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
