FLORES, Nicole A

BSA 4A
AUDIT OF PREPAYMENTS

Findings and proposed adjusting entries

Since the estimated remaining office supplies is only 20% of the

original invoiced amount, an adjusting entry is necessary to correct the balance of
the office supplies.

Adjusting entry for Office Supplies

December 31, 2013
Office supplies expense 16,000
Office supplies 16,000
To record the used office supplies at the end of reporting period.

For the insurance it has a contract for 2 years and starting from the posting date.

Adjusting entry for the Insurance of office supplies

December 31, 2013
Office supplies insurance expense 8,750
Cash 8,750
To record the insurance expense for the office supplies for 10 ½ months.
FLORES, Nicole A
BSA 4A
AUDIT OF PREPAYMENTS
FLORES, Nicole A
BSA 4A
AUDIT OF FIXED ASSETS
Fixed asset Acquisition Acquisition Salvage Yearly 2013
Date Cost Value Depreciation Depreciation
Office March 29,
240,000 24,000 43,200 32,400
Equipment 2013
Office January 15,
200,000 20,000 36,000 34,500
Furniture 2013
Delivery February
1,000,000 100,000 90,000 75,000
Truck 28, 2013
Leasehold January 31,
1,500,000 150,000 67,500 61,875
Improvement 2013
TOTAL DEPRECIATION FOR 2013 Php203,775

Findings and Proposed Journal Entries

Since the accumulated depreciation for the listed fixed assets are not yet recorded in
the Sap, there is a need to record the proper depreciation expenses for the assets.

Journal entries on December 31, 2013

Depreciation expense – office equipment 32,400

Accumulated depreciation – office equipment 32,400
To record the accumulated depreciation for office equipment

Depreciation expense – office furniture 34,500

Accumulated depreciation – office furniture 34,500
To record the accumulated depreciation for office furniture

Depreciation expense – delivery truck 75,000

Accumulated depreciation – delivery truck 75,000
To record the accumulated depreciation for delivery truck

Depreciation expense – leasehold improvement 61,875

Accumulated depreciation – leasehold improvement 61,875
To record the accumulated depreciation for leasehold improvement
FLORES, Nicole A
BSA 4A