A purchases cut-off procedure was rendered by your audit staff in line with your audit of the financial statements of Friday Corp. for the period ended December 31, 2021. Inventories were physically counted on December 29 as a result, all goods received on or before December 29 has been included in the physical count which amounted to P449,000. Purchases and Accounts Payable balances per books were at P2,895,000 and P578,000, respectively. Receiving Report No. Receipt Date Invoice Price Remarks 816913 Dec. 28 10,600 Received on consignment basis 816914 Dec. 29 13,600 FOB Destination 816915 Dec. 30 15,000 FOB Shipping Point 816917 Dec, 31 10,800 FOB Shipping Point 816918 Dec. 31 7,200 Free Alongside the Vessel 816919 Dec. 31 14,500 FOB Destination 816920 Jan. 2 8,200 FOB Shipping Point 816921 Jan. 2 9,600 FOB Seller (In-transit) 816922 Jan. 2 9,100 FOB Buyer Warehouse (In-transit) Audit Notes: The last receiving report recorded in the purchases journal for December was RR No. 816918. Goods received on receiving report no. 816913 were still on hand as of December 31. Receiving report no. 816915 were for goods received from ABC Corp. on a “sale with repurchase agreement basis”. The agreement calls for the remittance to ABC Corp. of the amount due on January 5,. The repurchase shall be done 3 months later at P15,000 plus 12% in interest. Receiving report no. 816916 were for goods received on December 30. Supplier’s invoice amounting to P8,900 is yet to be received as of the cut-off procedure date. Required: What is the correct accounts payable balance as of December 31, 2021?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A purchases cut-off procedure was rendered by your audit staff in line with your audit of the financial statements of Friday Corp. for the period ended December 31, 2021. Inventories were physically counted on December 29 as a result, all goods received on or before December 29 has been included in the physical count which amounted to P449,000. Purchases and Accounts Payable balances per books were at P2,895,000 and P578,000, respectively.

Receiving Report No.	Receipt Date	Invoice Price	Remarks
816913	Dec. 28	10,600	Received on consignment basis
816914	Dec. 29	13,600	FOB Destination
816915	Dec. 30	15,000	FOB Shipping Point
816917	Dec, 31	10,800	FOB Shipping Point
816918	Dec. 31	7,200	Free Alongside the Vessel
816919	Dec. 31	14,500	FOB Destination
816920	Jan. 2	8,200	FOB Shipping Point
816921	Jan. 2	9,600	FOB Seller (In-transit)
816922	Jan. 2	9,100	FOB Buyer Warehouse (In-transit)

Audit Notes:

The last receiving report recorded in the purchases journal for December was RR No. 816918.
Goods received on receiving report no. 816913 were still on hand as of December 31.
Receiving report no. 816915 were for goods received from ABC Corp. on a “sale with repurchase agreement basis”. The agreement calls for the remittance to ABC Corp. of the amount due on January 5,. The repurchase shall be done 3 months later at P15,000 plus 12% in interest.
Receiving report no. 816916 were for goods received on December 30. Supplier’s invoice amounting to P8,900 is yet to be received as of the cut-off procedure date.

Required:

What is the correct accounts payable balance as of December 31, 2021?

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