Question

PROBLEM 3-3 Computation of Adjusted Sales and Inventories In testing the sales cut-off for the BIG LOVE COMPANY in connection with an audit for the year ended October 31, 2016, you find the following information. A physical inventory 31, 2016. All customers are within a three-day delivery area of the company's plant. The unadjusted balances of Sales and Inventories P7,500,000 and P330,000, respectively. was taken as of the close of business on October are Invoice Date Date Number FOB Terms 6671 6672 Shipped Recorded Oct. 20 Cost Sales Oct. 31 P 3,000 P2,700 Nov. 2 7,500 5,400 Oct. 29 12,600 Destination 6,000 3,600 9,300 Shipping point Oct. 31 Shipping point Oct. 25 Destination Oct. 31 6673 Oct.31 6674 6675 6676 Destination Oct. 31 Nov. 2 27,600 24,000 Oct. 23 19,500 15,300 Shipping point Nov. 2

can I have the explanation as well. thank you

Answer 1

Estimated Receiving Date Description Shiipped on recorder date (+3 Days) Sales FOB Term Inventory Remarks Unadjusted Balance 75,00,000 3,30,000 To be reported in October Invoice No 6671 Destination 20-Oct-16 31-Oct-16 23-Oct-16 Shipping Point Shipping Point -6,000 To be reported in October Invoice No 6672 31-Oct-16 02-Nov-16 03-Nov-16 7,500 To be reported in October 9,300 To be reported in November 28-Oct-16 Invoice No 6673 25-Oct-16 31-Oct-16 Invoice No 6674 Destination 31-Oct-16 29-Oct-16 03-Nov-16 -12,600 To be reported in November Invoice No 6675 Destination 31-Oct-16 02-Nov-16 03-Nov-16 Shipping Point Shipping Point 15,300 To be reported in November Invoice No 6676 02-Nov-16 23-Oct-16 05-Nov-16 -19,500 To be reported in November Invoice No 6677 05-Nov-16 06-Nov-16 08-Nov-16 28-Oct-16 -6,000 To be reported in October Invoice No 6678 Destination 25-Oct-16 03-Nov-16 11,700 Invoice No 6679 Shipping Point -25,800 24,600 To be reported in November 04-Nov-16 31-Oct-16 07-Nov-16 To be reported in November Invoice No 6680 Destination 05-Nov-16 02-Nov-16 08-Nov-16 3,67,200 74,61,300 The date to be considered for recording of sales