Auditing Problems SOLUTION v.1 - 2018.docx

Goodwill p600 000 5 d patent amortization for 2018

Info icon This preview shows pages 8–11. Sign up to view the full content.

View Full Document Right Arrow Icon
Goodwill, December 31, 2018 P600 ,000 5. D Patent amortization for 2018 (P157,500 + P168,214) P325 ,714 Page 9
Image of page 8

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
PROBLEM NO. 8 – SANDOVAL COMPANY – COMPUTATION OF CASH SHORTAGE Nov. 30 Receipts Disb. Dec. 31 Bank balances P 16,500 P173,700 P 65,200 P125,000 Undeposited collections: Nov. 30 500 (500) Dec. 31 6,300 6,300 Outstanding checks: Nov. 30 (5,300) (5,300) Dec. 31 46,300 (46,300) Erroneous bank charges: Nov. 30 2,000 (2,000) Dec. 31 (3,000) 3,000 Erroneous bank credits Nov. 30 (500) (500) Dec. 31 (600 ) (600 ) Adjusted bank balances P 13 ,200 P176 ,900 P102 ,700 P 87 ,400 Nov. 30 Receipts Disb. Dec. 31 Book balances P 20,200 P178,000 P 95,800 P102,400 Underfooting of receipts 9,000 9,000 Overfooting of disbursements (4,000) 4,000 Bank collection 5 ,000 5 ,000 Corrected book balances P 20,200 P192,000 P 91,800 P120,400 Adjusted bank balances 13 ,200 176 ,900 102 ,700 87 ,400 Shortage as of Nov. 30 P 7 ,000 Unaccounted receipts P 15 ,100 Unsupported/unrecorded disbursements P 10 ,900 Shortage as of December 31 P 33 ,000 1. B 2. D 3. B 4. C 5. C
Image of page 9
Page 10 PROBLEM 9 – AUDIT OF INVENTORIES SUMMARY OF WORKING PAPER ADJUSTMENTS D e b i t ( C r e d i t ) Retained BeginningAccounts Accounts Ending No. Earnings Purchases Inventory Receivable Sales Payable Inventory 1 P75,000 (P75,000) - - - - - 2 (39,600)- P39,600 - - - - 3 - - - P129,000 (P129,000)- - 4 - 45,000 - - - (P45,000)- 5 - - - - - - P54,000 6 - 36 ,000 - - - (36,000 ) 36,000 P35 ,400 P 6 ,000 P39 ,600 P129 ,000 (P129 ,000 )(P81 ,000 ) P90 ,000 1. Retained earnings 75,000 Purchases 75,000 Answer: B 2. Accounts receivable 129,000 Sales 129,000 Answer: A 3. Inventory per client-prepared income statement P300,000 Add: Item no. 5 P54,000 Item no. 6 36 ,000 90 ,000 Adjusted inventory, December 31 P390 ,000 Answer: A 4. Net adjustment to purchases – increase P6 ,000 Answer: C 5. Inventory, Jan. 1 (P240,000 + P39,600) P 279,600 Add: Purchases (P4,800,000 + P6,000) 4 ,806,000 Cost of goods available for sale P5,085,600 Less: Inventory, Dec. 31 (P300,000 + P90,000) 390,000 Cost of goods sold P4 ,695,600 Answer: D
Image of page 10

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Page 11 PROBLEM 10 – BUNCHING COMPANY – AUDIT OF VARIOUS WORKING CAPITAL ACCOUNTS Accounts Accounts Cash Receivable Inventory Payable Per books P963,200 P2,254,000 P6,050,000 P4,201,000 AJE 1 (654,600) 310,000 --- --- 2 360,000 --- --- 372,400 3 a --- --- --- (175,000) b --- --- 130,000 --- c --- --- (637,500) --- d --- --- 217,500 217,500 e --- --- 275 ,000 --- Per audit P668 ,600 P2 ,564,000 P6 ,035,000 P4 ,615,900 (1 – C ) (2 – B ) (3 – A ) (4 – B ) AJES 1. Sales 360,100 Accounts receivable (P294,500 / 95%) 310,000 Sales discounts (P310,000 x 5%) 15,500 Cash 654,600 2. Cash (P372,400 – P12,400) 360,000 Purchase discounts 12,400 Accounts payable 372,400 3. a Accounts payable 175,000 Purchases 175,000 b Inventory 130,000 Cost of sales 130,000 c Cost of sales 637,500 Inventory 637,500 d Purchases 217,500 Accounts payable 217,500 Inventory 217,500 Cost of sales 217,500 e Inventory 275,000 Cost of sales 275,000 f No adjusting entry 5. C Current ratio: Current assets: Cash P 668,600 Accounts receivable 2,564,000 Inventory 6 ,035,000 P9,267,600 Current liabilities: Accounts payable P4,615,900 Accrued expenses 431 ,000 5 ,046,900 1.84 ---END---
Image of page 11
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern