On April 1, 2020, you were hired by Binus Inc., a closely held company, as a staff member of its newly created internal auditing department. While reviewing the company’s records for 2018 and 2019, you discover that no adjustments have yet been made for the items listed below:

Q: You have been engaged to audit the financial statements of LUNA Corp for the year ended December 31,…

A: Adjusting entries are nothing but journal entries that are recorded at the end of the reporting…

Q: JYD Corporation has determined its 2019 and 2020 net income figures to be P1,150,000 and P1,100,000,…

A: After audit, corrections are made to ascertain the correct profit for the period During audit if…

Q: Having been engaged as external auditor of Duhat Company on February 28, 2019, you were unable to…

A: Sales = Cash sales + Credit sales =Cash sales during the year + Collections on accounts receivable +…

Q: Assume that in an annual audit of Harlowe Inc. at December 31, 2020, you find the following…

A: Items Included / Not included with reason 1 A special machine, fabricated to order…

Q: Penn Company is in the process of adjusting and correcting its books at the end of 2020. In…

A: Prepare the journal entries.

Q: During the course of an audit of the financial statements of Julie Company for the yearended…

A: Net income refers to the revenue a company earns less cost of goods sold, selling and administration…

Q: You are engaged in the regular annual examination of the accounts and records of Buddy Manufacturing…

A: "As per bartleby guidelines we’ll answer the first question since the exact one wasn’t specified.…

Q: Items to Be Included in Inventory As the auditor of Hayes Company for the year ended December 31,…

A: Explain whether Company H should include the merchandise in its inventory for each situation.…

Q: The following information were made available to you by Katz Corp. in line with your audit of its…

A: NOTE : As per BARTLEBY guidelines, when multiple questions are given then first question is to be…

Q: In an audit of Ingenious Company for the year ended December 31, 2013, the entity took its annual…

A: Inventory refers to the raw materials utilised in manufacturing as well as the finished goods that…

Q: During 2021, WMC Corporation discovered that its ending inventories reported in its financial…

A: Journal entry shows the recording of transactions during an accounting year and every transaction…

Q: tems 15 to 17 are based on the following information: You are engaged to perform an audit of the…

A: Sales- The revenue created by a company through selling its goods and services to clients is…

Q: During your audit of the books of Antigua Corporation for the year ended December 31, 2021, you…

A: Accounting Errors: These are the errors that are caused by either mistake made when processing…

Q: For each of the following potential unrecorded liabilities, determine the effects of the omission on…

A: (a) Since the Purchase terms is FOB destination and the goods is received before the date of balance…

Q: Your audit client presented the following information on December 31, 2018: Net purchases (all on…

A: 1. What is the correct net purchases for 2018?    Particulars Amount P Amount P Net purchases…

Q: You have been hired as the new controller for the Ralston Company. Shortly after joining the company…

A: Inventory: It refers to the items held by an organization which were in various forms like raw…

Q: In your audit of Joseph Moore Company, you find that a physical inventory on December 31, 2020,…

A: FOB destination: When the seller bears the freight charges for the delivery of merchandise from the…

Q: Trent Department Store uses a perpetual  inventory sys- tem but adjusts its inventory records at…

A: Cost of goods sold: It refers to the sum total of all the cost incurred by the company to produce a…

Q: Alpha company is a trading company that purchases and sales fruits and vegetables.  During the year…

A: When the manufacturer supplies goods to a customer and is responsible for the freight charges, such…

Q: Scruffy Brothers Supply does a physical inventory count when the business is closed at the end of…

A: Adjusting entries are made when the accounts are closed and after closing the account, any…

Q: Assume that in an annual audit of Cullumber Inc. at December 31, 2020, you find the following…

A: Introduction: FOB destination: The term FOB are seen while purchasing goods it mean the seller is…

Q: Having been engaged as external auditor of Duhat Company on February 28, 2019, you were unable to…

A:

Q: The owner of a trading company engaged your services as auditor. There is a discrepancy between the…

A: Percentage to calculate cost of sale=100-Gross profit%=100-40%=60%

Q: VACCINATION Company conducted a physical count on December 31 2021, which revealed total cost of…

A: Vaccination Company Inventory on December 31, 2021 Details Amount (P) Physical Inventory Count…

Q: Sterling Company reported their inventory as $50,700 on the books at December 31, 2021. At the close…

A: Correct amount of inventory is the value of the inventory which has been computed on the basis of…

Q: Kari Downs, an auditor with Wheeler CPAs, is performing a review of Waterway Company’s inventory…

A: SOLUTION- INVENTORY-  IT IS A TERM FOR GOODS AVAILABLE FOR SALE AND RAW MATERIALS USED TO PRODUCE…

Q: You were engaged to perform an audit of the accounts of the Fontana Blue Corporation for the year…

A: FOB Shipping Point: Title and responsibility of goods  is  transferred  from the seller to the…

Q: You have been assigned to examine the financial statements of Zarle Company for the year ended…

A:

Q: Based on its physical count of inventory in its warehouse at year-end, December 31, 2014, Madison…

A: Ending inventory is the amount of inventory that an entity has, at the end of a period. It is…

Q: You have been hired as the new controller for the Ralston Company. Shortly after joining the company…

A: Journal: Recording of a business transactions in a chronological order.

Q: he following information were made available to you by Katz Corp. in line with your audit of its…

A: Introduction :- Financial statements (sometimes called financial reports) are formal records of a…

Q: Assume that in an annual audit of Pharoah Inc. at December 31, 2020, you find the following…

A: As per the revenue recognition principle, sales should be recorded only when goods are delivered to…

Q: 1. Your audit of DEC Company's inventory and related records revealed the following information:…

A: For calculating closing stock we need to prepare trading account . There are two assumption under…

Q: You have been hired as the new controller for the Ralston Company. Shortly after joining the company…

A: Journal entry is the process of documenting commercial transactions for the first time in the books…

Q: At the end of 2016, the Biggie Company performed its annual physical inventory count. John Lawrence,…

A: Goods in transit:

Q: procedures is not directly relevant for auditors to verify the existence of inventory

A: First option is wrong because by enquiring the warehouse staff about inventory disposals between 1…

Q: Sandhill Electronics uses a perpetual inventory system which, at the company’s year-end December 31,…

A: In this numerical has covered the concept of Inventory Valuation.

Q: The net income of ABC before reflecting any corrections was 1,780,000. Determine the corrected net…

A: As per our protocol we provide solution to the one question only but as you have asked three…

Q: You are engaged in the audit of Company reported the following net income for 2019 to 2021: 2021:…

A: The prepaid expenses are the expenses paid but not expired yet. The Unearned income is the income…

Q: Understatement of ending inventory 25,000   30,000 Overstatement of ending inventory   16,000…

A: Correct net income is calculated after making adjustments in the net income and correct retained…

Q: You are auditing the financial statement of Pasig You have discovered that the merchandise inventory…

A: So we need to find the errors related to current assets and current liabilties

Q: In 2021, the internal auditors of Blooper Inc. discovered that goods costing $12 million that were…

A: A general journal is the book of accounts that is used to record all the transactions of the…

Q: At the end of 2018, the Biggie Company performed its annual physical inventory count. John Lawrence,…

A:

Q: In testing the sales cut-off for the EXAMPLE COMPANY in connection with an audit for the year ended…

A: Accounts receivable is a current asset arising from the credit sale of merchandise. At the time of…

Q: In January 2020, Susquehanna Inc. requested and secured permission from the commissioner of the…

A: Requirement a:   Inventory:   Inventory refers to the entire stock of goods purchased, goods…

Q: Jon Simon and Co has been engaged to perform an audit for High Trendy Sdn Bhd for the year ended 31…

A: Audit Opinion is divided into four types: a) Unqualified opinion b) Qualified Opinion c) Adverse…

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.