Audit of Current Liabilities

Pacioli Company has the following information related to your audit of current liabilities for year 2021:

Liability for compensated absences:

Pacioli Company has two departments on which separate leave credits were given, the summary of the leaves earned and used by the employees in each department were summarized as follows:

Department 1

Pacioli Company gives each of its 50 employees 12 days of paid vacation leave a year if they are employed at the end of the year. The vacation leave accumulates and maybe taken starting January 1 of the next year. The employees work 8 hours per day. In 2020, they made P55 per hour and in 2021 they made P60 per hour. During 2021, they took an average of 9 days of vacation each. The company's policy is to record the liability existing at the end of each year at the wage rate for that year.

Department 2

Pacioli Company has 35 employees who work 8-hours a day and are paid hourly. On January 1, 2020, the company began a program of granting its employees 10 days of paid sick leave each year. Sick leaves earned in 2020 may first be taken on January 1, 2021. It is the company's policy to record the liability for compensated absences using the current year rate of the employee. The information relative to these employees is as follows: (assume FiFo)

Hourly Sick leaves earned by Sick leaves used by Year Wage each employees each employees 2019 P50.00 10 days 2020 55.00 10 days 8 days 2021 60.00 10 days 10 daysReceiving Report Date Suppliers Invoice Date/ Amount Shipment terms Shipment Date Dec. 22, 2021 Dec. 21, 2021 P120,000 |Destination point Dec. 23, 2021 Dec. 23, 2021 100,000 From Consignor Dec. 29, 2021 Dec. 27, 2021 95,000 FAS Jan. 10, 2022 Dec. 29, 2021 110,000 For approval Jan. 10, 2022 Dec. 30, 2021 102,000 C. I. F. in transit Jan. 5, 2022 Dec. 29, 2021 155,000 Destination point Jan. 7, 2022 Dec. 30, 2021 230,000 From Consignor Jan. 9, 2022 Jan. 6, 2022 190,000 Shipping Point