1. You were assigned to audit for the first time the financial statements of Pryde Inc. is merchandiser of office and school supplies and has started operations in early 2013. No audit has been made on its financial statements from its inception. The following information were gathered as a result of your audit investigations: The retained earnings general ledger entries from 2013 to current year appears below: Date particulars debit credit balance 12/31/201 3 net income P700,000 P700,000 7/1/2014 land donated by a stockholder at fair value P400,000 P1,100,000 31-Dec net income P750,000 P1,850,00 10%stock dividend declared on 10,000, P100 par value shares issued and outstanding. (fair value 6/31/2015 at P115) P100,000 P1,750,000 2-Apr loss on inventory due to flood P50,000 P1,700,000 31-Dec net income P300,000 P2,000,00 Audit notes: a. The following were omitted at each year end; 2013 2014 2015 Accrued operating expenses 90,000 98,000 Prepaid advertising expense 30,000 35,000 Unearned rent income 40,000 50,000 b. Deliveries of merchandise to customers at each year-end were recorded as sales only upon collection the following year. Good were not physically included included in each year-end count since goods were already delivered prior to any inventory counts counted 2013 2014 2015 Selling price 150,000 190,000 120,000 Cost of inventories 90.000 114.000 72.000