Samsung Co., organized on March 1, 2021, has a very poor internal control system. The companys cashier
Question:
Samsung Co., organized on March 1, 2021, has a very poor internal control system. The company’s cashier is also its accountant. After 9 months of operations, the company’s manager suspects that the cashier-accountant has been misappropriating company collections. You have been engaged to audit the company’s accounts to determine the extent of fraud, if any
You started the audit on November 15. On that date, the cash on hand per your surprise count was P5,140. Also on that date, the bank confirmed that the balance of the company’s current account was P26,328. Your examination of the records reveals that a check for P1,852 was outstanding on November 15. The company’s mark-up is 40% of sales.
Further examination of the company’s records reveals the following transactions and balances at November 15, 2021:
Ordinary shares issued for cash | P 300,000 |
Share premium from ordinary shares | 20,000 |
Real property purchased for cash | 200,000 |
Mortgage payable | 80,000 |
Furniture and fixtures (of the acquisition cost, P6,000 remains unpaid as of November 15 | 29,000 |
Notes payable - bank | 32,000 |
Accounts payable - trade | 46,284 |
Selling and administrative expenses paid | 60,756 |
Merchandise inventory at cost | 93,920 |
Accounts receivable - trade | 85,380 |
Total sales | 340,000 |
How much was paid for inventory purchases?
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield