Existence of Accounts Receivable To substantiate the existence of the accounts receivable balances as at December 31, 2020 of Guipetacio Company, you have decided to send confirmation requests to customers. Below is a summary of the confirmation replies together with the exceptions and audit findings. Gross profit on sales is 20%. The company is under the perpetual inventory method. Customer Balances per Books (in PHP) Comments from customers Audit Findings Abejo 50,000 P30,000 on January 2, 2021. Correct balance is 20,000. Returned goods received January 5, 2021. Pacturan 10,000 Your credit memo representing price adjustment dated December 29. 2020 cancels this. The credit memo was taken up by Pacturan in 2021 Badilla 48,000 You have overpriced us by P50. Correct price should be P100. The complaint is valid. Villaranda 37,500 We received the goods only on January 5, 2021. Term is shipping point shipped in 2020. Dacer 45,000 Balance was offset by our December shipment of your raw materials. Guipetacio credited accounts payable for P45,000 to record purchases. Dacer is supplier. Required: Compute the overstatement of receivable from Badilla.
Existence of Accounts Receivable To substantiate the existence of the accounts receivable balances as at December 31, 2020 of Guipetacio Company, you have decided to send confirmation requests to customers. Below is a summary of the confirmation replies together with the exceptions and audit findings. Gross profit on sales is 20%. The company is under the perpetual inventory method. Customer Balances per Books (in PHP) Comments from customers Audit Findings Abejo 50,000 P30,000 on January 2, 2021. Correct balance is 20,000. Returned goods received January 5, 2021. Pacturan 10,000 Your credit memo representing price adjustment dated December 29. 2020 cancels this. The credit memo was taken up by Pacturan in 2021 Badilla 48,000 You have overpriced us by P50. Correct price should be P100. The complaint is valid. Villaranda 37,500 We received the goods only on January 5, 2021. Term is shipping point shipped in 2020. Dacer 45,000 Balance was offset by our December shipment of your raw materials. Guipetacio credited accounts payable for P45,000 to record purchases. Dacer is supplier. Required: Compute the overstatement of receivable from Badilla.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Existence of
To substantiate the existence of the accounts receivable balances as at December 31, 2020 of Guipetacio Company, you have decided to send confirmation requests to customers. Below is a summary of the confirmation replies together with the exceptions and audit findings. Gross profit on sales is 20%. The company is under the perpetual inventory method.
| Customer | Balances per Books (in PHP) | Comments from customers | Audit Findings |
| Abejo | 50,000 | P30,000 on January 2, 2021. Correct balance is 20,000. |
Returned goods received January 5, 2021. |
| Pacturan | 10,000 | Your credit memo representing price adjustment dated December 29. 2020 cancels this. |
The credit memo was taken up by Pacturan in 2021 |
| Badilla | 48,000 | You have overpriced us by P50. Correct price should be P100. |
The complaint is valid. |
| Villaranda | 37,500 | We received the goods only on January 5, 2021. |
Term is shipping point shipped in 2020. |
| Dacer | 45,000 | Balance was offset by our December shipment of your raw materials. |
Guipetacio credited accounts payable for P45,000 to record purchases. Dacer is supplier. |
Required:
Compute the overstatement of receivable from Badilla.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education