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Comprehensive Receivables Audit Report

The document contains several audit problems related to receivables, including adjusting entries, computations of sales and cost of sales over multiple years, aging of accounts receivable to calculate allowance for doubtful accounts, and calculations related to notes receivable from asset sales. It provides accounting entries, calculations, and required amounts for receivables, allowance for doubtful accounts, interest income and accrued interest on notes receivable.

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Romina Lopez
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20 views15 pages

Comprehensive Receivables Audit Report

The document contains several audit problems related to receivables, including adjusting entries, computations of sales and cost of sales over multiple years, aging of accounts receivable to calculate allowance for doubtful accounts, and calculations related to notes receivable from asset sales. It provides accounting entries, calculations, and required amounts for receivables, allowance for doubtful accounts, interest income and accrued interest on notes receivable.

Uploaded by

Romina Lopez
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd

Audit of Receivables

Problem 1

Adjusting Entries:
1) Sales Return 92,000
A/R- Love 92,000
2) No Adjustment Unadjusted Balance, A/R-Trade
1. Adjustment
3) No Adjustment 4. Adjustment
6. Adjustment
4) Sales 40,000 Adjusted Balance - AR
A/R 40,000
5) No Adjustment

6) Cash 124,000
A/R 124,000
7) No Adjustments
8) No Adjustments
9) No Adjustments

Problem 2
2003 2004
Cash Sales 68,000.00 104,000.00
Sales on Acccount 666,400.00 721,600.00
Total Sales 734,400.00 825,600.00
COGS 587,520.00 660,480.00
Gross Profit 146,880.00 165,120.00

Computation of Sales from 2003-2005


ACCOUNT RECEIVABLES
Beg. 66,400.00
Credit Sales 2,336,000.00

132,000.00

Computation of Sales on Account per Year


2003
AR, End. 3,200.00
Collections:
2,003.00 595,200.00
2,004.00 60,000.00
2,005.00 8,000.00
Sales on Account 666,400.00
Computation of Cost of Sales from 2003-2005
TOTAL
Inv. Beg 146,400.00
Add: Purchases 2,084,000.00
TGAS 2,230,400.00
Less: COGS (2,106,240.00)
Inv. End 124,160.00

ACCOUNT PAYABLES
Payment 2,060,000.00
Discounts
Returns

Problem 3
Requirement 1:
A Allowance for Bad Debts
Write off 187,500.00 300,000.00
50,000.00
37,500.00
200,000.00

B Accounts Receivable 2,375,000.00


Less: Impairment loss (200,000.00)
NRV-AR 2,175,000.00

C Should be (Per Aging)


As recorded
Allowance for Doubtful Account
Add: Doubtful Account Expense
Add: Recoveries
Total
Less: Written-off
Adjustment
D Adjusting Entry:
Allowance for Doubtful Account 112,500.00
Doubtful Account Expense
Requirement 2:
Allowance for Bad Debts
Write off 187,500.00 500,000.00
312,500.00

Requirement 3:
Allowance for Bad Debts
Write off 187,500.00 300,000.00
50,000.00
27,500.00
190,000.00
Problem 4
1) Accounts Receivable, per book
Accounts Receivable, per Audit
Understated
ACCOUNT RECEIVABLES
Credit Sales 2,100,000.00 1,500,000.00
12,500.00
587,500.00

Inv. Beg
Add: Purchases 2,250,000.00 Credit Sales
TGAS Cash Sales
Less: COGS 1,875,000.00 Total Sales (COGS*140%)
Inv. End 375,000.00

2) Allowance for Bad Debts


Write off 12,500.00

105,000.00
Recorded 62,500.00
Per Audit 92,500.00
3) Understated (30,000.00)

4) Accounts Receivable, per Audit 587,500.00


Less: Allowance for Bad Debts (92,500.00)
NRV of AR 495,000.00

Problem 5
Customer Account balance 0-30
Maybe, Inc. P140,720 56,000.00
Perhaps Co. 83,680
Pwede Corp. 122,400 80,000.00
Perchance Co. 180,560
Possibly Co. 126,400 126,400.00
Luck, Inc. 69,600.00
Total 582,640.00 262,400.00

Age of Accounts Total Rate


0-30 262,400.00 1.00%
31-60 177,280.00 1.50%
61-90 130,400.00 3.00%
91-120 117,600.00 10.00%
Over 120 35,680.00 50.00%
Required Allowance

Bad debt Expense 24,795.20


Allowance for Bad Debts 24,795.20

Problem 6
a) Note Receivable from Sale of Land
Balance, 12/31/2005 (6M-2M) 4,000,000.00
Less: Current Portion of NR 2,000,000.00
b) Note Receivable from officer 1,600,000.00
c) Note Receivable from sale of Equipment 800,000.00
PV Factor 0.797
Present Value, 4/1/2005 637,600.00
Add: Interest for 2005 (12% *9/12) 57,384.00
d) Note Receivable from Sale of Land
Balance, 12/31/2005 2,800,000.00
Less: Principal Installment due on 2006
Total Amount to be Received 902,500.00
Less: Interest (2800000*11%) 308,000.00 594,500.00

Non Current Portion


a) NR from Sale of Land 2,000,000.00
b) Note Receivable from officer 1,600,000.00
c)Note Receivable from sale of Equipment 694,984.00
d) NR from Sale of Land 2,205,500.00
Total Non Current Portion 6,500,484.00 B

Current Portion
a) NR from Sale of Land 2,000,000.00
d) NR from Sale of Land 594,500.00
Total Current Portion 2,594,500.00 B

Accrued Interest Receivable


a) NR from Sale of Land (4M*12%*9/12) 360,000.00
d) NR from Sale of Land (2.8M*11%*6/12) 154,000.00
Total 514,000.00 B
Interest Income
a) NR from Sale of Land (6M*12%*3/12) 180,000.00
a) NR from Sale of Land (4M*12%*9/12) 360,000.00
b) Note Receivable from officer 160,000.00
c)Note Receivable from sale of Equipment 57,384.00
d) NR from Sale of Land 154,000.00
Total Interest Income 911,384.00 B
Problem 7 PV Factor
Principal 300,000.00 0.7513
Interest 15,000.00 2.4869
Present Value of Principal

Carrying Amount, End 262,693.50


1+ER 1.10
Nominal Interest 15,000.00
Carrying Amount, 2005 273,962.85

Carrying Amount, Beg. 262,693.50


Effective Interest Rate 10%
Interest Income 26,269.35
2,020,000.00
(92,000.00)
(40,000.00)
(124,000.00)
1,764,000.00

2005 TOTAL
124,800.00 296,800.00
948,000.00 2,336,000.00
1,072,800.00 2,632,800.00 100.00%
858,240.00 (2,106,240.00) 80.00%
214,560.00 526,560.00 GPR 20.00%

UNT RECEIVABLES
2,270,400.00 Collections

2004 2005 TOTAL


7,200.00 112,800.00 123,200.00

- - 595,200.00
647,200.00 - 707,200.00
67,200.00 835,200.00 910,400.00
721,600.00 948,000.00 2,336,000.00
OUNT PAYABLES
20,000.00 Beg.
2,084,000.00 Gross Purchases

44,000.00

Beg. aging of receivable


Recovery Balance Sheet Approach
Bad Debt Expense

200,000.00

300,000.00
150,000.00
50,000.00
500,000.00
187,500.00 312,500.00
(112,500.00)

112,500.00

Bad Debt Expense Used percentage of sale 500,000.00


Income Statement Approach
Beg. Balance Sheet Approach
Recovery Percentage of receivable
Bad Debt Expense

575,000.00
587,500.00
(12,500.00) A

Collections
Write-off

2,100,000.00
525,000.00
2,625,000.00

Beg.
Recovery
Bad Debt Expense A

31-60 61-90 91-120 Over 120


84,720.00
48,000.00 35,680.00
42,400.00
92,560.00 88,000.00

69,600.00
177,280.00 130,400.00 117,600.00 35,680.00

Allowance
2,624.00
2,659.20
3,912.00
11,760.00
17,840.00
38,795.20 C

2,000,000.00

694,984.00

2,205,500.00
Present Value
225,390.00
37,303.50
262,693.50
Audit of Inventories

Problem 1

Inventory, Beg. 375,000


Net Purchases 1,925,000
TGAS 2,300,000
Less: COGS 1,950,000
Estimated Inventory, End. 350,000
LCNRV of actual inventory, end 244,000
Missing Inventory 106,000 A

Account Receivable
Beg. 135,000 3,000,000 Collections
B Credit Sales 3,250,000 Returns
Recovery Discounts
10,000 Write-off
Collections of recovery
375,000

Account Payable
Payment 2,000,000 375,000 Beg.
Returns 1,925,000 Gross Purchase B
Discounts

300,000

Net Sales 3,250,000


Divide : 100%-40% 60% Based on Net Sales
COGS 1,950,000

Problem 2
Inventory Inventory
1-Jul-19 Purchases 30-Jun-20
Unadjusted Balance 125,000 900,000 175,000
a) 32,500
b) (13,500)
c) 46,500 46,500
d) 18,500
e) 27,000
f) - - -
Adjusted Balance 157,500 960,000 240,000

Inventory, Beg. 157,500


Net Purchases 960,000
TGAS 1,117,500
Less: Estimated Inventory, End. 240,000
COGS 877,500

Problem 3
Cash
Beg. Bal. 200,000 943,400 Payment
Collections 50,000 440,000
Sales 1,840,000
706,600
Sales 1,840,000
Divide by: Selling Price 100
1) Unit Sold 18,400 A

Account Payable
Payment 943,400 150,000 Beg.
Returns 1,193,400 Gross Purchase
Discount
2) 400,000 A
January 1,500 65.20 97,800
February 1,500 65.40 98,100
March 1,500 65.60 98,400
April 1,500 65.80 98,700
May 1,500 66.00 99,000
June 1,500 66.20 99,300
July 1,500 66.40 99,600
August 1,500 66.60 99,900
September 1,500 66.80 100,200
October 1,500 67.00 100,500
November 1,500 67.20 100,800
December 1,500 67.40 101,100
Gross Purchases 18,000 1,193,400

3) Inventory Quantity (399,750/65) 6,150


Add: Purchases 18,000
Units Available for Sale 24,150
Less: Unit Sold (18,400)
Inventory Ending 5,750 A

4) December 1,500 67.40 101,100


November 1,500 67.20 100,800
October 1,500 67.00 100,500
September 1,250 66.80 83,500
5,750 385,900 A
Audit in Investment

Problem 1
Shares Cost/Share Total
3/1/2020 PLDT Shares 40,000 30.75 1,230,000
11/1/2020 8,000
48,000 25.63 1,230,000
11/5/2020 Sold @ 30 (14,400) 25.63 (369,000)
33,600 861,000 861,000

3/1/2020 Benpress 20,000 23 460,000


11/5/2020 Sold @25 (4,000)
16,000 23 368,000
11/15/2020 2,400
18,400 20 368,000 368,000 1,229,000
7/3/2020 Pag-ibig 4,000,000 PLDT Benpress
Accrued Interest 300,000
(4M*15%*6/12) 4,300,000 Cost 369,000 92,000
4,220,000 SP 432,000 100,000
(80,000) Gain/Loss 63,000 8,000 (9,000)
Loss
Problem 2

SPIKES Co.
1/15/2020 10,000 39 390,000
4/30/2020 5,000
Balance 15,000 26 390,000
5/20/2020 (5,000) (130,000) Cost
10,000 260,000
11/30/2020
12/10/2020 (2,000) (52,000) Cost
Balance 8,000 208,000

Cost SP Gain/Loss
5/20/2020 130,000 125,000 (5,000)

12/10/2020 52,000 120,000


(20,000)
100,000 48,000
D

D
Property, Plant and Equipment

Problem 1

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