PROBLEM NO. 3In the audit of the books of Greenwich Company for the year 2020, the following items andinformation appeared in the Production Machines account of the auditee:CreditDate2020Jan. 01ParticularsDebitBalance-Machines 1, 2, 3, and 4 at P90,000 each P 360,000Machine 5Aug 31198,000Machine 1Machine 6P 3,000Sept 30Dec 01Dec 013196,000432,000Machines 7 and 8 at P216,000 eachMachine 2Balance21,0001,062,000P1,086,000 P1.086,000The Accumulated Depreciation account contained no entries for the year 2020. The balanceon January 1, 2020 per your audit, was as follows:Machine 1P 84,37539,37533,75022,500P 180,000Machine 2Machine 3Machine 4TotalBased on your further inquiry and verification, you noted the following:1. Machine 5 was purchased for cash; it replaced Machine 1, which was sold on this datefor P3,000.2. Machine 2 was destroyed by the thickness of engine oil used leading to explosion onDecember 1, 2020. Insurance of P21,000 was recovered. Machine 7 was to replaceMachine 2.3. Machine 3 was traded in for Machine 6 at an allowance of P12,000; the difference waspaid in cash and charged to Production Machine account.4. Depreciation rate is recognized at 25% per annum.REQUIRED:Determine the adjusted balance of the Production Machine as of December 31, 2020 andDepreciation Expense for the year 2020.

Accumulated depreciation is the overall amount of a company's asset depreciation, whereas…

Answered: PROBLEM NO. 3 In the audit of the books…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter5: Sales And Receivables

Section: Chapter Questions

Problem 65E: Average Uncollectible Account Losses and Bad Debt Expense The accountant for Porile Company prepared...

See similar textbooks

Similar questions

What is the adjusted balance of accounts payable on December 31, 2021? a. P158,000 b. P138,000 c. P118,000 d. P108,000
What is the adjusted balance of accounts receivable on December 31, 2021? a. P36,000 b. P64,000 c. P24,000 d. P16,000
In the audit of Zhongli Inc. you have performed cutoff test, the results of the audit procedure you have performed revealed the following: Recorded as Sales in December 2022 Invoice Number Selling Price 18,000 12,500 100123 100124 100125 100126 100127 100128 100129 100130 8,680 14,200 9,000 10,000 Answer: 7,800 14,000 Recorded as Sales in January 2023 Invoice Number Selling Price 100131 21,000 100132 10,500 100133 4,500 100134 6,500 Cost 16,500 10,200 7,240 12,500 7,500 7,750 6,100 12,000 Cost 18,200 8,800 3,200 5,000 Terms FOB Shipping point FOB Destination FOB Destination Shipped to consignee FOB Shipping point FOB Destination FOB Shipping point Shipped to consignee Terms FOB Shipping point FOB Destination FOB Destination FOB Shipping point The goods shipped to consignees are still unsold at December 31. The (overstatement) / understatement of sales is Input negative sign if overstated
Problem 10 You are assigned to assess the collectibility of the receivables carried in the books Goliath Company, your company's audit client. The working trial balance are prepared at December 31, 2021 showed the following balances: Notes Receivable 6,000,000 Accounts Receivable 4,000,000 In the course of your examination, you discovered the following: Notes Receivable from Company A Notes Receivable from Company B 2,000,000 3,000,000 Notes Receivable from Company C 1,000,000 No interest has yet been recorded by Goliath during 2021 on any of the notes above. Company A is undergoing bankruptcy proceedings and has negotiated for a restructuring of its notes receivable. The note was for a four-year period and interest of 10% is collectible annually. All interest accrued before 2021 has been collected. The note matured on December 31, 2021. Collection of Interest was last made on December 31, 2020. The restructuring agreement with Company A calls for annual payment of P550,000 starting…
What is the audited net sales balance?
Existence of Accounts ReceivableTo 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 is20,000. Returned goods receivedJanuary 5, 2021. Pacturan 10,000 Your credit memorepresenting priceadjustment datedDecember 29. 2020cancels this. The credit memo wastaken up by Pacturan in2021 Badilla 48,000 You have overpriced usby P50. Correct priceshould be P100. The complaint is valid. Villaranda 37,500 We received the goodsonly on January 5, 2021. Term is shipping pointshipped in 2020. Dacer 45,000 Balance was offset by ourDecember shipment ofyour raw…
A. Based on the above and the result of your audit, answer the following(Round off present value factors to four decimal places and final answers to nearest hundred) 1. The consultation service fee revenue that should be recognized in 2022 is
14 Use the following information to answer next five (5) questions: You are auditing the accounts receivable and the related allowance for bad debts account of AACA Company. The following data are available: General Ledger Accounts Receivable 2022 Dec. 31 381,600 Allowance for Bad Debts 2022 2022 Jul. 31 GJ Write-off 7,200 Jan. 1 Balance 9,000 Dec. 31 GJ - Provision 21,600 Summary of Aging Schedule The summary of the subsidiary ledger balances as of December 31, 2022, is shown below: Debit balances Under one month P 162,000 One to six months 165,600 Over six months 68,400 P 396,000 Credit balances Mark Co. P 3,600 OK; additional billing in Jan. 2023 Lady Co. 6,300 Should have been credited to…
Problem 8. In connection with the audit of the financial statements of Janus Corporation for the year ended December 31, 2020, you conducted a surprise count of undeposited receipts on December 29, 2020, the last working day for the year. You conducted the count in the presence of the cashier whose accountability per general ledger was P 160,000. The following were revealed during the count: Currencies and coins: 97,680 880 Unused postage stamps (88 pieces at P 10 each) Checks: Date Payee Maker Jan. 21 Cash Cashier Dec. 19 Janus Corporation Dec. 27 Janus Corporation Dec. 28 Tiktok Corporation Cyborg Company Titan Corporation Janus Corporation 8,000 18,800 15,680 7,200 Office supplies paid out of receipts Repairs paid out of receipts Total per count 8,000 4,800 161,040 18. What is the cash shortage on December 31, 2020?
Determine the following as a result of your audit: a. How much of the notes payable is reported in the non-current liabilities section of the statement of financial position as of December 31, 2023? b. How much is the correct interest expense for the year ended December 31, 2024? show solution:
Problem 16-3 (AICPA Adapted) Atlanta Company reported net income for 2020 P4,000,000 and 2021 P5,000,000. An audit revealed certain errors. A collection of P100,000 from a customer was received on December 29, 2021 but not recorded until January 4, 2022 Supplier's invoice on account of P160,000 for inventory received in December 2021 was not recorded until January 2022. Inventories on December 31, 2020 and 2021 were correctly stated. Depreciation for 2020 was understated by P90,000. In September 2021, a P20,000 invoice for office supplies was charged to purchases. Office supplies are expensed when incurred. Sales on account of P300,000 in December 2021 were recorded in 2022. Required: b. Prepare adjusting entries on December 31, 2021. a. Determine the correct net income for 2020 and 2021.
PROBLEM 1 (ftg) Your audit of IVERMET Company’s trial balance of income statement accounts for 2020 included the following: Debit Credit Sales 5,720,000 Cost of sales 2,400,000 Administrative expenses 700,000 Loss on sales of equipment 100,000 Sales commissions 500,000 Interest revenue 250,000 Freight out 150,000 Loss on early retirement of long-term debt 200,000 Uncollectible accounts expense 150,000 4,200,000 6,000,000 Finished goods inventory: January 1 (Physical count) 4,000,000 December 31 (Per record) 3,000,000 (In transit to customer fob destination) 600,000 Work in process inventory…

SEE MORE QUESTIONS

Recommended textbooks for you

Cornerstones of Financial Accounting

Accounting

ISBN:

9781337690881

Author:

Jay Rich, Jeff Jones

Publisher:

Cengage Learning

Auditing: A Risk Based-Approach (MindTap Course L…

Accounting

ISBN:

9781337619455

Author:

Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:

Cengage Learning

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

Cornerstones of Financial Accounting

Accounting

ISBN:

9781337690881

Author:

Jay Rich, Jeff Jones

Publisher:

Cengage Learning

Auditing: A Risk Based-Approach (MindTap Course L…

Accounting

ISBN:

9781337619455

Author:

Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:

Cengage Learning

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

Financial Accounting

Accounting

ISBN:

9781305088436

Author:

Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS