Chapter 24
Chapter 24
Chapter 24
Bsac-3
AUDIT 3
CHAPTER 24
Problem 1:
Required: Adjusting Entries
Problem 2:
Part 1
(9)Purchases P800
Accounts Payable P800
(13)Machinery P20,000
Depreciation expense-machinery 167
(1,500/9yrs)
Allowance for depreciation-machinery P167
Repairs and maintenance 20,000
(b) None
(e) Machinery xx
Retained earnings xx
(f) Depreciation xx
Allowance for depreciation xx
Problem 3
Requirement 1: Adjusting Entries
Requirement 2
Other Income:
Interest revenue P2,780 (i)
Dividend revenue 14,300
Gain on sale of assets 37,000 P54,080
Total Income P619,730
Operating expenses:
Selling expenses:
Sales salaries and commissions P70,216 (e)
Advertising expense 33,392 (f)
Dep’n exp.-sales/ delivery equip’t 13,500 (g)
Freight expense 8,400
Travel expense 9,120
Miscellaneous selling expenses 4,400 P139,028
Computations:
(a) Sales: P990,400 + P8,400= P998,800
(b) Freight-in: P11,050 + P1,600= P12,650
(c) Purchase returns and allowances: P346,000 x 6%=P20,760
(d) Inventory: P41,100 + P67,200= P108,300
(e) Sales salaries and commissions: P70,000 + (P7,200 x 3%)=P70,216
(f) Advertising expense: P32,180 + (P3,636 x 2/6)= P33,392
(g) Depreciation expense: P12,200 + (P15,600 x 10/120)= P13,500
(h) Doubtful accounts expense: (P522,000 x 3%)- P740= P14,920
(i) Interest Revenue: P1,400 + P1,380= P2,780
(j) Income taxes: P335,582 x 32%= P107,387
(k) Supplies expense: P4,360 – P3,200= P1,160
Problem 4:
Problem 5.
(1)Cash P200,000
Accounts Payable P200,000
(4)Cash 75,000
Accounts receivable 75,000
(12)Inventory 400,000
Cost of Sales 400,000
(29)Land 1,062,500
Building 3,187,500
Land and Building 4,250,000
(30)Building 425,000
Land and Building 425,000
Masipag Corporation
Balance Sheet
December 31, 20X8
ASSETS:
Current assets
Cash P734,000
Marketable securities P400,000
Valuation Allowance 145,000 545,600
Accounts Receivable P422,000
Allowance for doubtful accounts (33,150) 408,850
Notes receivable P600,000
Discount on notes receivable (50,000) 550,000
Accounts receivable-others 96,333
Inventory, Dec 31, 20X8 1,960,500
Prepaid expenses 175,250
Total current assets P4,470,533
Investments
Long term bond Investment 744,077
Property, Plant and Equipment
Land P1,062,500
Building P3,612,500
Accumulated depreciation-building (121,922) 3,490,578
Equipment P1,654,000
Accumulated depreciation-equipment (235,400) 1,418,600
Total PPE 5,971,678
Other Assets 110,000
Total Assets P11,296,288
Current liabilities
Accounts Payable P877,000
Bank loan payable 1,100,000
Accrued expenses payable 59,000
Other current liabilities 100,000
Income taxes payable 130,558
Estimated liability on warranties 70,000
Total Current Liabilities P2,336,558
Shareholders’ equity
Ordinary Shares P5,000,000
Additional paid-in capital 1,655,250
Retained Earnings 2,304,480
Total shareholders’ equity 8,959,730
Total liabilities and shareholders’ equity P11,296,288
MASIPAG CORPORATION
Income Statement
For the year ended December 31, 20X8
Sales P6,437,000
Cost of Sales (4,060,000)
Gross profit P2,377,000
Other Income 225,710
Operating expenses (1,511,509)
Other expenses (37,500)
Income before taxes P1,053,701
Provision for income tax (342,441)
Net Income P711,260