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1. Determine any irregularity in the receivables of the entity 2. Explain/Compute how the irregularity was committed.

1. Determine any irregularity in the receivables of the entity 2. Explain/Compute how the irregularity was committed.

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter6: Cash And Receivables
Section: Chapter Questions
Problem 11MC
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please answer all the following and give the complete solutions on how you come up with that .

Question No. 1 The STUVWXYZ Corp. suspects anomalies being committed in its receivables. You were commissioned to audit the entity and to report to the management any irregularity. Some information on their financial records as of December 31, 2022: Accounts Receivable, January 1 P1,920,000 6,240,000 Collections of account receivable per cash ledger Bad debts 200,000 Inventory, January 1 2,880,000 Inventory, December 31 2,640,000 Accounts payable, January 1 1,000,000 Accounts payable, December 31 1,500,000 Cash sales 1,200,000 Purchases 4,800,000 Gross profit on sales 2,160,000 Accounts receivable, December 31 880,000 Required: 1. Determine any irregularity in the receivables of the entity 2. Explain/Compute how the irregularity was committed.
Transcribed Image Text:Question No. 1 The STUVWXYZ Corp. suspects anomalies being committed in its receivables. You were commissioned to audit the entity and to report to the management any irregularity. Some information on their financial records as of December 31, 2022: Accounts Receivable, January 1 P1,920,000 6,240,000 Collections of account receivable per cash ledger Bad debts 200,000 Inventory, January 1 2,880,000 Inventory, December 31 2,640,000 Accounts payable, January 1 1,000,000 Accounts payable, December 31 1,500,000 Cash sales 1,200,000 Purchases 4,800,000 Gross profit on sales 2,160,000 Accounts receivable, December 31 880,000 Required: 1. Determine any irregularity in the receivables of the entity 2. Explain/Compute how the irregularity was committed.
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