In the audit of Beatles Company, the auditor had an appreciation of the following schedule and noted some comments for possible adjustments : Customer Love M. Do Strawberry Fields This Boy Company Girl Corporation Ticket To Ride Transport Corp. Let It Be Corp. Hey Jude Get Back Company Yesterday Corp. Totals 2. Strawberry Fields 3. This Boy Company 4. Girl Corporation 5. Ticket To Ride The Accounts Receivable control account balance was determined to be P2,020,000. Transport Corp. 6. Let It Be Corp. Beatles Company Accounts Receivable Schedule December 31, 2010 The external auditor submitted the following audit comments for possible adjustments : 1. Love M. Do 7. Hey Jude Balance Current P P92,000 420,000 248,000 350,000 92,000 374,000 212,000 8. Get Back Company 9. Yesterday Corp. Past Due P92,000 172,000 258,000 162,000 - 160,000 160,000 64,000 124,000 60,000 4,000 4,000 256,000 80,000 176,000 240,000 240,000 P2,020,000 P936,000 P1,084,000 Merchandise found defective; returned by customer on October 31, 2010 for credit, but the credit memo was issued by Beatles only on January 15, 2011. Account is good but usually pays late. Merchandise worth P160,000 was destroyed while in transit on May 31, 2010, terms FOB Destination. The carrier was billed on June 15, 2010. (See Ticket To Ride Corp. and Yesterday Corp.) Customer billed twice in error for P40,000. Balance is collectible. Collected in full on January 31, 2011. Paid in full on December 30, 2010 but not recorded. Collections were deposited on January 2, 2011. Received account confirmation from customer for P44,000. Investigation revealed an erroneous credit for P40,000. (See Get Back Company) Neglected to post P40,000 credit to customers account. Customer wants to know reason for receipt of P160,000 credit memo as their accounts payable balance was P400,000. The following information is based on the first audit of Paul Company. The client has not prepared financial statements for 2008, 2009, or 2010. 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, 2008, the client used the accrual method of accounting. From January 1, 2008 to December 31, 2010, 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, 2008. As a result of your examination, the correct data shown below are available: Accounts receivable balances : Less than one year old One to two years old Two to three years old Over three years old Inventories Accounts payable for inventory purchased Cash received on AR In: Applied to: Current year sales Accounts of the prior year Accounts of two year prior Total Cash sales Cash disbursements for inventory purchased 2008 P595,200 53,600 12/31/07 P61,600 4,800 P66,400 146,400 20,000 2009 P647,200 60,000 12/31/10 P112,800 7,200 3,200 8,800 P132,000 124,160 44,000 2010 P835,200 67,200 2,400 1,600 8,000 P651,200 P708,800 P910,400 68,000 104,000 124,800 750,000 728,400 581,600 REQUIRED: Based on the above and the result of your audit, compute for the gross profit for the years ended December 31, 2008, 2009 and 2010.