All inventory for documents 313 and earlier were excluded 2 Sales after

All inventory for documents 313 and earlier were

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All inventory for documents 313 and earlier were excluded. 2. Sales, after adjustments, were included only for shipments 310 and those preceding, as shown in the analysis in part b.
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11-12 Solutions Manual to Accompany Applied Auditing, 2014 Edition 3. Inventory for shipping documents 311 to 313 should therefore be added to inventory. The amount of the cost of the inventory cannot be determined without reference to inventory costs. Presumably, cost will be less than the sales value shown in part b. Shipping Document No. Included in Physical Recorded as Sale After Adjustments in Part b 310 No Yes 311* No No 312* No No 313* No No 314 Yes No 315 Yes No 316 Yes No 317 Yes No 318 Yes No * Requires addition to inventory at cost. Shipping Document No. Selling Price 311 P 56 312 3,194 313 635 Inventory cost 3,885 (70% of selling price) 2,719 Summary Reduction of inventory due to physical count error resulting from receipt of goods. P5,124.00 Increase of inventory due to physical count error resulting from shipment of goods. 2,719.50 Net reduction of inventory required P2,404.50 d. The accuracy about September 1 receipts and shipments of goods could be verified by reference to bills of lading.
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Substantive Tests of Inventories and Cost of Goods Sold 11-13 11-19. Green Company Requirement (a) Green Company Inventory 12.31.15 Per Audit Item Quantity Unit Price * Amount Per Client A – 510 720 units P 2.64 / doz. P 218.40 P 2,592.00 A – 520 48 units 4.70 each 225.60 252.60 A – 530 146 units 16.50 each 2,409.00 2,706.00 A – 540 86 units 5.15 each 442.90 353.60 A – 550 80 units 8.50 each 680.00 7,280.00 A – 560 140 units 2.00 each 3,360.00 280.00 A – 570 910 gross 132 gross 120,120.00 27,360.00 Total P127,455.90 P 40,824.20 Add: AJE (1) __________ 86,631.70 P127,455.90 P127,455.90 * Lower of cost or market Requirement (b) Inventory 86,631.70 Cost of sales 86,631.70 11-20. Requirement (a) Requirement (b) 1. Exclude Title to the goods passed to the client on January 3, 2012 or upon receipt because the term of shipment was FOB Destination. 2. Exclude Goods held on consignment are not owned by the client. 3. Include Regular stock item even if segregated but not actually delivered as of the end of the year is still part of the client’s inventory. 4. Include Title to the goods passed to the client on December 31, 2011 or upon shipment because the invoice showed FOB supplier’s warehouse.
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11-14 Solutions Manual to Accompany Applied Auditing, 2014 Edition 5. Exclude Goods fabricated to order for a customer are considered sold as soon as completed even if not yet delivered. 11-21. Isabela Company ISABELA COMPANY Worksheet to Correct Selected Accounts 12-31-15 Inventory Accounts Payable Sales Initial amounts P1,250,000 P1,000,000 P9,000,000 Adjustments Increase (Decrease) 1 P (155,000) P (155,000) None 2 (22,000) None None 3 None None P 40,000 4 210,000 None None 5 25,000 25,000 None 6 2,000 2,000 None 7 (5,300) (5,300) None Total adjustments P 54,700 P (133,300) P 40,000 Adjustment amounts P1,304,700 P 866,700 P9,040,000 11-22. Stockroom W Stockroom W Reconciliation of Inventory Openi ng Invent ory Recei pts Withdra wals Ending Invento ry Balance per Accounting Department P 22,60 0 P28,0 00 P 26,000 P 24,600 Add (Deduct) Reconciling Items 1) Receipt of materials erroneously posted
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Substantive Tests of Inventories and Cost of Goods Sold 11-15 by the Accounting Department to Stockroom W.
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