Instructions:

• Do not use peso sign
• Do not use comma
• Do not use decimal point
• Round off your final answer to the nearest whole number ( Unless there is a specific instruction attached to the problem or question)
• Example: If your answer is Php 123,456.78, write 123457

Questions (13-25)

13.

Management salaries and other indirect costs related to issuance of shares are expensed immediately. Treasury shares are entity's own shares that have been issued and then reacquired and canceled.

Group of answer choices

False, False

True, False

False, True

True, True

14.

In the case of par value share, legal capital is the aggregate par value of all shares issued excluding subscribed shares. Share issuance costs are direct costs to sell the shares such as underwriting and commission, accounting and legal fees, printing costs, documentary stamps, filing fees with SEC and costs of advertising the issue.

Group of answer choices

False, False

True, False

True, True

False, True

15.

In the case of no-par value share, legal capital is aggregate stated value of shares issued and subscribed including any excess over the stated value. If the treasury shares are reissued at less than its cost, the difference is debited against the retained earnings.

Group of answer choices

False, False

False, True

True, False

True, True

16.

How is loss on retirement of treasury shares recorded?

Group of answer choices

Debited to share premium from original issuance, share premium from treasury shares and then retained earnings.

Debited to retained earnings.

Debited to share premium from treasury shares, share premium from original issuance and then retained earnings.

Debited to share premium from treasury shares and then retained earnings.

17.

How would a share split affect the share capital and retained earnings, respectively?

Group of answer choices

Decrease, No effect

No Effect, Increase

Increase, Increase

No effect, No effect

18.

An entity acquired its own shares at a price above its par value, and then subsequently reissued it at a price more than its cost. What is the effect on share premium on acquisition of its own shares and reissuance of such shares, respectively?

Group of answer choices

Decrease, No effect

Increase, Increase

No Effect, Increase

No effect, No effect

19.

When treasury shares are retired instead of being reissued and the cost of the treasury shares is less than the par or the stated value, the difference is credited to share premium from treasury shares. Ordinary shareholders have the same rights and privileges and enjoy no preference over each other.

Group of answer choices

True, False

False, True

False, False

True, True

20.

When shares of stocks are issued in exchange for services, the consideration is measured by

Group of answer choices

Par value of the shares issued.

Fair value of the shares issued.

The fair value of the services received.

Stated value of the shares issued.

21.

CFAS Company had total assets of P4,000,000 and shareholders' equity of P1,500,000 on January 1. During the year, assets increased by P900,000 and liabilities decreased to P800,000. CFAS Company should report what amount of shareholders' equity on December 31?

22.

The trial balance of CFAS Company shown below does not balance. Your review of the ledger reveals the following: (a) Each account had a normal balance. (b) The debit footings in Supplies, Accounts Payable, and Property Tax Expense were each understated by P100. (c) a footing error on Cash account overstated it by P200. (d) A transposition error was made in Accounts Receivable; the correct balances for Accounts Receivable and Service Revenue are P2,750 and P6,690, respectively. (e) A debit posting to Advertising Expense of P300 was omitted. (f) A P1,500 cash drawing by the owner was debited to CFAS Capital, and credited to Cash.

CFAS Company Trial Balance December 31
	Debit	Credit
Cash	P 4,800
Accounts Receivable	2,570
Supplies	700
Equipment		P 8,000
Accounts Payable		4,500
Property Tax Payable	360
CFAS, Capital		11,200
Service Revenue	6,960
Salaries Expense	4,200
Advertising Expense	1,100
Property Tax Expense	______	800
	P20,690	P24,500

The corrected trial balance of the company should show total debits of ________

23.

CFAS Company shows the following balances in its Unearned rent account for the year 2022:

Balance, Jan. 31	P17,250
Balance, Dec. 31	22,500

Warehouse quarterly rent received in advance is P27,000. During the year, equipment was rented to another company at an annual rent of P13,500. The quarterly rent payments were credited to Rent Income; the annual equipment rental was credited to Unearned Rent. What was the adjusting entry made by to company related to its unearned rent account at year-end?

Group of answer choices

Debit Unearned Rent and credit Rent Income, P6,000

Debit Rent Income and credit Unearned Rent, P7,500

Debit Unearned Rent and credit Rent Income, P7,500

Debit Rent Income and credit Unearned Rent, P6,000

24.

The accountant of CFAS Company made the following adjusting entry on December 31.

Rent Income Unearned Rent Income

P 3,150

P 3,150

If annual rent is received in advance every March 1, the original transaction entry made was

Group of answer choices

Debit Rent Income and credit Cash, P18,900.

Debit Cash and credit Rent Income, P18,900.

Debit Cash and credit Unearned Rent Income, P3,150.

Debit Cash and credit Rent Income, P3,780.

25.

CFAS Company shows the following balances in its Supplies account for the year 2022:

Balance, Jan. 31	P11,200
Balance, Dec. 31	12,800

In 2022, the company purchased additional supplies worth P5,000 and it was charged to a nominal account. What was the adjusting entry made by to company related to its supplies account at year-end?

Group of answer choices

Debit Supplies and credit Supplies Expense, P3,400.

Debit Supplies Expense and credit Supplies, P3,400.

Debit Supplies Expense and credit Supplies, P1,600.

Debit Supplies and credit Supplies Expense, P1,600.