PROBLEM 1: Potterhead Corporation engaged your services as external auditor of the Company. The management of the c suspects that someone in the company is committing theft. During your audit, you were able to obtain the fol information: 1. Based on the inventory count at the end of the year the total cost of remaining inventory is Php! while the total cost of the inventory at the beginning of the year is Php 75,000. II. Based on the records provided by the accountant, the beginning balance of accounts receivable 25,000. During the year, the Company wrote-off receivable amounting to Php 5,000. III. Accounts receivable balance as of the end of the year was Php 75,000 IV. Accounts payable at the end of the year amounted to Php 75,000. The balance at the beginning year was Php 35,000. According to the finance team, the average gross profit rate was 30% of net sales. Total receipts from custom the year amounted to P500,000 while total disbursements to merchandise creditors amounted to Php 350,00 Q1: How much is the Company's sales for the year? Q2: What amount of inventory short or over must be reported? Q3: How much is the Company's purchases for the year? PROBLEM 3: ABC Company provided you the following information for the purpose of determining the amount of its inventory as of December 31, 2021: Goods located at the warehouse (physical count) 1,700,000 Goods located at the sales department (at cost) 7,900,000 Goods in-transit purchased FOB Destination 1,200,000 Goods in-transit purchased FOB Shipping Point 800,000 Freight incurred under freight prepaid for the goods purchased under FOB Shipping Point 40,000 Goods held on consignment from Smoke, Inc. 900,000 Q6: How much should be reporte as Inventory at the end of the year? PROBLEM 4: MINISO corporation hired you as auditor of the company for December 31, 2021 Financial Statements. However, on November 30, 2021 (Bonifacio Day) the Company's warehouse and all the inventories stored therein were destroyed by fire. The Company asked for your help to determine the losses incurred by the Company due to the fire: The Company's accountant provided the following data: 400,000 Purchases before the fire Total sales before the fire Beginning inventory 700,000 75,000 The warehouseman provided the following information: a. 30% of the inventory stored in the warehouse has been saved from the fire. b. 40% of the inventory was only partially damaged and can be sold at 20% of its cost The Gross profit rate based on cost is 30%. Q7: How much is the Cost of Goods Sold/Sales? Q8: How much is the inventory loss due to fire? PROBLEM 5: During your audit of Gryffindor Corporation's Inventories, your client provided the following schedule of their inventories: Selling Selling Cost per Price per Cost per Unit Unit Unit Quantity 200 300 2000 3000 1500 4000 200 350 Nimbus 2000 Firebolt Golden Snitch Wizard Robe Wizard Wand 400 5000 6000 500 100 1000 1100 200 100 500 800 50 Q9. What amount must be reported in the balance sheet as total inventories? PROBLEM 6: Your client asked for your help regarding the total amount of inventories that must be reported in their balance sheet. The accountant provided the below information regarding the purchases of the Company for the entire month of December 2021: Invoice Date Amount QTY Dec-03 300,000 400,000 Dec-10 600,000 800,000 Dec-15 1,200,000 1,800,000 Dec-17 400,000 500,000 Dec-22 600,000 750,000 Dec-25 300,000 350,000 Dec-30 200,000 275,000 The Company uses FIFO costing system. During the month of December, the Company sold 3,500,000 units of inventory for Php 4,200,000. On November 30, 2021, the remaining inventory reported was 300,000 units with a total cost of 375,000. Q10. How much should be reported as inventories at the end of the year? PROBLEM 2: JBL Corporation hired you as the Company's external auditor. During the audit of inventories, the accountant provided you with the following information: Supplier Invoice Date Date Name Amount Shipped Received Terms ABC Dec. 23, Jan. 5, Company 300,000 2021 2022 FOB Destination DEF Dec. 28, Dec. 30, Company 200,000 2021 2021 FOB Destination GHI Dec. 30, Jan. 3, Company 100,000 2021 2022 FOB Shipping Point XYZ Dec. 16, Jan. 2, Company 400,000 2021 2022 FOB Destination TUV Company 300,000 Dec. 2, Dec. 31, 2021 2021 FOB Shipping Point 1. Total inventory at the beginning of the month (December) amounted to Php 800,000. 2. Total sales for the month of December totaled to Php 2,000,000. Gross Margin is 40%. 3. Total cost of inventory per inventory count amounted to Php 850,000. Q4: How much should be reported as Inventory in the Company's balance sheet at the end of the year? Q5: How much is the shortage or overage in the inventory at the end of the year? PROBLEM 1: Potterhead Corporation engaged your services as external auditor of the Company. The management of the c suspects that someone in the company is committing theft. During your audit, you were able to obtain the fol information: 1. Based on the inventory count at the end of the year the total cost of remaining inventory is Php! while the total cost of the inventory at the beginning of the year is Php 75,000. II. Based on the records provided by the accountant, the beginning balance of accounts receivable 25,000. During the year, the Company wrote-off receivable amounting to Php 5,000. III. Accounts receivable balance as of the end of the year was Php 75,000 IV. Accounts payable at the end of the year amounted to Php 75,000. The balance at the beginning year was Php 35,000. According to the finance team, the average gross profit rate was 30% of net sales. Total receipts from custom the year amounted to P500,000 while total disbursements to merchandise creditors amounted to Php 350,00 Q1: How much is the Company's sales for the year? Q2: What amount of inventory short or over must be reported? Q3: How much is the Company's purchases for the year? PROBLEM 3: ABC Company provided you the following information for the purpose of determining the amount of its inventory as of December 31, 2021: Goods located at the warehouse (physical count) 1,700,000 Goods located at the sales department (at cost) 7,900,000 Goods in-transit purchased FOB Destination 1,200,000 Goods in-transit purchased FOB Shipping Point 800,000 Freight incurred under freight prepaid for the goods purchased under FOB Shipping Point 40,000 Goods held on consignment from Smoke, Inc. 900,000 Q6: How much should be reporte as Inventory at the end of the year? PROBLEM 4: MINISO corporation hired you as auditor of the company for December 31, 2021 Financial Statements. However, on November 30, 2021 (Bonifacio Day) the Company's warehouse and all the inventories stored therein were destroyed by fire. The Company asked for your help to determine the losses incurred by the Company due to the fire: The Company's accountant provided the following data: 400,000 Purchases before the fire Total sales before the fire Beginning inventory 700,000 75,000 The warehouseman provided the following information: a. 30% of the inventory stored in the warehouse has been saved from the fire. b. 40% of the inventory was only partially damaged and can be sold at 20% of its cost The Gross profit rate based on cost is 30%. Q7: How much is the Cost of Goods Sold/Sales? Q8: How much is the inventory loss due to fire? PROBLEM 5: During your audit of Gryffindor Corporation's Inventories, your client provided the following schedule of their inventories: Selling Selling Cost per Price per Cost per Unit Unit Unit Quantity 200 300 2000 3000 1500 4000 200 350 Nimbus 2000 Firebolt Golden Snitch Wizard Robe Wizard Wand 400 5000 6000 500 100 1000 1100 200 100 500 800 50 Q9. What amount must be reported in the balance sheet as total inventories? PROBLEM 6: Your client asked for your help regarding the total amount of inventories that must be reported in their balance sheet. The accountant provided the below information regarding the purchases of the Company for the entire month of December 2021: Invoice Date Amount QTY Dec-03 300,000 400,000 Dec-10 600,000 800,000 Dec-15 1,200,000 1,800,000 Dec-17 400,000 500,000 Dec-22 600,000 750,000 Dec-25 300,000 350,000 Dec-30 200,000 275,000 The Company uses FIFO costing system. During the month of December, the Company sold 3,500,000 units of inventory for Php 4,200,000. On November 30, 2021, the remaining inventory reported was 300,000 units with a total cost of 375,000. Q10. How much should be reported as inventories at the end of the year? PROBLEM 2: JBL Corporation hired you as the Company's external auditor. During the audit of inventories, the accountant provided you with the following information: Supplier Invoice Date Date Name Amount Shipped Received Terms ABC Dec. 23, Jan. 5, Company 300,000 2021 2022 FOB Destination DEF Dec. 28, Dec. 30, Company 200,000 2021 2021 FOB Destination GHI Dec. 30, Jan. 3, Company 100,000 2021 2022 FOB Shipping Point XYZ Dec. 16, Jan. 2, Company 400,000 2021 2022 FOB Destination TUV Company 300,000 Dec. 2, Dec. 31, 2021 2021 FOB Shipping Point 1. Total inventory at the beginning of the month (December) amounted to Php 800,000. 2. Total sales for the month of December totaled to Php 2,000,000. Gross Margin is 40%. 3. Total cost of inventory per inventory count amounted to Php 850,000. Q4: How much should be reported as Inventory in the Company's balance sheet at the end of the year? Q5: How much is the shortage or overage in the inventory at the end of the year