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QUESTION #1: GIVE COMPLETE SOLUTIONS

QUESTION #1: GIVE COMPLETE SOLUTIONS

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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QUESTION #1: GIVE COMPLETE SOLUTIONS

 

Question No. 1 To verify management's assertion on the existence of the accounts receivable balances as at December 31, 2022 of STUVWXYZ Corp., you have decided to send confirmation requests to customers. Below is a summary of confirmation replies together with the exceptions and audit findings. Gross profit on sales is 20%. The company is under the perpetual inventory method.' Name of Balance per books. Customer Ferrari P50,000 Comments from customers P30,000 was returned on January 2, 2023. Correct balance is P20,000 Audit findings Returned goods were received January 5, 2023 Lamborghini P10,000 Your CM representing price adjust- ment dated 12-29-22 cancels this The CM was taken up by STUVWXYZ in 2023 Maserati P48,000 You have overpriced us by P50 Correct price should be P100 Actual error made by the staff. Complaint is valid. Jaguar P45,000 Balance was offset by our December shipment of your raw materials STUVWXYZ credited accounts payable for P45,000 to record purchases. CC is a supplier BMW P37,500 We received the goods only on January 5, 2023 Term is shipping point. Shipped in 2022 Porsche P74,000 You have not provided us the Statement of consignment Sales. UU is consignor. STUVWXYZ recorded the consignment sale among trade receivables. McLaren (P55,200) We have not received the goods we ordered to date. deposit made to purchase an item. Rolls-Royce P38,900 waiting for your delivery. COD sales for delivery January 4, 2023 Bentley P250,000 We are following arrangement of payment approved by the Board Advancement made to Bentley, a subsidiary of STUVWXYZ. BIR P20,000 No comment Claim for tax refund. Required: Prepare adjusting entries to the above results of confirmation of receivables.
Transcribed Image Text:Question No. 1 To verify management's assertion on the existence of the accounts receivable balances as at December 31, 2022 of STUVWXYZ Corp., you have decided to send confirmation requests to customers. Below is a summary of confirmation replies together with the exceptions and audit findings. Gross profit on sales is 20%. The company is under the perpetual inventory method.' Name of Balance per books. Customer Ferrari P50,000 Comments from customers P30,000 was returned on January 2, 2023. Correct balance is P20,000 Audit findings Returned goods were received January 5, 2023 Lamborghini P10,000 Your CM representing price adjust- ment dated 12-29-22 cancels this The CM was taken up by STUVWXYZ in 2023 Maserati P48,000 You have overpriced us by P50 Correct price should be P100 Actual error made by the staff. Complaint is valid. Jaguar P45,000 Balance was offset by our December shipment of your raw materials STUVWXYZ credited accounts payable for P45,000 to record purchases. CC is a supplier BMW P37,500 We received the goods only on January 5, 2023 Term is shipping point. Shipped in 2022 Porsche P74,000 You have not provided us the Statement of consignment Sales. UU is consignor. STUVWXYZ recorded the consignment sale among trade receivables. McLaren (P55,200) We have not received the goods we ordered to date. deposit made to purchase an item. Rolls-Royce P38,900 waiting for your delivery. COD sales for delivery January 4, 2023 Bentley P250,000 We are following arrangement of payment approved by the Board Advancement made to Bentley, a subsidiary of STUVWXYZ. BIR P20,000 No comment Claim for tax refund. Required: Prepare adjusting entries to the above results of confirmation of receivables.
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