You obtained directly from your client, Jail Rock Corporation, and reviewed a schedule of accounts receivable as of

December 31, 2020. The schedule shows that receivable amounts to P 1,660,000. This does not agree with the balance

in the accounts receivable general ledger account. The difference may be shown below as your audit findings:

1. A special goods costing P 72,000, fabricated to order for a customer, was finished and specifically segregated

in back part of the shipping room on December 31, 2020. The customer was billed on that date and the goods

excluded from inventory although it was shipped on January 3, 2021.

2. A promissory note was issued by a customer to Jail Rock Corporation for goods purchased worth P 200,000.

The promissory note carries an interest of 12% per annum with a term of 60 days dated November 30, 2020.

This was reflected as part of accounts receivable. No interest was accrued as of year-end.

3. A review of pertinent records showed that on December 24, 2020, P 160,000 of trade accounts receivable

was factored without recourse for P 152,000. Client recorded this transaction by debiting Cash and crediting

Notes Payable - Rich Finance Company for P 152,000.

4. A review of sales documents revealed that goods having a selling price of P 100,000 were shipped to a

customer FOB shipping point on December 31, 2020, but the sale was recorded on January 4, 2021. The

goods were not included in the December 31, 2020 inventory. Client's gross profit rate is 40% of sales.

Jail Rock Corporation uses the allowance method and estimates bad debts at 1% of net sales. After consulting with a

credit manager, you believe that this is a reasonable estimate. Below is a transcript of the allowance for doubtful

accounts in the general ledger.

Allowance for Doubtful

Accounts

11/25/2020

30,000

100,000 Beg. Balance 01/01/2020

80,000 GL

12/31/2020

December 25, 2020:

To write-off the following known worthless accounts:

Allowance for Doubtful Accounts

30,000

Accounts Receivable

30,000

Benjamin Mason

8,000

Carlos Pascual

3,600

Juan Espinosa

6,400

Jonathan Hernandez

3,960

Janet Alcaraz

6,040

Total

30,000

December 31, 2020:

To record the doubtful accounts expense for the year ending December 31, 2020, computed as

follows:

Balance, January 1, 2020

100,000

Less: Accounts written off

30,000

Balance

70,000

Add: Provision for doubtful accounts

80,000

Balance, December 31, 2020 (P 15,000,000 x 1%)

150,000

Doubtful Accounts Expense

80,000

Allowance for Doubtful Accounts

80,000

On January 10, 2021 P 6,000 was received from Juan Espinosa in settlement of his account.

Based on the foregoing, answer the following questions:

Question 13:

The amount of Trade Accounts Receivable to be reported in the audited statement of financial position at December

31, 2020 is:

Question 14:

The Allowance for Doubtful Accounts to be reported in the audited statement of financial position at December 31, 2020

is:

Question 15:

The doubtful accounts expense to be reported in the audited income statement for the year ending December 31, 2020

is:

Question 16:

The net increase (decrease) in the ending inventory resulting from audit adjustments is:

Question 17:

The net increase (decrease) in net sales from audit adjustment is