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AUDITING (AUD)
PROBLEM 1:
The following information was provided by Alinsod Corp. as of the
fiscal year ended September 30, 2015:
August 31 September 30
Loan proceeds directly credited by 200,000 250,000
the bank
Note payable payment by the bank 120,000 80,000
Undeposited collections 450,000 ?
Outstanding checks 180,000 ?
Total credits per bank statement 1,955,000
Total debits per bank statement 1,655,000
Total debits per books 1,795,000
Total credits per books 1,800,000
Additional information:
a. A P100,000 collections was erroneously recorded twice in the
books in September, the company discovered the error and
corrected the same immediately in September.
Requirements:
1. What is the correct cash in bank balance as of August 31, 2015?
a. 675,000 c. 720,000
b. 755,000 d. 795,000
PROBLEM 2:
NFJPIA-NCR Page 2 of 13
Audit notes:
a. The company’s term is n/60 days.
Requirements:
6. How much is the unreconciled difference between the control
account the subsidiary ledger?
a. None c. 10,000
b. 20,000 d. 30,000
PROBLEM 3:
You were assigned to audit the receivables of Sarmiento
Merchandising Company. As instructed by your audit manager, you
have performed a cut-off test of sales. The results of the cut-off
test revealed the following:
Sales 1,520,000
Cost of sales 942,000
PROBLEM 4:
You auditing Adelaida Corp.’s various liability accounts. The
following schedule of liabilities was presented to you by the
company’s accountant in relation to your audit:
Accounts payable P460,000
Warranties payable 153,250
Salaries payable 268,500
Audit notes:
a. You have rendered a purchases cut-off to ascertain the
completeness of the company’s accounts payable balance. The
following is the summary of the entries 10 days before and
after the balance sheet date and your audit observations:
2013 2014
Number of units sold 1,250 1,410
Actual warranty costs 153,000 250,000
The balance of the warranties payable is the accrued warranty
cost at the end of 2013. Actual warranty costs were charged
to current-year warranty expense. Adjusting entry at the end
of 2014 is yet to be made.
Required:
16. What is the adjusted balance of the accounts payable account?
a. 485,000 c. 443,000
b. 473,000 d. 388,000
18. What is the correct balance of the salaries payable in the form
of liability for compensated absences as of December 31, 2014?
a. 212,250 c. 220,250
b. 202,500 d. 222,750
PROBLEM 5:
Mendoza Corp. has the following non-trading equity securities on
December 31, 2015:
Fair Value
Security # of Cost (12/31/15)
Shares
ABC ordinary shares 9,000 P441,000 P46 per share
DEF ordinary shares 30,000 1,080,000 P35 per share
GHI preference shares 2,400 360,000 P154 per share
Audit notes:
a. The above securities were all bought in 2015. On the initial
recognition, Mariah made an irrevocable election to present
gain/loss on the said securities to other comprehensive income.
Requirements:
Based on the results of your audit answer the following:
21. What is the realized gain on sale of ABC ordinary shares in
2016, under PAS 39?
a. 190,000 c. 144,000
b. 171,000 d. None.
24. Assuming that the 4,200 JKL shares acquired in 2016 represent
20% interest on JKL’s outstanding ordinary shares, what is the
correct carrying value of the investment in JKL shares?
a. 371,850 c. 382,250
b. 412,250 d. 401,850
25. How should the auditor establish existence and ownership of the
non-trading equity securities subjected to the audit?
a. Corresponding with the investee company to verify the
number of shares owned.
b. Confirming the number of shares owned that are held by an
independent custodian.
c. Inspecting the audited financial statements of the
investee company.
d. Determining that the investment is carried current fair
market value.
PROBLEM 6:
Your audit of Tantoco Company’s property plant and equipment account
disclosed the following data as of December 31, 2015:
PROBLEM 7:
YambaoInc .had the following selected information in its December
31, 2015 Stockholders’ Equity portion of its balance sheet:
e. On August 15, all but 9,000 stock rights were exercised by the
ordinary shareholders.
c. Information systems
d. Monitoring
47. What is the amount or amounts set by the auditor at less than
materiality for the financial statements as a whole to reduce
to an appropriately low level the probability that the
aggregate of uncorrected and undetected misstatements exceeds
materiality for the financial statements as a whole?
a. Planning Materiality
b. Preliminary Materiality
c. Performance Materiality
d. Prudent Materiality
57. Which is true about facts after the date of the auditor's
report but before the financial statements are issued?
a. Auditor should inform the management about such facts
b. Those charged with governance should inform the management
about such facts
c. Management should inform the auditor about such facts
d. The auditor has an active duty to search for such facts
c. Advocacy Threat
d. Familiarity Threat