CPA REVIEW SCHOOL OF THE PHILIPPINES
Manila
FINANCIAL ACCOUNTING AND REPORTING VALIX/VALIX/SANTOS
BATCH 93 – MAY 2023 CPALE
STATEMENT OF COMPREHENSIVE INCOME
1. An entity reported the following data for the current year:
Legal and audit fees 1,700,000 Freight out 1,600,000
Rent for office space 2,400,000 Officers’ salaries 1,500,000
Interest on inventory loan 2,100,000 Insurance 850,000
Loss on abandoned equipment 350,000 Sales representative salaries 2,150,000
Freight in 1,750,000 Research and development expense 1,000,000
The office space is used equally by the sales and accounting departments. What amount should be
classified as general and administrative expenses?
a. 5,250,000
b. 6,450,000
c. 5,600,000
d. 6,250,000
2. An entity reported operating expenses other than interest expense for the year at 40% of cost of goods
sold but only 20% of sales. Interest expense is 10% of sales. The amount of purchases is 120% of cost of
goods sold. Ending inventory is twice as much as the beginning inventory. The net income for the year
is P2,250,000. The income tax rate is 25%. What amount was reported as sales for the year?
a. 10,000,000
b. 15,000,000
c. 16,875,000
d. 12,000,000
3. An entity incurred the following costs and expenses during the current year:
Raw material purchases 4,000,000
Direct labor 1,500,000
Indirect labor – factory 800,000
Factory repairs and maintenance 200,000
Taxes on factory building 100,000
Depreciation – factory building 300,000
Taxes on salesroom and general office 150,000
Depreciation – sales equipment 50,000
Advertising 400,000
Sales salaries 500,000
Office salaries 700,000
Utilities – 60% applicable to factory 500,000
Beginning Ending
Raw materials 300,000 450,000
Goods in process 400,000 350,000
Finished goods 500,000 700,000
1. What amount should be reported as cost of goods manufactured?
a. 7,450,000
b. 7,200,000
c. 7,100,000
d. 7,300,000
2. What amount should be reported as cost of goods sold?
a. 7,300,000
b. 6,900,000
c. 7,600,000
d. 8,300,000
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4. An entity reported the following data for the current year:
Net sales 9,500,000
Cost of goods sold 4,000,000
Selling expenses 1,000,000
Administrative expenses 1,200,000
Interest expense 700,000
Gain from expropriation of land 500,000
Income tax 800,000
Income from discontinued operation 600,000
Unrealized gain on equity investment at FVOCI 900,000
Unrealized loss on debt investment at FVOCI 200,000
Unrealized loss on forward contract designated as a cash flow hedge 400,000
Actuarial loss on defined benefit plan due to actuarial assumptions 300,000
Foreign translation gain 100,000
Loss on credit risk of financial liability designated at FVPL 700,000
Revaluation surplus during the current year 2,500,000
1. What net amount should be recognized in other comprehensive income?
a. 1,900,000
b. 3,100,000
c. 2,600,000
d. 2,800,000
2. What net amount in OCI should be reclassified to profit or loss?
a. 900,000
b. 800,000
c. 500,000
d. 600,000
3. What amount should be reported as comprehensive income?
a. 4,800,000
b. 1,000,000
c. 2,900,000
d. 2,300,000
5. An entity reported net income of P7,500,000 for the current year which included the following amounts:
Unrealized loss on foreign currency translation ( 500,000)
Gain on early retirement of bonds payable 2,200,000
Adjustment of profit of prior year for error in depreciation, net of tax effect ( 750,000)
Loss from fire (1,400,000)
What amount should be reported as adjusted net income?
a. 6,250,000
b. 9,500,000
c. 8,000,000
d. 8,750,000
6. An entity reported net income of P5,000,000 for the current year which included the following amounts:
Equity in earnings of an associate – 40% interest 1,600,000
Dividend received from associate 400,000
Adjustment of profit of prior year for error in depreciation, net of tax effect 500,000
Gain on sale of equity investment at FVOCI 1,000,000
What amount should be reported as adjusted net income?
a. 4,100,000
b. 4,600,000
c. 4,500,000
d. 3,100,000
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