Based on the information, Determine the adjusted balances of Inventory,Accounts receivable,Sales,Purchases and net income. The GUNDING CO. is on a calendar year basis. The following data were foundduring your review of preliminary financial statements:a. Goods in transit shipped FOB shipping point on December 28 by a supplierin the amount of P100,000 had been excluded from the inventory, and furthertesting revealed that the purchase had been recorded.b. Goods costing P30,000 had been received, included in inventor, andrecorded as a purchase. However, upon you inspection, the goods were foundto be defective and would immediately returned.c. Materials costing P170,000 and billed in December 30 at a selling price ofP264,000 had been segregated in the warehouse for shipment to a customer.The materials had been excluded from inventory as a signed purchase orderhad been received from the customer. Term, FOB destination.d. Goods costing P70,000 was out on consignment with Gundara, Inc. Sincethe monthly statement from Gundara listed those materials as on hand, theitems had been excluded from the final inventory and invoiced on December31 at P80,000e. The sale of P150,000 worth materials and costing P120,000 had beenshipped FOB point of shipment on December 31. However, this inventory wasfound to be included in the final inventory.f. Goods costing P100,000 and selling for P140,000 had been segregated, butnot shipped at December 31, and were not included in the inventory. A reviewof the customer's purchase order set forth terms as FOB destination. The salehad not been recorded.g. Your client has an invoice from supplier, terms FOB shipping point, but thegoods had not arrived as yet. However, these materials costing P134,000 hadbeen included in the inventory count, but no entry had been made for theirpurchase.h. Merchandise costing P200,000 had been recorded as a purchase but notincluded in inventory. Terms of sale are FOB shipping point according thesupplier's warehouse which had been arrived by December 31.Further inspection of the client's records revealed the following December 31balances: Inventory, P1,350,000; Accounts receivable, P630,000; Accountspayable, P690,000; Sales, P6,032,000; Purchases, P3,150,000; Net income,P727,000.

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Description: Based on the information, Determine the adjusted balances of Inventory,Accounts receivable,Sales,Purchases and net income. The GUNDING CO. is on a calendar year basis. The following data were foundduring your review of preliminary financial statement

Adjusted balance can be defined as those amount of balance determined after the closure of books. It…

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Based on the information, Determine the adjusted balances of Inventory,Accounts receivable,Sales,Purchases and net income.

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter11: Work Sheet And Adjusting Entries

Section: Chapter Questions

Problem 4PB: The accounts and their balances in the ledger of Markeys Mountain Shop as of December 31, the end of...

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