POLYTECHNIC UNIVERSITY OF THE PHILIPPINESCOLLEGE OF ACCOUNTANCY AND FINANCESta. Mesa, ManilaACCO 4083 – Advanced Financial Accounting and Reporting (AFAR)Third Evaluation ExaminationFebruary 12, 2017INSTRUCTION: Choose your best answer and shade the letter of your choice in the answer sheet provided. Erasures arenot allowed. Show all supporting computations in a separate worksheet. Always observe HONESTYduring theexamination. 1.Pan Corp. owns 75% of the voting ordinary shares of Sat Corp. acquired at book value during 2016.Selected information from the accounts of Pan and Sat for 2017 are as follows:Pan Corp. Sat Corp.Sales P900,000 P500,000Cost of sales 490,000 190,000During 2017, Pan sold merchandise to Sat for P50,000 at a gross profit to Pan of P20,000. Half of thismerchandise remained in Sat Corp.’s inventory at December 31, 2017. Sat’s December 31, 2016 inventoryincluded unrealized profit of P4,000 on goods acquired from Pan. Compute the consolidated cost of sales.a.P686,000b. P680,000c. P624,000d. P636,000
2.The following balances as of the end of 2016 for the partnership of X, Y, and Z, together with their respectiveprofit and loss percentages, were as follows:AssetsP360,000X, loanP 18,000X, capital (20%) 84,000Y, capital (20%)78,000Z, capital (60%)180,000P360,000P360,000X decided to retire from the partnership. Parties agreed to adjust the assets to their fair market value ofP432,000 as of December 31, 2016. X will be paid P122,400 for X’s partnership interest inclusive of X loan whichis to be repaid in full. No goodwill is to be recorded. After X’s retirement, what will be the balance of Y’s capitalaccount?
3.The balance sheet for the Handsome Partnership, which shares profit and loss in the ratio 5:3:2 shows thefollowing balances before liquidation:Cash150,000Liabilities250,000Noncash assets743,750Marvin, capital275,000Andrew, capital193,750Ryan, capital175,000Total893,750Total893,750On the first month of liquidation, 60% of noncash assets was sold at a loss P46,250. Liquidation expenses ofP12,500 were paid and additional expenses were anticipated. Liabilities amounting to P67,500 were paid. On thefirst cash distribution Marvin received P78,125. The amount of cash withheld for future liquidation expensesamounted to:
4.Refer to #3, assuming in the 2ndmonth: half of the remaining noncash assets was sold at a loss of P15,000, half ofthe remaining liabilities was paid, liquidation expenses of P7,500 was paid and after payment to partners in thesecond month Ryan need P48,750 to fully recovered his interest? How much is the restricted interest in the 2ndmonth?