1.

While preparing the 2006 trial balance, Rosalyn Companys accountant committed the following errors: omission of the prepaid rent account amounting to P4,000; understatement of the inventory account by P72,000; overstatement of the sales account by P1,500; accounts receivables totaling to P123,000 was included in the trial balance as P213,000; accounts payable totaling to P153,000 was included as P135,000; discount on bonds payable was included as a credit rather than as a debit, P1,500; Revenue expenditures of P35,000 was erroneously capitalized to furniture and fixtures. The difference between the debit and credit amounts in Rosalyn Companys trial balance is a. P2,500 b. P26,000 c. P7,500 d. P27,500 2. The following items were taken from Rosalyn Companys adjusted trial balance; except for its land and building accounts Accounts receivable P 200,000 Inventory 300,000 Accounts payable 120,000 Rosalyn, capital 420,000 Accrued Interest Expenses 35,000 Prepaid supplies 11,000 Accrued Interest Revenue 20,000 Rent revenue 11,500 Advances from customers 49,500 Salaries expense 75,000 Cost of sales 400,000 Sales 800,000 Furniture and fixtures 410,000 Sales returns and allowances 23,000 Interest expense 65,000 Unearned rent income 35,000 Interest revenue 90,000 Utilities expense 45,000 In Rosalyn Companys post-closing trial balance, the credit total would amount to a. P903,500 b. P938,000 c. P1,561,000 d. P953,000 3. Rosalyn Company reported the following changes during the current year Increase (Decrease) Cash P 400,000 Accounts payable Accounts receivable 300,000 Bonds payable Allowance for bad debts 50,000 Discount on bonds payable Inventory (150,000) Common stock Prepaid rent (50,000) Premium on common stock Plant and equipment 1,000,000 Treasury stock at costs Accumulated depreciation 100,000 Increase (Decrease) P 80,000 (100,000) (10,000) 120,000 60,000 30,000

There were no other entries in the Retained earnings account except for the dividend declaration of P50,000, which was paid in the current year Net income for the year a. P1,200,000 b. P1,260,000 c. P1,280,000 d. P1,360,000 e. 4. Rosalyn Supplies, Inc. lost most of its inventory in a fire in December just before the year-end physical inventory was taken. Corporate records disclosed the following: beginning inventory, P1,207,000; purchases, P3,600,000; purchase returns, P225,000; sales, P5,250,000; sales returns, P120,000. Rosalyn Companys markup on cost has averaged 25% during the past few years. Merchandise with a selling price of P100,000 remained undamaged after the fire, and the damaged merchandise has a salvage value of P56,200. Rosalyn Company does not carry fire insurance on its inventory. It is estimated that the year-end inventory would have been subject to a normal 5% writedown for obsolescence. The estimated fire loss incurred by Rosalyn Supplies is a. P302,900 b. P341,800 c. P324,710 d. P321,900

Use the following information for numbers 15 -16 The information that follows is available from the general ledger, cash in bank BPI and the bank statement of Rosalyn Company for the month of August 2006: Bank statement balance, August 31, P1,430,000 Note collected by the bank in August including interest of P2,500, P62,500 NSF checks in August, P25,000 Outstanding checks at the beginning of August, P47,650, at the end of August, P68,450 Bank service charges for July, P1,200; for August, P1,400 Deposit in transit at the beginning of August P27,000; at the end of August P32,900 Error committed by Rosalyn Companys accountant in recording check No 12345 for P16,000 was recorded as P1,600 and check No. 12348 for P1,250 was recorded as P12,500 Error committed by Rosalyn Companys accountant in recording deposits for its BPI checking account of P12,000 was recorded under its BDO checking account, and deposits for its BDO checking account of P16,000 was recorded as deposits to its BPI checking account Bank error in recording a disbursement by Roslyn Company for P28,000 was recorded against Rosalyn Companys account 5. The adjusted cash in bank BPI balance is a. P1,393,600 b. P1,422,450 c. P1,415,100 d. P1,397,600 6. Rosalyn Companys cash in bank balance as of May 31, 2006 included the following information: Ending balance, May 31 P 38,280 Deposits made but not yet recorded by the bank 5,100 Checks written and mailed but not yet recorded by the bank 3,460 In comparing the cash records to the bank statement Rosalyn Company found the following: Bank service charge for May P 100 Interest paid by bank to Rosalyn for May 1,500 In addition, Rosalyn Company discovered that it had erroneously recorded a check for P1,450 that should have been recorded for P1,540. The correct cash balance at May 31 is a. P39,920 b. P39,830 c. P39,770 d. P39,590 7. Rosalyn Corp. acquires patent rights from other enterprises and pays advance royalties in some case, and in others, royalties are paid within 90 days after year end. The following data are included in Rosalyn Corp December 31 balance sheet: 2006 2007 Prepaid royalties P 55,000 P 45,000 Royalties payable 80,000 75,000 During 2007 Rosalyn remitted royalties of P300,000. In its income statement for the year ended December 31, 2007, Rosalyn Corp. should report royalty expense of a. P330,000 b. P310,000 c. P305,000 d. P295,000 8. Rosalyn Corporation had the following bank reconciliation at September 30, 2007 Balance per bank statement, 9/30/07 P 46,500 Add: Deposit in Transit 10,300 Less: Outstanding checks 12,600 Balance per books, 9/30/07 P 44,200 Data per bank statement for the month of October 2007 follows: Deposits P 58,400

Disbursements 49,700 All reconciliation items at September 30, 2007, cleared through the bank in October. Outstanding checks at October 31, 2007, totaled P7,500. The amount of cash disbursements per books in October is. a. P44,600 b. P49,700 c. P54,800 d. P57,200 9. Rosalyn Company, a publicly owned corporation was incorporated in January 1, 2004 and reported the following net income for the past 3 years: 2004: P1,600,000; 2005: P1,900,000; 2006: P2,400,000 The following items were discovered in 2006 while preparing Rosalyn Companys 2006 financial statements Depreciation of P32,000 for 2006 on delivery trucks was not recorded The physical inventory count on December 31, 2005, improperly excluded merchandise costing P190,000 that had been temporarily stored in a public warehouse The physical inventory count on December 31, 2006, improperly included merchandise being held on consignment in the amount of P89,000 An equipment was purchased on January 3, 2006, for P32,000 and was charged to Repairs and Maintenance. The equipment has an estimated life of 8 years and no residual value. Rosalyn Company uses the straight-line method for this type of equipment Rosalyn Company failed to accrue sales commissions payable at the end of each of the last 2 years as follows: December 31, 2005, P40,000; December 31, 2006, P25,000 Wages payable on December 31 have been consistently omitted from the records of that date and have been entered as expenses when paid in the following year. December 31, 2004: P 140,000 December 31, 2005: 160,000 December 31, 2006: 180,000 Invoices for office supplies purchased have been charged to expense accounts when received. Inventories of supplies on hand at the end of each year have been ignored, and no entry has been made for them December 31, 2004: P 13,000 December 31, 2005: 7,400 December 31, 2006: 14,200 The adjusted net income for 2006 is a. P2,118,800 b. P2,116,200 c. P2,681,200 d. P1,989,200

10. Rosalyn Company on December 31, 2006 reported an inventory balance of P2,575,000 which was based on a physical count conducted as of December 29, 2006. An analysis of the purchase records of Rosalyn Company revealed the following information: Goods costing P120,000 purchased fob shipping point were sent by the seller on December 30, 2006 and was received by Rosalyn Company on January 5, 2007. Goods costing P150,000 purchased fob destination were sent by the seller on December 27, 2006 and was received by Rosalyn Company on January 2, 2007. Goods costing P175,000 shipped to Rosalyn Company fob destination on December 28, 2007 and was received on December 31, 2006. Goods costing P125,000 received on December 30, 2006 from Milady Company on consignment. Rosalyn was to sell the goods at a mark-up of 25% of cost. 80% of the goods remained unsold at December 31, 2006. Goods costing P130,000 and P125,000 were sent out on consignment to Mac Company on December 28, 2006 and Myles Company on December 31, 2006 respectively. The goods remained unsold at December 31, 2006. The correct amount of inventory to be reported as of December 31, 2006 by Rosalyn Company is a. P3,000,000 b. P2,875,000 c. P3,125,000 d. P2,825,000