20THREGIONAL MID YEAR CONVENTIONADVANCED FINANCIAL ACCOUNTING AND REPORTING (AFAR) CUPQuiz Master’s Copy

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EASY # 1 Which of the following statements is incorrect concerning installment sales? I. Installment contract receivable is always classified as a current asset. II. Installment contract receivable... qualifies for inclusion under the current assets or non-current assets depending on the length of time required for its collection. A. I only B. II only C. Both I and II D. Neither I nor II EASY # 2 Partners Art and Tony, who share equally in profits and losses, have the following statement of financial position as of December 31, 2015: Cash ₱120,000 Accounts payable ₱172,000 Accounts receivable 100,000 Accumulated depreciation 8,000 Inventories 140,000 Art, capital 140,000 Equipment 80,000 Tony, capital 120,000 Total 440,000 Total 440,000 They agreed to incorporate their partnership, with the new corporation absorbing the net assets after the following adjustments: provision of allowance for bad debts of ₱10,000; restatement of the inventory at its current fair value of ₱160,000; and recognition of further depreciation on the equipment of ₱3,000. The corporation’s share capital is to have a par value of ₱100, and the partners are to be issued corresponding total shares equivalent to their adjusted capital balances. The total par value of the share capital that were issued to partners Art and Tony was: A. ₱260,000 B. ₱267,000 C. ₱273,000 D. ₱280,000 EASY # 3 O and M formed KERN Partnership several years ago. Capital account balances on December 31, 2016, after closing were as follows: O ₱500,000 M 280,000 The partnership agreement provides O with an annual salary of ₱10,000 plus a bonus of 5% of partnership net income for managing the business. M is provided [Show More]

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