On July 01, 2007, one of FLOYD INC.'S delivery trucks was destroyed in an accident.
On that date, the truck's book
value was P900,000.
On July 15, 2007, FLOYD INC. received and recorded a P42,000 invoice for a new engine installed
in the truck in May 2007 and another P6,000 invoice for various repairs.
What amount should FLOYD INC. use to determine the gain or loss on disposal of the truck?
Henry Company had the following bank reconciliation at March 31:
Balance per bank statement, March 31
Add deposit in transit
Less outstanding checks
Balance per books, March 31
Data per bank statement for the month of April follow:
All reconciliation items at March 31 cleared through the bank in April. Outstanding checks at April 30 totaled P15,000.
What is the amount of cash disbursements per books in April?
BRAND CO. reported P9,000 of net income for 2007.
The correct net income however was
It was determined
that the ending inventory was overstated by P1,000.
The only other error was with the beginning inventory which must have been:
Understated by P1,000
Understated by P3,000
Overstated by P1,000
Overstated by P3,000
On December 30, 2007, SWIFT CO. shipped to a customer merchandise with selling price of P37,500; terms net 30, FOB
The sale which is 125% of cost was recorded in January 2007 when the check was received from the
Ending inventory was determined by physical count on December 31, 2007.
As a result of the above transactions, SWIFT CO.’s cost of goods sold for the year ended December 31, 2007 was:
Understated by P3,000
Overstated by P30,000
Overstated by P37,500
BART Company started operations on January 01, 2008.
The following are available as of June 30, 2008:
Purchase of merchandise
Inventory, June 30, 2008
Goods were sold at 50% above cost; 75% ofsales were on account
Estimated bad debts
1% of credit sales
Collections from charge customers
Allowance for doubtful accounts, June 30,2008
after write off of uncollectible accounts
The outstanding accounts receivable as of June 30, 2008 were:
PRIME Co. received from a customer a one year, P500,000 note bearing annual interest of 8%.
After holding the note for
six months, PRIME discounted the note at Asian Bank at an effective interest rate of 10%.
At the date of discounting, PRIME should recognize
P 40,000 interest revenue
P23,810 interest revenue
P13,000 interest revenue
P 4,762 interest expense
Information pertaining to Trace Company for the month of August appears below:
Balance per bank statement
Balance per books
Deposit in transit
Note collected by bank
An analysis of the cancelled checks returned with the bank statement reveals the following:
Check for the purchase of merchandise was drawn for P155,000 but was recorded as