Pararel Quiz Intermediate Accounting 1Thursday, 19 October 2012

Closed book, calculator is permitted

Problem 1. Statement of Financial Position (25%)

Presented below is the trial balance of PT Luber at December 31 2011 (in Rp 000).

Account Amount Cash 217,000 Sales 7,876,300 Trading securities (at cost $145,000) 153,000 COGS 4,800,000 Long term investment in bonds 322,700 Long term investment in share capital ordinary 282,000 Notes payable 965,000 Account payable 375,000 Selling expense 1,875,000 investment revenue 63,000 land 260,000 building (at historical cost) 1,040,000 dividend payable 161,250 accrued liabilities 96,000 account receivable 435,000 AFDA 25,000 administrative expense 917,000 interest expense 18,900 inventories 673,000 provision for pension 60,000 equipment (at historical cost) 600,000 bond payable 1,000,000 franchise 160,000 share capital ordinary ($5 par) 1,000,000 treasury shares 192,700 dividend 10,000 patent 195,000 retained earning (1 dec 2011) 78,000 accumulated other comprehensive income 34,000 Additional information :a. Notes payable of $90,000 is due on November 2012b. Included in the amount of land is $95,000 land held for future plant sitec. Included in the amount of cash is $77,000 cash restricted for plant expansiond. equipment was purchased on 31 May 2009 and have 8 year estimated useful lifee. building was purchased on 31 dec 2005 and have20 years estimated useful life f. not included in administrative expense is depreciation expense for building and equipmentINSTRUCTIONSPrepare a statement of financial position at 31 December 2011 for PT Luber with a right classification

Problem 2 . Statement of Comprehensive Income (25%)

Here is Income statement of PT. AL Caisario for the period ended 31 December 2010 Sales 750.000.000COGS 245.750.000Gross Profit 504.250.000Selling and Administrative Expenses 115.000.000Pretax Income 389.200.000Income Tax (30%) 116.775.000Net Income 272.475.000

Additional information (all below transaction has not been included in preparing income statement, except differently stated):1. PT AL Caisario incurred loss due to its own building damage by an earthquake. Book value of the building was Rp

400.000.000 and insurance company only covered Rp 225.000.000 of the loss.2. PT AL Caisario sold its investment in a banking company and beared Rp 22.000.000 loss due to declining stock’s Price.3. PT AL Caisario changed its estimation on doubtful account which causing additional bad debt expense for the period

increase by Rp 3.000.000. This amount has been reported as part of selling and administrative expenses.4. On 1 Oktober 2010, PT AL Caisario determined to sol done of its división to avoid further loss. Operating loss from 1

January -1 October 2010 was Rp 65.000.000 (before tax). Company got gain on sale of this división by Rp 25.000.000 (before tax).

5. In 2010 PT AL Caisario bought a financial instrumnet which classified as available for sale. In the end of the year, the instrument value was reported Rp 20.000.000 (before tax) below of its acquisition price.

6. PT AL Caisario changed depreciation method from Straight line kto doublé declining in the beginning of the year. Total depreciation for 2007-2010 was Rp 55.000.000 for straight line, compared to Rp 65.546.500 for doublé declining.

7. Inventory value was reported declined by Rp 4.500.000. 8. Average number of outstanding ordinary share during the year was 12.000 shares.9. Retained earnings as of 1 January 2010 was Rp 48.000.000 and an amount of Rp 14.500.000 was paid as preferred dividend

for 2010.10. Tax rate is 30%

Required : Prepare comprehensive income statement for period ended 2010 according to PSAK 1!

Problem 3 Receivables (20%)Part 1DEF corporation has the following receivables classified into individually significant and all other receivables (in million)Significant:PT. A Rp 35.000PT. B Rp 100.000PT. C Rp 50.000PT. D Rp 60.000Total Rp 245.000All other receivables:Current Rp 150.0001-30 days Rp 45.00031-60 days Rp 50.00061-180 days Rp 45.000181-365 days Rp 50.000>365 days Rp 45.000Amount Rp 385.000Total Rp 630.000DEF determines that PT A’s receivable is impaired by Rp 15.000.000 and PT D’s receivable is totally impaired. Both PT B’s and PT C’s receivables are not considered impaired individually but they are considered to be current. DEF also determines that all other receivables have been grouped into the bucket according their ages. DEF applies a different percentage based on past experience to determine the percentage of impairment:

Age % estimated to be impairedCurrent 5%1-30 days 20%31-60 days 35%61-180 days 65%181-365 days 90%>365days 100%

Compute the loss on impairment DEF will suffer on December 31, 2011. What journal entries should be made to record this loss?PART 2

On 1 january 2011, PT ABC receives a Rp 2.000.000.000, four year note, bearing interest at 12% annually, in exchange for cash. The market rate of interest for a note of similiar risk is 10%. Unfortunately, during 2011, PT GHI experienced financial liability. On 31 December 2011, even though PT GHI manages to pay all of te accrued interest, PT GHI informs PT ABC that the rest of the interest and te principal amount of the note can only be paid 65%. PT ABC has enough evidences to determine that the note has been impaired.

PV Single Sum 10%, 4 0,68301 PV Ordinary Annuity 10%, 4 3,16986PV Single Sum 12%, 4 0,63552 PV Ordinary Annuity 12%, 4 3,03735PV Single Sum 10%, 3 0,75132 PV Ordinary Annuity 10%, 3 2,48685PV Single Sum 12%, 3 0,71178 PV Ordinary Annuity 12%, 3 2,40183

1. Provide the schedule of effective interest method2. Calculate the amount of impairment loss of receivable3. Prepare the necessary journal entries to record transactions of notes receivable, including impairment

Problem 4 Inventories (20%)Part A (15%)Happy Co. Record the transaction for the month of December 2012 as follows:

Purchase Sales

Date Units Price/unit Date Units Price/unit

1(beg balance) 200 $ 10 10 300 $ 13

5 300 $ 10.5 18 300 $ 14

15 350 $ 10.2 27 200 $ 15

20 150 $ 10.4

1. Assume the company keeps the average perpetual periodic inventory method (rounded up the unit cost into nearest 2 decimal):

a. Compute the inventory at December 31, 2012, show your calculation. b. Prepare the journal entry needed on December 20 and 27, 2012.

2. Assume the company keeps the FIFO periodic inventory method: a. Compute the inventory at December 31, 2011 show your calculation. b. Prepare the journal entry needed on December 15 and 18, 2012. c. Prepare end of period entries for inventory if the physical inventory count indicates that total inventory on hand is 210 units! d. At December 31, 2012, the company gathered information that the selling price/unit of company’s inventory is $13.1 and estimated cost to sell/unit is $3.00 Prepare the journal needed if Happy Co. applies Lower-of-Cost-or-Net-Realizable-Value (LCNRV) for its inventory!e. At January 31, 2013, the company gathered information that the NRV of product rebound to $10.2/ unit. Prepare the journal needed to record the recovery!

Part B (5%)On December 31, 2010 Felt Company's inventory burned. Sales and purchases for the year had been $1,400,000 and $980,000, respectively. The beginning inventory (Jan. 1, 2010) was $170,000; in the past Felt's gross profit has averaged 40% of selling price.InstructionsCompute the estimated cost of inventory burned!

Problem 5 Framework (10%)Presented below are a number of accounting procedures and practices in Amanda Corp. For each of these items, list the assumption, principle, qualitative characteristic, or constraint that is violated.1. Because the company's income is low this year, a switch from accelerated depreciation to straight-line depreciation is made this

year. 2. The president of Amanda Corp. believes it is foolish to report financial information on a yearly basis. Instead, the president

believes that financial information should be disclosed only when significant new information is available related to the company's operations.

3. Amanda Corp. decides to establish a large loss and related liability this year because of the possibility that it may lose a pending patent infringement lawsuit. The possibility of loss is considered remote by its attorneys.

4. An officer of Amanda Corp. purchased a new home computer for personal use with company money, charging miscellaneous expense.