[go: up one dir, main page]
Scribd
Upload
316 views2 pages

ACC12 - Auditing and Assurance Concepts and Applications 1 Midterm Examination

Uploaded by

Un known

The document is a midterm examination question that provides information about an audit of Annaleisse Corporation. It describes several accounting issues discovered in the company's financial records for 2014-2016: 1) A 3-year rent payment was fully expensed in 2015 instead of allocated; 2) Accrued salary expenses were omitted each year; 3) Revenue for delivered goods was recorded upon collection instead of delivery; 4) Advance payments to suppliers were recorded upon payment instead of receipt of goods. The question asks what the correct reported net income for 2014 should have been.

Copyright:

© All Rights Reserved
Download as PDF, TXT or read online from Scribd
Download as pdf or txt

ACC12 - Auditing and Assurance Concepts and Applications 1 Midterm Examination

Uploaded by

Un known
316 views2 pages
The document is a midterm examination question that provides information about an audit of Annaleisse Corporation. It describes several accounting issues discovered in the company's financial records for 2014-2016: 1) A 3-year rent payment was fully expensed in 2015 instead of allocated; 2) Accrued salary expenses were omitted each year; 3) Revenue for delivered goods was recorded upon collection instead of delivery; 4) Advance payments to suppliers were recorded upon payment instead of receipt of goods. The question asks what the correct reported net income for 2014 should have been.

Original Title

P 4

Copyright

© © All Rights Reserved

Available Formats

PDF, TXT or read online from Scribd

Did you find this document useful?

Is this content inappropriate?

The document is a midterm examination question that provides information about an audit of Annaleisse Corporation. It describes several accounting issues discovered in the company's financial records for 2014-2016: 1) A 3-year rent payment was fully expensed in 2015 instead of allocated; 2) Accrued salary expenses were omitted each year; 3) Revenue for delivered goods was recorded upon collection instead of delivery; 4) Advance payments to suppliers were recorded upon payment instead of receipt of goods. The question asks what the correct reported net income for 2014 should have been.

Copyright:

© All Rights Reserved
Download as PDF, TXT or read online from Scribd
Download as pdf or txt
316 views2 pages

ACC12 - Auditing and Assurance Concepts and Applications 1 Midterm Examination

Uploaded by

Un known
The document is a midterm examination question that provides information about an audit of Annaleisse Corporation. It describes several accounting issues discovered in the company's financial records for 2014-2016: 1) A 3-year rent payment was fully expensed in 2015 instead of allocated; 2) Accrued salary expenses were omitted each year; 3) Revenue for delivered goods was recorded upon collection instead of delivery; 4) Advance payments to suppliers were recorded upon payment instead of receipt of goods. The question asks what the correct reported net income for 2014 should have been.

Copyright:

© All Rights Reserved
Download as PDF, TXT or read online from Scribd
Download as pdf or txt
You are on page 1/ 2

4/4/22, 4:43 PM Midterm Examination - ACC12 - Auditing and Assurance Concepts and Applications 1 - Midterm Examination - University of Batang…

Home

ACC12 - Auditing and Assurance Concepts and Applications 1


Midterm Examination

Question 46 of 70
1 Point

PROBLEM 4

      You were engaged to audit, for the first time, the financial statements of Annaleisse Corporation for the period
ended December 31, 2016. The company which is into the distribution of construction materials and supplies in
various locations in the Northern Luzon, has started its operations in 2014. The company reported net income for
2014, 2015 and 2016 at P1,020,000, P1,450,000 and P1,805,000; respectively. Your investigations and inquiries
revealed the following information:

      a. A three-year rent covering the period 2015 to 2017, amounting to P180,000 for a warehouse in Pangasinan
was paid in advance at the beginning of 2015. The entire amount was charged to rent expense upon payment.

      b. Accrued salaries expense at the end of the following years were consistently omitted:

December 31, 2014 86,000

https://ubian.ub.edu.ph/student_take_quiz_assignment/display/31954829?part=46&results=338823671# 1/2
4/4/22, 4:43 PM Midterm Examination - ACC12 - Auditing and Assurance Concepts and Applications 1 - Midterm Examination - University of Batang…

December 31, 2015 55,000

December 31, 2016 75,000

          c. The following are the invoice prices of construction materials and supplies delivered to customers by the end of
each year under FOB Shipping Point term. While the goods were appropriately excluded from the year-end inventory
count, the related invoices were recorded in the sales journal only upon collection the following year. Gross profit margin
is at 40% based on sales.

December 31, 2014 135,000

December 31, 2016 174,000

            d. The following advance payments to suppliers at the end of each year were recorded in the purchases journal
upon payment. Goods for the said advances however were only received the following year.

December 31, 2014 105,000

December 31, 2016 122,000

      

               e. A major overhaul was done on one of the company's delivery trucks at the beginning of 2015. The
overhaul did not extend the truck's remaining life which was 5 years but it improved the truck's operating
efficiency and safety. The overhaul cost P250,000 and was charged by the company to repairs and maintenance
expense upon incurrence.

  The correct 2014

1,269,000
1.

income is:

Select the correct response:

1,269,000
1,174,000
1,069,000
1,155,000


Previous
Continue

https://ubian.ub.edu.ph/student_take_quiz_assignment/display/31954829?part=46&results=338823671# 2/2

You might also like