Pls explain first how you solve it. Thank you. F COMPANY, organized on March 1, 2021, has a very poor internal control system. The company's cashier is also its accountant. After 9 months of operations, the company's manager suspects that the cashier-accountant has been misappropriating company collections. You have been engaged to audit the company's accounts to determine the extent of fraud, if any. You started the audit on November 15. On that date, the cash on hand per your surprise count was P5,140. Also on that date, the bank confirmed that the balance of the company's current account was P26,328. Your examination of the records reveals that a check for P1,852 was outstanding on November 15. The company's markup is 40% of sales. Further examination of the company's records reveals the following balances at November 15, 2021:
Pls explain first how you solve it. Thank you. F COMPANY, organized on March 1, 2021, has a very poor internal control system. The company's cashier is also its accountant. After 9 months of operations, the company's manager suspects that the cashier-accountant has been misappropriating company collections. You have been engaged to audit the company's accounts to determine the extent of fraud, if any. You started the audit on November 15. On that date, the cash on hand per your surprise count was P5,140. Also on that date, the bank confirmed that the balance of the company's current account was P26,328. Your examination of the records reveals that a check for P1,852 was outstanding on November 15. The company's markup is 40% of sales. Further examination of the company's records reveals the following balances at November 15, 2021:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Pls explain first how you solve it. Thank you.
F COMPANY, organized on March 1, 2021, has a very poor internal
company's cashier is also its accountant. After 9 months of operations, the company's manager
suspects that the cashier-accountant has been misappropriating company collections. You have
been engaged to audit the company's accounts to determine the extent of fraud, if any.
You started the audit on November 15. On that date, the cash on hand per your surprise count
was P5,140. Also on that date, the bank confirmed that the balance of the company's current
account was P26,328. Your examination of the records reveals that a check for P1,852 was
outstanding on November 15. The company's markup is 40% of sales.
Further examination of the company's records reveals the following balances at November 15,
2021:
Transcribed Image Text:Ordinary share capital
Share premium
Real property purchased for cash
Mortgage payable
Furniture and fixtures (of the acquisition cost,
P6,000 remains unpaid as of Nov. 15)
Notes payable - bank
Accounts payable - trade
Expenses paid (excluding
Merchandise inventory at cost
Accounts receivable - trade
Total sales
purchases)
P300,000
20,000
200,000
80,000
29,000
32,000
46,284
60,756
93,920
85,380
340,000
Transcribed Image Text:1. How much was paid for inventory purchases?
A. P157,716
C. P183,636
B. P293,716
D. P251,636
2. How much was collected from customers?
A. P118,620
C. P50,620
B. P254,620
D. P340,000
3. How much is the cashier's accountability at November 15, 2015?
A. P131,228
B. P83,228
C. P145,228
D.P151,228
4. What is the adjusted bank balance as of November 15, 2015?
A. P31,468
B. P26,328
C. P29;616
D. P23,040
5. The cash shortage as of November 15, 2014 totaled
A. P121,612
B. P101,612
C. P127,612
D. P206,992
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