SHOW THE SOLUTIONS. INCOMPLETE = DOWNVOTE

You were engaged to audit the books of accounts of E Enterprise for the year ended December 31, 2007. From the records of the Co. you gathered the following information: E Enterprises started operation on October 2, 2007 with E investing P200,000 cash. Monthly bank reconciliation statements have not been prepared for 2007; however, bank statements for October, November, and December were made available to you. Your analysis of these bank statements revealed total bank credits (deposits) of P1.140.000 including, E's initial investment and bank loan, details of which are in the additional data. The bank statement in December, 2007 showed an ending balance of P60,760 Examination of the paid checks disclosed that checks totaling P9.000 were issued by the Co. in December, 2007 and were presented for payment only in January, 2008. Cash count of the Cashier's accountability amounted to P12,600 You were told by the Cashier that P10.000 of these, in checks, were cash sales on December 29, 2007 deposited on Jan. 3, 2008. The balance, in currency and coins, represents Petty Cash Fund. Additional data: 1. Accounts receivable subsidiary ledger had a total balance of P140.000 at December 31, 2007. P10.000 of this was estimated to be uncollectible. 2. Supplier's unpaid invoices for merchandise totaled P30,000; while an account for store fixtures bought on October 2, 2007 for P100,000 had an unpaid balance of P10,000. Fixtures are depreciated at 10% per annum 3. Merchandise inventory at December 31, 2007 amounted to P60.000 4. The bank statement in October showed a bank credit for P190.000 dated October 2, 2007. Inquiry from the Cashier disclosed that the amount represents proceeds of a 90-day, 20% discounted bank note. P160.000 of this loan was paid by check in December, 2007 5. Operating expenses paid during the period totaled P351.500; while merchandise purchases amounted to P500,000 REQUIRED: d. P2,600 d. P70,760 d. P890,000 d. P560,000 d. P500,000 1. Petty cash fund as of December 31, 2007 a. P12,600 b. P5,000 c. P11,600 2. Adjusted cash balance per bank. a. P61,760 b. P51,760 c. P60,760 3. Total sales in 2007 a. P902,600 b. P910,000 c. P900,000 4. Total cash paid to suppliers for merchandise purchases. a. P500,000 b. P470,000 c. P530,000 5. Cost of sales in 2007 a. P560,000 b. P530,000 c. P440,000 6. Total operating expense in 2007. a. P371,500 b. P363,750 c. P364,000 7. Bad debts expense in 2007. a. P10,000 b. P5,000 c. P20,000 8. Depreciation expense in 2007 a. P10,000 b. P2,500 C. P5,000 9. Net income in 2007 a. P98,600 b. P96,000 c. P86,000 10. Cash shortage as of December 31, 2007 a. P14,140 b. P16,740 c. P4,140 d. P351,500 d. PO d. P2,250 d. P106,000 d. P6,740 Suggested answers: 1d 2 a 3c 4b 5c 6c 7 a 8 b 9c 10 a NEED SOLUTIONS TY