Problem 1.6: The records of your audit client, Anna Corp., which maintains records under cash-basis, revealed total payments made to supplier of merchandise amounted to P 1,250,000. Based on Audit investigation, they revealed that the additional information are the following: Accounts payable, January 1, 2021 Accounts payable, December 31, 2021 Notes payable-trade, January 1, 2021 Notes payable-trade, December 31, 2021 Merchandise inventories, January 1, 2021 Merchandise inventories, December 31, 2021 Purchase discounts Purchase returns before any payments were made, thus credit memos were received from the suppliers Purchase returns after payments were made, thus, cash was received from suppliers as refunds Requirements: Compute for the following under the accrual method: 1. Gross purchases for the year 2. Cost of goods sold for the year 75,000 108,000 57,000 42,000 189,000 243,000 45,000 55,000 25,000

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Chapter1: Financial Statements And Business Decisions
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Problem 1.6: The records of your audit client, Anna Corp., which maintains records under
cash-basis, revealed total payments made to supplier of merchandise amounted to P
1,250,000. Based on Audit investigation, they revealed that the additional information are
the following:
Accounts payable, January 1, 2021
Accounts payable, December 31, 2021
Notes payable-trade, January 1, 2021
Notes payable-trade, December 31, 2021
Merchandise inventories, January 1, 2021
Merchandise inventories, December 31, 2021
Purchase discounts
Purchase returns before any payments were made, thus credit memos were received
from the suppliers
Purchase returns after payments were made, thus, cash was received from suppliers
as refunds
Requirements: Compute for the following under the accrual method:
1. Gross purchases for the year
2. Cost of goods sold for the year
75,000
108,000
57,000
42,000
189,000
243,000
45,000
55,000
25,000
Transcribed Image Text:Problem 1.6: The records of your audit client, Anna Corp., which maintains records under cash-basis, revealed total payments made to supplier of merchandise amounted to P 1,250,000. Based on Audit investigation, they revealed that the additional information are the following: Accounts payable, January 1, 2021 Accounts payable, December 31, 2021 Notes payable-trade, January 1, 2021 Notes payable-trade, December 31, 2021 Merchandise inventories, January 1, 2021 Merchandise inventories, December 31, 2021 Purchase discounts Purchase returns before any payments were made, thus credit memos were received from the suppliers Purchase returns after payments were made, thus, cash was received from suppliers as refunds Requirements: Compute for the following under the accrual method: 1. Gross purchases for the year 2. Cost of goods sold for the year 75,000 108,000 57,000 42,000 189,000 243,000 45,000 55,000 25,000
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