Applied Auditing
Applied Auditing
1A
A flood recently destroyed many of the financial records of Bulls
ManufacturingCompany. Management has hired you to re-create as much financial
information aspossible for a month of July. You are able to find out that the company
uses an averagecost inventory valuation system. You also learn that Bulls makes a
physical count at theend of each month in order to determine monthly ending inventory
values. By examiningvarious documents you are able to gather the following information:
July purchases
Date Units Unit Cost
July 5 60,000 P0.40
11 50,000 0.41
15 40,000 0.42
16 50,000 0.45
QUESTIONS:
Based on the above and the result of your engagement, you are asked to provide
thefollowing information:
1. Number of units on hand, July 1
100,000
2. Units sold during July
P250,000
3.Unit cost of inventory at July 31
P0.396
4.Value of inventory at July 31
P19,800
PROBLEM NO. 2A
Pacers Company, a manufacturer of small tools, provided the following information
fromits accounting records for the year ended December 31, 2006:
QUESTIONS:
Based on the above and the result of your audit, answer the following:
1. The adjusted balance of Inventory as of December 31, 2006 is
P1,704,000
2. The adjusted balance of Accounts Payable as of December 31, 2006 is
P1,333,000
3. The adjusted Net Sales fro the year ended December 31, 2006 is
P8,063,000