on preference shares for 2007 and 2008. On December 31, 2009, a total cash dividend of P 200,000 was declared. How much dividends would be received by ordinary shareholders?AP 0CP 176,000BP 188,000DP 164,000

52Using the information in item 51, how much dividends will be received by preference shareholders?AP 200,000CP 12,000BP 24,000DP 36,000

53On April 8, 2009, Simsimi Corporation declared and issued 25% ordinary share capital dividend. Prior to this date, Simsimi Corporation had 20,000 shares of P 2 par value ordinary share that were both issued and outstanding. The carrying value of each share of stock is P 20 at the time of declaration of the dividend. As a result of the stock dividend, how much will be debited to Retained Earnings?AP 40,000CP 100,000BP 10,000DP 75,000

54Red Corporation and Yellow Corporation have Preference Share Capital outstanding. Red Corporation has issued 3,000 shares of 5% Preference Share Capital, par value P 100. Yellow Corporation has issued 5,000 shares of 10% Preference Share Capital, par value P 120. What is the dividend per share for the Preference Share Capital for the two corporations?

AP 5 for Red, P12 for YellowCP 5 for Red, P 10 for YellowBP 100 for Red, P 120 for YellowDP 5 for Red, P 120 for Yellow

55White Rock Resort Corporation has 400 shares of 6% preference share capital outstanding, par value is P 50 per share and market value is P 80 per share. The amount of cash dividends for the year on this share capital would beAP 1,200CP 2,400BP 12DP 1,920

56Club Manila East Corporation has 6,000 shares of P 8 non-cumulative preference shares outstanding and 12,000 ordinary shares outstanding. At the end of the year, cash dividends of P 180,000 were declared. How much dividends were paid on both classes of share capital?AP 48,000 and P 132,000 CP 90,000 and P 90,000BP 60,000 and P 120,000Dnone of the given

57Using the information in item 56, what is the dividend per share on both classes of share capital?AP 10 and P 10CP 15 and P 2.50BP 8 and P 11Dnone of the given

58Park Min-Young Corporation was organized on January 1, 2009 with authorized capital of 100,000 shares of P 10 par value ordinary share capital. During 2009, Park Min-Young Corporation had the following transactions affecting shareholders equity: January 7, issued 40,000 shares at 12 per share; December 2, purchased 6,000 treasury shares at P 13 per share. Profit for the year amounted to P 300,000. What is the amount of shareholders equity as of December 31, 2009?AP 702,000 CP 640,000BP 720,000DP 708,00

Note: This was the qualifying exam taken by students last April 15, 2011. This was only re-typed and only the names of companies were changed. No amounts were changed in each problem.

Special Qualifying Examination for First Year | 1