Reference no: EM133078451

Questions -

Q1. The cost of goods sold and total operating expenses of a merchandising company are both understated by P5,300 and P3,500 respectively. As a result of these errors, the company's gross margin is overstated (understated) by how much?

Q2. The total debit and credit balances of an Income Statement in the worksheet is P481,700 and P715,800. The omitted adjustment was debit Unearned Rent and credit Rent Revenue of P7,500. What is the corrected balance of Net Income?

Q3. Eternity Company had the following data for the period ended. Cash sales P400,000; credit sales 70% of cash sales; sales discounts P25,000; sales returns P20,000; freight in P15,000; freight out P16,000. The company would report net sales on its income statement of __________?

Q4. On January 1, 2021, the beginning balance of Armani Company (VAT registered) inventory amounted to P600,000. On January 15, 2021, Armani Company purchased P952,000 (VAT inclusive) worth of inventory with terms 2/15 n/60. On January 25, Armani Company returned 10% of defective inventories and paid the rest on January 29, 2021. At the end of the accounting period, inventory on hand amounted to P450,000. How much will recorded as credit to Purchase returns and allowances?

Q5. On January 1, 2020, Montblanc Company's Allowance for Bad debts had a credit balance of P120,000. During the year, the company wrote off P205,000 of uncollectible accounts receivable, and unexpectedly recovered P65,000 of bad debts written off in the prior year. Also at the end of the year, the company charged P260,000 to bad debts expense. How much is the adjusted balance of Allowance for Bad debts on December 31, 2020?

Q6. The worksheet at the end of October has P4,000 in the Trial Balance credit column for Accumulated Depreciation and has P4,750 in the Balance Sheet credit column for Accumulated Depreciation. What was the amount of the Depreciation expense adjustment for the month of October?