Chapter 23 - answer.doc - CHAPTER 23 23-1 COMPREHENSIVE AUDIT OF STATEMENT OF FINANCIAL POSITION AND STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE

Chapter 23 - answer.doc - CHAPTER 23 23-1 COMPREHENSIVE...

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23-1. Daffodil, Inc. Adjusting Journal Entries 12.31.16 AJE (1) Share donation 60,000 Treasury shares 35,000 Land 10,000 Building 15,000 (2) Accumulated depreciation - machinery 1,000 Loss on sale of machinery 2,000 Machinery 3,000 Cost P 5,000 Less: AD (20%) 1,000 NBV P 4,000 Proceeds 2,000 Loss P 2,000 (3) (a) Accumulated depreciation - building 300 Retained earnings 300 (b) Factory operating expenses 21,300 Accumulated depreciation - building 6,300 Accumulated depreciation - machinery 15,000 Building (P315,000 x 2%) Machinery: 5,000 x 10% = P 500 145,000 x 10% = 14,500 P15,000 (4) Merchandise inventory, 12.31.16 B/S 175,000 Merchandise inventory, 12.31.16 I/S 175,000 CHAPTER 23 COMPREHENSIVE AUDIT OF STATEMENT OF FINANCIAL POSITION AND STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ACCOUNTS
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23-2 Solutions Manual to Accompany Applied Auditing, 2014 Edition (5) Administrative expenses 1,000 Allowance for doubtful accounts 1,000 (6) Factory operating expenses 3,000 Unexpired insurance 3,000 (7) Retained earnings 2,500 Bond interest expense 2,500 Unamortized bond discount 5,000 (8) Sinking fund assets 23,500 First Mortgage SF Bonds 23,500 (9) Sinking fund assets 1,500 Sinking fund income 1,500
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Comprehensive Audit Cases and Problems 23-3 23-1. Daffodil, Inc. (continued) Daffodil, Inc. Working Trial Balance 12.31.16 Trial Balance Adjustments Statement of Profit or Loss and Other Comprehensive Income Statement of Financial Position Dr Cr Dr Cr Dr Cr Dr Cr Cash P 64,000 P 64,000 Accounts receivable 200,000 200,000 Provision for doubtful accounts P 1,000 (5) 1,000 P 2,000 Inventories, 12.31.15 223,000 P 223,000 Unexpired insurance, 12.31.15 6,000 (6) 3,000 3,000 Land 220,000 (1) 10,000 210,000 Buildings 330,000 (1) 15,000 315,000 Accumulated Depreciation - Buildings 6,600 (3a) 300 (3b) 6,300 12,600 Machinery 148,000 (2) 3,000 145,000 Accumulated Depreciation - Machinery 15,000 (2) 1,000 (3b) 15,000 29,000 Sinking fund assets 25,000 (8) 23,500 (9) 1,500 50,000 Unamortized bond discount 25,000 (7) 5,000 20,000 Treasury shares, ordinary 35,000 (1) 35,000 - Accounts payable 88,000 88,000 Bond interest accrued 3,750 3,750 1st Mortgage, 6% SF Bonds 226,500 (8) 23,500 250,000 Ordinary shares 500,000 500,000 Premium on ordinary shares 50,000 50,000 Share donation 60,000 (1) 60,000 - Retained earnings, 12.31.15 74,150 (7) 2,500 (3a) 300 71,950 Sales 875,000 P 875,000 Purchases 283,500 283,500 Payroll 169,000 169,000 Factory operating expenses 121,500 (3b)
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21,300 (6) 3,000 145,800 Administrative expenses 35,000 (5) 1,000 36,000 Bond interest expense 15,00 0 (7) 2,500 17,500 P1,900,00 0 P1,900,00 0 Loss on sale of machinery (2) 2,000 2,000 Merchandise inventory 12.31.16 (4) 175,000 (4) 175,000 175,000 175,000 Sinking fund income (9) 1,500 1,5 00 P 293,600 P 293,600 P 876,800 P1,051,5 00 P1,182,0 00 P1,007,3 00 Net Income 174,70 0 174,7 00 P1,051,50 0 P1,051,5 00 P1,182,0 00 P1,182,0 00
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23-5 Solutions Manual to Accompany Applied Auditing, 2014 Edition 23-2. Part I Adjusting Journal Entries, 12-31-14 AJE (1) Depreciation expense 1,778 Accumulated depreciation 1,778 (2) Prepaid interest 5,000 Retained earnings 3,100 Interest expense 1,900 (3) Merchandise inventory, 12-31-16, BS 15,000 Merchandise inventory, 12-31-16, IS or Cost of Sales 15,000 (4) Retained Earnings 6,000 Purchases 6,000 (5) Prepaid insurance 3,000 Insurance expense 3,000 (6) Store supplies inventory 1,450 Store supplies expense 550 Retained earnings 900 (7) Retained earnings 730 Commissions expense 240 Accrued commissions payable 970 (8) Cash in bank 650 Miscellaneous income 650 (9) Purchases 800 Accounts payable 800 (10) Income from Investment 3,000 Investment 3,000 (11) Prepaid advertising and promotions 90,000 Advertising and promotions expense 90,000 (12) NO AJE (13) Machinery 20,000 Depreciation expense – machinery 167 Allowance for depreciation – machinery 167 Repairs and maintenance 20,000 [(P22,000 – P2,000) – P4,000] 9
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