Excel Applications for Accounting Principles
4th Edition
ISBN: 9781111581565
Author: Gaylord N. Smith
Publisher: Cengage Learning
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Chapter 14, Problem 4R
Suppose that an audit of Prime Sports Gear encountered the following two errors:
- a. Inventory totaling $4,500 should have been written off as worthless at the end of the year. Year-end inventory should be only $195,600. Net income is reduced to $117,110.
- b. Checks totaling $20,000 for some of the salaries payable at year-end had in fact been written and mailed out on December 31, 2013. Thus, both the cash account and the salaries payable account are overstated at year-end.
Correct both errors on the worksheet. Save your completed file as CASHFLOW4. Print the worksheet when done. What impact did each of these adjustments have on
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A company’s draft financial statements for 2021 showed a profit of $630,000. However, the trial balance did not agree, and a suspense account appeared in the company’s financial statements.Subsequent checking revealed the following errors:1 The cost of an item of plant $48,000 had been entered in the cash book and in the plant account as $4,800.2 Bank charges of $440 appeared in the bank statement in December 2021 but had not been entered in the company’s records.3 One of the directors paid $800 due to a supplier in the company’s payables ledger by a personal cheque. The bookkeeper recorded a debit in the supplier’s ledger account but did not complete the double entry for the transaction.4 The payments side of the cash book had been understated by $10,000. Which of the above items would require an entry to the suspense account in correcting them? What would the company’s profit become after the correction of the above errors?
In your audit of ABC Co., you noted that the company's balance sheet shows the accounts receivable balance at December 31, 2005 as follows:Accounts receivable P3,600,000Allowance for doubtful accounts 72,000During 2006, transactions relating to the accounts were as follows:• Sales on account, P38,400,000.• Cash received from collection of current receivable totaled P31,360,000, afterdiscount of P640,000 were allowed for prompt payment.• Customers' accounts of P160,000 were ascertained to be worthless and were written off.• Bad accounts previously written off prior to 2005 amounting to P40,000 were recovered.• The company decided to provide P184,000 for doubtful accounts by journal entry at the end of the year.• Accounts receivable of P5,600,000 have been pledged to a local bank on a loan of P3,200,000. Collections of P1,200,000 were made on these receivables (not included in the collections previously given) and applied as partial payment to the loan.1. The accounts receivable as of…
So, owner of a trading company engaged your services as auditor. There is a discrepancy between the company’s income and the sales volume. The owner suspects that the staff is committing theft. You are to determine whether or not this is true. Your investigation revealed the following:
The physical taken on December 31, 2018 under your observation showed that cost was P26,500. The inventory on January 1, 2018 showed cost of P39,000.
The accounts receivable as of January 1, 2018 were P13,500. During 2018, accounts receivable written off amounted to P1,000. Accounts receivable as of December 31, 2018 were P37,500.
Outstanding purchase invoices amounted to P30,000 at the end of 2018. At the beginning of 2018, they were P37,500.
Receipts from customers during 2018 amounted to P300,000.
Disbursement to merchandise creditors amounted to P200,000.
The average gross profit rate was 40% of net sales.
Required:
Total Sales
Total Purchases
Inventory Shortage
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