Professional Documents
Culture Documents
QUIZZER VOL. 2
Contains 15 random questions on the various subjects covered in
the CPA Board Exams, plus supplementary discussions. Based on
lectures and materials from the CPA Review School of the
Philippines (2016). Questions rated PG
questions
TAX
#1
RFBT
#2 Ang Pa-Ngit, the oldest board member at Samsung, has
FAR
#3 Panda purchased a new ink-filling machine for their
FAR
#4 MDFKING Enterprises sold its outstanding receivables to
RFBT
#5 Lucy Nia granted PDF Partnership Ltd. a Php 900,000 loan
FAR
#6 Islamic State has a 30% stake in Taliban, accounted using
MAS
#7 There are several kinds of financing policies relating to
c.
d.
Relaxed policy
Aggressive policy
AUDITING THEORY
#8 Abdul Jakul, in the course of his audit of MDFKING
MAS
#9 TILF uses linear programming to determine the maximum
AFAR
#10 In 2015, Hong Enterprises investment account for its
AUDITING THEORY
#11 Last year, NWA spent Php 580,000 total in securing a
TAXATION
#12 Michael purchased an automated cupcake-making machine
AUDITING THEORY
#14 Among the financial statements, which of the following is
AFAR
#15 Pat Focker borrowed $15,000 from the U.S. Treasury at a
answers
#1
#2
(c) NO, SINCE THE SHAREHOLDERS MUST VOTE FOR THE NEW
BOARD MEMBER THEMSELVES
#3
#4
#5
#6
(b) 5,000
Once the share in the losses of the investee (Taliban)
exceeds the balance of the investment in associate, the
balance becomes zero. The excess over the balance is
reported in the notes to the financial statements (in 2015, it
was 10,000). Once this excess is exhausted, the
investment in associate can once again report a positive
balance. The share in the 2016 profit is 15,000 (50,000 x
.30), well over the negative balance of 10,000
#7
#8
(a) VALUATION
The obsolescence of inventory may also relate to the
presentation and disclosure assertion, but this most likely is
toward the valuation assertion
#9
(a) 5 UNITS
In such scenario, one technique to determine the number
of dolls (x) is to substitute zero for y in both equations,
then solve for the value of x in both equations. The lower
figure between the values of x in the two equations should
be the answer the number of units that can only be
produced under the constraint
#10
#11
#12
#13
While (A) and (D) are also true, the following solution
derives the more proper answer:
Total share options
MULTIPLY: Fair value of options
Total fair value
MULTIPLY: Fraction of expected vesting period
15,000
2.00
30000
1/3
10,000
Remaining share options (30 each for the 100 employees who left)
MULTIPLY: Fair value of options
Total fair value
MULTIPLY: Fraction of expected vesting period
Share options outstanding, 2015
Salaries expense, 2015
12,000
2.00
24,000
2/3
16,000
6,000
24,000
3/3
24,000
8,000
#14
#15
(d) (11,450.50)
As to loan transactions denominated in foreign currency,
three items affect earnings interest expense, forex
gains/losses on the principal, and forex gains/losses on the
interest. Computing interest expense on the local loan
should be straight forward. However, as to the foreign loan,
interest is computed on the principal at its current
exchange/spot rate. Of course, to ease computations, the
exchange rate must first be expressed in direct quotation
by dividing 1 with the foreign currency equivalent of Php 1
Principal (nominal amount), first loan
MULTIPLY: Exchange rate at March 3, 2017 (1 0.23)
MULTIPLY: Interest rate at 2/12
Interest expense, 2017 first loan
ADD: Interest expense, second loan (15,000 x .12 x 3/12)
Total interest expense
15,000
4.35
65,250
0.01667
1,088
450
1,538
15,000
0.65
9,750
9,750
0.01667
162.5
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