Question
As part of your audit of receivables of Dance Floor Corporation you performed a cut-off test of sales. Results of the cut-off test revealed the
As part of your audit of receivables of Dance Floor Corporation you performed a cut-off test of sales. Results of the cut-off test revealed the following: Recorded as Sales in December 2022 Invoice Number Selling Price Cost Terms Shipment Date Received by Customer 100123 18,000 16,500 FOB Shipping point 12/26/2022 12/29/2022 100124 12,500 10,200 FOB Destination 12/26/2022 12/29/2022 100125 8,680 7,240 FOB Destination 12/28/2022 01/02/2023 100126 14,200 12,500 Shipped to consignee 12/29/2022 01/02/2023 100127 9,000 7,500 FOB Shipping point 12/30/2022 01/02/2023 100128 10,000 7,750 FOB Destination 12/31/2022 01/03/2023 100129 7,800 6,100 FOB Shipping point 12/31/2022 01/02/2023 100130 14,000 12,000 Shipped to consignee 12/31/2022 01/02/2023 Recorded as Sales in January 2023 Invoice Number Selling Price Cost Terms Shipment Date Received by Customer 100131 21,000 18,200 FOB Shipping point 12/31/2022 01/03/2023 100132 10,500 8,800 FOB Destination 12/30/2022 01/03/2023 100133 4,500 3,200 FOB Destination 01/02/2023 01/03/2023 100134 6,500 5,000 FOB Shipping point 01/02/2023 01/05/2023 A count of all inventories within the premises was made in the afternoon of December 30, 2022 (after deliveries were made for the day). The total cost of the count was recorded as inventories as of December 31, 2022. The goods shipped to consignees are still unsold at December 31. The unadjusted ledger balances show the following: Accounts receivable - P276,500 Inventories - P425,000 Sales - P1,320,000 Cost of sales - P842,000
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