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P1,480,000 2.  Accounts payable a.  P710,000                                      c.  P810,000 b.  P540,000                                     d.  P760,000 3.  Net sales a.  P4,550,000                                  c.  P4,730,000 b.  P4,650,000                                   d.  P4,970,000 4.  Net purchases a.  P2,370,000                                  c.  P2,150,000 b.  P2,420,000                                  d.  P2,320,000 5.  Net income a.  P220,000                                     c.  P540,000 b. ÂP290,000                                     d.  P550,000 Suggested Solution: Questions  No. 1 to 5 Inventory AccountsPayable Net Sales NetPurchases NetIncome Unadjusted balances P1,100,000 P690,000 P5,050,000 P2,300,000 P510,000 (a) - (100,000) - (100,000) 100,000 (b) (50,000) (50,000) - (50,000) - (c) 250,000 - (320,000) - (70,000) (d) 70,000 - (80,000) - (10,000) (e) (120,000) - - - (120,000) (f) 100,000 - - - 100,000 (g) - 170,000 - 170,000 (170,000) (h)    200,000             -                -                -  200,000 Adjusted balances P1,550,000 P710,000 P4,650,000 P2,320,000 P540,000 PROBLEM NO. 4 You were engaged by Asingan Corporation for the audit of the companyâ s financial statements for the year ended December 31, 2006. The company is engaged in the wholesale business and makes all sales at 25% over cost. The following were gathered from the clientâ s accounting records:                         S A L E S                                   P U R C H A S E S Date Reference Amount Date Reference Amount Balance forwarded P7,800,000 Balance forwarded P4,200,000 12/27 SI No. 965 60,000 12/28 RR #1059 36,000 12/28 SI No. 966 225,000 12/30 RR #1061 105,000 12/28 SI No. 967 15,000 12/31 RR #1062 63,000 12/31 SI No. 969 69,000 12/31 RR #1063 96,000 12/31 SI No. 970 102,000 12/31 Closing entry (4,500,000) 12/31 SI No. 971 24,000 P             - 12/31 Closing entry (8,295,000) P             - Note: SI = Sales Invoice                     RR = Receiving Report Accounts receivable P750,000 Inventory 900,000 Accounts payable 600,000 You observed the physical inventory of goods in the warehouse on December 31 and were satisfied that it was properly taken. When performing sales and purchases cut-off tests, you found that at December 31, the last Receiving Report which had been used was No. 1063 and that no shipments had been made on any Sales Invoices whose number is larger than No. 968. You also obtained the following
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