CAT
CERTIFIED ACCOUNTING TECHNICIAN
NAME: ___________________________________________
MOBILE NO. __________________
EMAIL: ___________________________________________
DATE: ________________________
EXAM PROVIDER: _________________________________
VENUE: ______________________
INSTRUCTION TO CANDIDATES
1. This is a FINAL paper.
2. This paper consists of 5 sheets or 10 pages (back to back). PLEASE CHECK BEFORE
COMMENCING.
3. Please read the problem and the instructions carefully.
4. You are given 4 hours to read, comprehend, and solve the problem.
5. All required solutions must be presented in the answer sheets/forms provided.
6. Electronic hand held calculators are permitted.
7. Use black pen.
CAT EXAMINATION LEVEL 1 - ACCOUNTING
PROBLEM 1
As at December 31, 200A, the accounting records for Monica Outdoor Ad Concepts contained the
following balances:
Assets
Equities
Cash
180,000
Accounts
Receivable
110,000
Land
90,000
Total
380,000
Accounts Payable
Nolasco, Capital
The following accounting events apply to 200B:
Jan 1
Received ₱10,000 additional cash investments from the owner.
34,000
346,000
380,000
Purchased a service vehicle that costs ₱80,000. The vehicle has an ₱8,000 salvage
value and a three-year useful life.
Feb. 1 Borrowed ₱100,000 by issuing a note that carried a 9% annual interest rate a one-year
term.
Paid ₱24,000 cash in advance for a one year lease of office space.
Mar. 1 Monica withdrew ₱30,000 for emergency personal use.
Apr. 1
Acquired land that costs ₱70,000 cash.
May 1 Made a cash payment on accounts payable amounting to ₱15,000.
July 1 Received ₱42,000 cash in advance as a retainer for services to be performed monthly
over the coming year.
Sept. 1 Sold land for ₱100,000 cash. The land originally cost ₱90,000.
Oct. 1 Purchased ₱20,000 of supplies on account.
Nov. 1 Purchased a one-year, ₱50,000 certificate of deposit that paid a 6% annual rate of
interest.
Dec.31 Total service revenues (on account) for the year, ₱250,000.
Total cash collections from accounts receivable amounted to ₱200,000.
Incurred other operating expenses on account during the year that amounted to
₱80,000 which were paid in cash.
Accrued salaries amounted to ₱32,000.
₱1,000 of supplies remained on hand at the end of the period.
REQUIRED:
Based on the preceding information, answer the following questions. All questions pertain to the 2008
financial statements. Use the table below to facilitate your computations. (45 points)
1. What is the total amount of revenues from operations appearing on the income statement?
2. What is the amount of supplies expense that would appear on the income statement?
3. What is the amount of interest expense that would appear on the income statement?
4. What is the amount of rent expense that would appear on the income statement?
5. What is the amount of total expenses that would appear on the income statement?
6. What is the amount of the gain from the sale of land that would appear on the income statement?
7. What is the amount of profit appearing on the income statement?
8. What is the amount of unearned revenue that would appear on the balance sheet?
9. What is the amount of interest payable that would appear on the balance sheet?
10. What is the amount of total assets that would appear on the balance sheet?
11. What is the amount of total liabilities that would appear on the balance sheet?
12. What is the amount of the ending capital?
13. What is the amount of net cash flows from operating activities that would appear on the statement of
cash flows?
14. What is the amount of net cash flows from investing activities that would appear on the statement of
cash flows?
15. What is the amount of net cash flows from financing activities that would appear on the statement of
cash flows?
Supporting Computations / Answers for Questions 1-15
Supporting Computations / Answers for Questions 1-15
PROBLEM 2
The following selected adjusted account balances were take from the worksheet of Simply Divine,
distributor of crafts and frames, for the year ended December 31, 200X.
Account Title
Debit (Php)
C. Celis, Capital
Credit (Php)
220,000.00
C. Celis, Withdrawals
35,000.00
Sales
550,000.00
Sales Returns and Allowances
7,000.00
Sales Discounts
13,000.00
Purchases
200,000.00
Transportation In
10,000.00
Purchases Returns and Allowances
14,000.00
Purchases Discounts
16,000.00
Delivery Expense
45,000.00
Commission Expense
85,000.00
Sales Salaries Expense
130,000.00
Pag-ibig Premium Expense-Sales
2,400.00
SS & EC Premiums Expense - Sales
8,248.00
Phil Health Premiums Expense - Sales
1,500.00
Bad Debts
5,500.00
Insurance Expense
12,000.00
Office Salaries Expense
75,000.00
Pag-ibig Premium Expense - Office
1,200.00
SS & EC Premiums Expense - Office
5,668.00
Phil Health Premiums Expense - Office
900.00
Interest Income
8,000.00
Interest Expense
5,000.00
Beginning and closing stocks are ₱50,000 and ₱60,000, respectively.
Required:
1. Prepare an income statement using the function of expense presentation format. (15 points)
Simply Divine
Income Statement
For the year ended, December 31, 2012
Net Sales (note 1)
P
Simply Divine
Income Statement
For the year ended, December 31, 2012
Cost of Sales (note 2)
Gross Profit
Other Operating Income
Selling Expenses (note 3)
General Expenses (note 4)
Other Operating Expenses
Net Income (Loss)
Note 1: Net Sales
Sales
Less:
₱___________
Sales returns and allowances
₱_________
Sales discount
___________________
Net Sales
₱___________
Note 2: Cost of Sales
Merchandise Inventory, beginning
₱_________
Net Cost of Purchases
Purchases
₱_________
Transportation In
__________
Total
Less:
Purchase Returns and allowances₱_________
Purchase Discounts
_____________________________________
Goods Available for Sale
__________
Merchandise Inventory, End
__________
Cost of Sales
__________
Note 3: Selling Expenses
Pag-ibig Premium Expense
SS & EC Premium Expense
Phil Health Premium Expense
₱
Delivery Expense
Commission
Sales Salaries
Selling Expenses
₱
Note 4: General Expenses
Pag-ibig Premium Expense
₱
SS & EC Premium Expense
Phil Health Premium Expense
Bad Debts
Insurance
Office Salaries
General Expenses
₱
PROBLEM 3
On January 1, 200A, Born and Corn formed a computer sales and service enterprise by investing
₱900,000 cash. The new company has the following transactions during January.
a. Pays ₱60,000 in advance for three month’s rent of office, showroom, and repair space.
b. Purchases 40 personal computers at a cost of ₱15,000 each, 6 graphic computers at a cost of
₱30,000 each, and 25 printers at a cost of ₱4,500, each, paying 75% of the total amount due upon
delivery.
c. Sales, repair and office employees earn ₱126,000 in salaries during January of which ₱30,000 was
still payable at the end of January.
d. Sells 30 personal computers at ₱25,500 each, 4 graphic computers at ₱45,000 each, and 15 printers
for ₱7,500 each; ₱750,000 is received in cash in January and ₱307,500 is sold on a deferred
payment basis.
e. Other operating expenses of ₱84,000 are incurred and paid for during January; ₱20,000 additional
incurred expenses are payable at January 31.
Required:
Compute the profit or loss for the month of January using:
a. Cash basis of accounting (3 pts)
b. Accrual basis of accounting (3 pts)
Sales
Cash Basis
Accrual Basis
₱
₱
₱
₱
Cost of Sales
Salaries Expense
Rent Expense
Other Operating Expense
Profit (Loss)
PROBLEM 4
Nilo Burgos Haulers is in the cargo business. The entity is servicing the cargo forwarding requirements of
business within the Calabarzon region. At the end of accounting year, Dec. 31, 200B, the following data
must be considered to effect the adjusting entries:
a.
b.
c.
d.
e.
f.
g.
On July 1, 200B, an eighteen-month insurance coverage on trucks was paid and debited to Prepaid
Insurance. Premiums amounted to ₱18,000 and coverage began immediately.
During 200B, office supplies amounting to ₱8,000 were purchased for cash and debited to Office
Supplies. At the end of 200A, the inventory count of supplies on hand was ₱2,000. Inventory of
supplies as at Dec. 31, 200B showed ₱3,000.
On December 31, 200B, Lipa Motors completed repairs on one of the trucks at a cost of ₱8,000; the
amount is not yet recorded and by agreement will be paid during January 200C.
In December 200B, a real property tax assessment for ₱16,000 on land owned during 200B was
received from the city. The taxes which are unpaid and unrecorded are already due but the company
intends to pay them on February 15, 200C.
On December 31, 200B, Burgos completed a bulk-hauling project. The bill was for ₱80,000 payable
within 30 days. No cash has been collected, and no journal entry has been made for this transaction.
On July 1, 200B, the company purchased a new hauling van at a cash price of ₱236,000. The
estimated useful life of the van was 10 years, with an estimated residual value of ₱36,000. No
depreciation has been recorded for 200B.
On October 1, 200B, Burgos borrowed ₱100,000 from a multi-purpose cooperative on a six-month,
12% per annum note payable. The principal plus interest is payable at the end of six months.
Required:
1. Prepare the adjusting entries. (20 pts)
Date
Particulars
Debit
Credit
Date
2.
Particulars
Debit
Credit
Describe the effects of the adjusting entries on profit, total assets, total liabilities, and owner’s equity.
Fill in the table and use (+) to indicate an increase and (-) to indicate a decrease to the mentioned
items. (14 pts)
Effect on
Amount
a.
b.
c.
Profit
Total Assets
Total
Liabilities
Owner’s
Capital
Effect on
Amount
d.
e.
f.
g.
Profit
Total Assets
Total
Liabilities
Owner’s
Capital