an Antonio Corporation’s current assets and current liabilities section of the statement of financial position as of December 31, 20x1 appear as follows: Current assets Cash Accounts receivable P5,340,000 P2,400,000 Less: Allowance for doubtful accounts 420,000 4,920,000 Inventories 10,260,000 Prepaid expenses 540,000 Total current assets P18,120,000 Current liabilities Accounts payable P3,660,000 Notes payable 4,020,000 Total current liabilities P7,680,000 The following errors in the corporation’s accounting have been discovered: January 20x2 cash disbursements entered as of December 20x1 included payment of accounts payable amounting to P2,340,000, on which a cash discount of 2% was taken. The inventory included P1,620,000 of merchandise
San Antonio Corporation’s current assets and current liabilities section of the
Current assets
|
Cash Accounts receivable |
P5,340,000 |
P2,400,000 |
|
Less: Allowance for doubtful accounts |
420,000 |
4,920,000 |
|
Inventories |
|
10,260,000 |
|
Prepaid expenses |
|
540,000 |
|
Total current assets |
|
P18,120,000 |
Current liabilities
Accounts payable P3,660,000
Notes payable 4,020,000
Total current liabilities P7,680,000
The following errors in the corporation’s accounting have been discovered:
- January 20x2 cash disbursements entered as of December 20x1 included payment of accounts payable amounting to P2,340,000, on which a cash discount of 2% was taken.
- The inventory included P1,620,000 of merchandise received on December 31, but no purchase invoices were received or entered. Of this amount, P720,000 had been received on consignment; the remainder was purchased FOB destination, terms 2/10, n/30.
- Sales for the first four (4) days in January 20x2 amounting to P1,800,000 were entered in the sales book as of December 31, 20x1. Of these, P1,290,000 were sales on account, and the remainder were cash
- Cash, not including cash sales, was collected in January 20x2 and entered as of December 31, 20x1, totaled P2,119,440. Off this amount, P1,399,440 was received on account after cash discount of 2% had been deducted; the remainder represented the proceeds of a bank
Based on the above and the result of your audit, determine the following amounts as of December 31, 20x1:
I NEED 1-3
- Adjusted cash balance
- Adjusted accounts receivable balance
- Adjusted accounts payable balance
- Adjusted
working capital - Net misstatement in the reported profit as a result of the errors
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