AUDIT OF INTANGIBLE ASSET AND PREPAYMENTS

REQUIRED: audit adjustments for the following situations you find in the records of Jasmine, Inc., which closes its accounts December 31, 20x1:

a.December 31 ,20x1

Advertising Expense12,000

Cash12,000

b.Balance of Office Supplies Expense at Dec. 31, 20x1P5,000

Balance of Office Supplies on Hand at Dec. 31, 20x1500

Inventory value of Office Supplies at Dec. 31, 20x1750

c.June 1, 20x1

Prepaid Insurance1,800

Cash1,800

Records payment of 36-month policy for fire loss on inventory

d.Balance of Factory Supplies Expense account at Dec. 31, 20x1P3,300

Physical inventory of Factory Supplies at Dec. 31, 20x1 P1,100

e.On May 1, 20x1, a three-year subscription to the Professional Journal in the amount of P1,800 was mailed in but not paid for. Subscriptions Expense was charged for the entire amount.

f.On September 1, 20x1, paid 36 months premium of P3,600 on fire and extended coverage on the building. No amortization of this premium has been recorded to date, and the full amount remains in the Prepaid Insurance account.

g.Signed a 10-year lease for a new warehouse; the closing costs of P12,000 paid on July 1, 20x1, effective date of lease, was charged to Rent Expense.

h.Paid annual dues of P1,200 on September 1, 20x21, to the Chamber of Commerce and charged Dues and Subscription Expense.

i.Subscribed to Building Reports on April 1, 20x1, agreeing to pay equal semi-annual installments of P720 each. The first payment was charged to Prepaid Dues and Subscriptions, and the second was charged to Dues and Subscriptions Expense.

j.Vacation advances were made in the amount of P6,000 on December 15, 20x1, and charged to Vacation Expense. Of this amount, P3,000 applies to vacations starting January 1, 20x2.