c
ICCT Colleges Foundation Inc.
V.V Soliven Ave. II, Cainta, Rizal
College of Business and Accountancy
TEST BANK REVIEWER RBR BACAY, CPA, CrFA, CMC, MBA, FRIAcc
ACTG-INT1 Page 1
F
,c
ICCT Colleges Foundation Inc.
V.V Soliven Ave. II, Cainta, Rizal
College of Business and Accountancy
TEST BANK REVIEWER RBR BACAY, CPA, CrFA, CMC, MBA, FRIAcc
TABLE OF CONTENTS F F
I. Current Liabilities- 65 items F F F
II. Notes and Bonds Payable- 65 items F F F F F
III. Leases- 70 items F F
IV. Employee Benefits- 45 items F F F
V. Income Taxes- 40 items F F F
VI. Shareholders Equity- 70 items F F F
VII. Share Based Compensation- 15 items F F F F
VIII. Book Value and Earnings per Share- 50 items F F F F F F F
IX. Error Correction- 20 items F F F
X. Statement of Cash Flows- 35 items F F F F F
XI. Hyperinflation and Current Cost Accounting- 10 items F F F F F F
XII. Small and Medium Sized Entities SMEs Part 1- 12 items F F F F F F F F F
XIII. Small and Medium Sized Entities SMEs Part 2- 13 items F F F F F F F F F
I. CURRENT LIABILITIES F
Average
1. During!!2020,!!Aguirre Company sold 500,000 boxes of cake mix under a new sales promotional F F F F F F F F F F F F F
program. Each box contained one coupon, which entitled the customer to a baking pan upon
F F F F F F F F F F F F F F F
remittance of P40. The entity paid P50 per pan and P5 for handling and shipping and estimated that
F F F F F F F F F F F F F F F F F F
80% of the coupons would be redeemed, even though only 300,000 coupons had been processed
F F F F F F F F F F F F F F F
during 2020. What amount should be reported as a liability for unredeemed coupons on December
F F F F F F F F F F F F F F F
31, 2020? F
a. 1,000,000
b. 1,500,000
F F
c. 3,000,000
d. 5,000,000
F F
Answer: b F
Net premium expense (50 + 5 – 40)
F F F F F F F 15
Coupons to be redeemed (80% x 500,000)
F F F F F F 400,000
Less: Coupons redeemed
F F F F 300,000
Coupons outstanding F 100,000
Liability for unredeemed coupons (100,000 x 15)
F F F F F F 1,500,000
ACTG-INT1 Page 2F
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ICCT Colleges Foundation Inc.
V.V Soliven Ave. II, Cainta, Rizal
College of Business and Accountancy
TEST BANK REVIEWER RBR BACAY, CPA, CrFA, CMC, MBA, FRIAcc
Average
2. Almencion Company started a new promotional program. For every 10 box tops returned,
F F F F F F F F F F F F F
customers receive a basketball. The entity estimated that only 60% of the box tops reaching the
F F F F F F F F F F F F F F F F
market would be redeemed. Additional information is as follows:
F F F F F F F F
Units Amount
Sales of product
F F 100,000 30,000,000
Basketballs purchased F 5,500 4,125,000
Basketballs distributed F 4,000
What is the amount of year-end estimated liability associated with this promotion?
F F F F F F F F F F F
a. 4,125,000
b. 1,500,000
c. 3,000,000
d. 4,500,000
Answer: b F
Basketballs to be distributed (100,000 x 60% / 10)
F F F F F F F F 6,000
Basketballs distributed F 4,000
Balance 2,000
Multiply by cost of basketball (4,125,,500)
F F F F F F F 750
Estimated liability F 1,500,000
Average
3. Beginning 2020, Fatima Company
F F marketing a new beer called
F F To help F F F F F F F F
began “Serbesa”.
promote the product, the management is offering special Serbesa beer mug to each customer for
F F F F F F F F F F F F F F F
every 20 specially marked bottle caps of Serbesa. The entity estimated that out of the 300,000
F F F F F F F F F F F F F F F F
bottles of Serbesa sold during 2020; only 50% of the marked bottle caps would be redeemed.
F F F F F F F F F F F F F F F F
During 2020, the entity purchased 8,000 beer mugs at a total cost of P360, 000 or P45 each. During
F F F F F F F F F F F F F F F F F F F
the year, the entity already distributed 4,500 mugs to customers. What is the premium liability on
F F F F F F F F F F F F F F F F
December 31, 2020? F F
a. 135,000
b. 337,500
c. 202,500
d. 360,000
Answer: a F
ACTG-INT1 Page 3 F
, c
ICCT Colleges Foundation Inc.
V.V Soliven Ave. II, Cainta, Rizal
College of Business and Accountancy
TEST BANK REVIEWER RBR BACAY, CPA, CrFA, CMC, MBA, FRIAcc
Beer mugs to be distributed (50% x 300,)
F F F F F F F F F 7,500
Beer mugs already distributed
F F F 4,500
Beer mugs outstanding
F F 3,000
Estimated liability – December 31, 2020 (45 x 3,000)
F F F F F F F F 135,000
Average
4. Bringas Company included one coupon in each box of laundry soap sold. A towel is offered as a
F F F F F F F F F F F F F F F F F F
premium to customers who send in 10 coupons and a remittance of P20.
F F F F F F F F F F F F
2020 2021
Boxes of soap sold
F F F 500,000 800,000
Number of towels purchased (P100 per towel)
F F F F F F 20,000 25,000
Coupons redeemed F 140,000 200,000
The entity estimated that only 30% of the coupons would be redeemed. What is the premium liability on
F F F F F F F F F F F F F F F F F F
December 31, 2021? F F
a. 500,000
b. 400,000
c. 320,000
d. 80,000
Answer: b F
Coupons to be redeemed in 2020 and 2021
F F F F F F F
(1,300,000 x 30%) F F 390,000
Coupons redeemed in 2020 and 2021 (140,000 + 200,000)
F F F F F F F F 340,000
Outstanding coupons – December 31, 2021 F F F F F F 50,000
Number of towels (50,)
F F F F F 5,000
Multiply by cost of towel minus remittance (100 – 20)
F F F F F F F F F 80
Premium liability – December 31, 2021
F F F F F 400,000
Average
5. Maglaya Company included one coupon in each package sold. A towel is offered as a premium to
F F F F F F F F F F F F F F F F F
customers who send in 10 coupons: F F F F F
2020 2021
Packages of cereal soldF F 500,000 800,000
F F
Number of towels purchased at P40 per towel
F F 30,000 F 60,000 F F F F
ACTG-INT1 Page 4 F
ICCT Colleges Foundation Inc.
V.V Soliven Ave. II, Cainta, Rizal
College of Business and Accountancy
TEST BANK REVIEWER RBR BACAY, CPA, CrFA, CMC, MBA, FRIAcc
ACTG-INT1 Page 1
F
,c
ICCT Colleges Foundation Inc.
V.V Soliven Ave. II, Cainta, Rizal
College of Business and Accountancy
TEST BANK REVIEWER RBR BACAY, CPA, CrFA, CMC, MBA, FRIAcc
TABLE OF CONTENTS F F
I. Current Liabilities- 65 items F F F
II. Notes and Bonds Payable- 65 items F F F F F
III. Leases- 70 items F F
IV. Employee Benefits- 45 items F F F
V. Income Taxes- 40 items F F F
VI. Shareholders Equity- 70 items F F F
VII. Share Based Compensation- 15 items F F F F
VIII. Book Value and Earnings per Share- 50 items F F F F F F F
IX. Error Correction- 20 items F F F
X. Statement of Cash Flows- 35 items F F F F F
XI. Hyperinflation and Current Cost Accounting- 10 items F F F F F F
XII. Small and Medium Sized Entities SMEs Part 1- 12 items F F F F F F F F F
XIII. Small and Medium Sized Entities SMEs Part 2- 13 items F F F F F F F F F
I. CURRENT LIABILITIES F
Average
1. During!!2020,!!Aguirre Company sold 500,000 boxes of cake mix under a new sales promotional F F F F F F F F F F F F F
program. Each box contained one coupon, which entitled the customer to a baking pan upon
F F F F F F F F F F F F F F F
remittance of P40. The entity paid P50 per pan and P5 for handling and shipping and estimated that
F F F F F F F F F F F F F F F F F F
80% of the coupons would be redeemed, even though only 300,000 coupons had been processed
F F F F F F F F F F F F F F F
during 2020. What amount should be reported as a liability for unredeemed coupons on December
F F F F F F F F F F F F F F F
31, 2020? F
a. 1,000,000
b. 1,500,000
F F
c. 3,000,000
d. 5,000,000
F F
Answer: b F
Net premium expense (50 + 5 – 40)
F F F F F F F 15
Coupons to be redeemed (80% x 500,000)
F F F F F F 400,000
Less: Coupons redeemed
F F F F 300,000
Coupons outstanding F 100,000
Liability for unredeemed coupons (100,000 x 15)
F F F F F F 1,500,000
ACTG-INT1 Page 2F
,c
ICCT Colleges Foundation Inc.
V.V Soliven Ave. II, Cainta, Rizal
College of Business and Accountancy
TEST BANK REVIEWER RBR BACAY, CPA, CrFA, CMC, MBA, FRIAcc
Average
2. Almencion Company started a new promotional program. For every 10 box tops returned,
F F F F F F F F F F F F F
customers receive a basketball. The entity estimated that only 60% of the box tops reaching the
F F F F F F F F F F F F F F F F
market would be redeemed. Additional information is as follows:
F F F F F F F F
Units Amount
Sales of product
F F 100,000 30,000,000
Basketballs purchased F 5,500 4,125,000
Basketballs distributed F 4,000
What is the amount of year-end estimated liability associated with this promotion?
F F F F F F F F F F F
a. 4,125,000
b. 1,500,000
c. 3,000,000
d. 4,500,000
Answer: b F
Basketballs to be distributed (100,000 x 60% / 10)
F F F F F F F F 6,000
Basketballs distributed F 4,000
Balance 2,000
Multiply by cost of basketball (4,125,,500)
F F F F F F F 750
Estimated liability F 1,500,000
Average
3. Beginning 2020, Fatima Company
F F marketing a new beer called
F F To help F F F F F F F F
began “Serbesa”.
promote the product, the management is offering special Serbesa beer mug to each customer for
F F F F F F F F F F F F F F F
every 20 specially marked bottle caps of Serbesa. The entity estimated that out of the 300,000
F F F F F F F F F F F F F F F F
bottles of Serbesa sold during 2020; only 50% of the marked bottle caps would be redeemed.
F F F F F F F F F F F F F F F F
During 2020, the entity purchased 8,000 beer mugs at a total cost of P360, 000 or P45 each. During
F F F F F F F F F F F F F F F F F F F
the year, the entity already distributed 4,500 mugs to customers. What is the premium liability on
F F F F F F F F F F F F F F F F
December 31, 2020? F F
a. 135,000
b. 337,500
c. 202,500
d. 360,000
Answer: a F
ACTG-INT1 Page 3 F
, c
ICCT Colleges Foundation Inc.
V.V Soliven Ave. II, Cainta, Rizal
College of Business and Accountancy
TEST BANK REVIEWER RBR BACAY, CPA, CrFA, CMC, MBA, FRIAcc
Beer mugs to be distributed (50% x 300,)
F F F F F F F F F 7,500
Beer mugs already distributed
F F F 4,500
Beer mugs outstanding
F F 3,000
Estimated liability – December 31, 2020 (45 x 3,000)
F F F F F F F F 135,000
Average
4. Bringas Company included one coupon in each box of laundry soap sold. A towel is offered as a
F F F F F F F F F F F F F F F F F F
premium to customers who send in 10 coupons and a remittance of P20.
F F F F F F F F F F F F
2020 2021
Boxes of soap sold
F F F 500,000 800,000
Number of towels purchased (P100 per towel)
F F F F F F 20,000 25,000
Coupons redeemed F 140,000 200,000
The entity estimated that only 30% of the coupons would be redeemed. What is the premium liability on
F F F F F F F F F F F F F F F F F F
December 31, 2021? F F
a. 500,000
b. 400,000
c. 320,000
d. 80,000
Answer: b F
Coupons to be redeemed in 2020 and 2021
F F F F F F F
(1,300,000 x 30%) F F 390,000
Coupons redeemed in 2020 and 2021 (140,000 + 200,000)
F F F F F F F F 340,000
Outstanding coupons – December 31, 2021 F F F F F F 50,000
Number of towels (50,)
F F F F F 5,000
Multiply by cost of towel minus remittance (100 – 20)
F F F F F F F F F 80
Premium liability – December 31, 2021
F F F F F 400,000
Average
5. Maglaya Company included one coupon in each package sold. A towel is offered as a premium to
F F F F F F F F F F F F F F F F F
customers who send in 10 coupons: F F F F F
2020 2021
Packages of cereal soldF F 500,000 800,000
F F
Number of towels purchased at P40 per towel
F F 30,000 F 60,000 F F F F
ACTG-INT1 Page 4 F
