To substantiate the existence of the accounts receivable balances as at December 31, 2018, of Lukas Company, you have decided to send confirmation requests to customers. Below is a summary of the confirmation replies together with the exceptions and audit findings. Gross profit on sales is 20%. The company is under the perpetual inventory method. 

 

Name of Customer	Balance per Book	Comments From Customers	Audit Findings
Concordia	P150,000	P90,000 was returned on December 30, 2018. The correct Balance is P60,000.	Returned goods were received December 31, 2018
Falcon	P30,000	Your CM representing price adjustment dated December 28, 2018, cancel this.	The CM was taken up by Lukas Company in 2019.
Lazaro	P144,000	You have overpriced us by P150. correct price should be P300.	The complaint is valid.
Silang	P122,500	We received the goods only on January 6, 2019.	Term is shipping point. Shipped in 2018.
Yakal	P135,000	Balance was offset by our December shipment of your raw materials.	Lukas company credited accounts Payable for 135,000  to record purchases. Yakal is a supplier.

 

Questions: 

1. The overstatement of receivable from Lazaro is?
2. The effect on 2018 net income of Lukas Company of its failure to record the CM involving transaction with Falcon amounted If the necessary adjusting journal entry is made regarding the case of Concordia, the net income will be?
3. The adjusting entry to correct the receivable from Yakal is?
4. The accounts receivable from Silang is?

Answer rating: 100% (QA)

1 The overstatement of receivable from Lazaro is 400 The balance per books of accounts receivable fr... View the full answer