The December 31,2021, Statement of Financial Position of REED Company contained the following current assets; Cash and cash equivalents - P2,400,525; Accounts receivable, net - P1,775,500; Inventories- P 387,270; Prepaid expenses P500,000 An examination revealed that: • Cash- includes P400,000 set aside for plant expansion, cash in bank which is net of bank overdraft, P13,000 and petty cash fund including IOUS of employens totaling, P3,500 Accounts receivable- includes accounts with credit balances of P45,000, accounts for write-off, P12,500 •Inventories- includes goods held on consignment, P27,000, goods in transit to customers, FO8 destination, P85,750 Prepaid expenses consist of an insurance aoplicable for 5 months starting September 16, 2021, P96,000

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