Reference no: EM132664760
Question - On April 21, 2015, a fire damaged the office and warehouse of Muntinlupa Company. The only accounting record saved was the general ledger, from which the trial balance below was prepared.
Muntinlupa Company Trial Balance March 31, 2015
DEBIT CREDIT
Cash P 180,000
Accounts receivable 400,000
Inventory, December 31, 2014 750,000
Land 350,000
Building 1,100,000
Accumulated depreciation P 413,000
Other assets 56,000
Accounts payable 237,000
Accrued expenses 180,000
Share capital, P100 par 1,000,000
Retained earnings 520,000
Sales 1,350,000
Purchases 520,000
Operating expenses 344,000
Totals P3,700,000 P3,700,000
The following data and information have been gathered:
a. The company's year-end is December 31.
b. An examination of the April bank statement and cancelled checks revealed that checks written during the period April 1 to 21 totaled P130,000: P57,000 paid to accounts payable as of March 31, P34,000 for April merchandise purchases, and P39,000 paid for other expenses. Deposits during the same period amounted to P129,500, which consisted of receipts on account from customers with the exception of a P9,500 refund from a vendor for merchandise returned in April.
c. Correspondence with suppliers revealed unrecorded obligations at April 21 of P106,000 for April merchandise purchases, including P23,000 for shipments in transit on that date.
d. Customers acknowledged indebtedness of P360,000 at April 21, 2015. It was also estimated that customers owed another P80,000 that will never be acknowledged or recovered. Of the acknowledged indebtedness, P6,000 will probably be uncollectible.
e. The insurance company agreed that the fire loss claim should be based on the assumption that the overall gross profit ratio for the past two years was in effect during the current year. The company's audited financial statements disclosed the following information:
2014 2013
Net sales P 5,300,000 P 3,900,000
Net purchases 2,800,000 2,350,000
Beginning inventory 500,000 660,000
Ending inventory 750,000 500,000
f. Inventory with a cost of P70,000 was salvaged and sold for P35,000. The balance of the inventory was a total loss.
Required - Based on the above and the result of your audit, determine the following:
1. How much is the adjusted balance of the Accounts Payable as of April 21, 2015?
2. How much is the net purchases for the period January 1 to April 21, 2015?
3. How much is the adjusted balance of the Accounts Receivable as of April 21, 2015?
4. How much is the sales for the period January 1 to April 21, 2015?
5. How much is the cost of sales for the period January 1 to April 21, 2015?
6. How much is the estimated inventory on April 21, 2015?
7. How much is the estimated inventory fire loss?
Show the steps in computing and explanation?