You have been engaged to audit MASINAG COMPANY, a trading company, for the year ended December 31, 2016. The company's unadjusted trial balance as of December 31, 2016 is presented below:

Masinag Company

UNADJUSTED TRIAL BALANCE

December 31, 2016

Debits Jan. 1 Balance after deducting credit balance of P6,000..........................F' 159,000 Charge sales ..................................................................................... 1,951,770 Charge for goods out on consignment (Note 1) ......................................... 225.000 Refund to customers for January 1 credit balance.........................................6,000 Claim against common carrier for shipping damages .................................... 9,000 IOUs from employees .............................................................................. 1.500 Advances to suppliers 15,000 Total P2 7 27 Credits Collections from customers, including overpayment of P15,000 ............. P1,950,000 Write offs ............................................................................................... 9,000 Merchandise returns and allowances ......................................................... 16,770 Collections from consignees 75000 Collections on carrier claims 4.500 [32,055,270 Balance, December 31. 2016_312_0_0_0_ Note 1 Goods delivered to consignees were marked up to 25% of cost. Unsold goods in the possession of the consignees as of December 31, 2016, costing P120,000 were not included in the ending inventory. DEBIT CREDIT Cash P 261,750 Financial assets held for trading 114,600 Accounts receivable 312,000 Allowance for doubtful accounts P 3,375 Notes receivable 180,000 Discounts on notes receivable Accounts receivable - others 4,800 Inventory, December 31, 2016 460,650 Prepaid expenses 110,700 Investment in bonds 221,490 Land and building 1,353,750 Accumulated depreciation - Building Delivery equipment 502,200 Accumulated depreciation - Delivery equipment 54,000 Other assets 15,000 Accounts payable 251,940 Bank loan payable 450,000 Accrued expenses payable 17,700 Other current liabilities 15,000 Estimated warranty payable 16,500 Ordinary share capital 1,500,000 Share premium 496,575 Retained earnings, December 31, 2015 477,966 Sales 2,085,000 Cost of sales 1,320,000 Operating expenses 514,116 Other income 25,500 Other expenses 22,500 P5,393,556 P5,393,556