1) In the audit ofKinship Corporation, the auditor had an appreciation of the following schedule and noted some comments for possible adjustments:

Kinship Corporation

Accounts Receivable Schedule

December 31, 2021

Customer	Balance	Current	Past Due
1. Gaide	P92,000	P -	P92,000
2. Flower Fields	420,000	248,000	172,000
3. Love Company	350,000	92,000	258,000
4. Hate Corporation	374,000	212,000	162,000
5. Hug Corp.	160,000	-	160,000
6. Blue Corporation	124,000	60,000	64,000
7. Vita Corporation	4,000	4,000	-
8. Lychee Company	256,000	80,000	176,000
9. Ox Corporation	240,000	240,000	-
Totals	P2,020,000	P936,000	P1,084,000

The Accounts Receivable control account balance was determined to be P2,020,000.

The external auditor submitted the following audit comments for possible adjustments:

1. Gaide	Merchandise found defective; returned by customer on October 31, 2021 for credit, but the credit memo was issued by Kinship only on January 15, 2022.
2. Flower Fields	Account is good but usually pays late.
3. Love Company	Merchandise worth P160,000 was destroyed while in transit on May 31, 2021, terms FOB Destination. The carrier was billed on June 15, 2021. (See Ticket To Ride Corp. and Yesterday Corp.)
4. Hate Corporation	Customer billed twice in error for P40,000. Balance is collectible.
5. Hug Corp.	Collected in full on January 31, 2022.
6. Blue Corporation	Paid in full on December 30, 2021but not recorded. Collections were deposited on January 2, 2022.
7. Vita Corporation	Received account confirmation from customer for P44,000. Investigation revealed an erroneous credit for P40,000. (See Get Back Company)
8. Lychee Company	Neglected to post P40,000 credit to customer's account.
9. Ox Corporation	Customer wants to know reason for receipt of P160,000 credit memo as their accounts payable balance was P400,000.

REQUIRED:

1. Adjusting entries as of December 31, 2021.
2. Adjusted balance of Trade AR as of December 31, 2021.

2) The following information is based on the first audit ofKaye Company.

The client has not prepared financial statements for 2019, 2020, or 2021. During these years, no accounts have been written off as uncollectible, and the rate of gross profit on sales has remained constant for each of the three years.

Prior to January 1, 2019, the client used the accrual method of accounting. From January 1, 2019 to December 31, 2021, only cash receipts and disbursements records were maintained. When sales on account were made, they were entered in the subsidiary accounts receivable ledger. No general ledger postings have been made since December 31, 2019.

As a result of your examination, the correct data shown below are available:

	12/31/2018	12/31/2021
Accounts receivable balances:
	Less than one year old	P61,600	P112,800
	One to two years old	4,800	7,200
	Two to three years old	-	3,200
	Over three years old	-	8,800
		P66,400	P132,000

Inventories

146,400

124,160

Accounts payable for inventory purchased

20,000

44,000

Cash received on accounts receivable in:	2019	2020	2021
Applied to:
	Current year sales	P595,200	P647,200	P835,200
	Accounts of the prior year	53,600	60,000	67,200
	Accounts of two year prior	2,400	1,600	8,000
Total	P651,200	P708,800	P910,400

Cash sales

68,000

104,000

124,800

Cash disbursements for inventory purchased

750,000

728,400

581,600

REQUIRED:

Compute for the gross profit for the years ended December 31, 2019, 2020 and 2021.

3. West company has the following account in its books:

Allowance for doubtful accounts, Jan. 1, 2005	P300,000
Provision for doubtful accounts during 2005 (3% of P5,000,000 sales)	150,000
Bad debts written off in 2005	187,500
Recovery of bad debts written off during 2005	50,000
Estimated doubtful accounts per aging of accounts on Dec. 31, 2005	200,000
Accounts receivable, December 31, 2005	2,375,000

REQUIRED:

1. Based on the result of your audit, determine the following:
   1. Doubtful accounts expense for 2005.
   2. Net realizable value of Accounts Receivable as of December 31, 2005.
   3. The increase(decrease) in the recorded Allowance for doubtful accounts.
   4. Adjusting journal entry.

1. Assuming there was no aging of accounts, determine the following:
   1. Doubtful accounts expense for 2005.
   2. Allowance for doubtful accounts as of December 31, 2005.

1. Assuming there was no aging of accounts and the company used 8% percent of accounts receivable method, determine the following:
   1. Doubtful accounts expense for 2005.
   2. Allowance for doubtful accounts as of December 31, 2005.