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Problem 13-14 (AICPA Adapted) In conducting an audit of Ultimate Company for the year ended June 30, 2020, the CPA observed the physical inventory at an interim date, May 31, 2020, instead of at year end. The following information was obtained from the general ledger. 875,000 Inventory, July 1, 2019 950,000 Physical inventory, May 31, 2020 Sales for 11 months ended May 31, 2020 8,400,000 Sales for year ended June 30, 2020 9,600,000 Purchases for 11 months ended May 31, 2020 before audit adjustments 6,750,000 Purchases for year ended June 30, 2020 before audit adjustments 8,000,000 1. Shipments received in May and included in the physical inventory but recorded as June purchases 75,000 b. Shipments received in unsalable condition and excluded from physical inventory. Credit memos had not been received nor had chargebacks to vendors been recorded: 10,000 Total at May 31, 2020 Total at June 30, 2020, including the May unrecorded chargebacks 15,000 c. Deposit made with vendor and charged to purchases in April, 2020. Product was shipped in July, 2020 20,000 d. Deposit made with vendor and charged to purchases in May, 2020. Product was shipped FOB destination, on May 29, 2020 and was included in May 31, 2020 physical inventory as goods in transit 55,000 e. Through the carelessness of the receiving department a June shipment was damaged by rain. This shipment was later sold in June at its cost of 100,000 376 1. What is the amount of gross profit for the eleven months ended May 31, 2020? a. 1,680,000 b. 1,725,000 c. 1,735,000 d. 1,670,000 2. What is the amount of sales for the month of June? a. 1,100,000 b. 1,200,000 c. 1,300,000 d. 1,400,000 3. What is the cost of goods sold for the month of June ? a. 960,000 b. 880,000 c. 980,000 d. 950,000 4. What is the inventory on June 30, 2020? a. 1,160,000 b. 1,240,000 c. 1,340,000 d. 1,140,000 Problem 13-15 (AICPA Adapted) On April 30, 2020, a fire damaged the office of Waterloo The following balances were gathered from the general ledger Company. * on March 31, 2020: 920,000 Accounts receivable 1,880,000 Inventory - January 1 950,000 Accounts payable 3,600,000 Sales 1,680,000 Purchases An examination of the April bank statement and canceled checks revealed checks written during the period April 1-30: 240,000 Accounts payable as of March 31 80,000 April merchandise shipments Expenses 160,000 Deposits during the same period amounted to P440,000 which consisted of collections from customers with the exception of P20,000 refund from a vendor for merchandise returned in April. Customers acknowledged indebtedness of P1,040,000 at April 30. Customers owed another P60,000 that will never be recovered. of the acknowledged indebtedness, P40,000 may prove uncollectible. Correspondence with suppliers revealed unrecorded obligations at April 30 of P340,000 for April merchandise shipment, including P100,000 for shipments in transit on that date. The average gross profit rate is 40%. * Inventory with a cost of P260,000 was salvaged and sold for P140,000. The balance of the inventory was a total loss. Ho 1. What is the total amount of sales up to April 30? a. 4,200,000 b. 4,220,000 c. 4,140,000 d. 4,160,000 2. What is the total amount of purchases up to April 30? a. 1,760,000 b. 2,100,000 c. 2,020,000 d. 1,680,000 3. What is the inventory on April 30? a. 1,476,000 b. 1,464,000 c. 1,440,000 d. 1,428,000 4. What is the fire loss to be recognized on April 30? a. 1,440,000 b. 1,300,000 c. 1,340,000 d. 1,200,000 Problem 13-14 (AICPA Adapted) In conducting an audit of Ultimate Company for the year ended June 30, 2020, the CPA observed the physical inventory at an interim date, May 31, 2020, instead of at year end. The following information was obtained from the general ledger. 875,000 Inventory, July 1, 2019 950,000 Physical inventory, May 31, 2020 Sales for 11 months ended May 31, 2020 8,400,000 Sales for year ended June 30, 2020 9,600,000 Purchases for 11 months ended May 31, 2020 before audit adjustments 6,750,000 Purchases for year ended June 30, 2020 before audit adjustments 8,000,000 1. Shipments received in May and included in the physical inventory but recorded as June purchases 75,000 b. Shipments received in unsalable condition and excluded from physical inventory. Credit memos had not been received nor had chargebacks to vendors been recorded: 10,000 Total at May 31, 2020 Total at June 30, 2020, including the May unrecorded chargebacks 15,000 c. Deposit made with vendor and charged to purchases in April, 2020. Product was shipped in July, 2020 20,000 d. Deposit made with vendor and charged to purchases in May, 2020. Product was shipped FOB destination, on May 29, 2020 and was included in May 31, 2020 physical inventory as goods in transit 55,000 e. Through the carelessness of the receiving department a June shipment was damaged by rain. This shipment was later sold in June at its cost of 100,000 376 1. What is the amount of gross profit for the eleven months ended May 31, 2020? a. 1,680,000 b. 1,725,000 c. 1,735,000 d. 1,670,000 2. What is the amount of sales for the month of June? a. 1,100,000 b. 1,200,000 c. 1,300,000 d. 1,400,000 3. What is the cost of goods sold for the month of June ? a. 960,000 b. 880,000 c. 980,000 d. 950,000 4. What is the inventory on June 30, 2020? a. 1,160,000 b. 1,240,000 c. 1,340,000 d. 1,140,000 Problem 13-15 (AICPA Adapted) On April 30, 2020, a fire damaged the office of Waterloo The following balances were gathered from the general ledger Company. * on March 31, 2020: 920,000 Accounts receivable 1,880,000 Inventory - January 1 950,000 Accounts payable 3,600,000 Sales 1,680,000 Purchases An examination of the April bank statement and canceled checks revealed checks written during the period April 1-30: 240,000 Accounts payable as of March 31 80,000 April merchandise shipments Expenses 160,000 Deposits during the same period amounted to P440,000 which consisted of collections from customers with the exception of P20,000 refund from a vendor for merchandise returned in April. Customers acknowledged indebtedness of P1,040,000 at April 30. Customers owed another P60,000 that will never be recovered. of the acknowledged indebtedness, P40,000 may prove uncollectible. Correspondence with suppliers revealed unrecorded obligations at April 30 of P340,000 for April merchandise shipment, including P100,000 for shipments in transit on that date. The average gross profit rate is 40%. * Inventory with a cost of P260,000 was salvaged and sold for P140,000. The balance of the inventory was a total loss. Ho 1. What is the total amount of sales up to April 30? a. 4,200,000 b. 4,220,000 c. 4,140,000 d. 4,160,000 2. What is the total amount of purchases up to April 30? a. 1,760,000 b. 2,100,000 c. 2,020,000 d. 1,680,000 3. What is the inventory on April 30? a. 1,476,000 b. 1,464,000 c. 1,440,000 d. 1,428,000 4. What is the fire loss to be recognized on April 30? a. 1,440,000 b. 1,300,000 c. 1,340,000 d. 1,200,000

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