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O.A.docx - QUIZ 11 (9 pa lang tama) Required: 1. Prepare...

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QUIZ 11 (9 pa lang tama)Required:1.Prepare the audit adjustments required in the problem. All peso amounts are tobe rounded off to the nearest thousands. Ignore tax effects except for the 35%provision for income tax.2.Compute the final balances of each account on your WBS and WPL. Answer themultiple choice questions.AYALA MERCHANTS CORPORA TIQNPROBLEM :You have been assigned to audit the financial statements of Ayala MerchantsCorporation for the year 2020. The company is a dealer of appliances and has severalbranches in Metro Manila. Its main office is located in Makati City. You were given by thecompany controller the unadjusted statement: of financial position and statement ofcomprehensive income. Audit findings are as follows:1.Audit of CashA cash count was conducted by your staff on January 7, 2021. The petty, cash fund ofP10,000 maintained by the company on an imprest basis reflected a balance of P11 ,375. Unreplenished expenses totaled P8,625 of which P14,755 pertains to January2021.You were furnished a copy of the company's bank reconciliation statement withChartered Bank as follows:Balance per: bank P138,997Add: Deposit in transit 124,418Bank debit memos356,375 .Returned check31,500Less: Outstanding checks( 87,290)Book error (36,000)Balance. per books P528,000
Your review of the reconciliation statement disclosed the following:1.Postdated checks totaling P53,700 were included as part of the deposit in transit,These represent collections from various customers whose accounts have beenoutstanding for less than three months. These checks were actually deposited onJanuary 8, 2021.2.Included in the deposit in transit is a check from a customer for P31,500 whichwas returned by the bank on December 2.7. 201 o for insufficiency of funds. Thisaccount has been outstanding for over six months, The check was replaced bythe customer on January 15.2021.3.The bank debited the account of Ayala Merchants for P355,000 as payment ofnotes payable including interest ofP5,000 due on December 26.2020. This wasnot recorded as of year-end.4.A check was cleared by the bank as P15,450 . but was recorded by thebookkeeper as P51,450. This was in payment of accounts payable.5.Bank service charges totaling P1,375 were not recorded.2.Audit of Accounts Receivable and Allowances for Doubtful AccountsIt is the company's policy to provide allowance for doubtful accounts as follows: 'Less than 3 months P1,250,4801%3 to 6 months 421.6005%Over 6 months 137,25010%Total 1,809,330An analysis of the accounts receivable schedule showed that several long outstandingaccounts for more than a year. totaling P76,230 should be written-off.3.Audit of Marketable Securities – TradingThe company's equity portfolio as of' year-end showed the following:No...of Market valueIssue shares Cost per shareBacnotan Cement 3,500 P 54,250 P16.00Fil-Estate 5,000 ' 97,500 19.75lonics 1,200 24,600 24.00
La Tondena 1.000 33,500 26.00Selecta 4,000 15,8001.20Union Bank 800 25,44027.50P251,090The securities are listed in the stock exchange. The company follows the fair valueaccounting.

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Term
Winter
Professor
lll
Tags
Balance Sheet, Generally Accepted Accounting Principles, AYALA MERCHANTS

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