Below is the data provided by a company regarding its receipts and disbursements. 31-Dec 1-Jan Accounts Receivable 225,000 215,000 Notes Receivable 100,000 120,000 110,000 Accounts Payable Notes Payable Prepaid Insurance 130,000 180,000 270,000 40,000 25,000 Cash Sales 480,000 Collections of A/R net of 40,000 discounts 1,500,000 Collections of nots receivable 90,000 Bank ban- 1 year. Dated Dec 31 90,000 Purchase returns and allow ances 50,000 Cash Purchases 130,000 Payments of A/P net of 15,000 discounts Payments of Notes Payable 1,400,000 300,000 Insurance 200,000 Other Expenses 620,000 Sales Retums and Allowances 55,000
Below is the data provided by a company regarding its receipts and disbursements. 31-Dec 1-Jan Accounts Receivable 225,000 215,000 Notes Receivable 100,000 120,000 110,000 Accounts Payable Notes Payable Prepaid Insurance 130,000 180,000 270,000 40,000 25,000 Cash Sales 480,000 Collections of A/R net of 40,000 discounts 1,500,000 Collections of nots receivable 90,000 Bank ban- 1 year. Dated Dec 31 90,000 Purchase returns and allow ances 50,000 Cash Purchases 130,000 Payments of A/P net of 15,000 discounts Payments of Notes Payable 1,400,000 300,000 Insurance 200,000 Other Expenses 620,000 Sales Retums and Allowances 55,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The data below is the sales of MGM Co. The accountant of the company has
provided you with the following data as well as his computed balance of
P2,350,000 as the gross sales of the company. As the external auditor of the
firm, you are tasked to compute whether the gross sales presented to you is
understated or overstated as compared to your audited amount. How much is
the understatement or overstatement? (Place 0 if there is no misstatement. If the
amount represents an overstatement, place a - sign before the amount. No need
to provide description.)
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