Auditing Problems SOLUTION v.1 - 2018.docx

Goodwill p600 000 5 d patent amortization for 2018

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Goodwill, December 31, 2018 P600 ,000 5. D Patent amortization for 2018 (P157,500 + P168,214) P325 ,714 Page 9
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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
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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
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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---
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  • Summer '18
  • Jane
  • Depreciation, 1966, Generally Accepted Accounting Principles, Turkey Bonds

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