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The Review School No.: That or
The Review School No.: That or
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Presented below is a list of items that may or may not be reported as inventory in a company's
December 31, balance sheet:
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PROALEU 2:
The following accounts were extracted from the unadjusted trial balance of Silang Corp. as of
December 31,2074:
Cash 963,200
Accounts receivables 2,254,00O
Merchandise inventory 6,o5o,0oo
Accounts payable 4,201,000
Accrued expenses 60,400
During your audit, you discovered that the client heid its cash records open even after year end.
Audit notes:
a. Collections forJanuary 2015 of P654,600 were recorded in the December 2014 cash records.
The receipts of P360,100 represents cash sales with the balance representing collections from
customers who paid'within the 5Yo cash discount period.
b. Accounts payable of P372,4O0 was paid in January 2O15. The payments on which a P12,400
cash discount has been taken were included in the December 31,2014 check register.
c. Merchandise inventory as stated in the triai balance represented the result of the count
conducted on December 30, 2Ot4 on inventories on hand. The following information were
found to be relevant in your audit of inventories:
Goods valued at P275,AAO are on consignment with a customer and were not included
in the physical count
Goods costing P217,500 were received from a vendor on January 4,2015. The related
invoice was receiVed and recorded on January 6, 2015. These goods were shipped by
the vendor on December 31, 2014 under an FOB shipping point terms.