Problem 10 In your year-end audit of Angela Corp., the cashier showed a cash accountability of P1,100,000 as at December 31, 2006. The following transactions were extracted in the books of the company, in summary form: Accounts receivable, beginning P 275,000 Accounts receivable, end 385,000 Sales (80% on credit) 1,850,000 Accounts written-off 25,000 Recovery of accounts written-off, included in the collection of account receivable 15,000 Depreciation of fixed assets 150,000 Inventory, end 185,000 Inventory, beg 203,000 Cost of sales 960,000 Income tax accrued 18,500 Payment of bank loan 200,000 Subscription receivable 250,000 Subscribed capital stock 950,000 Purchases of fixed assets 320,000 Proceeds from short-term bank loan 300,000 Accounts payable, end 425,000 Accounts payable, beg. 200,000 Questions 1. The correct cashier's accountability at December 31, 2006 is: a. P 1,493,000 b. P 1,123,000 c. P 793,000 d. P 423,000 2. ANGELA CORPORATION'S cash account at December31, 2006 is: a. Understated by P 307,000 b. Understated by P 393,000 c. Overstated by P 693,000 d. Overstated by P 677,000