In conducting your audit of Mangatarem Corporation, a company engaged in import and wholesale business, for the fiscal year ended June 30, 2006, you determined that its internal control system was good. Accordingly, you observed the physical inventory at an interim date, May 31, 2006 instead of at June 30, 2006. You obtained the following information from the company's general ledger: Sales for eleven months ended May 31, 2006 (before audit adjustments) Sales for the fiscal year ended June 30, 2006 (before audit adjustments) Purchases for eleven months ended May 31, 2006 (before audit adjustments) Purchases for the fiscal year ended June 30, 2006 Inventory, July 1, 2005 Physical inventory, May 31, 2006 Your audit disclosed the following additional information. 1) Shipments costing P12,000 were received in May and included in the physical inventory but recorded as June purchases. 2) Deposit of P4,000 made with vendor and charged to purchases in April 2006. Product was shipped in July 2006. 3) A shipment in June was damaged through the carelessness of the receiving department. This shipment was later sold in June at its cost of P56,000. P1,615,000 1,843,000 1,296,000 1,536,000 170,200 264,000 4) Sale of goods for P75,000 was recorded in the company's books on June 1, 2006. Your further inquiry reveals that the goods were shipped to buyer on May 31, term FOB shipping point. The goods costs P26,000. 5) Shipment of goods on May 29, 2006 terms FOB destination with cost of P30,000 was recorded as sales for P60,000 in May. The goods were received by the buyer on June 3, 2006. Question: (round off gross profit rate to whole number) 2. How much is the adjusted inventory as of May 31? a. 268,000 b. 208,000 c. 238,000 3. How much is the cost of sales for the month of June? a. 172,180 b. 180,180 c. 164,280 d. 264,000 d. 178,380
In conducting your audit of Mangatarem Corporation, a company engaged in import and wholesale business, for the fiscal year ended June 30, 2006, you determined that its internal control system was good. Accordingly, you observed the physical inventory at an interim date, May 31, 2006 instead of at June 30, 2006. You obtained the following information from the company's general ledger: Sales for eleven months ended May 31, 2006 (before audit adjustments) Sales for the fiscal year ended June 30, 2006 (before audit adjustments) Purchases for eleven months ended May 31, 2006 (before audit adjustments) Purchases for the fiscal year ended June 30, 2006 Inventory, July 1, 2005 Physical inventory, May 31, 2006 Your audit disclosed the following additional information. 1) Shipments costing P12,000 were received in May and included in the physical inventory but recorded as June purchases. 2) Deposit of P4,000 made with vendor and charged to purchases in April 2006. Product was shipped in July 2006. 3) A shipment in June was damaged through the carelessness of the receiving department. This shipment was later sold in June at its cost of P56,000. P1,615,000 1,843,000 1,296,000 1,536,000 170,200 264,000 4) Sale of goods for P75,000 was recorded in the company's books on June 1, 2006. Your further inquiry reveals that the goods were shipped to buyer on May 31, term FOB shipping point. The goods costs P26,000. 5) Shipment of goods on May 29, 2006 terms FOB destination with cost of P30,000 was recorded as sales for P60,000 in May. The goods were received by the buyer on June 3, 2006. Question: (round off gross profit rate to whole number) 2. How much is the adjusted inventory as of May 31? a. 268,000 b. 208,000 c. 238,000 3. How much is the cost of sales for the month of June? a. 172,180 b. 180,180 c. 164,280 d. 264,000 d. 178,380
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Please answer numbers 2 and 3 with solutions so i can understand how u came up with an answer. Thank you
Transcribed Image Text:In conducting your audit of Mangatarem Corporation, a company engaged in import and
wholesale business, for the fiscal year ended June 30, 2006, you determined that its internal
control system was good. Accordingly, you observed the physical inventory at an interim date,
May 31, 2006 instead of at June 30, 2006.
You obtained the following information from the company's general ledger:
Sales for eleven months ended May 31, 2006 (before audit adjustments)
P1,615,000
Sales for the fiscal year ended June 30, 2006 (before audit adjustments)
1,843,000
Purchases for eleven months ended May 31, 2006 (before audit adjustments)
1,296,000
Purchases for the fiscal year ended June 30, 2006
1,536,000
Inventory, July 1, 2005
170,200
Physical inventory, May 31, 2006
264,000
Your audit disclosed the following additional information.
1) Shipments costing P12,000 were received in May and included in the physical inventory but
recorded as June purchases.
2) Deposit of P4,000 made with vendor and charged to purchases in April 2006. Product was
shipped in July 2006.
3) A shipment in June was damaged through the carelessness of the receiving department.
This shipment was later sold in June at its cost of P56,000.
4) Sale of goods for P75,000 was recorded in the company's books on June 1, 2006. Your
further inquiry reveals that the goods were shipped to buyer on May 31, term FOB shipping
point. The goods costs P26,000.
5) Shipment of goods on May 29, 2006 terms FOB destination with cost of P30,000 was
recorded as sales for P60,000 in May. The goods were received by the buyer on June 3, 2006.
Question: (round off gross profit rate to whole number)
2. How much is the adjusted inventory as of May 31?
a. 268,000
b. 208,000
с. 238,000
d. 264,000
3. How much is the cost of sales for the month of June?
а. 172,180
b. 180,180
с. 164,280
d. 178,380
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