Chapter 1, Problem 1.3IE

You have been assigned to audit the financial statements of SAN MIGUEL CORPORATION for the year 2017. The company is a dealer of appliances and has several branches in Metro Manila. Its main office is in Makati City. You were given by the company controller the unadjusted balances of the items to be included in the company’s statement of financial position and statement of income as of and for the year ended December 31, 2017. Audit findings are as follows:  I. AUDIT OF CASH A cash count was conducted by your staff on January 7, 2018. The petty cash fund of P60,000 maintained by the company on an imprest basis reflected a balance of P22,750. Unreplenished expenses totaled P37,250 of which P9,510 pertains to January 2018.  You were furnished a copy of the company’s bank reconciliation statement with BPI Bank as follows: Balance per bank P277,994 Add: Deposit in transit 248,836 Bank debit memos 712,750 Returned check 63,000 Less: Outstanding checks (174,580) Book error (72,000)  Balance…

For the 2021 audit of the financial statements, you are tasked to audit EMPLEO Corporation's liabilities. The following information relates to the obligations of EMPLEO Corporation as of December 31, 2021: • Accounts payable for goods and services purchased on open account amounted to P350,000 on December 31, 2021. This amount was gross of a supplier's debit balance of P30,000. On the other hand, the testing of the accounts receivable account revealed that a customer's credit balance of P50,000 was netted against the balance of the accounts receivable. At December 31, 2021, EMPLEO declared a cash dividend at P0.50 per share on its P10 par value ordinary share capital, payable at January 12, 2022, to shareholders as of December 31, 2022. At December 31, 2021, EMPLEO had 1,000,0000 issued ordinary shares and 800,000 oustanding ordinary shares. • The company financed its receivables, dated November 1, 2021, by discounting its 180-day P400,000 accounts receivable to a bank on a with…

For the 2021 audit of the financial statements, you are tasked to audit EMPLEO Corporation's abilities. The following information relates to the obligations of EMPLEO Corporation as of December 31, 2021:   Accounts payable for goods and services purchased on open account amounted to P350,000 on December 31, 2021. This amount was gross of a supplier's debit balance of P30,000, On the other hand, the testing of the accounts receivable account revealed that a customer's credit balance of P50,000 was netted against the balance of the accounts receivable   At December 31, 2021, EMPLEO declared a cash dividend at PO.50 per share on its P10 par value ordinary share capital, payable at January 12, 2022, to shareholders as of December 31, 2022. At December 31, 2021, EMPLEO had 1,000,0000 issued ordinary shares and 800,000 oustanding ordinary shares.   The company financed its receivables, dated November 1, 2021, by discounting its 180-day P400,000 accounts receivable to a bank on a with…