The audit adjustment to be recorded to correct the depreciation in 2020
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You have been assigned to audit the MACHINERY account of WHITE Printing Corporation for the year ended December 31, 2020. In the course of your examination, you found out that your client acquired on July 1, 2020 three printing machines for a list price of ₱280,000 with a 10% trade discount, term 2/10, n/60. The liability was fully paid on September 1, 2020. In addition, freight charges of ₱1,040 and cost of installation of P5,000 were paid. The client recorded the transactions under machinery account for ₱280,440. Assuming that the annual
DR:
DR:
DR: Accumulated depreciation - ₱ 1,372; CR: Retained earnings - ₱ 1,372
DR: Accumulated depreciation - ₱ 1,372; CR: Depreciation expense - ₱ 1,372
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- The balance in Ashwood Companys accounts payable account at December 31, 2019, was 1,200,000 before any necessary year-end adjustment relating to the following: Goods were in transit from a vendor to Ashwood on December 31, 2019. The invoice cost was 85,000, and the goods were shipped FOB shipping point on December 29, 2019. The goods were received on January 2, 2020. Goods shipped FOB shipping point on December 20, 2019, from a vendor to Ashwood were lost in transit. The invoice cost was 40,000. On January 5, 2020, Ashwood filed a 40,000 claim against the common carrier. Goods shipped FOB destination on December 22, 2019, from a vendor to Ashwood were received on January 6, 2020. The invoice cost was 20,000, What amount should Ashwood report as accounts payable on its December 31,2019, balance sheet? a. 1,260,000 b. 1,285,000 c. 1,325,000 d. 1,345,000You have been assigned to audit the MACHINERY account of WHITE Printing Corporation for the year ended December 31, 2020. In the course of your examination, you found out that your client acquired on July 1, 2020 three printing machines for a list price of ₱280,000 with a 10% trade discount, term 2/10, n/60. The liability was fully paid on September 1, 2020. In addition, freight charges of ₱1,040 and cost of installation of P5,000 were paid. The client recorded the transactions under machinery account for ₱280,440. How much is the Machinery account overstated?You are engaged to audit the December 31, 2020, financial statements of Justin Company, a manufacturer of household appliances. Your audit disclosed the following situations: In June 2020, the company began producing and selling a new line of dishwasher. By the end of the year, it had sold 120,000 to various dealers for P15,000 each. The product was sold under a 1-year warranty, and the company estimates the warranty costs to be P750 per dishwasher. Justin had paid out P30 million in warranty expenses as of December 31, 2020, which is also the amount shown as warranty expense in its income statement for the current year. In response to your letter audit, Justin’s lawyer informed you that the company is involved in a lawsuit for violating environmental laws regulating hazardous waste. Although the litigation is pending, Justin’s lawyer is certain that Justin will most probably have to pay cleanup cost Justin is the defendant in a patent infringement suit by Bever over Justin’s use of a…
- On May 3, 2020, Ayayai Company consigned 90 freezers, costing $480 each, to Remmers Company. The cost of shipping the freezers amounted to $850 and was paid by Ayayai Company. On December 30, 2020, a report was received from the consignee, indicating that 45 freezers had been sold for $780 each. Remittance was made by the consignee for the amount due after deducting a commission of 6%, advertising of $210, and total installation costs of $330 on the freezers sold.(Round answers to 0 decimal places, e.g. 5,275.)(a) Compute the inventory value of the units unsold in the hands of the consignee. Inventory value $enter the inventory value in dollars (b) Compute the profit for the consignor for the units sold. Profit on consignment sales $enter the profit on consignment sales in dollars (c) Compute the amount of cash that will be remitted by the consignee. Remittance from consignee $enter the amount of cash that will be remitted by the consignee rounded to 0…A Movers is a freight railway entity that enters a contract with a customer to transport goods from location A to location B for PhP 1,000,000 on December 28, 2021. The shipper has an unconditional obligation to pay for the service when the goods reach location B. A Movers were able to load the shipment on the night of December 29 and departed location A on December 30. If onDecember 31, 2021, the shipment is a quarter far from location B how much revenue should A Movers recognize on its Statement of Comprehensive Income?Please explain why did you have that answer.Jares Investments Global Limited is a listed company which manufactures stationery products. The company’s profit before tax for the year ended 31 December 2020 is GH¢16·3m and total assets as at that date are GH¢66·8m. You are an audit supervisor of Jeremiah & Associate and you are currently finalizing the audit program for the year-end audit of your existing client Jares Investments Global Limited. You attended a meeting with your audit manager where the following matters were discussed: Trade payables and accruals Jares Investments Global Limited purchases its raw materials from a large number of suppliers. The company’s policy is to close the purchase ledger just after the year end and the financial controller is responsible for identifying goods which were received pre year-end but for which no invoice has yet been received. An accrual is calculated for goods received but not yet invoiced (GRN) and is included within trade payables and accruals. The audit strategy has…
- Jares Investments Global Limited is a listed company which manufactures stationery products. The company’s profit before tax for the year ended 31 December 2020 is GH¢16·3m and total assets as at that date are GH¢66·8m. You are an audit supervisor of Jeremiah & Associate and you are currently finalizing the audit program for the year-end audit of your existing client Jares Investments Global Limited. You attended a meeting with your audit manager where the following matters were discussed: Trade payables and accrualsJares Investments Global Limited purchases its raw materials from a large number of suppliers. The company’s policy is to close the purchase ledger just after the year end and the financial controller is responsible for identifying goods which were received pre year-end but for which no invoice has yet been received. An accrual is calculated for goods received but not yet invoiced (GRN) and is included within trade payables and accruals. The audit strategy has…On May 3, 2020, Flint Company consigned 80 freezers, costing $450 each, to Remmers Company. The cost of shipping the freezers amounted to $870 and was paid by Flint Company. On December 30, 2020, a report was received from the consignee, indicating that 40 freezers had been sold for $730 each. Remittance was made by the consignee for the amount due after deducting a commission of 6%, advertising of $200, and total installation costs of $310 on the freezers sold.(Round answers to 0 decimal places, e.g. 5,275.)(a) Compute the inventory value of the units unsold in the hands of the consignee. Inventory value $enter the inventory value in dollars (b) Compute the profit for the consignor for the units sold. Profit on consignment sales $enter the profit on consignment sales in dollars (c) Compute the amount of cash that will be remitted by the consignee. Remittance from consignee $enter the amount of cash that will be remitted by the consignee rounded to 0…On August 15, 2020, Japan Ideas consigned 770 electronic play systems, costing $100 each, to YoYo Toys Company. The cost of shipping the play systems amounted to $1,100 and was paid by Japan Ideas. On December 31, 2020, an account sales summary was received from the consignee, reporting that 420 play systems had been sold for $170 each. Remittance was made by the consignee for the amount due, after deducting a 20% commission. Calculate the inventory value of the units unsold in the hands of the consignee at December 31, 2020. Calculate the profit for the consignor for the units sold at December 31, 2020. Calculate the amount of cash that will be remitted by the consignee at December 31, 2020.
- You were engaged to audit the financial statements of the Philippine Refining Company for the year ended December 31, 2021 with comparative figures for the year ended December 31, 2020. One of your concern regarding material risk is on their long-term liabilities related to the acquisition of machinery. Your examination of their books revealed that on December 31, 2019, Philippine Refining Company purchased machinery having a cash selling price of P85,933.75. The company paid P10,000 down and agreed to finance the remainder by making four equal payments each December 31 at the implicit interest rate of 12%. The accountant prepared a table of payment below for their long-term financing for you to test for the accuracy of their presentation and payment. Date Total Payment Interest Payment Principal Payment Carrying Valu 12/31/1910,000.00 75.933.75 12/31/20 28.095.49 9.112.05 18,983.44 $6.950.31 12/31/21 25.817.48 6.834,04 18,983.44 137.966.87 12/31/22/23.519.46 4,556,02 18.983.44…Sky Jewelers Muscat received an order to supply gold ornaments worth OMR 50,000. They supplied ornaments worth OMR 30,000 up to the year ending 31st December 2020 and rest of the ornaments worth OMR 20,000 were supplied in January 2021. - Which accounting concept/convention must be followed while recording this transaction?On May 3, 2020, Tamarisk Company consigned 80 freezers, costing $490 each, to Remmers Company. The cost of shipping the freezers amounted to $870 and was paid by Tamarisk Company. On December 30, 2020, a report was received from the consignee, indicating that 40 freezers had been sold for $670 each. Remittance was made by the consignee for the amount due after deducting a commission of 6%, advertising of $210, and total installation costs of $300 on the freezers sold.(Round answers to 0 decimal places, e.g. 5,275.)(a) Compute the inventory value of the units unsold in the hands of the consignee. Inventory value $enter the inventory value in dollars (b) Compute the profit for the consignor for the units sold. Profit on consignment sales $enter the profit on consignment sales in dollars (c) Compute the amount of cash that will be remitted by the consignee. Remittance from consignee $enter the amount of cash that will be remitted by the consignee rounded…