Case 5 You are auditing the financial statement of Pasig Company for the fllst tume You have discovered that the merchandise inventory at the end of ee year was understated by P50,000 and P100,000 in 2020 and 2021 respectively. In addition, in inspecting the record of the company, you discovered that some items had been improperly recorded and that certain year-end adjustments had been overlooked in 2020 and 2021. These omission and other errors for each year were summarized as follows: 12/31/2021 12/31/2020 Accrued Salaries Accrued Interests Income P390,000 106,500 153,900 a P436,800 ourn129,600 192,000 Prepaid Insurance Advances from Customers (Collections from customers had been recorded as sales but should have been recognized as advances from customers because goods were not shipped until the following year) Machinery (Capital expenditures had been records as repairs but should have been charged to Machinery; the depreciation rate is 10% per year, but depreciation in the year of expenditure is to be recognized at 5%.) 280,500 235,200 261,000 282,000
Case 5 You are auditing the financial statement of Pasig Company for the fllst tume You have discovered that the merchandise inventory at the end of ee year was understated by P50,000 and P100,000 in 2020 and 2021 respectively. In addition, in inspecting the record of the company, you discovered that some items had been improperly recorded and that certain year-end adjustments had been overlooked in 2020 and 2021. These omission and other errors for each year were summarized as follows: 12/31/2021 12/31/2020 Accrued Salaries Accrued Interests Income P390,000 106,500 153,900 a P436,800 ourn129,600 192,000 Prepaid Insurance Advances from Customers (Collections from customers had been recorded as sales but should have been recognized as advances from customers because goods were not shipped until the following year) Machinery (Capital expenditures had been records as repairs but should have been charged to Machinery; the depreciation rate is 10% per year, but depreciation in the year of expenditure is to be recognized at 5%.) 280,500 235,200 261,000 282,000
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
Chapter8: Inventories: Special Valuation Issues
Section: Chapter Questions
Problem 14RE: Refer to the information provided in RE8-4. If Paul Corporations inventory at January 1, 2019, had a...
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