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Problem 8: You were assigned to audit he books of BACOLOD CORP. for the period ended December 31, 2014. The bookkeeper of the client provided you the following summarized data taken directly from its records: P 7,500,000 2,550,000 5,100,000 1,200,000 2,250,000 750,000 1,200,000 100,000 25,000 125,000 175,000 450,000 600,000 1,500,000 1,800,000 60,000 90,000 3,000,000 120,000 30,000 120,000 10,000 Sales for Cash Total cash collected from charge customers Cash purchases of merchandise Credit purchases of merchandise Expenses paid in cash Accounts Receivable, January 1 Accounts Receivable, December 31 Bad Debt Expense Recovery of Bad Debts Allowance for Doubtful Accounts, January 1 Allowance for Doubtful Accounts, December 31 Accounts Payable, January 1 Accounts Payable, December 31 Merchandise Inventory, January 1 Merchandise Inventory, December 31 Accrued Expenses, December 31 Prepaid Expenses, December 31 Furniture and Equipment, at cost Interest received Accrued interest income, January Purchase Returns se Discounts Additional Information: The furniture and equipment which had estimated useful life of 10 years were acquired on July 1, 2011 and were estimated to have a 10% salvage value based on cost. The company uses the double declining balance method in computing the depreciation. Requirements: 1. What is the correct net sales for the year? 2. What is the correct cost of sales for the year? 3. How much is the correct depreciation expense for the year? 4. What is the net income for the year?

Problem 8: You were assigned to audit he books of BACOLOD CORP. for the period ended December 31, 2014. The bookkeeper of the client provided you the following summarized data taken directly from its records: P 7,500,000 2,550,000 5,100,000 1,200,000 2,250,000 750,000 1,200,000 100,000 25,000 125,000 175,000 450,000 600,000 1,500,000 1,800,000 60,000 90,000 3,000,000 120,000 30,000 120,000 10,000 Sales for Cash Total cash collected from charge customers Cash purchases of merchandise Credit purchases of merchandise Expenses paid in cash Accounts Receivable, January 1 Accounts Receivable, December 31 Bad Debt Expense Recovery of Bad Debts Allowance for Doubtful Accounts, January 1 Allowance for Doubtful Accounts, December 31 Accounts Payable, January 1 Accounts Payable, December 31 Merchandise Inventory, January 1 Merchandise Inventory, December 31 Accrued Expenses, December 31 Prepaid Expenses, December 31 Furniture and Equipment, at cost Interest received Accrued interest income, January Purchase Returns se Discounts Additional Information: The furniture and equipment which had estimated useful life of 10 years were acquired on July 1, 2011 and were estimated to have a 10% salvage value based on cost. The company uses the double declining balance method in computing the depreciation. Requirements: 1. What is the correct net sales for the year? 2. What is the correct cost of sales for the year? 3. How much is the correct depreciation expense for the year? 4. What is the net income for the year?

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter4: Internal Control And Cash
Section: Chapter Questions
Problem 69.4C
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BACOLOD CORP

Problem 8: You were assigned to audit he books BACOLOD CORP. for the period ended December 31, 2014. The bookkeeper of the client provided you the following summarized data taken directly from its records: P 7,500,000 2,550,000 5,100,000 1,200,000 2,250,000 750,000 1,200,000 100,000 25,000 125,000 175,000 450,000 600,000 1,500,000 1,800,000 60,000 90,000 3,000,000 120,000 30,000 120,000 210,000 Sales for Cash Total cash collected from charge customers Cash purchases of merchandise Credit purchases of merchandise Expenses paid in cash Accounts Receivable, January 1 Accounts Receivable, December 31 Bad Debt Expense Recovery of Bad Debts Allowance for Doubtful Accounts, January 1 Allowance for Doubtful Accounts, December 31 Accounts Payable, January 1 Accounts Payable, December 31 Merchandise Inventory, January 1 Merchandise Inventory, December 31 Accrued Expenses, December 31 Prepaid Expenses, December 31 Furniture and Equipment, at cost Interest received Accrued interest income, January Purchase Returns Purchase Discounts Additional Information: The furniture and equipment which had estimated useful life of 10 years were acquired on July 1, 2011 and were estimated to have a 10% salvage value based on cost. The company uses the double declining balance method in computing the depreciation. Requirements: 1. What is the correct net sales for the year? 2. What is the correct cost of sales for the year? 3. How much is the correct depreciation expense for the year? 4. What is the net income for the year?
Transcribed Image Text:Problem 8: You were assigned to audit he books BACOLOD CORP. for the period ended December 31, 2014. The bookkeeper of the client provided you the following summarized data taken directly from its records: P 7,500,000 2,550,000 5,100,000 1,200,000 2,250,000 750,000 1,200,000 100,000 25,000 125,000 175,000 450,000 600,000 1,500,000 1,800,000 60,000 90,000 3,000,000 120,000 30,000 120,000 210,000 Sales for Cash Total cash collected from charge customers Cash purchases of merchandise Credit purchases of merchandise Expenses paid in cash Accounts Receivable, January 1 Accounts Receivable, December 31 Bad Debt Expense Recovery of Bad Debts Allowance for Doubtful Accounts, January 1 Allowance for Doubtful Accounts, December 31 Accounts Payable, January 1 Accounts Payable, December 31 Merchandise Inventory, January 1 Merchandise Inventory, December 31 Accrued Expenses, December 31 Prepaid Expenses, December 31 Furniture and Equipment, at cost Interest received Accrued interest income, January Purchase Returns Purchase Discounts Additional Information: The furniture and equipment which had estimated useful life of 10 years were acquired on July 1, 2011 and were estimated to have a 10% salvage value based on cost. The company uses the double declining balance method in computing the depreciation. Requirements: 1. What is the correct net sales for the year? 2. What is the correct cost of sales for the year? 3. How much is the correct depreciation expense for the year? 4. What is the net income for the year?
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