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- at an interim date, May 31, 2020, instead of at year end. ended June 30, 2020, the CPA observed the physical inventory In conducting an audit of Ultimate Company for the year The following information was obtained from the general Problem 13-14 (AICPA Adapted) for the year ledger. 875,000 950,000 8,400,000 9,600,000 Inventory, July 1, 2019 Physical inventory, May 31, 2020 Sales for 11 months ended May 31, 2020 Sales for year ended June 30, 2020 Purchases for 11 months ended May 31, 2020 before audit adjustments Purchases for year ended June 30, 2020 before audit adjustments 6. 6,750,000 8,000,000 1. Shipments' received in May and included in the physical inventory but recorded as June purchases 75,000 b. Shipments received in unsalable condition and excluded from physical inventory. Credit memos had not been received nor had chargebacks to vendors been recorded: 10,000 Total at May 31, 2020 Total at June 30, 2020, including the May unrecorded chargebacks 15,000 c. Deposit made with…I What is the amount of gross profit for the eleven months 2 What is the amount of sales for the month of June? a What is the cost of goods sold for the month of June ? at an interim date, May 31, 2020, instead of at year end. ended June 30, 2020, the CPA observed the physical inventory The following information was obtained from the general „Problem 13-14 (AICPA Adapted) ended May 31, 2020? year In conducting an audit of Ultimate Company for the a 1,680,000 b. 1,725,000 C. 1,735,000 d. 1,670,000 ledger. Inventory, July 1, 2019 Physical inventory, May 31, 2020 Sales for 11 months ended May 31, 2020 Sales for year ended June 30, 2020 Purchases for 11 months ended May 31, 2020 before audit adjustments Purchases for year ended June 30, 2020 before audit adjustments 875,000 950,000 8,400,000 9,600,000 в. 1,100,000 b. 1,200,000 c. 1,300,000 d. 1,400,000 er 14 6,750,000 8,000,000 1. Shipments received in May and included in the physical inventory but recorded as June purchases a. 960,000 b.…Upon inspection of the records of Eisenhower Company in connection to its financial statement audit for the year ended December 31, 2022, the following errors were revealed: • A fire insurance premium of P 40,000 was paid and charged to insurance expense in 2021. This covers one year from April 1, 2021. • Inventory at December 31, 2020 was understated by P 80,000. • Inventory at December 31, 2021 was understated by P 120,000. • The year 2021 last quarter taxes amounting to P 60,000 were paid on January 19, 2022 and charged to expense account of 2022. • A cash advance of P 100,000 in payment of goods to be delivered in January 2022 was received on December 15, 2021 and credited to Sales. • The gross profit on sales is 40%. • The net income for the year ended December 31, 2021 before any adjustments is P 1,550.000. 1,200,000 1,440,000 1,550,000 1,600,000
- In conducting your audit of Blue Lagoon Corporation, a company engaged in import and wholesale business, for the fiscal year ended June 30, 2021, you determined that its internal control system was good. Accordingly, you observed the physical inventory at an interim date, May 30, 2021 instead of at June 30, 2021. You obtained the following information from the company's general ledger. Sales for eleven months ended May 31, 20121 (before audit adjustments) Sales for the fiscal year ended June 30, 2021 (before audit adjustments) Purchases for eleven months ended May 31, 2021 (before audit adjustments) Purchases for the fiscal year ended June 30, 2021 (before audit adjustments) Inventory, July 1, 2020 Physical inventory, May 30, 2021 P1,615,000 1,843,000 1,296,000 1,536,000 170,200 264,000 Your audit disclosed the following additional information. a. Shipments costing P12,000 were received in May and included in the physical inventory but recorded as June purchases. b. Deposit of P4,000…During your audit of the books of Antigua Corporation for the year ended December 31, 2021, you discovered the following errors during the years 2019, 2020 and 2021. Errors 2019 2020 2021 Understatement of ending inventory 25,000 30,000 Overstatement of ending inventory 16,000 Omission of the following: Prepaid insurance 7,500 10,000 Unearned rent income 8,000 Accrued salaries expense 12,000 10,000 Accrued interest revenue 2,000 3,000 Erroneous capitalization of machinery repairs 15,000 Overstatement of machinery depreciation 1,500 1,500 Erroneous charging to expense of equipment cost 25,000 Understatement of equipment depreciation 2,500 2,500 2,500 Net income for the year 1,500,000 2,000,000 2,250,000 Retained earnings at year-end 7,500,000 8,750,000 9,250,000 Machinery has an estimated useful life of 10 years while equipment is 5 years. REQUIRED: Compute the corrected balances of the…During your audit of the books of Antigua Corporation for the year ended December 31, 2021, you discovered the following errors during the years 2019, 2020 and 2021. Errors 2019 2020 2021 Understatement of ending inventory 25,000 30,000 Overstatement of ending inventory 16,000 Omission of the following: Prepaid insurance 7,500 10,000 Unearned rent income 8,000 Accrued salaries expense 12,000 10,000 Accrued interest revenue 2,000 3,000 Erroneous capitalization of machinery repairs 15,000 Overstatement of machinery depreciation 1,500 1,500 Erroneous charging to expense of equipment cost 25,000 Understatement of equipment depreciation 2,500 2,500 2,500 Net income for the year 1,500,000 2,000,000 2,250,000 Retained earnings at year-end 7,500,000 8,750,000 9,250,000 Machinery has an estimated useful life of 10 years while equipment is 5 years. REQUIRED: Compute the corrected balances of the…
- Determine the following as a result of your audit: a. What is the cost of ending inventories as of December 31, 2023? b. What is the correct carrying value inventories reported in its December 31, 2023 Statement of Financial Position? c. What is the amount of loss on inventory write down reported in its profit or loss in 2023 assuming that the allowance for inventory write down has a beginning balance of P35,000.PLEASE ANSWER ASAP Problem No. 6 In conducting your audit of AACA Corporation, a company engaged in import and wholesale business, for the year ended December 31, 2022, you determined that its internal control system was good. Accordingly, you observed the physical inventory at an interim date, November 30, 2022 instead of at December 31, 2022. You obtained the following information from the company’s general ledger. Sales for eleven months ended November 30, 2022 P1,120,000 Sales for the year ended December 31, 2022 1,536,000 Purchases for eleven months ended November 30, 2022 (before audit adjustments) 856,000 Purchases for the year ended December 31, 2022 1,280,000 Inventory, January 1, 2022 140,000 Physical inventory, November 30, 2022 220,000 Your audit disclosed the following additional information. Shipments costing P12,000 were received in November and included in the physical inventory but recorded as December purchases. Deposit of…During the conduct of the audit of the financial statements of ABC Incorporated dated December 31, 2021, the following information were determined: Inventory on January 1, 2021 is understated by 30,000. On May 1, 2021, sales made to a customer on account was recorded by debiting cash of 500,000 and crediting other income of 500,000. Payment of 100,000 insurance covering 10 months starting June 1, 2021, was not recorded. Inventory on December 31, 2021 is overstated by 40,000 On June 1, 2021, ABC paid 240,000 in payment for 24 months of rent. This was originally charged to an expense account. As of the end of the year, no adjustments were made yet. ABC failed to accrue salaries of their office workers amounting to 38,000. A note was received from a customer amounting to 150,000 on May 1, 2021. The note bears an interest of 15% and will mature after 25 months. No entries were made yet with respect to the accrual of interest. The net income of ABC before reflecting any corrections…
- Your audit client presented the following information on December 31, 2018: Net purchases (all on account) — P2,400,000; Inventory, December 31, 2018 — P350,000. The audited balance of inventory on December 31, 2017 is P260,000. Additional information:A. The December 31, 2018 inventory balance is based on the inventory count conducted on the entity's warehouse. All inventories in the warehouse at that date were included, while inventories not in the warehouse were not included in the count. B. A purchase of inventory for P6,000 was recorded on December 28, 2018 and the goods are still in transit as of December 31. The related freight term is FOB Shipping Point. C. Goods (costing P20,000) consigned by your client to another entity are not yet sold as of December 31, 2018. No journal entry was prepared by your client upon the transfer of goods to the consignee. D. Goods costing P8,000 were sold for P15,000 on December 28, 2018. The freight term is FOB Shipping Point.E. A purchase of…You are auditing the financial statements of A Company for the year ended December 31, 2023. The Company's income statements indicated the following net income:2021: P1,200,0002022: P1,490,0002023: P1,325,000An examination of the accounting records for the year ended December 31, 2023 indicates that several errors were made. The following errors were discovered:A. Unused supplies at the end of each year were consistently omitted:2020: P95,000; 2022: P100,000; 2023: P140,000B. The footings and extensions showed that the inventory on December 31, 2022 was understated by P80,000C. P105,000 worth of inventories were received on January 5, 2022 and were not included in the physical count as of December 31, 2021. Upon investigation, however, you discovered that these goods were shipped free-alongside by the supplier on December 28, 2021. The invoice for the goods were received and recorded in the purchase journal on December 29, 2021.D. The following advance payments to suppliers at the…1. What amount should be reported as the pretax cumulative effect of this accounting change? During 2021, Revel Company decided to change from the FIFO method of inventory valuation to weighted average method. a. 400,000 b. 300,000 c. 600,000 d. 500,000 January 1 inventory December 31 inventory FIFO 7,200,000 7,900,000 2. What total amount should be reported as prior period error in the financial statements for the year ended December 31, 2020? a. 1,400,000 b. 600,000 WEIGHTED AVERAGE 7,700,000 8,300,000 ABC Company reported the ff events during 2020: • It was decided to write off 800,000 from inventory which was over two years old as it was obsolete. c.800,000 d. 200,000 • Sales of 600,000 had been omitted from the financial statements for the year ended December 31,2019