Reference no: EM132913276

Question - The following accounts were included in the unadjusted trial balance of Editah Company as of December 31, 2019:

Cash 963,200

Accounts receivable 2,254,000

Inventory 6,050,000

Accounts payable 4,201,000

Accrued expenses 431,000

During your audit, you noted that Editah Company held its cash books open after year-end. In addition, your audit revealed the following:

1. Receipts for January 2020 of P654,600 were recorded in the December 2019 cash receipts book. The receipts of P360,100 represent cash sales, and P294,500 represent collections from customers, net of 5% cash discounts.

2. Accounts payable of P372,400 was paid in January 2020. The payments, on which discounts of P12,400 were taken, were included in the December 2019 check register.

3. Merchandise inventory is valued at P6,050,000 before any adjustments. The following information has been found relating to certain inventory transactions:

a. The invoice for goods costing P175,000 was received and recorded as a purchase on December 31, 2019. The related goods shipped FOB destination was received on January 4, 2020, and thus were not included in the physical inventory.

b. A P182,000 shipment of goods to a customer on December 30, 2019, terms FOB destination, are not included in the year-end inventory. The goods cost P130,000 and were delivered to the customer on January 3, 2020. The sale was recorded correctly in 2020.

c. Goods costing P637,500 were shipped on December 31, 2019, and were delivered to the customer on January 3, 2020. The terms of the invoice were FOB shipping point. The goods were included in 2019 ending inventory, even though the sale was recorded in 2019.

d. Goods costing P217,500 were received from a vendor on January 4, 2020. The related invoice was received and recorded on January 6, 2020. The goods were shipped on December 31, 2019, terms FOB shipping point.

e. Goods valued at P275,000 are on consignment with a customer. These goods are not included in the physical inventory.

f. Goods valued at P612,500 are on consignment from a vendor. These goods are not included in the physical inventory.

Requirements - Based on the above transactions, determine the adjusted balance of the following account as of December 31, 2019:

1. Cash

2. Accounts Receivable

3. Inventory

4. Accounts Payable