Audit Report Final

Account No.
101
102
103
104
104-A
105
106
107
108
109
110
111
201
202
202-A
203
203-A
204
204-A
205
205-A
301
1001
1002
1003
1004
1005
1006
1007
1008
2001
2002
2003
2004
2005
3001
3002
3003
3004
3005
4001
4002
4003
4004
4005
4006
4007
4008
4009
4010
4011
4012
4013
4014
4015
4016
4017
4018
4019
GRACE CORPORATION
Working Trial Balance
December 31, 2011
Account Name
Cash in Bank
Petty Cash Fund
Marketable Securities
Accounts Receivable
Acounts Receivable - Others
Allowance for Bad Debts
Notes Receivable
Merchandise Inventory
Accrued Interest Receivable
Prepaid Advertising
Prepaid Insurance
Unused Supplies
Input Tax
Land
Building
Accumulated Depreciation - Building
Furniture and Fixture
Accumulated Depreciation - Furniture and Fixture
Transportation Equipment
Accumulated Depreciation - Transportation Equipment
Office Equipment
Accumulated Depreciation - Office Equipment
Organization Cost
Accounts Payable
Notes Payable
Notes Payable - Non Trade
Notes Payable - Officer
SSS Medicare Premium Payable
Withholding Taxes Payable
HDMF Premiums Payable
Accrued Interest Payable
Output Tax
Ordinary Share Capital
WP Ref
C
C
D
E
E
E
E
F
E
G
G
G
P
K
K
K
K
K
K
K
K
K
M
N
O
O
O
N
N
N
N
P
T
Subscribed Ordinary Share Capital

Subscription Receivable - Ordinary Share Capital
Premium in Excess of Par Value - Ordinary Share Capital
Retained Earnings
Sales
Sales Discount
Sales Returns and Allowances
Interest Income
Purchase Discount
Cost of Sales
Salaries Expense
Supplies Expense
Taxes and Licenses
SSS Premium Expense
HDMF Premium Expense
Gasoline Expense
Light, Water & Telephone
Depreciation Expense - Building
Depreciation Expense - Furniture and Fixture
Depreciation Expense - Transporation Equipment
Depreciation Expense - Office Equipment
Amortization of Organization Cost
Bad Debts Expense
Representation Expense
Advertising Expense
Insurance Expense
Miscellaneous Expenses
Interest Expense
TOTAL
T
T
T
T
UA
UA
UA
UB
VB
VB
VB
VB
VB
VB
VB
VB
VB
VB
VB
VB
VB
VB
VB
VB
VB
VC
December 31, 2009

Debit
December 31, 2010
Credit
Debit
150,000
10,000
1,010,000
4,650,000
4,200,000
1,000,000
100,000
1,150,000
5,850,000
6,400,000
600,000
700,000
1,500,000
900,000
50,000
60,000
200,000
450,000
16,500,000
33,000,000
120,000
80,000
300,000
600,000
16,500,000
33,000,000
3,550,000
3,550,000
6,000,000
6,000,000
2,130,000
2,130,000
1,000,000
1,000,000
900,000
14,000,000
52,000
40,500
21,500
600,000
45,000,000
3,500,000
48,766,000
200,000
650,000
300,000
800,000
80,000
29,085,000
6,253,000
67,000
750,000
210,000
70,000
86,500
184,000
34,785,500
7,000,000
108,000
900,000
270,500
100,000
100,000
210,000
230,000
113,000
207,000
170,000
60,000
364,500
280,000
132,000
318,000
200,000
70,000
445,500
112,960,000
112,960,000
126,199,500
TB
ecember 31, 2010
December 31, 2011
Credit
Debit
Credit
4,709,230
1,700
9,500,000
10,318,635
497,811
2,970,000
4,402,787
38,853
50,000
50,000
300,000
1,556,422
16,500,000
53,000,000
650,000
3,550,000
355,000
6,000,000
1,200,000
2,130,000
426,000
800,000
906,500
5,124,090
3,506,500
21,000,000
62,000
52,500
29,500
1,000,000
45,000,000
1,700,000
144,720
129,600
63,200
66,565
2,470,332
70,000,000
5,000,000
2,625,000
3,500,000
5,250,000
4,481,456
112,152,313
54,539,000
866,435
1,041,475
110,000
248,853
4,520
56,646,887
24,022,840
1,411,862
910,000
1,270,500
1,100,000
1,146,000
1,223,000
650,000
355,000
1,200,000
426,000
200,000
497,811
120,000
820,520
550,000
397,938
112,065
126,199,500
213,470,960
Prepared by:
ILW
Date:
1/8/2012
Reviewed by:
Date:
RIT
1/11/2012
213,470,960
GRACE CORPORATION
Lead Schedule - Financial Assets
December 31, 2011
Account No.
Account Name
WP Ref
103
Marketable Securities
TOTAL
ORATION
l Assets
2009
Debit
1,010,000
1,010,000
2010
Credit
-
Debit
1,150,000
1,150,000
2010
2011
Credit
-
Debit
9,500,000
9,500,000
Credit
-
PAJE
Debit
Audited Balance
Credit
9,500,000
9,500,000
Prepared by:
Reviewed by:
D
Difference
8,350,000
8,350,000
Date:
Date:
Percentage
726.09%
726.09%
GRACE CORPORATION
Lead Schedule - Trade and Other Receivables

December 31, 2011
Account No.
104
0
104-A
105
107
Account Name
Accounts Receivable
Acounts Receivable - Others
Notes Receivable
TOTAL
TION
r Receivables
WP Ref
E
E
E
E
E
2009
Debit
4,650,000.00
4,200,000
600,000
9,450,000
2010
Credit
-
Debit
5,850,000.00
6,400,000
1,500,000
13,750,000
2010
2011
Credit
-
Debit
10,318,635.00
2,970,000
38,853
13,327,488
Credit
497,811
497,811
PAJE
Debit
Audited Balance
Credit
10,318,635.00
(497,811)
2,970,000
38,853
12,829,677
Prepared by:
Reviewed by:
E
Difference
4,468,635.00
(6,400,000)
(497,811)
1,470,000
38,853
(920,323)
Date:
Date:
Percentage
76.39%
-100.00%
0.00%
98.00%
0.00%
-6.69%
GRACE CORPORATION
Lead Schedule - Cash and Cash Equivalents

December 31, 2011
Account No.
101
102
Account Name
Cash in Bank
Petty Cash Fund
TOTAL
WP
Ref
C
C
PORATION
and Cash Equivalents
2009
Debit
150,000
10,000
160,000
2010
Credit
-
Debit
1,000,000
100,000
1,100,000
2010
2011
Credit
-
Debit
4,709,230
1,700
4,710,930
Credit
-
PAJE
Debit
Audited Balance
Credit
4,709,230
1,700
4,710,930
Prepared by:
Reviewed by:
C
Difference
3,709,230
(98,300)
3,610,930
Date:
Date:
Percentage
370.92%
-98.30%
328.27%
GRACE CORPORATION
Lead Schedule - Inventories
December 31, 2011
Account No.
106
Account Name
TOTAL
WP Ref
ORATION
2009
Debit
700,000
700,000
2010
Credit
Debit
-
900,000
900,000
2010
2011
Credit
-
Debit
4,402,787
4,402,787
Credit
-
PAJE
Debit
Audited Balance
Credit
4,402,787
4,402,787
Prepared by:
Reviewed by:
F
Difference
3,502,787
3,502,787
Date:
Date:
Percentage
389.20%
389.20%
GRACE CORPORATION
Lead Schedule - Prepayments and Other Current A

December 31, 2011
Account No.
108
109
110
Account Name
Prepaid Advertising
Prepaid Insurance
Unused Supplies
TOTAL
WP Ref
G
G
G
ORATION
ments and Other Current Assets
2009
Debit
50,000
60,000
200,000
310,000
2010
Credit
Debit
-
120,000
80,000
300,000
500,000
2010
2011
Credit
Debit
-
50,000
50,000
300,000
400,000
Credit
-
PAJE
Debit
Audited Balance
Credit
50,000
50,000
300,000
400,000
Prepared by:
Reviewed by:
G
Difference
(70,000)
(30,000)
(100,000)
Date:
Date:
Percentage
-58%
-38%
-20%
Account No.
201
202
202-A
203
203-A
204
204-A
205
205-A
GRACE CORPORATION
Lead Schedule - Property, Plant and Equioment

December 31, 2011
Account Name
Land
Building
Office Equipment
TOTAL
WP
Ref
K
K
K
K
K
K
K
K
K
2009
Debit
16,500,000
33,000,000
3,550,000
6,000,000
2,130,000
61,180,000
2010
Credit
-
Debit
16,500,000
33,000,000
3,550,000
6,000,000
2,130,000
61,180,000
2010
2011
Credit
-
Debit
16,500,000
53,000,000
3,550,000
6,000,000
2,130,000
78,549,000
Credit
650,000
355,000
1,200,000
426,000
PAJE
Debit
Audited Balance
Credit
16,500,000
53,000,000
650,000
3,550,000
355,000
6,000,000
1,200,000
2,130,000
426,000
78,549,000
Prepared by:
Reviewed by:
K
Difference
20,000,000
650,000
355,000
1,200,000
426,000
17,369,000
Date:
Date:
Percentage
61%
28%
GRACE CORPORATION
Lead Schedule - Intangible Assets
December 31, 2011
Account No.
301
Account Name
Organization Cost
TOTAL
WP
Ref
M
PORATION
gible Assets
2009
Debit
1,000,000
1,000,000
2010
Credit
-
Debit
1,000,000
1,000,000
2010
2011
Credit
-
Debit
800,000
800,000
Credit
-
PAJE
Debit
Audited Balance
Credit
800,000
800,000
Prepared by:
Reviewed by:
M
Difference
(200,000)
(200,000)
Date:
Date:
Percentage
-20%
-20%
GRACE CORPORATION
Lead Schedule - Trade and Other Payables
December 31, 2011
Account No.
1001
1004
1005
1006
1007
Account Name
Accounts Payable
Income Tax Payable
TOTAL
WP
Ref
N
N
N
N
N
N
RATION
r Payables
2009
Debit
-
2010
Credit
900,000.00
52,000.00
40,500.00
21,500.00
1,014,000.00
Debit
-
2010
2011
Credit
906,500.00
62,000.00
52,500.00
29,500.00
11,769,300.00
12,819,800.00
Debit
-
Credit
5,124,090.00
144,720.00
129,600.00
63,200.00
22,223,916.00
66,565.00
27,752,091.00
PAJE
Debit
Audited Balance
Credit
5,124,090.00
144,720.00
129,600.00
63,200.00
66,565.00
5,528,175.00
Prepared by:
Reviewed by:
N
Difference
4,217,590.00
82,720.00
77,100.00
33,700.00
66,565.00
(7,291,625.00)
Date:
Date:
Percentage
465%
133%
147%
114%
0%
-57%
GRACE CORPORATION
Lead Schedule - Notes Payable
December 31, 2011
Account No.
1002
1002
1003
Account Name
Notes Payable
Notes Payable - Non Trade
TOTAL
WP Ref
O
O
O
ORATION
Payable
2009
Debit
2010
Credit
14,000,000
14,000,000
Debit
-
2010
2011
Credit
21,000,000
21,000,000
Debit
-
Credit
3,506,500
1,700,000
5,206,500
PAJE
Debit
Audited Balance
Credit
3,506,500
1,700,000
5,206,500
Prepared by:
Reviewed by:
O
Difference
3,506,500
(21,000,000)
1,700,000
(15,793,500)
Date:
Date:
Percentage
0%
-100%
0%
-75%
GRACE CORP
Working Income Statement - Lead Schedule

For the Years Ended December 31, 2009-2011
Account Name
Unadjusted Balance
2011 Balance
2010 Balance
Sales
Cost of Sales
Gross Profit
110,244,403
0
110,244,403
53,439,000
0
53,439,000
Operating Expenses
Income from Operations
(36,301,471)
73,942,932
(9,688,500)
43,750,500
248,853
(112,065)
74,079,720
(22,223,916)
51,855,804
110,000
(445,500)
43,415,000
(13,024,500)
Other Income
Finance Cost
Taxable Income
Income Tax (30%)
Net Income
30,390,500
Prepared by:
Reviewed by:
ad Schedule
1, 2009-2011
d Balance
2009 Balance
47,916,000
0
47,916,000
(8,400,500)
39,515,500
80,000
(364,500)
39,231,000
(11,769,300)
27,461,700
Date:
Date:
GRACE CORPORATION
Lead Schedule - VAT Payable
December 31, 2011
Account No.
Account Name
WP
Ref
2009
Debit
1008
111
Output Tax
Input Tax
TOTAL
P
P
450,000
450,000
TION
2009
2010
Credit
600,000
600,000
Debit
600,000
600,000
Credit
1,000,000
1,000,000
2011
Debit
1,556,422
1,556,422
PAJE
Credit
2,470,332
2,470,332
Debit
PAJE
Audited Balance
Difference
Credit
2,470,332
(1,556,422)
913,910
1,470,332
(1,556,422)
(86,090)
Prepared by:
Date:
Reviewed by:
Date:
P
Percentage
147.03%
-259.40%
-21.52%
Account No.
2001
2002
2003
2004
2005
GRACE CORPORATION
Lead Schedule - Shareholders' Equity
December 31, 2011
Account Name
Ordinary Share Capital

Subscribed Ordinary Share Capital
Subscription Receivable - Ordinary Share Capital
Premium in Excess of Par Value - Ordinary Share Capital
RE Composition
Previous Balance
Dividends Declared
Net Income
Other Comprehensive Income
Retained Earnings
TOTALS
WP Ref
T
T
T
T
2009
Debit
2010
Credit
Debit
45,000,000
3,500,000
48,500,000
2010
2011
Credit
Debit
45,000,000
3,500,000
48,500,000
Credit
2,625,000
-
70,000,000
5,000,000
5,250,000
4,481,456
4,481,456
82,106,456
PAJE
Debit
Audited Balance
Credit
70,000,000
5,000,000
(2,625,000)
5,250,000
4,481,456
4,481,456
86,587,912
Prepared by:
Reviewed by:
T
Difference
25,000,000
5,000,000
(2,625,000)
1,750,000
4,481,456
4,481,456
38,087,912
Date:
Date:
Percentage
55.56%
50.00%
#DIV/0!
#DIV/0!
78.53%
GRACE CORPORATION
Lead Schedule - Net Sales
December 31, 2011
Account No.
Account Name
WP Ref
2009
Debit
3001
3002
3003
Sales
Sales Discount
Sales Returns and Allowances
TOTAL
UA
UA
UA
200,000
650,000
850,000
2009
2010
Credit
48,766,000
48,766,000
Debit
300,000
800,000
1,100,000
2011
Credit
54,539,000
54,539,000
Debit
866,435
1,041,475
1,907,910
Credit
112,152,313
112,152,313
UA
PAJE
Debit
Audited Balance
Difference
Percentage
Credit
112,152,313
(866,435)
(1,041,475)
110,244,403
57,613,313
566,435
241,475
56,805,403
Prepared by:
Date:
Reviewed by:
Date:
105.64%
188.81%
30.18%
106.30%
GRACE CORPORATION
Lead Schedule - Other Income
December 31, 2011
Account No.
Account Name
WP Ref
2009
Debit
3004
Interest Income
TOTAL
UB
Credit
-
80,000
80,000
2010
Debit
2011
Credit
110,000
110,000
Debit
PAJE
Credit
248,853
248,853
Debit
UB
PAJE
Audited Balance
Difference
Percentage
Credit
248,853
248,853
138,853
138,853
Prepared by:
Date:
Reviewed by:
Date:
126.23%
126.23%
GRACE CORPORATION
Lead Schedule - Cost of Sales
December 31, 2011
Account No.
4001
3005
Account Name
Cost of Sales
Purchase Discount
TOTAL
WP Ref
ORATION
2009
Debit
29,085,000
29,085,000
2010
Credit
-
Debit
34,785,500
34,785,500
2010
2011
Credit
-
Debit
56,646,887
56,642,367
Credit
4,520
PAJE
Debit
Audited Balance
Credit
56,646,887
4,520
56,642,367
Prepared by:
Reviewed by:
VA
Difference
21,861,387
4,520
21,856,867
Date:
Date:
Percentage
63%
0%
63%
Account No.
4002
4003
4004
4005
4006
4007
4008
4009
4010
4011
4012
4013
4014
4015
4016
4017
4018
GRACE CORPORATION
Lead Schedule - Operating Expenses
December 31, 2011
Account Name
Salaries Expense
Supplies Expense
Taxes and Licenses
SSS Premium Expense
HDMF Premium Expense
Gasoline Expense
Light, Water & Telephone
Depreciation Expense - Furniture and Fixture
Depreciation Expense - Office Equipment
Amortization of Organization Cost
Bad Debts Expense
Advertising Expense
Insurance Expense
TOTAL
WP
Ref
VB
VB
VB
VB
VB
VB
VB
VB
VB
VB
VB
VB
VB
VB
VB
VB
VB
2009
Debit
6,253,000
67,000
750,000
210,000
70,000
86,500
184,000
230,000
113,000
207,000
170,000
60,000
8,400,500
2010
Credit
-
Debit
7,000,000
108,000
900,000
270,500
100,000
100,000
210,000
280,000
132,000
318,000
200,000
70,000
9,688,500
2010
2011
Credit
-
Debit
24,022,840
1,411,862
910,000
1,270,500
1,100,000
1,146,000
1,223,000
650,000
355,000
1,200,000
426,000
200,000
497,811
120,000
820,520
550,000
397,938
36,301,471
Credit
-
PAJE
Debit
Audited Balance
Credit
24,022,840
1,411,862
910,000
1,270,500
1,100,000
1,146,000
1,223,000
650,000
355,000
1,200,000
426,000
200,000
497,811
120,000
820,520
550,000
397,938
36,301,471
Prepared by:
Reviewed by:
VB
Difference
17,022,840
1,303,862
10,000
1,000,000
1,000,000
1,046,000
1,013,000
650,000
355,000
1,200,000
426,000
200,000
217,811
(12,000)
502,520
350,000
327,938
26,612,971
Date:
Date:
Percentage
243.18%
1207.28%
1.11%
369.69%
1000.00%
1046.00%
482.38%
0.00%
0.00%
0.00%
0.00%
0.00%
77.79%
-9.09%
158.03%
175.00%
468.48%
GRACE CORPORATION
Lead Schedule - Finance Cost
December 31, 2011
Account No.
4019
Account Name
Interest Expense
TOTAL
WP Ref
VC
ORATION
2009
Debit
364,500
364,500
2010
Credit
Debit
-
445,500
445,500
2010
2011
Credit
Debit
-
Credit
112,065
112,065
PAJE
Debit
Audited Balance
Credit
112,065
112,065
Prepared by:
Reviewed by:
VC
Difference
(333,435)
(333,435)
Date:
Date:
Percentage
-74.85%
Work
ACCOUNT TITLE
ASSETS
Current Assets
Cash and Cash Equivalents
Financial Assets
Short- term Investments
Trade and Other Receivables (net)
Prepayments
TOTAL CURRENT ASSETS
Non-current Assets
Property, Plant and Equipment (net)
Intangibles Assets
TOTAL NONCURRENT ASSETS
TOTAL ASSETS
LIABILITIES AND EQUITY
Current Liabilities
Trade and Other Payables
Notes Payable
VAT Payable
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
Shareholder's Equity
Share Capital
Subscribed Share Capital
Subscription Receivable
Additional Paid-in Capital
Retained Earnings
TOTAL EQUITY
WP Ref
C
D
TOTAL LIABILITIES AND EQUITY
GRACE CORPORATION
Working Statement of Financial Position- Le

As of December 31, 2011, 2010, 20
Balances (Php) December
31, 2009
Balances (Php) December

31, 2010
160,000
1,010,000
1,100,000
1,150,000
9,450,000
700,000
200,000
11,520,000
13,750,000
900,000
300,000
17,200,000
61,180,000
1,000,000
62,180,000
73,700,000
61,180,000
1,000,000
62,180,000
79,380,000
1,014,000
14,000,000
150,000
15,164,000
15,164,000
12,819,800
21,000,000
400,000
34,219,800
34,219,800
45,000,000
-
45,000,000
-
15,164,000
34,219,800
ACE CORPORATION
nt of Financial Position- Lead Schedule

ecember 31, 2011, 2010, 2009
Unadjusted (Php)
December 31, 2011
Adjustments (Php)
Debit
Credit
4,710,930
9,500,000
12,829,677
4,402,787
300,000
31,743,394
78,549,000
800,000
79,349,000
111,092,394
27,752,091
5,206,500
913,910
33,872,501
33,872,501
5,000,000
5,000,000
38,872,501
Adjusted (Php)
12/31/2011
4,710,930
9,500,000
Increase/Decrease (Php)
3,610,930
8,350,000
Percentage
Change
328.27%
726.09%
12,829,677
4,402,787
300,000
31,743,394
(920,323)
3,502,787
14,543,394
-6.69%
389.20%
0.00%
78,549,000
800,000
79,349,000
111,092,394
17,369,000
(200,000)
17,169,000
31,712,394
28.39%
-20.00%
5,528,175
5,206,500
913,910
11,648,585
11,648,585
(7,291,625)
(15,793,500)
(86,090)
(23,171,215)
(23,171,215)
-56.88%
-75.21%
-21.52%
25,000,000
5,000,000
(2,625,000)
4,481,456
0.00%
55.56%
0.00%
0.00%
0.00%
70,000,000
5,000,000
(2,625,000)
4,481,456
16,130,041
(18,689,759)
Prepared by:
Date:
Reviewed by:
Date:
GRACE CO
Working Cash Flow Statem

December 31 2011
ACCOUNT TITLE
OPERATING ACTIVITIES
Net Income before Tax
Adjustments to reconcile net income to net operating income
before working capital changes
Depreciation
Amortization
Bad Debts Expense
Gain on Sale of Securities
Unrealized Gain/Losses
Loss on Obsolescence
Interest Income
Interest Expense
Operating Income Before Capital Changes
Changes in Operating Assets and Liabilities

(Increase) Decrease in Marketable Securities
(Increase) Decrease in Trade and Other Payables
(Increase) Decrease in Merchadise Inventory
(Increase) Decrease in Prepaid Expenses
Increase (Decrease) in Trade and Other Payables
Increase (Decrease) in Income Tax Payable
Cash Generated from Operations
Accrued Expenses Paid
Income Taxes Paid
Net Cash (used) provided by Operating Activities
INVESTING ACTIVITIES
Acquisition of Property, Plant and Equipment
Recognition of Amortization Cost as an Intangible Asset
Sale of an Intangible Asset
PCIB Time Deposit
Net Cash (used) provided by Investing Activities

FINANCING ACTIVITIES
Due to related party
Payment of Notes Payable
Increase in Notes Payable
Subscription Receivable
Issuance of Shares
Dividends Payable
Net Cash (used) provided by Financing Activities
NET CASH
Add: Beginning Cash Balance
CASH BALANCE: DEC 31
GRACE CORP
Cash Flow Statement - Lead Schedule

ecember 31 2011, 2010, 2009
WP
Ref
IS
Adjusted Balance
2009
Adjusted Balance
2010
(11,769,300)
Adjusted Balance
2011
(22,223,916)
rating income
les
les
VB
VB
VB
UB
UB
VB
UB
VC
WBS
WBS
WBS
WBS
WBS
WBS
es
ible Asset
WBS
WBS
230,000
280,000
2,631,000
200,000
497,811
(80,000)
364,500
514,500
(110,000)
445,500
(11,153,800)
(248,853)
112,065
(19,031,893)
#VALUE!
0
0
0
0
0
#VALUE!
0
(9,450,000)
(700,000)
0
14,000,000
(940,000)
0
(4,300,000)
(200,000)
0
7,000,000
#VALUE!
#VALUE!
(17,471,893)
0
0
0
0
61,180,000
0
0
0
0
es
WBS
WBS
WBS
WBS
WBS
WBS
61,180,000
0
0
0
0
0
1,014,000
0
0
11,805,800
0
0
0
1,014,000
11,805,800
#VALUE!
0
#VALUE!
#VALUE!
0
#VALUE!
(5,666,093)
0
(5,666,093)
Prepared by:
Date:
Reviewed by:
Date:
Adjusted Balance
2011
(22,223,916)
2,631,000
200,000
497,811
(248,853)
112,065
(19,031,893)
(940,000)
0
(4,300,000)
(200,000)
0
7,000,000
(17,471,893)
0
0
0
11,805,800
0
0
0
11,805,800
(5,666,093)
0
(5,666,093)
GRACE CO
Proposed Adju
For the Years Ended
Date
Account Title
2011
31-Dec C-1
C-1
Accounts Receivable
C-1
Petty Cash
C-1
Cash Short and Over
Petty Cash
Cash in Bank
Discount on Notes Payable
Notes Payable
Miscellaneous Expense
Cash in Bank
Accounts Receivable
Accounts Receivable - Gwendo Reyes
10
Accounts Receivable - Sampollo Company
11
Accounts Receivable - J.R. Alano Trading
12
Accounts Receivable - Susan de Leon
13
Sales
Output Tax
14
Cash
15
Accounts Receivable - Chad Acosta
16
Sales
17
Sales
Output VAT
18
Accounts Receivable - Ida Company
19
Accounts Receivable - Benitez Merchandising
20
Cash
21
Accounts Receivable
22
Cash
23
Cash
24
Cash
25
Bad Debts Expense
26
27
28
29
GRACE CORPORATION
Proposed Adjusted Journal Entries
For the Years Ended December 31, 2009-2011
Account Title
Petty Cash
Accrued Expense Payable
To record unreplenished expense.
WP Ref
C
N
Accounts Receivable
Petty Cash Fund
To record Advances or I.O.U.s to employees.
Petty Cash
Cash Short and Over
To record cash overage
Cash Short and Over
Miscellaneous Income
To reclassify cash overage to miscellaneous income.
Cash in Bank
To record proceeds of promissory note
Cash in Bank
To record bank service charge
Cash in Bank
Notes Receivable
To record collection of notes receivable
Accounts Receivable
Cash in Bank
To reverse entry for the receipt of a postdated check.
VB

Advances from Customers
To reclassify credit balances of Gwendo Reyes
To reclassify account balances erroneously recorded in wrong SL
To reclassify payments made by Sampollo OR #110
Sales
Output Tax
To record overstatement of SI #1258

To record payment made by Susan. OR #122
To reclassify payment made by Susan de Leon, OR #112
Sales
Accounts Receivable - Anna Reyes
To derecognize sales made to Anna due to lack of supporting documents
Sales
Output VAT
Sales
Output tax
To record understatement of SI #1256

Sales
Output Tax
To record SI #1266

To record payment by Benitez OR # 121
Accounts Receivable
Sales
To record sales to Louie Tan
Accounts Receivable
To record payment made by Louie Tan OR #118
Cash
Output Tax
Sales
To record the unrecorded Sales Invoice No. 1264
Output Tax
Sales
To record unrecorded Sales Invoice No. 1265
Bad Debts Expense
To record adjustments to Allowance for Bad Debts
ORATION
ournal Entries
mber 31, 2009-2011
Debit
Credit
Posting Stat
800.00
800.00
2,800.00
2,800.00
1,704.00
1,704.00
1,704.00
1,704.00
7,900,000
2,100,000
10,000,000
2,500
2,500
490,000
10,000
500,000
85,113
85,113
50,000
50,000
730,350
730,350
580,350
580,350
681,000
681,000
1,364
136
1,500
204,475
202,975
1,500
681,000
681,000
300,000
300,000
68
7
75
10
9
1
232,000
210,909
21,091
93,750
93,750
484,000
484,000
484,000
484,000
165,550
15,050
150,500
186,250
16,932
169,318
2,306
2,306
GRACE CORPORATION
Cash Count
December 31, 2011
I. OBJECTIVES
1
2
3
To verify the existence of cash on hand and petty cash fund at year en
To determine that cash on hand and petty cash fund are properly value
To determine that cash on hand and petty cash fund of the client are r
Existence
II. ASSERTIONS
III. PROCEDURES
1
2
3
4
5
6
Performed surprise cash count

Controlled all cash funds and negotiable instruments held by the clien
Performed cash count in the presence of the Cash Custodian
Listed each item in the fund showing the denominations of bills and co
Obtained Cash Custodian's signature to acknowledge the return of item
Reconciled items counted with general ledger balances
IV. FINDINGS
CASH
DENOMINATION
BILLS
500
200
100
50
20
COINS
10
5
1
1
TOTAL BILLS AND COINS

CASH ITEMS
Check for Deposits
Date
12.28.2011
12.30.2011
12.30.2011
12.31.2011
12.31.2011
Maker
Louie Tan
Eagle Contractor
Dynasty Construction
Benitez Merchandising
Susan de Leon
Unreplenished Vouchers
Date
12.10.11
12.10.11
12.18.11
12.20.11
12.21.11
12.29.11
Payee
Luigi's Deli
Mobilshel Gasoline Station
Mr. Jose Castro
MWSS
Bureau of Posts
Mobilshel Gasoline Station
Advances or I.O.U.s
Date
12.29.11
12.29.11
Payee
Maricel Pastor
Jon Sandoval
Total Amount of Fund per Count

Total Amount of Fund per Books or Receipts
Petty Cash Fund per Ledger
Undeposited Collections
OVERAGE
I hereby certify that the above fund was counted in my presence by Rhena
______________
1
2
3
4
5
A check with OR # 119 is erroneously included as P165,560 in the cas
The list of checks for deposit included PNB Check #203 dated January
The unreplenished vouchers are Petty Cash Voucher Nos. 0801-0806.
The telephone bill to PLDT in the Petty Cash Book of P800 is not suppo
Petty Cash Voucher Nos. 0807 and 0808 are Advances and I.O.U.s
Proposed Adjusting Journal Entries:

Petty Cash Fund
Accrued Expense Payable
To correct entry made in recording telephone bill not supported b
Accounts Receivable
Petty Cash Fund
To record Advances or I.O.U.s to employees.
Petty Cash Fund
Miscelleneous Income
To record overage.
LEGEND:
- Computations Verified
- Footed
- Checked Against General Ledger
V. CONCLUSIONS
The existence of the recorded cash and petty cash fund of the client had been
RATION
on hand and petty cash fund at year end

and petty cash fund are properly valued.
and petty cash fund of the client are reflected on the Statement of Financial Position at year end
egotiable instruments held by the client until all the funds have been counted
esence of the Cash Custodian
owing the denominations of bills and coins
ature to acknowledge the return of items counted
general ledger balances
CASH COUNT SHEET

QUANTITY
AMOUNT
1
1
2
3
5
500
200
200
150
100
9
20
50
20
90
100
50
10
40
C-1.4
C-1.4
C-1.4
C-1.4
C-1.4
484,000
165,550
186,250
93,750
204,475
C1.2
C1.2
C1.2
C1.2
C1.2
C1.2
2,000
2,050
250
500
150
2,550
C-1.3
C-1.3
2,550
250
10,000
1,134,025
Payee
Grace
Grace
Grace
Grace
Grace
Corporation
Corporation
Corporation
Corporation
Corporation
Particulars
Gasoline
Taxi Fare
Water Bill
Stamps
Gasoline
was counted in my presence by Rhenalyn I. Tarucan of WC & Co., on January 5, 2012 at 8:00 AM and the same w
me intact.
_______________________________________
Cashier
eously included as P165,560 in the cash count made by the client instead of P165,550.
cluded PNB Check #203 dated January 15, 2012 is a post-dated check and is not included in the cash count for t
e Petty Cash Voucher Nos. 0801-0806.
e Petty Cash Book of P800 is not supported by a Petty Cash Voucher.
nd 0808 are Advances and I.O.U.s
800
ecording telephone bill not supported by a PCV.

2,800
U.s to employees.
1,704
d petty cash fund of the client had been verified through the cash count sheet. Adjusting entries are recommend
C-1
t year end
TOTAL
1,150
254
1,404
C4
1,134,025
7,500
2,800
1,145,729
1,144,025
1,704
8:00 AM and the same was returned to
ed in the cash count for the year-ended December 31, 2011.
800
2,800
1,704
g entries are recommended.
Prepared by:
RIT
Reviewed by:
LCC
Date:
2/6/2012
Date:
2/26/2012
CASH
Cash account conducted before the start of business on January 5, 2012 at 8:00 AM yielded the
following
COINS
Denominations
P
10.00
5.00
1.00
0.50
0.10
Qty.
9
20
50
20
40
CHECKS
Date
12.28.2011
12.30.2011
12.30.2011
12.31.2011
12.31.2011
01.03.2012
Number
PCIB Check #2255
FEBTC Check #408
PNB Check #1122
PCIB Check #4425
FEBTC Check #775
PNB Check #203 (dated Jan.
15, 2012)
OR
118
119
120
121
122
123
UNUSED STAMPS
11 pieces @ P 5.50
Vouchers for unreplenished expenses and advances were available on this date and found in order.
C-1.1
uary 5, 2012 at 8:00 AM yielded the
CURENCY
Denominations
P
Qty.
1
1
2
3
5
500.00
200.00
100.00
50.00
20.00
Drawer
Louie Tan
Eagle Contractor
Susan de Leon
Luli Samson
able on this date and found in order.
C1.4
C1.4
Amount
484,000.00
165,560.00
186,250.00
93,750.00
204,475.00
29,725.00
C1
C1
C1
C1
C1
<traced to C-1.4 OR
<traced to C-1.4 OR
<traced to C-1.4 OR
<traced to C-1.4 OR
<traced to C-1.4 OR
PETTY CASH BOO

PETTY CASH FUND
DATE
PAYEE
EXPLANATION
PCV.
NO.
RECEIPTS
PAYMENTS
2011
Dec.1 Balance
8 Luigi's Deli
10,000.00
Refreshment
0800
C1.3
2,000.00
Gasoline
0801
C1.3
2,050.00
15 PLDT
Telephone Bill
0802
18 Co. Messenger
Taxi Fare
0803
20 MWSS
Water Bill
0804
21 Bureau of Posts
Stamps
Gasoline
10 Mobilshel Gasoline
Station
800.00
250.00
0805
C1.3
C1.3
C1.3
0806
C1.3
2,550.00
500.00
150.00
29 Mobilshel Gasoline
Station
10,000.00
8,300.00
C-1.2
TTY CASH BOOK

DISTRIBUTION OF PAYMENTS
REPRESENTATION
LIGHT, WATER
& TELEPHONE
GASOLINE
SUNDRIES
ACCOUNTS
AMOUNT
2,000.00
2,050.00
800.00
Transpostation Expense
250.00
Supplies - Office
150.00
500.00
2,000.00
###
2,550.00
1,300.00
4,600.00
400.00
PETTY CASH VOUCHER
LUIGI'S DELI
TO:
PARTICULARS
APPROVED BY:
PAID BY:
__________________________
__________________________
PETTY CASH VOUCHER
MOBILSHEL GASOLINE STATION
TO:
PARTICULARS
Gasoline expense for delivery of merchandise

to Benitez Merchandising
APPROVED BY:
PAID BY:
__________________________
__________________________
PETTY CASH VOUCHER

TO:
MR. JOSE CASTRO

PARTICULARS
Transportation expense
taxi fare
APPROVED BY:
PAID BY:
__________________________
__________________________
PETTY CASH VOUCHER

TO:
MANILA WATER WORKS & SEWERAGE SYSTEM (MWSS)

PARTICULARS
Water Bill
APPROVED BY:
PAID BY:
__________________________
__________________________
PETTY CASH VOUCHER

TO:
BUREAU OF POSTS
PARTICULARS
Stamps
APPROVED BY:
PAID BY:
__________________________
__________________________
PETTY CASH VOUCHER
MOBILSHEL GASOLINE STATION
TO:
PARTICULARS
Gasoline expense
premium gasoline
APPROVED BY:
PAID BY:
__________________________
__________________________
PETTY CASH VOUCHER
JON SANDOVAL
TO:
PARTICULARS
I.O.U.
APPROVED BY:
PAID BY:
__________________________
__________________________
PETTY CASH VOUCHER
MARICEL PASTOR
TO:
PARTICULARS
I.O.U.
APPROVED BY:
PAID BY:
__________________________
__________________________
C-1.3
NO.
DATE
December 10, 2011
AMOUNT
TOTAL
2,000.00
2,000.00 C1.2
RECEIVED BY:
_______________
_______________
0801
__________________________
NO.
DATE
0802
December 10, 2011
AMOUNT
TOTAL
2,050.00
2,050.00 C1.2
RECEIVED BY:
__________________________
NO.
DATE
0803
December 18, 2011
AMOUNT
TOTAL
250.00
250.00 C1.2
RECEIVED BY:
_______________
__________________________
0804
NO.
DATE
December 20, 2011
AMOUNT
TOTAL
500.00
500.00 C1.2
RECEIVED BY:
_______________
_______________
__________________________
0805
NO.
DATE
December 21, 2011
AMOUNT
TOTAL
150.00
150.00 C1.2
RECEIVED BY:
__________________________
NO.
DATE
0806
December 29, 2011
AMOUNT
TOTAL
2,550.00
2,550.00 C1.2
RECEIVED BY:
_______________
__________________________
0808
NO.
DATE
<unr
December 29, 2011
AMOUNT
TOTAL
250.00
250.00
RECEIVED BY:
_______________
__________________________
NO.
DATE
0807
December 29, 2011
AMOUNT
TOTAL
2,550.00
2,550.00
RECEIVED BY:
<unr
_______________
__________________________
Grace
OFFICIAL RECEIPT
CORPORATION
No.
12 Ninoy Aquino Avenue, Paranaque City | Tel: 632 8
VAT 2011-002-148 | TIN 4004-009-175
Telefax: 632 843 7690 | Website: www.gracecorporatio
Received from:
Date:
Legarda Company
December 1,2011
The sum of:
Invoice no.
Two hundred twenty four thousand five hundred pesos only
1121
In settlement of:
Invoice # 1121
Cash:
Checks:
PNB 481853
224,500.00
Total
224,500.00
Received by:
TOTAL
Grace
OFFICIAL RECEIPT
CORPORATION
No.
VAT 2011-002-148 | TIN 4004-009-175
Received from:
Date:
Susan de Leon
December 1,2011
The sum of:
Invoice no.
One million thirty eight thousand eight hundred pesos only

In settlement of:
1125
less:
Invoice # 1125
discount
Cash:
Checks:
RCBC 329864
1,038,800.00
Total
1,038,800.00
Received by:
TOTAL
Grac
e
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
Received from:
OFFICIAL RECEIPT
No.
Date:
December 5,2011
The sum of:
Invoice no.
Three hundred sixty two thousand six hundred pesos only

In settlement of:
1125
discount
Invoice # 1135
Cash:
Checks:
SBTC 928421
362,600.00
Total
362,600.00
Received by:
TOTAL
Grac
e
OFFICIAL RECEIPT
CORPORATION
No.
VAT 2011-002-148 | TIN 4004-009-175
Received from:
Date:
Johann Morales
December 8,2011
The sum of:
Invoice no.
Five hundred thousand pesos only
1133
In settlement of:
Invoice # 1133
Cash:
Checks:
PCIBank 4825
500,000.00
Total
500,000.00
Received by:
TOTAL
Grace
OFFICIAL RECEIPT
CORPORATION
No.
VAT 2011-002-148 | TIN 4004-009-175
Received from:
Date:
Solomon Enterprises
December 8,2011
The sum of:
Invoice no.
Four hundred ninety thousand pesos only
1149
In settlement of:
less: returns
Invoice # 1149
discount
Cash:
Checks:
CBC 123498
490,000.00
Total
490,000.00
Received by:
TOTAL
Grace
OFFICIAL RECEIPT
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
Received from:
Eagle Contractors
The sum of:
Two hundred forty one thousans eight hundred eighty eight pesos only
No.
Date:
December 11,2011
Invoice no.
1251
In settlement of:
less: discount
Invoice # 1251
Cash:
Checks:
RCBC 728465
241,888.00
Total
241,888.00
Received by:
TOTAL
Grace
OFFICIAL RECEIPT
CORPORATION
No.
VAT 2011-002-148 | TIN 4004-009-175
Received from:
Date:
Ida Coronel
December 12,2011
The sum of:
Invoice no.
Five hundred twenty eight thousand pesos only
1152
In settlement of:
Invoice # 1152
Cash:
Checks:
BPI 249169
528,000.00
Total
528,000.00
Received by:
TOTAL
Grace
OFFICIAL RECEIPT
CORPORATION
No.
VAT 2011-002-148 | TIN 4004-009-175
Received from:
Date:
Luli Samson
December 12,2011
The sum of:
Invoice no.
Eight hundred forty five thousand pesos only
1231
In settlement of:
Invoice # 1231
Cash:
Checks:
BPI 249169
845,000.00
Total
845,000.00
Received by:
TOTAL
Grace
OFFICIAL RECEIPT
CORPORATION
No.
VAT 2011-002-148 | TIN 4004-009-175
Received from:
Date:
Valera Company
December 15,2011
The sum of:
Invoice no.
Four hundred ten thousand pesos only
1070
In settlement of:
Invoice # 1070
Cash:
Checks:
RCBC # 876521
410,000.00
Total
410,000.00
Received by:
TOTAL
Grace
OFFICIAL RECEIPT
CORPORATION
No.
VAT 2011-002-148 | TIN 4004-009-175
Received from:
Date:
Sampollo Company
December 12,2011
The sum of:
Invoice no.
Fifty six thousand eight hundred seventy four pesos only

In settlement of:
1253
less: discount
Invoice # 1253
Cash:
P 56, 874.00
Checks:
P
Total
56,874.00
Received by:
TOTAL
Grace
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
Received from:
Cora Tayag
OFFICIAL RECEIPT
No.
Date:
December 17,2011
The sum of:
Invoice no.
Seven hundred fifty seven thousand five hundred pesos only
1100
In settlement of:
Invoice # 1100
Cash:
Checks:
PCIBank 246810
757,500.00
Total
757,500.00
Received by:
TOTAL
Grace
OFFICIAL RECEIPT
CORPORATION
No.
VAT 2011-002-148 | TIN 4004-009-175
Received from:
Date:
Susan de Leon
December 1,2011
The sum of:
Invoice no.
Six hundred eighty one thousand pesos only
1242
In settlement of:
Invoice # 1242
Cash:
Checks:
RCBC 369125
681,000.00
Total
681,000.00
Received by:
TOTAL
Grace
OFFICIAL RECEIPT
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
Received from:
Date:
December 20,2011
The sum of:
Invoice no.
Nine hundred eighty thousand pesos only
1254
In settlement of:
1255
Invoice # 1254, 1255

Cash:
No.
total
P
less:
Checks:
returns
PCIBank 481265
980,000.00
Total
980,000.00
discounts
Received by:
TOTAL
Grace
OFFICIAL RECEIPT
CORPORATION
No.
VAT 2011-002-148 | TIN 4004-009-175
Received from:
Date:
Building Blocks, Inc.
December 23,2011
The sum of:
Invoice no.
One hundred eighty seven thousand two hundred pesos only

In settlement of:
1259
1260
Invoice # 1259, 1260

Cash:
Checks:
PNB 510152
187,200.00
Total
187,200.00
Received by:
TOTAL
Grace
OFFICIAL RECEIPT
CORPORATION
No.
VAT 2011-002-148 | TIN 4004-009-175
Received from:
Date:
The sum of:
Invoice no.
Four thousand six hundred twenty five pesos only
1252
In settlement of:
Invoice # 1252
Cash:
4,625
Checks:
P
Total
4,625.00
Received by:
TOTAL
Grace
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
Received from:
OFFICIAL RECEIPT
No.
Date:
M. Paredes
December 26,2011
The sum of:
Invoice no.
Two million six hundred twenty five thousand pesos only

In settlement of:
Subscription
Payment
Subscription Fee
Cash:
Checks:
RCBC 481216
2,625,000.00
Total
2,625,000.00
Received by:
TOTAL
Grace
OFFICIAL RECEIPT
CORPORATION
No.
VAT 2011-002-148 | TIN 4004-009-175
Received from:
Date:
Luli Samson
December 26,2011
The sum of:
Invoice no.
Eighty five thousand one hundred thirteen pesos only

In settlement of:
1257
less: discount
Invoice # 1257
Cash:
Checks:
Total
85,113.00
85,113.00
Received by:
TOTAL
Grace
OFFICIAL RECEIPT
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
Received from:
Date:
Louie Tan
December 28,2011
The sum of:
Invoice no.
Four hundred eighty four thousand pesos only
1240
In settlement of:
Invoice # 1240
Cash:
Checks:
PCIB 2255
No.
484,000.00
Total
484,000.00
Received by:
TOTAL
Grace
OFFICIAL RECEIPT
CORPORATION
No.
VAT 2011-002-148 | TIN 4004-009-175
Received from:
Date:
Eagle Contractos
December 30,2011
The sum of:
Invoice no.
One hundred sixty five thousand five hundred fifty pesos only
1264
In settlement of:
Invoice # 1264
Cash:
Checks:
FEBTC 408
165,550.00
Total
165,550.00
Received by:
TOTAL
Grace
OFFICIAL RECEIPT
CORPORATION
No.
VAT 2011-002-148 | TIN 4004-009-175
Received from:
Date:
December 30,2011
The sum of:
Invoice no.
One hundred eighty six thousand two hundred fifty pesos only
1265
In settlement of:
Invoice # 1265
Cash:
Checks:
PNB 1122
186,250.00
Total
186,250.00
Received by:
TOTAL
Grace
OFFICIAL RECEIPT
CORPORATION
No.
VAT 2011-002-148 | TIN 4004-009-175
Received from:
Date:
December 31, 2011
The sum of:
Invoice no.
Ninety three thousand seven hundred fifty pesos only
1266
In settlement of:
Cash:
Checks:
PCIB 4425
93,750.00
Total
93,750.00
Received by:
TOTAL
Grace
OFFICIAL RECEIPT
CORPORATION
No.
VAT 2011-002-148 | TIN 4004-009-175
Received from:
Date:
Susan de Leon
December 31, 2011
The sum of:
Invoice no.
Two hundred four thousand four hundred seventy five pesos only
1258
In settlement of:
Cash:
Checks:
FEBTC 775
204,475.00
Total
204,475.00
Received by:
TOTAL
Grace
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
Received from:
Luli Samson
OFFICIAL RECEIPT
No.
Date:
January 3,2005
The sum of:
Invoice no.
Twenty nine thousand seven hundred twenty five pesos only
1268
In settlement of:
Invoice # 1268
Cash:
Checks:
PCIB 2277
29,725.00
Total
29,725.00
Received by:
TOTAL
C-1.4
101
Aquino Avenue, Paranaque City | Tel: 632 843 7689
2 843 7690 | Website: www.gracecorporation.biz.ph
ecember 1,2011
Amount
224,500.00
224,511.00
102
ecember 1,2011
Amount
1,600,000.00
(21,200.00)
1,578,800.00
103
ecember 5,2011
Amount
370,000.00
(7,400.00)
362,600.00
104
ecember 8,2011
Amount
500,000.00
500,000.00
105
ecember 8,2011
Amount
520,000.00
(20,000.00)
(10,000.00)
490,000.00
106
ecember 11,2011
Amount
246,825.00
(4,937.00)
241,888.00
107
ecember 12,2011
Amount
528,000.00
528,000.00
108
ecember 12,2011
Amount
845,000.00
845,000.00
109
ecember 15,2011
Amount
410,000.00
410,000.00
110
ecember 12,2011
Amount
58,035.00
(1,161.00)
56,874.00
111
ecember 17,2011
Amount
757,500.00
757,500.00
112
ecember 1,2011
Amount
681,000.00
681,000.00
113
ecember 20,2011
Amount
711,950.00
309,525.00
1,021,475.00
(21,475.00)
(20,000.00)
2,001,475.00
114
ecember 23,2011
Amount
75,805.00
111,395.00
187,200.00
115
Amount
4,625.00
4,625.00
116
ecember 26,2011
Amount
2,625,000.00
2,625,000.00
117
ecember 26,2011
Amount
86,850.00
(1,737.00)
85,113.00
118
ecember 28,2011
Amount
484,000.00
484,000.00
119
ecember 30,2011
Amount
165,550.00
165,550.00
120
ecember 30,2011
Amount
186,250.00
186,250.00
121
ecember 31, 2011

Amount
93,750.00
93,750.00
122
ecember 31, 2011

Amount
204,475.00
204,475.00
123
Amount
29,725.00
29,736.00
GRACE CORPORATION
Bank Reconciliation
December 31, 2011
I. OBJECTIVES
1
2
3
To ascertain that all the necessary reconciling items are taken into account
To ascertain the accurary of the recorded cash in bank balance and the reconciling items in the books of the company
To ascertain that all reconciling items are actually exisiting
1
2
3
Completeness
Accuracy
Existence
1
2
3
4
Agreed the amounts to the trial balance and/or general ledger and to supporting documentation.
Tied the balances to the bank statement
Clerically tested the totals and subtotals.
Tested the accuracy and completeness of the reconciling items between the bank balance and the general ledger balance by:
II. ASSERTIONS
III. PROCEDURES
- Determined the disposition of individual reconciling items greater than the amount specified in the work step and any unusual rec
- Examined transactions occurring in the account subsequent to period end to determine that they were properly included or exclud
reconciliation
- Determined significant transactions on the subsequent month bank statement that were dated prior to period end are included on
- Examined whether receipts or disbursements are recorded on a timely basis by reviewing the appropriateness of reconciling items
unusual items.
IV. FINDINGS
Balance per Bank Statement
C-2.3
14,267,272
Total
Outstanding Checks
Adjusted balance
14,267,272
Balance per Book

Note Collected by Bank
Proceeds on Promissory Note
(1,255,655)
Total
13,011,617
Postdated Check
Bank Service Charge
Total
Adjusted Balance
Proposed Adjusting Entries:

Cash in Bank
Notes Payable
7,900,000
2,100,000
10,000,000
To record proceeds of promissory note
Cash in Bank
To record bank service charge
C-2.1
C-2.4
C-2.4
2,500
2,500
C-2.5
C-2.4
Cash in Bank
Notes Receivable
To record collection of notes receivable
490,000
10,000
Accounts Receivable
85,113
Cash in Bank
To reverse entry for the receipt of a postdated check.
500,000
85,113
LEGEND:
3 Traced to Cash Disbursements Book
Computations Verified
Footed
C Cash Lead Schedule
Checked Against General Ledger
IV.CONCLUSION
With the exceptions of the adjusting entries recommended by the auditor, sufficient and appropriate evidence were gathered to support the
assertions made.
C-2
ger balance by:
p and any unusual reconciling items
erly included or excluded from the
d end are included on the reconciliation.

ss of reconciling items and searching any
4,709,230
490,000
7,900,000
13,099,230
(85,113)
(2,500)
(87,613)
13,011,617
hered to support the
Prepared by:
JGN
Reviewed by:
ILW
Date:
2/1/2012
Date:
2/5/2012
ACCOUNT
Cash in Bank
DATE
2011
Nov. 30 Balance
Dec. 30
Balance
ITEM
DEBIT
P
CR 12
1,000,000.00
10,018,100.00
4,709,230.00
C-2.3
ACCOUNT NO.
DATE
ITEM
4709230
Dec. 31
C2
GJ 12
101
CREDIT
6,308,870.00
C-2.3
PCI Bank
STATEMENT OF ACCOUNT
ACCOUNT NO.:
NO. OF CHECKS
4486-9156-80
PAGE NO.:
18
1/1
DEPOSITS
BALANCE
NAME AND ADDRESS:
GRACE CORPORATION
12 Ninoy Aquino Avenue, Paraaque City
CHECKS
DATE
NO.
AMOUNT
2011
Dec. 1
2
6
6
9
10
13
13
16
17
23
23
23
23
28
29
P
12340
12342
12338
12344
12345
12348
100,000.00
123,500.00
200,000.00
143,000.00
300,000.00
12347
12350
12346
87,500.00
500,000.00
34,200.00
114,900.00
972,750.00
12351
12353
1,554,500.00
1,080,000.00
170,500.00
1,263,300.00
362,600.00
990,000.00
RT
769,888.00
500,000.00
CM
1,255,000.00
1,495,374.00
12355
13,250.00
12356
12354
12357
12359
12358
12360
83,300.00
625,000.00
5,000.00
125,315.00
32,500.00
25,000.00
2,500.00
2005
Jan. 5
12387
12349
12352
12365
12366
12362
12363
12367
12360
980,000.00
191,825.00
SC
7,900,000.00
2,625,000.00
CM
490,000.00
CM
6,122,215.00
18,993,487.00
34,200.00
175,000.00
14,000.00
85,000.00
249,750.00
13,325.00
85,000.00
97,000.00
70,000.00
85,113.00
929,550.00
204,475.00
29,725.00
1,396,000.00
1,466,500.00
1,343,000.00
2,406,300.00
2,263,300.00
2,325,900.00
3,315,900.00
3,228,400.00
3,498,288.00
3,964,088.00
3,849,188.00
2,876,438.00
2,876,438.00
2,576,938.00
1,496,938.00
2,992,312.00
2,992,312.00
2,979,062.00
3,959,062.00
4,067,587.00
3,442,587.00
11,337,587.00
13,837,272.00
13,804,772.00
13,779,772.00
14,267,272.00 C2
PCI Bank
NAME AND ADDRESS:
GRACE CORPORATION
12 Ninoy Aquino Avenue, Paranaque City
We have debited your Current Account
No. 4486-9156-80 for service charges
for December.
DEBIT MEMO
PCI Bank
NAME AND ADDRESS:
GRACE CORPORATION
We have debited your Current Account No. 4486-9156-80
for return of PCIB check #4825 for P 500,000.00
drawn against insufficient funds
DEBIT MEMO
PCI Bank
NAME AND ADDRESS:
GRACE CORPORATION
We have credited your Current Account
No. 4486-9156-80 for collection of notes
receivable P 500,000.00 proceeds.
CREDIT MEMO
PCI Bank
NAME AND ADDRESS:
GRACE CORPORATION
No. 4486-9156-80 for redeposit of PCIB
check #4825 for P 500,000.00
CREDIT MEMO
PCI Bank
NAME AND ADDRESS:
GRACE CORPORATION

No. 4486-9156-80 proceeds of P 10,000,000.00
promissory note discounted at 12%
CREDIT MEMO
C-2.4
DATE:
December 29, 2011
2,500.00 C2
CA 4486-9156-80
ACCOUNT NO.:
DATE:
December 10, 2011
No. 4486-9156-80
500,000.00
ACCOUNT NO.:
500,000.00 C2
CA 4486-9156-80
DATE:
December 29, 2011
490,000.00 C2
E-5
CA 4486-9156-80
ACCOUNT NO.:
DATE:
December 13, 2011
500,000.00
CA 4486-9156-80
ACCOUNT NO.:
DATE:
December 28, 2011
ACCOUNT NO.:
7,900,000.00 C2
CA 4486-9156-80
Page B71
C-2.5
CURRENT ACCOUNT DEPOSIT SLIP
For Cash Deposits and Regular Clearing
only (On-Us and Other Bank's Checks)
PCI Bank
4 4 8 6
ACCOUNT
NUMBER
9 1 5 6
DATE
ACCOUNT
NUMBER

PCI Bank
8 0
ACCOUNT
NUMBER
28 December 2011
ACCOUNT
NUMBER
4 4 8 6
GRACE CORPORATION
TELLER'S VALIDATION:
THIS SERVES YOUR RECEIPT WHEN VALIDATED
THIS DEPOSIT IS SUBJECT TO THE TERMS AND CONDITION COVERING THE ACCOUNT
NO. OF PIECES
PLEASE ENDORSE AND LIST EACH CHECK PROPERLY
DENOMINATION
LOCAL CLEARING CHECKS

NAME OF BANK / BRANCH
CHECK NO.
RCBC
481216
500.00
AMOUNT
AMOUNT
1,000.00
2,625,000.00
200.00
100.00
50.00
20.00
CASH DEPOSIT
PCI BANK CHECKS AND OTHER
BANKS' CHECKS
TOTAL
REGIONAL CLEARING AND

RPTW's AND PMO's
TOTAL
Page B71
2,625,000.00

4 4 8 6
ACCOUNT
NUMBER
DRAFT/CASHIER'S CHECK
9 1 5 6
DATE
ACCOUNT
NUMBER
8 0
ACCOUNT
NUMBER
28 December 2011
ACCOUNT
NUMBER
4 4 8 6
85,113.00 C2
9 1 5 6
DATE
8 0
5 January 2012
GRACE CORPORATION
THIS IS YOUR RECEIPT WHEN VALIDATED
Page B71

PCI Bank
Page B72
AMOUNT
TOTAL DEPOSIT
GRACE CORPORATION
RECEIVED BY:
DENOMINATION
CHECK DEPOSIT
PCI Bank
TOTAL DEPOSIT
85,113.00
2,625,000.00
REGIONAL & INTERNATIONAL CLEARING CHECKS - PMO's / RPTW's

RECEIVED BY:
THIS DEPOSIT IS SUBJECT TO THE TERMS

AND CONDITIONS COVERING THE ACCOUNT

MACHINE PRINT..
MACHINE PRINT..
PCI
PCI
12.28.04
DATE
TELLER NUMBER
2,625,000.00
RECEIPT NUMBER
PHILIPPINE CURRENCY
01.05.05
DATE
TELLER
TELLER NUMBER
85,113.00
RECEIPT NUMBER
PHILIPPINE CURRENCY
TELLER

PCI Bank
4 4 8 6
ACCOUNT
NUMBER
9 1 5 6
DATE
ACCOUNT
NUMBER

PCI Bank
8 0
ACCOUNT
NUMBER
23 December 2011
ACCOUNT
NUMBER
4 4 8 6
9 1 5 6
DATE
GRACE CORPORATION
8 0
23 December 2011
GRACE CORPORATION
NO. OF PIECES
DENOMINATION
Page B72
8 0
5 January 2012
GRACE CORPORATION
Page B71
9 1 5 6
DATE
CHECK NO.
PCIB
481265
500.00
AMOUNT
AMOUNT
1,000.00
980,000.00
200.00
100.00
50.00
20.00
CASH DEPOSIT
BANKS' CHECKS
TOTAL
980,000.00
CHECK / DRAFT
PNB
TOTAL

RPTW's AND PMO's
Page B72
TOTAL DEPOSIT
PCI Bank
P
P
980,000.00

4,625.00

DENOMINATION
AMOUNT
510152
CHECK DEPOSIT
TOTAL DEPOSIT
PCI Bank
187,200.00
187,200.00
191,825.00

Page B72
PCI Bank
PCI Bank
4 4 8 6
ACCOUNT
NUMBER
9 1 5 6
DATE
ACCOUNT
NUMBER
8 0
ACCOUNT
NUMBER
23 December 2011
ACCOUNT
NUMBER
4 4 8 6
GRACE CORPORATION
Page B72
Page B73
23 December 2011

RECEIVED BY:


MACHINE PRINT..
MACHINE PRINT..
PCI
PCI
12.23.04
DATE
TELLER NUMBER
980,000.00
RECEIPT NUMBER
PHILIPPINE CURRENCY
12.23.04
DATE
TELLER
TELLER NUMBER
191,825.00
RECEIPT NUMBER
PHILIPPINE CURRENCY
TELLER

PCI Bank
4 4 8 6
ACCOUNT
NUMBER
9 1 5 6
DATE
ACCOUNT
NUMBER

PCI Bank
8 0
ACCOUNT
NUMBER
16 December 2011
ACCOUNT
NUMBER
4 4 8 6
9 1 5 6
DATE
GRACE CORPORATION
8 0
23 December 2011
GRACE CORPORATION
NO. OF PIECES
DENOMINATION
Page B73
8 0
GRACE CORPORATION
RECEIVED BY:
9 1 5 6
DATE
CHECK NO.
BPI
RCBC
500.00
AMOUNT
249169
876521
AMOUNT
1,000.00
845,000.00
410,000.00
200.00
100.00
50.00
20.00
CASH DEPOSIT
BANKS' CHECKS
TOTAL
CHECK / DRAFT
DENOMINATION
RCBC
PCIB
RPTW's AND PMO's
TOTAL
Page B73
4 4 8 6
9 1 5 6
DATE
ACCOUNT
NUMBER
8 0
ACCOUNT
NUMBER
16 December 2011
ACCOUNT
NUMBER
4 4 8 6
Page B73
Page B74
1,438,500.00
1,495,374.00
8 0
23 December 2011
GRACE CORPORATION

RECEIVED BY:


MACHINE PRINT..
MACHINE PRINT..
PCI
PCI
12.16.04
DATE
TELLER NUMBER
1,255,000.00
RECEIPT NUMBER
PHILIPPINE CURRENCY
12.23.04
DATE
TELLER
TELLER NUMBER
1,495,374.00
RECEIPT NUMBER
PHILIPPINE CURRENCY
TELLER

PCI Bank
4 4 8 6
9 1 5 6
DATE
ACCOUNT
NUMBER

PCI Bank
8 0
ACCOUNT
NUMBER
4 4 8 6
9 December 2011
9 1 5 6
DATE
ACCOUNT
NUMBER
GRACE CORPORATION
13 December 2011

8 0
GRACE CORPORATION
Page B74
9 1 5 6
DATE
PCIB
CBC
681,000.00
757,500.00

PCI Bank
GRACE CORPORATION
ACCOUNT
NUMBER
CHECK DEPOSIT
RECEIVED BY:
AMOUNT
369125
246810
TOTAL DEPOSIT

PCI Bank
ACCOUNT
NUMBER
1,255,000.00
TOTAL DEPOSIT
56,874.00
1,255,000.00
CHECK NO.
4825
123498
AMOUNT
500,000.00
490,000.00
C2
BPI
RCBC
CHECK NO.
249169
728465
AMOUNT
528,000.00
241,888.00
Page B74

BANKS' CHECKS
TOTAL
990,000.00

RPTW's AND PMO's
TOTAL
Page B74
990,000.00

PCI Bank
4 4 8 6
ACCOUNT
NUMBER
9 1 5 6
DATE
ACCOUNT
NUMBER

RPTW's AND PMO's
TOTAL
8 0

9 December 2011
4 4 8 6
ACCOUNT
NUMBER
Page B74
Page B75

RECEIVED BY:

MACHINE PRINT..
MACHINE PRINT..
PCI
PCI
12.09.04
TELLER NUMBER
990,000.00
RECEIPT NUMBER
PHILIPPINE CURRENCY
12.13.04
DATE
TELLER

PCI Bank
769,888.00
RECEIPT NUMBER
PHILIPPINE CURRENCY
4 4 8 6
9 1 5 6
DATE

PCI Bank
8 0
6 December 2011
4 4 8 6
ACCOUNT
NUMBER
9 1 5 6
DATE
ACCOUNT
NUMBER
GRACE CORPORATION
2 December 2011

CHECK NO.
SBTC
AMOUNT
928421

BANKS' CHECKS
TOTAL
362,600.00

RPTW's AND PMO's
362,600.00
TOTAL DEPOSIT
362,600.00

PCI Bank
4 4 8 6
9 1 5 6
DATE
ACCOUNT
NUMBER
AMOUNT
481853
329864

BANKS' CHECKS
TOTAL
224,500.00
1,038,800.00
1,263,300.00
P
P
CHECK NO.
PNB
RCBC
TOTAL
8 0
GRACE CORPORATION
Page B75
TELLER NUMBER
TELLER
ACCOUNT
NUMBER
Page B75
13 December 2011
GRACE CORPORATION
ACCOUNT
NUMBER

RPTW's AND PMO's
TOTAL
8 0
6 December 2011
P
P
TOTAL DEPOSIT
ACCOUNT
NUMBER
1,263,300.00

PCI Bank
4 4 8 6
9 1 5 6
DATE
ACCOUNT
NUMBER
GRACE CORPORATION
8 0
2 December 2011
GRACE CORPORATION
Page B75
8 0
DATE

RECEIVED BY:


MACHINE PRINT..
MACHINE PRINT..
PCI
PCI
12.06.04
DATE
TELLER
9 1 5 6
DATE
ACCOUNT
NUMBER
RECEIVED BY:
769,888.00
PCI Bank
ACCOUNT
NUMBER
769,888.00
TOTAL DEPOSIT
GRACE CORPORATION
RECEIVED BY:
TOTAL DEPOSIT

BANKS' CHECKS
TOTAL
TELLER NUMBER
P
RECEIPT NUMBER
362,600.00
PHILIPPINE CURRENCY
12.02.04
DATE
TELLER
TELLER NUMBER
P
RECEIPT NUMBER
1,263,300.00
PHILIPPINE CURRENCY
GRACE CORPORATION
Bank Reconcilliation
November 30, 2011
Balance per Bank
Add Undeposited Collection
Less Outstanding Checks

Date
11/28/2011
11/29/2011
11/25/2011
Balance per Ledger
Check #
12340
12342
12344
Amount
100,000.00 C2.3
123,500.00 C2.3
143,000.00 C2.3
C-2.6
P
1,396,000.00
170,500.00
566,500.00
P
1,000,000.00
GRACE CORPORATION
Bank Confirmation
December 31, 2011
I. OBJECTIVES
1
2
3
To determine whether cash in bank exists at year-end and cash-related transactions occur within the y
To determine that all cash balances of the client are reflected on the balance sheet at year-end.
To determine that cash balances are available for sure without restrictions, if with restrictions,
determine if it is properly indicated in the balance sheet.
1
2
Existence
Rights and Obligations
II. ASSERTIONS
III. PROCEDURES
1
2
3
IV. FINDINGS
Send bank confirmation request to PCI bank where the client has an account.
Obtain the reply from PCI bank.
Reconcile the reply from the bank with bank reconciliation and the bank statement.
V. CONCLUSIONS
No exceptions noted.
occur within the year.

at year-end.
estrictions,
C-3
Prepared by:
LCTC
Reviewed by:
Date:
2/4/2012
Date:
ILW
2/5/2012
Re:
1. We hereby report that at the close of business on
DECEMBER 31, 2011 our records showed the following balances to the
CREDIT
of the abovementioned client:

AMOUNT
DESCRIPTION
INTEREST
ACCOUNT NUMBER
14,267,272 Regular Checking Acct.
RATE (P.A.)
PAID UP TO
775
Regular Checking Acct.

Savings Acct.
1 year%
6,500,000 Time Deposits
18%
2. Direct liabilities, assets and related balances of said clients as at the
5. Other accounts with the bank on that date were:
date above mentioned date were as follows: (attached details by LC)
(details attached)*
a)
b)
c)
d)
AMOUNT
ACCOUNT
maturity
PESO
FOREIGN CURRENCY
Acceptance
Drafts
Securities held for safekeeping

Items held for collection
Trust accounts
Others (specify)
Trust Receipts
Marginal Deposits
Special Time Deposits
Import Letters of Credit
Domestic Letters of Credit
3. We further report that the acove-mentioned client was directly liable to us by way of overdrafts, loans, etc. at the close of business on that date as follows:
AMOUNT
DESCRIPTION OF LIABILITY
10,000,000 Loans
Other (Specify)
DATE GRANTED
DUE DATE
2011
2012
12.28
12.28
INTEREST
RATE (P.A.)
21%
C-3.1
Grace Corporation
ST
RESTRICTION ON WITHDRAWAL OF AMOUNT AND OTHER

REMARKS
PAID UP TO
1 year%
maturity
Due Date: June 30, 2012
>C3
h the bank on that date were:
s held for safekeeping

d for collection
INTEREST
PAID UP TO
DESCRIPTION OF COLLATERALS, LIENS, ENDORSERS, ETC.

OTHER REMARKS
2012
12.28
Land
>C3
GRACE CORPORATION
Analytical Procedures
December 31, 2011
I. OBJECTIVES
1
To be able to evaluate the fluctuations or unusual changes on the balance of cash and cash equivalent account.
2
3
To ensure cash at bank stated on the reconciliation is accurate.

To assess whether amounts and other data relating to recorded transactions and events have been recorded appropriately.
Accuracy
1
2
Compared the difference between the audited balance of cash of the current year from the audited balance of the preceding year (Balance of
2010 from 2009 and Balance of 2011 from 2010).
The differences on the account balances where expressed in percentage by diving the variance from the prior balance of an account.
Journal entries of transactions and supporting documents related to cash such as petty cash voucher and bank reconcillation were reviewed
II. ASSERTIONS
III. PROCEDURES
account balances to evaluate the differences on the
IV. FINDINGS
Cash
This account consists of:
2010
Percentage
2011
Cash in Bank
Petty Cash
Total
1,000,000
1201.16%
C2
13,011,617
100,000
-98.96%
C1
1,040
1,102,010
1081%
13,014,668
The significant increase in the total cash balance from 2010 to 2011 was primarily caused by the proceeds the company received from its borrowing.
V. CONCLUSION
No exceptions noted. Sufficient and appropriate evidence were gathered to support the assertions made.
Prepared by:
MZB
Reviewed by:
ILW
C-4
Date:
2/1/2012
Date:
2/5/2012
GRACE CORPORATION
Accounts Receivable General and Subsidiary Ledger Reconciliation
December 31, 2011
I. OBJECTIVES
1
2
3
To ascertain that all transactions affecting accounts receivable are recorded

To ascertain the accuracy of recording of accounts receivable transactions
To ascertain that accounts receivable transactions are actually existing
1
2
3
Completeness
Accuracy
Existence
1
2
3
4
5
6
7
8
9
Obtained the Accounts Receivable Schedule from the client

Reconciled accounts receivable beginning balance in subsidiary ledger with general ledger
Tested footings and cross footings of sales invoices
Checked accuracy of the accounts receivable general ledger
Vouched and traced sales book to sales invoices, or vice versa
Vouched and traced cash receipts book to official receipts, or vice versa
Vouched the accounts receivable subsidiary ledgers to sales invoices and official receipts
Footed debit and credit columns of subsidiary ledger records.
Reconciled subsidiary ledgers to the general ledger
II. ASSERTIONS
III. PROCEDURES
IV. FINDINGS
WP
Ref
Rex Enterprises
Louie Tan
Eagle Contractors
Valera Company
Ida Coronel
Alberto & Associates, CPAs
Legarda Company
Cora Tayag
Anna Reyes-employee
Gwendo Reyes
Lighthouse Commercial
Solomon Enterprises
Carlo Santos
Chad Acosta
J.R. Alano
Susan de Leon
Roces, Adriano & Salas, CPAs
R.V. Castro & Co.
Johann Morales
Centeno, Antonio & Tantoco, CPA
Luli Samson
E-1.2
E-1.2
E-1.2
E-1.2
E-1.2
E-1.2
E-1.2
E-1.2
E-1.2
E-1.2
E-1.2
E-1.2
E-1.2
E-1.2
E-1.2
E-1.2
E-1.2
E-1.2
E-1.2
E-1.2
E-1.2
E-1.2
E-1.2
E-1.2
Unadjusted Balances
Dr.
1,700,000
1,284,000
546,825
410,000
666,285
150,000
224,500
1,047,375
54,625
546,825
300,000
1,391,775
186,500
762,200
520,000
264,000
681,000
1,600,000
1,264,475
1,700,000
1,224,500
970,000
736,000
1,713,500
12/31/11
Cr.
246,825
410,000
528,000
224,500
757,500
4,625
246,825
350,000
1,391,775
187,200
520,000
681,000
1,060,000
970,000
1,713,500
Total Balances
Adjustments
Dr.
1,700,000
1,284,000
300,000
138,285
150,000
289,875
50,000
300,000
-50,000
186,500
575,000
264,000
1,600,000
204,475
1,700,000
1,224,500
736,000
-
Cr.
484,000
10
300,000
50,000
232,000
681,000
681,000
93,825
681,000
885,475
J.R. Alano Trading
E-1.2
730,350
580,350
Sampollo Company
Total Balances
150,000
-
20,674,735
9,872,100
Net Accounts Receivable - Subsidiary Ledger
730,350
730,350
580,350
2,954,710
3,755,000
2,954,710
3,755,000
10,802,635
Accounts Receivable - General Ledger

Net Accounts Receivable - General Ledger
10,802,635
580,350
10,318,635
E-1.1
10,318,635
Differences GL to SL
To adjust GL to SL - Unrecorded Sales to Louie Tan
TOTAL ADJUSTED ACCOUNTS RECEIVABLE
ADJUSTING JOURNAL ENTRIES

a.
b.
c.
d.

To reclassify credit balance of Gwendo Reyes
50,000
50,000

730,350

To reclassify payments made by Sampollo OR #110
580,350

681,000
730,350
580,350
681,000
e.
Sales
Output Tax
1,364
136
f.
Cash
1,500
204,475
To record payment made by Susan. OR #122
g.
g.
202,975
1,500

To reclassify payment made by Susan de Leon, OR #112
681,000
Sales
300,000
681,000
Accounts Receivable - Anna Reyes
300,000
To derecognize sales made to Anna due to lack of supporting documents

h.
Sales
Output VAT
68
7
i.
j.

Sales
Output tax
To record understatement of SI #1256
Sales
Output Tax
75
10
9
1
232,000
210,909
21,091
To record SI #1266
k.
Cash
93,750
To record payment by Benitez OR # 121
l.
m.
93,750
Accounts Receivable
Sales
To record sales to Louie Tan
484,000
Cash
484,000
Accounts Receivable
To record payment made by Louie Tan OR #118
484,000
484,000
Additionally, the following errors were noted:

1.
An amount of P1,060,000 was erroneously recorded as P1,600,000 in OR #102 but was recorded properly in subsidiary ledger
2.
References to SI #1261 and #1262 in Cora Tayag's subsidiary ledger were erroneously refered to SI #1161 and #1162.
3.
Cross footing and footing was not properly done so a slide error was committed in SI #1252. Total amount of SI should be P4,625 but
reflected as P46.25. The correct amount was properly recorded in subsidiary ledger.
III. CONCLUSION
With the exceptions of the adjusting entries and corrections recommended by the auditor, sufficient and appropriate evidence were gathered to
support the assertions made.
Prepared by:
MGR
Reviewed by:
JGN
E-1
Adjusted Balances
1,700,000
800,000
300,000
138,295
150,000
289,875
50,000
138,175
186,500
575,000
264,000
1,600,000
1,700,000
1,224,500
736,000
-
E-4
E-4
E-4
E-4
E-4
E-4
E-4
E-4
E-4
E-4
E-4
E-4
E-4
E-4
E-4
E-4
E-4
E-4
E-4
E-4
E-4
E-4
E-4
E-4
E-4
150,000 E-4
-
10,002,345
10,002,345
9,518,345
9,518,345
484,000
484,000
0.00
10,002,345 E-4.2
e P4,625 but
e were gathered to
Date:
2/1/2012
Date:
2/5/2012
ACCOUNT
DATE
Accounts Receivable
ITEM
2011
Nov. 30 Balance
Dec. 31
ACCOUNT NO.
DEBIT
P
SJ 12
Balance
- Computations Verified
- Footed and Cross Footed
DATE
15,316,000.00
2,786,445.00
10,318,635.00
E-1
Dec. 5
8
31
13
ITEM
GJ 11
GJ 11
CR 12
GJ 11
104
CREDIT
20,000.00
470,000.00
7,272,335.00
21,475.00
E-1.1
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGERS

NAME:
ADDRESS:
DATE
Rex Enterprises
33 Teresa St., Metro Manila
PARTICULARS
Sept. 15
NAME:
ADDRESS:
DATE
ADDRESS:
DATE
Louie Tan
40 Bambang St., Metro Manila
PARTICULARS
ADDRESS:
DATE
Eagle Contractors
11 Forbes St., Makati
PARTICULARS
ADDRESS:
DATE
PARTICULARS
ADDRESS:
DATE
2011
Sept. 15
DEBIT
PARTICULARS
246,825.00
DEBIT
ACCOUNT NO.:
CREDIT
410,000.00
410,000.00
DEBIT
ACCOUNT NO.:
CREDIT
528,000.00
138,285.00
528,000.00

128 Pebble Road, Mandaluyong, MM
PARTICULARS
CREDIT
300,000.00
246,825.00
Ida Coronel
63 Manotoc St., Quezon City
2011
Nov. 30 SI 1152
Dec. 15 SI 1256
12 OR 107
NAME:
CREDIT
ACCOUNT NO.:
Valera Company
705 Aurora Bldg., Cubao, Quezon City
2011
Nov. 18 SI 1070
Dec. 15 OR 109
NAME:
DEBIT
ACCOUNT NO.:
1,284,000.00
2011
Nov. 20
Dec. 1 SI 1251
11 OR 106
NAME:
CREDIT
1,700,000.00
2011
Nov. 30
NAME:
DEBIT
ACCOUNT NO.:
DEBIT
150,000.00
ACCOUNT NO.:
CREDIT
NAME:
ADDRESS:
DATE
Legarda Company
23 Hidalgo, Binondo, Manila
PARTICULARS
DEBIT
2011
Nov. 19 SI 1121
Dec. 1 OR 101
NAME:
ADDRESS:
DATE
224,500.00
DEBIT
2011
Nov. 27 SI 1100
Dec. 17 OR 111
27 SI 1161-1162
NAME:
ADDRESS:
DATE
ADDRESS:
DATE
757,500.00
DEBIT
2011
Nov. 20
Dec. 1 SI 1251
11 OR 106
NAME:
ADDRESS:
DATE
2011
Oct. 30
Nov. 5 OR 86
NAME:
ADDRESS:
DATE
ACCOUNT NO.:
DEBIT
2011
Nov. 28 SI 1135
Dec. 5 OR 103
CREDIT
300,000.00
246,825.00
246,825.00
DEBIT
ACCOUNT NO.:
CREDIT
300,000.00
350,000.00
582 Kamagong St., Makati City
PARTICULARS
CREDIT
4,625.00
Gwendo Reyes
85 Cantada St., Diliman, Quezon City
PARTICULARS
ACCOUNT NO.:
50,000.00
4,625.00
Anna Reyes - employee

16 Legarda St., Manila
PARTICULARS
CREDIT
289,875.00
2011
Nov. 8
Dec.
3 SI 1252
23 OR 115
NAME:
ACCOUNT NO.:
757,500.00
36 Rizal Avenue, Sta. Cruz, Manila
PARTICULARS
CREDIT
224,500.00
Cora Tayag
1642 Reyes Avenue, Manila
PARTICULARS
ACCOUNT NO.:
DEBIT
ACCOUNT NO.:
CREDIT
370,000.00
370,000.00
10 SI 1254 - 1255
1,021,775.00
13 Sales returns & allowances
OR 113
NAME:
ADDRESS:
DATE
785 Ayala Avenue, Makati City
PARTICULARS
2011
Mar. 21
Apr. 19
NAME:
ADDRESS:
DATE
ADDRESS:
DATE

220 Ortigas St., Mandaluyong
PARTICULARS
DEBIT
ADDRESS:
DATE
PARTICULARS
DEBIT
Carlo Santos
25 Lumot St., Tondo, Manila
PARTICULARS
ADDRESS:
DATE
ADDRESS:
DATE
2011
Oct. 5
CREDIT
DEBIT
ACCOUNT NO.:
CREDIT
20,000.00
500,000.00
ACCOUNT NO.:
CREDIT
264,000.00
Chad Acosta
85 Laong-Laan St., Metro Manila
PARTICULARS
2011
Nov. 25 SI 1242
Dec. 18 OR 112
NAME:
ACCOUNT NO.:
187,200.00
Solomon Enterprises
326 Quirino Avenue, Baclaran
2011
June 3
NAME:
CREDIT
575,000.00
75,805.00
111,395.00
2011
Nov. 30 SI 1149
520,000.00
Dec. 5 Sales returns & allowances
8 OR 105
NAME:
ACCOUNT NO.:
100,000.00
86,500.00
2011
Nov. 19
Dec. 23 SI 1259
SI 1260
23 OR 114
NAME:
DEBIT
21,475.00
1,000,000.00
DEBIT
CREDIT
681,000.00
681,000.00
J. R. Alano
162 Laong-Laan St., Metro Manila
PARTICULARS
ACCOUNT NO.:
DEBIT
1,600,000.00
ACCOUNT NO.:
CREDIT
NAME:
ADDRESS:
DATE
Susan de Leon
482 Rizal Avenue, Metro Manila
PARTICULARS
2011
Nov. 27 SI 1125
Dec. 1 OR 102
22 SI 1258
NAME:
ADDRESS:
DATE
ADDRESS:
DATE
PARTICULARS
ADDRESS:
DATE
1,060,000.00
1,060,000.00
204,475.00
DEBIT
R.V. Castro & Co.

1856 Ayala Avenue, Makati City
PARTICULARS
DEBIT
ADDRESS:
DATE
Johann Morales
2000 C.M. Recto Avenue, Manila
PARTICULARS
DEBIT

296 Frisco St., Novaliches
PARTICULARS
2011
Dec 29 SI 1263
NAME:
ADDRESS:
DATE
DEBIT
CREDIT
PARTICULARS
J. R. Alano Trading
ACCOUNT NO.:
CREDIT
500,000.00
470,000.00
ACCOUNT NO.:
CREDIT
736,000.00
Luli Samson
852 Buendia Avenue, Makati City
2011
Nov. 29 SI 1231
Dec. 15 OR 108
20 SI 1257
27 OR 117
NAME:
ACCOUNT NO.:
1,000,000.00
224,500.00
2011
Nov. 29 SI 1133
970,000.00
Dec. 8 OR
converted to 60-day 12% note
NAME:
CREDIT
1,700,000.00
2011
Sept. 20
Nov. 30
NAME:
CREDIT
Roces Adriano & Salas, CPAs

ACCOUNT NO.:
Rm. 307 ABC Bldg., Ayala Avenue, Makati City
2011
Nov. 20
NAME:
DEBIT
ACCOUNT NO.:
DEBIT
ACCOUNT NO.:
CREDIT
845,000.00
845,000.00
868,500.00
868,500.00
ACCOUNT NO.:
ADDRESS:
DATE
555 Ilocos St., Metro Manila

PARTICULARS
2011
Nov. 8
Dec. 7 SI 1253
OR 110
LEGEND:
DEBIT
CREDIT
150,000.00
580,350.00
580,350.00
E-1.2
ARY LEDGERS
101
BALANCE
1,700,000.00
102
BALANCE
1,284,000.00
103
BALANCE
300,000.00
546,825.00
300,000.00
104
BALANCE
410,000.00
105
BALANCE
528,000.00
666,285.00
138,285.00
106
BALANCE
150,000.00
107
BALANCE
224,500.00
-
108
BALANCE
757,500.00
289,875.00
109
BALANCE
50,000.00
54,625.00
50,000.00
111
BALANCE
300,000.00
546,825.00
300,000.00
112
BALANCE
300,000.00
(50,000.00)
113
BALANCE
370,000.00
1,021,475.00
1,000,000.00
- -
114
BALANCE
100,000.00
186,500.00
115
BALANCE
675,000.00
650,805.00
762,200.00
575,000.00
117
BALANCE
520,000.00
500,000.00
- -
118
BALANCE
264,000.00
119
BALANCE
681,000.00
-
120
BALANCE
1,600,000.00
121
BALANCE
1,060,000.00
204,475.00
123
BALANCE
1,700,000.00
124
BALANCE
1,000,000.00
1,224,500.00
125
BALANCE
970,000.00
470,000.00
- -
126
BALANCE
736,000.00
127
BALANCE
845,000.00
868,500.00
-
128
BALANCE
150,000.00
208,350.00
150,000.00
SALES BOOK
DEBIT
DATE
SOLD TO
TERMS
INV. NO.
2/10. n/30
1251
246,825.00
224,386.00
3 Dynasty Construction
2/10. n/30
1252
4,625.00
4,205.00
7 Sampollo Company
2/10. n/30
1253
58,035.00
52,759.00
2/10. n/30
1254
711,950.00
647,227.00
1255
309,525.00
281,386.00
ACCOUNTS
RECEIVABLE
CASH SALES
CREDIT SALES
2004
Dec. 1 Eagle Contractors
10 Benitez Merchandising
15 Ida Coronel
2/10. n/30
1256
138,285.00
125,714.00
17 Luli Samson
2/10. n/30
1257
86,850.00
78,955.00
22 Susan de Leon
2/10. n/30
1258
204,475.00
Cash
1259
75,805.00
68,914.00
1260
111,395.00
101,268.00
23 Building Blocks, Inc.

27 Cora Tayag
2/10. n/30
29 Centeno, Antonio & Tantoco
2/10. n/30
1261
185,886.00
208,600.00
189,636.00
1262
81,275.00
73,886.00
1263
736,000.00
669,091.00
2,786,445.00
(104)
187,200.00
2,703,313.00
(3001)
E-1.3
CREDIT
OUTPUT TAX
22,439.00
420.00
5,276.00
64,723.00
28,139.00
12,571.00
7,895.00
18,589.00
6,891.00
10,127.00
18,964.00
7,389.00
66,909.00
270,332.00
(1008)
CASH RECEIPTS BOOK

DATE
RECEIVED FROM
EXPLANATION
OR#
BANK
SALES DISCOUNT
DR.
DR.
ACCOUNTS RECEIVABLE (CR.)
CASH SALES
AMOUNT
CR.
2011
Dec. 1 Legarda
SI
1121
101
224,500.00
Susan de Leon
SI
1125
102
5 Benitez Merch.
SI
1135
103
362,600.00
8 Johann Morales
SI
1133
104
500,000.00
Solomon Ent.
SI
1149
105
490,000.00
11 Eagle Contractors
SI
1251
106
241,888.00
12 Ida Coronel
SI
1152
107
15 Luli Samson
SI
1231
Velera Company
SI
17 Sampollo Company
1,038,800.00 P
224,500.00
21,200.00
1,060,000.00
7,400.00
370,000.00
500,000.00
10,000.00
500,000.00
4,937.00
246,825.00
528,000.00
528,000.00
108
845,000.00
845,000.00
1070
109
410,000.00
410,000.00
SI
1253
110
56,874.00
58,035.00
Cora Tayag
SI
1100
111
757,500.00
757,500.00
18 Susan de Leon
SI
1242
112
681,000.00
681,000.00
20 Benitez Merch.
SI 12541255
113
980,000.00
1,000,000.00
SI 1259 &
1260
114
187,200.00
1,161.00
20,000.00
187,200.00
SUNDRY (CR.)
ACCT. NAME
26 M. Paredes
27 Luli Samson
SI
1252
Subs. For 50,000

shares
SI
1257
115
4,625.00
116
2,625,000.00
117
85,113.00
1,737.00
10,018,100.00 P
66,435.00
4,625.00
Subs. Rec'ble
86,850.00
7,272,335.00 P
(101)
(3002)
(104)
187,200.00
E-1.4
SUNDRY (CR.)
F
AMOUNT
2003
2,625,000.00
2,625,000.00
Grace
INVOICE
No.
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
12 Ninoy Aquino Avenue, Paranaque City | Tel: 632 843 7689 | Telefax: 632 843 7690
Website: www.gracecorporation.biz.ph
Date
1 December 2011
Charged to:
Delivered to:
Eagle Contractors
11 Forbes St., Makati City
Job Order No.

P. O. No.
Terms
Quantity
Unit
Description
1,250
250
10
20
150
200
750
750
box
box
box
box
ream
ream
piece
piece
Plain Pencil - Mongol

Charcoal Pencil - Steadler
Silver Paper Clips
Blackie Carbon Paper
Whitey Bond Paper
Milky Onion Skin
Bic Ballpen - Black
Bic Ballpen - Blue
400
piece
Bic Ballpen - Red
2/10, n/30
Unit Price
101.50
130.50
50.00
145.00
188.50
159.50
12.50
12.50
12.50
TOTAL
12% interest per annum is to be charged on all overdue accounts, plus 23%
on said amount for attornye's fees and cost of collection, the parties expressly All merchandise covered by this invoice has
submit themselves to the jurisdiction of the Courts of the City of Manila in any been inspected, verified and checked.
legal action arising out of this transaction. Without in any way attempting to
divert on any other court or courts, returned goods will not be accepted
without written authority from our office, the above merchandise have been Received by:
carefully counted, checked and packed, packages delivered by carrier should
be checked with those recorded above.
Customer/Receiver
Grace
INVOICE
No.
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175

Date
3 December 2011
Delivered to: 36 Rizal Ave., Sta. Crux, Manila
Charged to:
Job Order No.

P. O. No.
Terms
Quantity
350
350
60
Unit
piece
piece
bottle
Description
Fastener
Folder - regular
Elmer's Glue
Unit Price
1.50
4.00
35.00
2/10, n/30
20
box
Roll-O Typewriter Ribbon
30.00
TOTAL
Customer/Receiver
Grace
INVOICE
No.
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175

Date
7 December 2011
Charged to:
Delivered to:
Sampollo Company
312 Arden St., Paranaque City
Job Order No.

P. O. No.
Terms
Quantity
Unit
70
70
100
20
80
50
bottle
piece
ream
box
ream
pads
50
pads
Description
2/10, n/30
Unit Price
Quink Ink
P
Pilot Fountain Pen
Whitey Bond Paper
Milky Onion Skin
10 Column Worksheet - Verna
82.50
150.00
188.50
145.00
159.50
72.50
12 Column Worksheet - Verna
72.50
TOTAL
Customer/Receiver
Grace
INVOICE
No.
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175

Date
10 December 2011
Charged to:
Delivered to:
Job Order No.

P. O. No.
Terms
Quantity
800
700
500
500
500
500
1,500
500
700
300
Unit
box
box
pad
pad
pad
pad
pad
ream
ream
roll
Description

P
Chrcoal Pencil - Staedler
16 column worksheet - verne
Yello paper - Old Mill
Bond Paper - Whitey
Onion Skin - Milky
Cartolina
Unit Price
101.50
130.50
72.50
72.50
72.50
72.50
43.50
188.50
159.50
12.50
2/10, n/30
2,500
250
500
500
meter
ream
piece
piece
Plastic Cover
Art Paper
Folder - Regular
Folder - Long
25.00
210.00
4.00
5.00
TOTAL
Customer/Receiver
Grace
INVOICE
No.
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175

Date
10 December 2011
Benitez Marchandising
Delivered to: 582 Kamagog St. Makati City
Charged to:
Job Order No.

P. O. No.
Terms
Quantity
100
150
300
150
240
300
1,500
1,000
2,500
2,500
2,500
1,000
1,500
150
Unit
box
box
bottle
box
box
pair
piece
piece
piece
piece
piece
piece
pads
bottle
Description
2/10, n/30
Unit Price
Plain pencil- mongol

thumbtacks - golden
P
Elemer's glue
Carbon paper - blackie
Typewriter Ribbon - Roll-o
scissors
thick notebook
thin notebook
Bic ballpen - black
Bic ballpen - blue
Bic Ballpen - red
Fastener
Intermediate Pad - old mill
Ink - Quink
50.00
58.00
35.00
145.00
30.00
17.50
47.00
40.00
12.50
12.50
12.50
1.50
22.00
82.00
TOTAL
Customer/Receiver
Grace
CORPORATION
INVOICE
No.
VAT 2011-002-148 | TIN 4004-009-175

Date
15 December 2011
Ida Coronel
Delivered to: 63 Manotoc, St., QC
Charged to:
Job Order No.

P. O. No.
Terms
Quantity
200
50
20
20
150
300
500
400
500
Unit
pair
piece
box
box
roll
pad
pad
pad
pad
Description
scissors
Fountain pen - pilot
thumbtacks - golden
paper clips - silver
cartolina
16 column worksheet 17 column worksheet 18 column worksheet 19 column worksheet -
2/10, n/30
Unit Price
17.50
150.00
58.50
50.00
12.50
72.50
72.50
72.50
72.50
verna
verna
verna
verna
TOTAL
Customer/Receiver
Grace
INVOICE
No.
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175

Date
17 December 2011
Luli Samson
Delivered to: 852 Buendia Ave., Makati City
Charged to:
Job Order No.

P. O. No.
Terms
Quantity
250
450
100
100
50
300
300
Unit
Description
pads
pads
ream
ream
pair
piece
piece
Intermediate pad- old mill

yelloe paper - old mill
onion skin - milky
bond paper - whitey
scissors
thick notebook
thin notebook
2/10, n/30
Unit Price
22.00
43.50
159.50
188.50
17.50
47.00
40.00
TOTAL
Customer/Receiver
Grace
INVOICE
No.
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175

Date
23 December 2011
susan de Leon
Delivered to: 482 Rizal Ave., MM
Charged to:
Job Order No.

P. O. No.
Terms
Quantity
1,500
1,250
1,300
450
250
250
300
300
500
150
200
150
Unit
pads
pads
meter
roll
piece
piece
piece
piece
piece
pair
ream
bottle
Description
2/10, n/30
Unit Price
intermediate pad - old mill

yellow paper - old mill
P
plastic cover
cartolina
folder - regular
folder - long
Leaf notebook - thick
bind notebook - thin
fastener
scissors
art paper
Elmer's glue
22.00
43.50
25.00
12.50
4.00
5.00
47.00
40.00
1.50
7.50
210.00
35.00
TOTAL
Customer/Receiver
Grace
INVOICE
No.
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175

Date
23 December 2011
Building blocks, inc

Delivered to: 220 Ortigas, Mandaluyong
Charged to:
Job Order No.

P. O. No.
Terms
Quantity
Unit
240
120
box
box
Description

Charcoal Pencil - Staedler
Unit Price
###
###
cash
30
20
40
60
250
250
150
600
600
80
box
box
box
box
piece
piece
piece
piece
piece
piece
Silver - Paper Clips

Golden Thumbtacks
Bic Ballpen - Black
Bic Ballpen - Blue
Bic Ballpen - Red
Folder - Long
Folder - Regular
Pilot Fountain Pen
###
###
###
###
###
###
###
###
###
###
TOTAL
Customer/Receiver
Grace
INVOICE
No.
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175

Date
23 December 2011
building blocks, inc.

Delivered to: 220 Ortigas, Mandaluyong
Charged to:
Job Order No.

P. O. No.
Terms
Quantity
Unit
1200
150
60
200
360
piece
bottle
bottle
ream
ream
Description
cash
Unit Price
Fastener
Quink Ink
Elmer's Glue
Bond Paper - Whitey
Onion Skin - Milky
#
###
###
###
###
TOTAL
Customer/Receiver
Grace
INVOICE
No.
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175

Date
27 December 2011
D
Cora Tayag
Delivered to: 1642 Reyes Avenue, Manila
Charged to:
Job Order No.

P. O. No.
Terms
Quantity
50
100
50
50
500
500
250
120
500
500
500
500
Unit
box
box
box
box
pad
pad
roll
bottle
pad
pad
pad
pad
Description
2/10 n/30
Unit Price

Silver - Paper Clips
Golden Thumbtacks
Intermediate Pad - Old Mill
Yellow Paper - Old Mill
Cartolina
Elmer's Glue
10 Column Worksheet - Vernal
###
###
###
###
###
###
###
###
###
###
###
###
TOTAL
Customer/Receiver
Grace
INVOICE
No.
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175

Date
27 December 2011
Cora Tayag
Delivered to: 1642 Reyes Avenue, Manila
Charged to:
Job Order No.

P. O. No.
Terms
Quantity
750
750
750
450
800
Unit
piece
piece
piece
piece
piece
Description
Bic Ballpen - Black

Bic Ballpen - Blue
Bic Ballpen - Red
Thick Notebook
Thin Notebook
2/10 n/30
Unit Price
12.50
12.50
12.50
47.00
40.00
TOTAL
Customer/Receiver
Grace
INVOICE
No.
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175

Date
29 December 2011
Centeno, Antonio and Tantoo, CPAs

Delivered to: 296 Frisco St., Novaliches
Charged to:
Job Order No.

P. O. No.
Terms
Quantity
1,500
1,250
2,000
1,250
100
500
250
1,250
1,250
750
1,200
600
60
Unit
pad
pad
pad
pad
box
box
box
piece
piece
piece
pad
ream
box
Description
cash
Unit Price
10-Column Worksheet - Verna P

12 column worksheet - verna
14 column worksheet - verna
Typewriter ribbon
Plain pencil- Mongol
Charcoal pencil- Staedler
Bic ballpen- Black
Bic Ballpen- Blue
Bic Ballpen- Red
Yellow paper - Old Mill
Bond Paper - Whitey
Carbon Paper - Blackie
72.50
72.50
72.50
72.50
30.00
101.50
130.50
12.50
12.50
12.50
43.50
188.50
145.00
TOTAL
Customer/Receiver
Grace
INVOICE
No.
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175

Date
30 December 2011
Eagle Contractors
Delivered to: 11 Forbes St., Makati City
Charged to:
Job Order No.

P. O. No.
Terms
Quantity
Unit
Description
Unit Price
2/10, n/30
500
300
1,500
1,500
500
box
ream
piece
piece
piece

Bond Paper- Whitey
Bic Ballpen - Black
Bic Ballpen - Blue
Bic Ballpen - Red
130.50
188.50
12.50
12.50
12.50
TOTAL
Customer/Receiver
Grace
INVOICE
No.
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175

Date
30 December 2011
Delivered to: 30 Rizal Ave., Sta. Cruz, Manila
Charged to:
Job Order No.

P. O. No.
Terms
Quantity
1,600
1,200
500
Unit
bottle
box
realm
Description
cash
Unit Price
elmer's glue
Typewriter Ribbon- Roll-O
Bond Paper- Whitey
35.00
30.00
188.50
TOTAL
Customer/Receiver
Grace
INVOICE
No.
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175

Date
Charged to:
Job Order No.
30 December 2011
Delivered to:
P. O. No.
2/10, n/30
Terms
Quantity
1,000
1,000
Unit
pad
ream
Description
Yellow Paper- Old Mill

Bond Paper - Whitey
Unit Price
43.50
188.50
TOTAL
Customer/Receiver
Grace
INVOICE
No.
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175

Date
3 January 2012
Benitez Marketing
Delivered to: 582 Kamagong St., Makati City
Charged to:
Job Order No.

P. O. No.
Terms
Quantity
2,500
3,000
2,000
Unit
piece
piece
piece
Description
2/10, n/30
Unit Price
Bic Ballpen - black

Bic Ballpen - blue
Bic Ballpen -red
12.50
12.50
12.50
TOTAL
Customer/Receiver
Grace
INVOICE
No.
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175

Date
3 January 2012
Luli Samson
Delivered to: 852 Buendia Ave., Makati City
Charged to:
Job Order No.

P. O. No.
Terms
Quantity
250
100
Unit
pad
ream
Description
yellow paper - old mill

bond paper - whitey
2/10, n/30
Unit Price
43.50
188.50
TOTAL
Customer/Receiver
E-1.5
1251
Date
1 December 2011
304
Job Order No.
P. O. No.
2/10, n/30
Terms
Amount
126,875.00
32,625.00
500.00
2,900.00
28,275.00
31,900.00
9,375.00
9,375.00
5,000.00
246,825.00
erchandise covered by this invoice has

inspected, verified and checked.
Customer/Receiver
1252
Date
3 December 2011
305
Job Order No.
P. O. No.
Terms
2/10, n/30
Amount
525.00
1,400.00
2,100.00
600.00
P

Customer/Receiver
4,625.00
1253
Date
7 December 2011
306
Job Order No.
P. O. No.
2/10, n/30
Terms
Amount
5,775.00
10,500.00
18,850.00
2,900.00
12,760.00
3,625.00
3,625.00
58,035.00

Customer/Receiver
1254
Date
10 December 2011
307
Job Order No.
P. O. No.
Terms
2/10, n/30
Amount
81,200.00
91,350.00
36,250.00
36,250.00
36,250.00
36,250.00
65,250.00
94,250.00
111,650.00
3,750.00
62,500.00
52,500.00
2,000.00
2,500.00
P
711,950.00

Customer/Receiver
1255
Date
10 December 2011
308
Job Order No.
P. O. No.
Terms
2/10, n/30
Amount
5,000.00
8,700.00
10,500.00
21,750.00
7,200.00
5,250.00
70,500.00
40,000.00
31,250.00
31,250.00
31,250.00
1,500.00
33,000.00
12,300.00
309,450.00

Customer/Receiver
1256
Date
15 December 2011
309
Job Order No.
P. O. No.
2/10, n/30
Terms
Amount
3,500.00
7,500.00
1,170.00
1,000.00
1,875.00
21,750.00
36,250.00
29,000.00
36,250.00
138,295.00

Customer/Receiver
1257
Date
17 December 2011
310
Job Order No.
P. O. No.
Terms
2/10, n/30
Amount
5,500.00
19,575.00
15,950.00
18,850.00
875.00
14,100.00
12,000.00
P
86,850.00

Customer/Receiver
1258
Date
23 December 2011
311
Job Order No.
P. O. No.
2/10, n/30
Terms
Amount
33,000.00
54,375.00
32,500.00
5,625.00
1,000.00
1,250.00
14,100.00
12,000.00
750.00
1,125.00
42,000.00
5,250.00
P
202,975.00

Customer/Receiver
1259
Date
23 December 2011
312
Job Order No.
P. O. No.
Terms
cash
Amount
24360.00
15660.00
1500.00
1160.00
5800.00
1800.00
3125.00
3125.00
1875.00
3000.00
2400.00
12000.00
75,805.00

Customer/Receiver
1260
Date
23 December 2011
313
Job Order No.
P. O. No.
Terms
cash
Amount
1,800.00
12,375.00
2,100.00
37,700.00
57,420.00
P
111,395.00

Customer/Receiver
1261
Date
27 December 2011
314
Job Order No.
P. O. No.
2/10 n/30
Terms
Amount
5,075.00
13,050.00
2,500.00
2,900.00
11,000.00
21,750.00
3,125.00
4,200.00
36,250.00
36,250.00
36,250.00
36,250.00
P
208,600.00

Customer/Receiver
1262
Date
27 December 2011
315
Job Order No.
P. O. No.
Terms
2/10 n/30
Amount
9,375.00
9,375.00
9,375.00
21,150.00
32,000.00
81,275.00

Customer/Receiver
1263
Date
29 December 2011
316
Job Order No.
P. O. No.
cash
Terms
Amount
108,750.00
90,625.00
145,000.00
90,625.00
3,000.00
50,750.00
32,625.00
15,625.00
15,625.00
9,375.00
52,200.00
113,100.00
8,700.00
736,000.00

Customer/Receiver
1264
Date
30 December 2011
317
Job Order No.
P. O. No.
Terms
2/10, n/30
Amount
65,250.00
56,550.00
18,750.00
18,750.00
6,250.00
165,550.00

Customer/Receiver
1265
Date
30 December 2011
318
Job Order No.
P. O. No.
cash
Terms
Amount
56,000.00
36,000.00
94,250.00
--------------
186,250.00

Customer/Receiver
1266
Date
30 December 2011
319
Job Order No.
P. O. No.
2/10, n/30
Terms
Amount
43,500.00
188,500.00
-------------
232,000.00

Customer/Receiver
1267
Date
3 January 2012
320
Job Order No.
P. O. No.
Terms
2/10, n/30
Amount
31,250.00
37,500.00
25,000.00
P
93,750.00

Customer/Receiver
1268
Date
3 January 2012
321
Job Order No.

P. O. No.
Terms
2/10, n/30
Amount
10,875.00
18,850.00
P
29,725.00

Customer/Receiver
GRACE CORPORATION
Accounts Receivable Confirmation
December 31, 2011
I. OBJECTIVES
1.
2.
To verify the accuracy and existence of the accounts receivable balances

To determine whether the company indeed has the rights over the amounts owed to the company.
1.
2.
Existence
1.
2.
3.
4.
5.
Obtained a list of the company's customers (or check subsidiary ledger for accounts receivable)
Performed sampling from the list, taking into consideration the materiality of the accounts.
Constructed confirmation letter and send it to the selected customers.
Collected the replies from the customers.
Reviewed the accuracy of the account balances based on the customer's replies.
II. ASSERTIONS
III. PROCEDURES
IV. FINDINGS
Customer Name
R.V Castro
Ida Coronel
Alberto & Associates, CPA
Conf #
AR-1 E-1.2
AR-2 E-1.2
AR-3 E-1.2
Balance per SL
1,224,500
138,285
150,000
a
a
a
E-2.1
E-2.1
Correct Balance
1,224,500
150,000
Difference
-
Louie Tan
AR-4
E-1.2
1,284,000
Valera Company
AR-5
E-1.2
Legarda Company
AR-6
E-1.2
Gwendo Reyes
REX Enterprise
J.R. Alano Trading
AR-7
AR-8
AR-9
E-2.1
800,000
484,000
E-1.2
E-1.2
E-1.2
-50,000
1,700,000
1,600,000
a
a
a
E-2.1
E-2.1
E-2.1
-50,000
1,700,000
1,600,000
Roces, Adriano & Salas,

CPAs
AR-10 E-1.2
1,700,000
E-2.1
1,700,000
Cora Tayag
AR-11 E-1.2
289,875
Susan de Leon
AR-12 E-1.2
204,475
E-2.1
204,475
Anna Reyes
AR-13 E-1.2
300,000
E-2.1
300,000
AR-14 E-1.2
50,000
AR-15 E-1.2
Centeno, Antonio & Tantoco,

CPAs
AR-16 E-1.2
736,000
E-2.1
736,000
Building Blocks Inc

Eagle Contractors
AR-17 E-1.2
AR-18 E-1.2
575,000
300,000
a
a
E-2.1
575,000
-
LEGENDS:
a
Vouched SL balances with the OR and SI balances
V. CONCLUSION
Aside from the necessary adjusting entry and recording of payment suggested, the transactions were properly recorded.
Prepared by:
JGN
Reviewed by:
MGM
E-2
Remarks
Balance is OK.
Returned by Post Office.
Balance is OK.
The 484,000 has been paid per OR

#118 on December 28, 2011+J30.
Necessary adjusting entry must be
made.
No response. (Receivable is fully paid)
Balance is OK.
Balance is OK. (Not yet due)
Balance is OK.
Balance is OK.
Returned by Post Office.
Balance was paid full on Dec 31, 2011
per OR #122. Proper recording of
payment must be made.
Anna Reyes replied to the

confirmation letter sent to her,
confirming her balance. However, the
auditor feels doubtful as to the
authenticity of this transaction.
Therefore, her account was excluded
in the computation of the Account
Receivable balance.
No response.
Recorded balance is correct but
balance reflected in the confirmation
letter was 73,600.
Balance is OK.
No response.
properly recorded.
Date:
2/25/2012
Date:
3/1/2012
THE FOLLOWING BALANCE DUE FROM ME (US) IS CORRECT:

DUE TO:
AS OF:
GRACE CORPORATION
THE FOLLOWING BALANCE DUE FROM ME (US) IS CORREC

AMOUNT:
December 31, 2011
Signature:
DUE TO:
289,975.00
E-2
Conf.No. AR-11
GRACE CORPORATION
Signature:
Position:
Position:
CORA TAYAG
IDA C
1642 Reyes Avenue, Manila
63 Manotoc St
Returned by Post Office
Returned

DUE TO:
AS OF:
GRACE CORPORATION

AMOUNT:
December 31, 2011
Signature:
REX Enterprises
Position:
Chief Accountant
DUE TO:
P
Conf.No. AR-8
1,700,000.00
E-2
GRACE CORPORATION
Signature:
J. R. Alano Trading
Position:
Chief Accountant
Balance is OK but this is not yet due.
DUE TO:
AS OF:
GRACE CORPORATION
AMOUNT:
December 31, 2011
Signature:
Position:
Chief Accountant
DUE TO:
P
Conf.No. AR-10
1,700,000.00
E-2
GRACE CORPORATION
Signature:
Susan de Leon
Position:
This is correct.
The above amou
Dec. 31, 201

Returned

DUE TO:
AS OF:
GRACE CORPORATION

AMOUNT:
December 31, 2011
Signature:
Position:
Chief Accountant
DUE TO:
150,000.00
E-2
Conf.No. AR-3
GRACE CORPORATION
Signature:
R.V. Castro & Co.
Position:
Chief Accountant
OK
Balance
Returned

DUE TO:
AS OF:
GRACE CORPORATION
Signature:

AMOUNT:
December 31, 2011
Louie Tan
DUE TO:
1,284,000.00
E-2
Conf.No. AR-4
Position:
GRACE CORPORATION
Signature:
Gwendo Reyes
Position:
Comptroller
P 484,000 has been paid per OR# 118
Bala
on December 28, 2011.

Returned

DUE TO:
AS OF:
GRACE CORPORATION
Signature:

AMOUNT:
December 31, 2011
Centeno, Antonio & Tantoco, CPAs
DUE TO:
P
Conf.No. AR-16
73,600.00
E-2
GRACE CORPORATION
Signature:
Position:
Chief Accountant
Position:
Balance is not correct.
Chief Accountant
Balanc
Iy should be P 736,000.00.
Returned

DUE TO:
AS OF:
GRACE CORPORATION
AMOUNT:
December 31, 2011
300,000.00
E-2
No Reply:
1. Eagle Contractors
Signature:
Anna Reyes
Conf.No. AR-19
2. Valera Company
3. Legarda Company
4. Dynasty Construction
Position:
5. Benitez Merchandising
6. J. R. Alano
Balance OK.
The company and auditor agreed on 5% Bad Debts Allowance

E-2.1
E FROM ME (US) IS CORRECT:

AS OF:
AMOUNT:
December 31, 2011
138,285.00
E-2
1,600,000.00
E-2
Conf.No. AR-2
IDA CORONEL
63 Manotoc Street, Quezon City

AS OF:
AMOUNT:
December 31, 2011
R. Alano Trading
Conf.No. AR-9
hief Accountant
OK
AS OF:
AMOUNT:
December 31, 2011
P
Conf.No. AR-12
The above amount was paid in ful on

Dec. 31, 2011 per OR # 122.
204,475.00
E-2

AS OF:
AMOUNT:
December 31, 2011
V. Castro & Co.
1,224,500.00
E-2
(50,000.00)
E-2
575,000.00
E-2
Conf.No. AR-1
hief Accountant
Balance is correct.

AS OF:
AMOUNT:
December 31, 2011

Conf.No. AR-7
Balance OK.

AS OF:
uilding Blocks, Inc.
AMOUNT:
December 31, 2011
Conf.No. AR-17
hief Accountant
Balance correct.
Not included in Send Out Confirmation:

1. Lighthouse Commercial
2. Solomon Enterprises
3. Carlo Santos
4. Chad Acosta
5. Johann Morales
6. Luli Samson
on 5% Bad Debts Allowance based on adjusted balance of Accounts Receivables.
GRACE CORPORATION
Sales Cut Off
December 31, 2011
I. OBJECTIVE
1
To determine that all transactions relative to accounts receivables have been recorded in t
Completeness
1
2
Examined sales invoices before and after the reporting period

Traced sales invoices to the sales books to determine whether the transactions are record
II. ASSERTIONS
III. PROCEDURES
IV. FINDINGS
DATE
2011
Dec 1
3
7
10
SALES
INVOICE
TERMS
1251
2/10. n/30
Eagle Contractors
E-1.3
1252
2/10. n/30
1253
1254
2/10. n/30
2/10. n/30
Sampollo Company
E-1.3
E-1.3
E-1.3
CLIENT
1255
WP REF
15
1256
2/10, n/30
Ida Coronel
E-1.3
E-1.3
17
1257
2/10, n/30
Luli Samson
E-1.3
E-1.3
22
1258
2/10, n/30
Susan de Leon
23
1259
Cash
Buillding Blocks, Inc.
27
1260
1261
Cash
2/10, n/30
Buillding Blocks, Inc.

Cora Tayag
E-1.3
E-1.3
E-1.3
1262
2/10, n/30
Cora Tayag
29
1263
2/10,n/30
Centeno, Antonio & Tantoco
30
1264
C.O.D
Eagle Contractors
1265
C.O.D
1266
2/10,n/30
E-1.3
E-1.3
E-1.5
E-1.5
E-1.5
CUT-OFF
2012
Jan
3
1267
C.O.D
1268
2/10,n/30
Proposed Adjusting Journal Entries:
E-1.5
Luli Samson
E-1.5
a.
Cash
Output Tax
Sales
To record the unrecorded Sales Invoice No. 1264
b. Cash
Output Tax
Sales
To record unrecorded Sales Invoice No. 1265
*
c.
Accounts Receivable-Benitez Merchandising

Output Tax
Sales
To record Sales Invoice No. 1266
LEGEND:
* Journal Entry is already made in E-1
r Examined Sales Invoices
q Traced from Sales Invoice to Sales Book
V. CONCLUSIONS
Except for the three unrecorded sales in December, other sales transactions are recorded in the pr
are recommended. No other exceptions are noted.
een recorded in the proper acounting period
ctions are recorded
E-3
PROPERLY
RECORDED
AMOUNT
246,825.00 rq
YES
4,625.00 rq
YES
YES
YES
58,035.00 rq
711,950.00 rq
309,525.00 rq
138,285
YES
YES
REMARKS
No exceptions noted
Total amount of SI should be P4,625 but
recorded as 46.25.
No exceptions noted
No exceptions noted
Correct amount is 309, 450 but recorded as
309250. Corrections made in Procedure E-1
Immaterial difference of 10 exists due to a
mistake in footing the Sales Invoice.
Corrections made in Procedure E-1.
rq
86,850 rq
YES
204,975 rq
YES
75,085 rq
YES
No exceptions noted
111,395 rq
208,600 rq
YES
YES
No exceptions noted
No exceptions noted
No exceptions noted
Correct amount is 202, 975 but recorded as
204, 475 due to a mistake in footing the Sales
Invoice. Corrections made in Procedure E-1.
81,275 rq
rq
YES
No exceptions noted
YES
No exceptions noted
736,000
165,550 rq
NO
Adjusting entries are recommended
186,250 rq
NO
232,000 rq
NO
93,750 rq
29,725 rq
YES
No Exceptions Noted
YES
No Exceptions Noted
CUT-OFF
165,550
15,050
150,500
16,932
169,318
21,091
210,909
186,250
232,000
ecorded in the proper accounting period . Necessary adjusting entries
Prepared by:
RIT
Reviewed by:
BAG
Date:
2/15/2012
Date:
2/25/2012
V. CONCLUSIONS
The above objectives were successfully met. Appropriate balances of the Allowance for Bad Debts
the adjusted Accounts Receivable balance. The Accounts Receivables would now be presented in
as required by the PFRS, that is, Accounts Receivable net of Allowance for Bad Debts.
f the Allowance for Bad Debts were determined using the agreed percentage based on
s would now be presented in the Statement of Financial Position at its net realizable
ce for Bad Debts.
Prepared by:
BAG
Reviewed by:
RIT
Date:
2/21/2012
Date:
2/26/2012
GRACE CORPORATION
Accounts Receivable - Aging Schedule
December 31, 2011
Name of Customer
Rex Enterprises
Louie Tan
Eagle Contractors
Valera Company
Ida Coronel
Legarda Company
Cora Tayag
Anna Reyes-employee
Gwendo Reyes
Solomon Enterprises
Carlo Santos
Chad Acosta
J.R. Alano
Susan de Leon
WP Ref
E-1
E-1
E-1
E-1
E-1
E-1
E-1
E-1
E-1
E-1
E-1
E-1
E-1
E-1
E-1
E-1
E-1
E-1
E-1
Audited Balances
1,700,000
800,000
300,000
138,295
150,000
289,875
50,000
138,175
186,500
575,000
264,000
1,600,000
-
Date of Invoice
09/15/11
11/30/11
11/20/11
12/15/11
09/15/11
12/27/11
11/08/11
12/30/11
3/21 and 4/19/11
11/19/11
06/03/11
10/05/11
-
CURRENT
138,295
289,875
138,175

R.V. Castro & Co.
Johann Morales
Luli Samson
J.R.
Alano Company
Trading
Sampollo
E-1
E-1
E-1
E-1
E-1
E-1
E-1
Total Accounts Receivable
E-1
1,700,000
1,224,500
736,000
150,000.00-
11/20/11
9/20 and 11/30/11
12/29/11
11/08/11-
10,002,345
Checked against Accounts Receivable Subsidiary Ledger
736,000
1,302,345
E-4.1
1-30
No. of Days Past Due

31-60
Over 60
1,700,000
800,000
300,000
150,000
50,000
186,500
575,000
264,000
1,600,000
1,700,000
224,500
150,000.00
3,799,500
1,000,000
1,600,000
3,300,500
E-4.2
Johann Morales
Luli Samson
J.R. Alano Company
Trading
Sampollo
E-1
E-1
E-1
E-1
E-1
Total Accounts Receivable
E-1
736,000
150,000.0010,002,345
Checked against Accounts Receivable Subsidiary Ledger
12/29/11
11/08/11-
736,000
1,302,345
150,000.00
3,799,500
1,600,000
3,300,500
E-4.2
GRACE CORPORATION
Accounts Receivable - Allowance for Doubtful Accounts Schedule
December 31, 2011
CURRENT
1-30
31-60
Over 90
Total
WP
REF
E-4.1
E-4.1
E-4.1
E-4.1
E-1.1
Amount
1,302,345
3,799,500
1,600,000
3,300,500
10,002,345
Unadjusted balances, as of December 31, 2011

Required Allowance for Bad Debts
Total Audit Adjustments
Accounts Receivable, balance per audit
Allowance for Bad Debts, balance per audit
Net Accounts Receivable, December 31, 2011
Expected Percentage of
Uncollectibility
5%
5%
5%
5%
E-4.2
Schedule
cted Percentage of
Uncollectibility
5%
5%
5%
5%
Estimated
Uncollectible
65,117
189,975
80,000
165,025
500,117
497,811
500,117
2,306 E-4
10,002,345
500,117
9,502,228
GRACE CORPORATION
Notes Receivable
December 31, 2011
I. OBJECTIVES
1
2
3
To determine that notes receivables exist as of the balance sheet date.

To determine whether all notes receivables were recorded properly.
To determine whether amounts of notes receivable were accurate.
1
2
3
Existence
Completeness
Valuation
1
2
3
4
Obtained a copy of notes receivable contracts.

Examined the terms of the contract.
Reconciled the amount stated in the contract with the amount recorded in the ledger.
Recalculated interest.
The total notes receivables of Php 2,970,000 is composed of Php 2,500,000 and php 470,0000 notes receivable from Alicia M. David and
Johann Morales respectively.
The correct balance of notes receivable as of the balace sheet date should have been Php 2,470,000.
II. ASSERTIONS
III. PROCEDURES
IV. FINDINGS
Maker
Alicia M. David
Date of Note
11.05.2011
Johann Morales
12.08.2011
Balance per ledger
Add (Deduct) Adjustments:
Note collected by the Bank
Maturity Date
03.04.2012
Interest Rate
24%
02.06.2012
24%
E-5.3
E-5.3
E-5.2
E-5.1
BALANCE PER AUDIT

Proposed Adjusting Journal Entry: (Entry was already made in C2)
Cash
490,000
10,000
Notes Receivable
To record Notes Receivable collected by the bank.
Amount
2,500,000 rq
470,000 rq
2,970,000
(500,000)
2,470,000 E-7
500,000
LEGEND:
r
q
Examined Notes Receivable Contracts

Traced from contract to ledger
V. CONCLUSIONS
The difference of Php 500,000 was the unrecorded note collected by the bank.
Prepared by:
MZB
Reviewed by:
LCC
Date:
2/13/2012
Date:
2/15/2012
E-5
ble from Alicia M. David and
Date:
2/13/2012
Date:
2/15/2012
E-5.2
ACCOUNT
Notes Receivable
DATE
2011
Nov. 30 Balance
Dec. 8
Balance
ITEM
ACCOUNT NO.
DEBIT
P
GJ 11
2,500,000.00
470,000.00
2,970,000.00 E-5
DATE
ITEM
105
CREDIT
E-5.
PROMISSORY NOTE
(Note Receivable)
470,000.00 E-5
December 8, 2011
sixty days after date
For value received, I / we jointly and severally promise to pay,

Grace Corporation
thousand
interest rat
24
or order, the sum of

pesos (
470,000.00 ),
% payable at
12 Ninoy Aquino Ave., Paranaque City
Philippine Currency at an annual

.
If this note is placed in the hands of attorney for collection; the makes and endorsers
shall, in addition, pay 25% of the amount due as attorney's fees and costs of collection (aside from
the costs of litigation allowed by the Rules of Court).
Signature
Signature
Sarah B. Tuason
for Grace Corporation
Johann Morales
Name in Print
Name in Print
12 Ninoy Aquino Avenue

Paranaque City
301 Frico Street

Novaliches, Quezon City
Mailing Address
Mailing Address
Res. Cert. No.: AB3486789
Res. Cert. No.: A4882283
Date: January 19, 2011
Place of Issue: Paranaque City
Place of Issue: Quezon City
SIGNED IN THE PRESENCE OF:
PROMISSORY NOTE
(Note Receivable)
2,500,000.00 E-5
December 5, 2011

Grace Corporation
thousand
interest rat
24
120
days after date

pesos (
% payable at
2,500,000.00 ),
shall, in addition, pay 25% of the amount due as attorney's fees and costs of collection (aside from
the costs of litigation allowed by the Rules of Court).
Signature
Signature
Sarah B. Tuason
Alicia M David
Name in Print
Name in Print

Paranaque City
58 Veronica Street
Sta. Mesa, Manila
Mailing Address
Mailing Address
Res. Cert. No.: 5982283
Place of Issue: Manila
E-5.3
GRACE CORPORATION
December 31, 2011
I. OBJECTIVES
1
2
3
To determine that accrued interesr receivables exist as of the balance sheet date.
To determine whether all accrued interest receivables were recorded properly.
To determine whether amounts of accrued interest receivable were accurate.
1
2
3
Existence
Completeness
Valuation
1
2
3
4
5
Obtained a copy of notes receivable contracts.

Determined the amount of accrued interest recorded for the period
Recalculatedinterest.
Noted for differences.
The total accrued interest receivables that exist as of the balance sheet date was understated.
II. ASSERTIONS
III. PROCEDURES
IV. FINDINGS
Maker
Alicia M. David
Principal
2,000,000
Johann Morales
Balance per Audit
Balance per Books
500,000
470,000
Interest Rate
24%
24%
24%
r
r
r
Days Outstanding
56
Interest Earned
54
23
E-6.1
Audit Adjustment
Proposed Adjusting Journal Entry:
59,652
Interest Income
To record accrued interest for the period.
59,652
LEGEND:
r
Examined Notes Receivable Contracts
V. CONCLUSIONS
An understatement of Php 59,652 exist in the Accrued Interest Receivable account and so with the Interest Income recorded.
With the exceptions of the adjusting entries recommended by the auditor, sufficient and appropriate evidence were gathered to
support the assertions
made.
E-6
Interest Earned
73,644
17,753
7,108
98,505
38,853
59,652
est Income recorded.

dence were gathered to
Prepared by:
MZB
Reviewed by:
LCC
Date:
2/16/2012
Date:
3/30/2012
E-6.1
ACCOUNT
DATE

ITEM
2011
Dec. 31 Balance
Balance
ACCOUNT NO.
DEBIT
38,853.00
38,853.00 E-6
DATE
ITEM
107
CREDIT
GRACE CORPORATION
Analytical Procedures - Accounts Receivable

December 31, 2011
I. OBJECTIVES
1
To be able to evaluate the fluctuations or unusual changes on the balance of accounts receivable and notes
receivable account.
To assess whether amounts and other data relating to recorded transactions and events have been recorded
appropriately.
II. ASSERTIONS
1
Accuracy
Compared the difference between the audited balance of cash of the current year from the audited balance of the
preceding year (Balance of 2010 from 2009 and Balance of 2011 from 2010).
The differences on the account balances where expressed in percentage by diving the variance from
the prior balance of an account.
Journal entries of transactions and supporting documents related to cash such as petty cash voucher and bank
III. PROCEDURES
2
3
reconcillation were reviewed to evaluate the differences on the account balances.
IV. FINDINGS
AR Ending Balances
2009
8,850,000
Accounts Receivables
2010
12,250,000
E-4.2
2011
9,502,228
Percent Increase (Decrease)

AR Turnover
Days in AR
NR Ending Balances
600,000
38%
5.07
72.06
1,500,000
150%
-22%
10.11
36.11
2,470,000
E-5
65%
III. CONCLUSION
In the ratios displayed above, the auditors can infer that credit collecting has improved significantly for Grace Corporation. Their receivables
have an average of 36 in days oustanding, from last years' 72. There is an effective collection policy during the year, considering that
their average credit term is 45 days.
Accounts receivable turnover is the number of times per year that a business collects its average accounts receivable.
The ratio is intended to evaluate the ability of a company to efficiently issue credit to its customers and collect funds from them in a timely
manner. Because Inventory turnover doubled, we can infer that there has been a more conservative credit policy and a
more aggressive collections department, as well as high quality customers.
Prepared by:
ILW
Reviewed by:
LCC
E-7
Date:
1/25/2012
Date:
2/10/2012
GRACE CORPORATION
Reconciliation of Inventory Balances
December 31, 2011
I. OBJECTIVES
1
2
3
To determine whether inventory exists at year-end and that inventory-related transactions occured within the year.
To determine that all inventory balances of the client are reflected on the balance sheet at year-end.
To determine whether all inventory are recorded at their proper amounts with concerns to the
General Ledger (Purchases, Cost of Sales).
1
2
Existence
Completeness
Occurrence
Accuracy
1
2
3
4
5
6
7
Obtained copy of the client's Purchase Book and Purchase Invoices for the month of December.
Reconciled the records in the purchase book to the corresponding Purchase Invoices.
Examined purchase terms and Cash Vouchers and looked for possible purchase discounts.
Obtained copy of the company's Cost of Sales sheet, and Sales Invoices for the month of December.
Traced sales invoices to cost of sales sheet.
Recalculated cost of Sales.
Reconciled recalculated amount to the company's cost of sales sheet.
II. ASSERTIONS
III. PROCEDURES
8
9
10
Reconciled purchase invoices and sales invoices to stock cards.

Traced the reconciled amounts to the General Ledger of Inventory.
Compared adjusted amount as per LCNRV to the computed ending inventory.
IV. FINDINGS
WP
Ref
Unadjusted Balances
Dr.
12/31/11
Total Balances
Adjustments
Cr.
Merchandise Inventory, November 30
F1.1
799,971
Purchases
F1.2
5,464,203
Dr.
799,971
5,464,203 F.4
F1.7
Purchase Discount
Sales (at cost)
F1.4
1,861,387
1,861,387
370,773
2,328 F1.6
F1.7
F1.8
Loss on Inventory
Merchandise Inventory, December 31
6,264,174
1,861,387
4,402,787
Merchandise Inventory, End per LCNRV

Inventory Loss
PROPOSED ADJUSTING JOURNAL ENTRIES

a.
Accounts Payable
4,109
Inventory
To record purchase discount taken.
b.
Inventory
Cost of Sales
To record decrease in Cost of Sales
due to change in cost because of the
purchase discount taken.
4,109
2,328
2,328
373,101
c.
d.
e.
Cost of Sales
Inventory
To record unrecorded Sales.
362,814
Losses in Inventory
Inventory
To record loss of inventory.
191,759
362,814
191,759
Cost of Sales
Inventory
To bring the Inventory account to its audited
balance per LCNRV.
ERRORS NOTED: (to avoid confusion for future references)

Purchase Book
Inventory
PI 1099
PI 127
Date
PI 1095
PI 147
Terms
PI 117
PI 120
PI 145
PI 147
PI 1100
F1.2
F1.2
F1.2
F1.2
F1.2
F1.2
F1.2
F1.2
F1.2
43,009
43,009
Per purchase book

111,136 F1.3
234,009 F1.3
12/18/2011 F1.3
12/15/2011 F1.3
2/10 n/45 F1.3
n/30 F1.3
1/10 n/30 F1.3
2500 down, n/15 F1.3
n/30 F1.3
Per Purchase Invoices

11,136
23,409
12/8/2011
12/26/2011
2/10 n/30
Cash
2/10 n/30
Cash
Cash
All the mentioned errors above are mostly just typing errors. No adjustments were made for them because Grace Corp
accounted for them accurately.
V. CONCLUSION
With the exceptions of the adjusting entries and corrections recommended by the auditor, sufficient and appropriate
evidence were gathered to support the assertions made.
F-1
Adjusted Balances
Cr.
799,971
5,834,976
4,109
1,781
362,814
2,224,201
191,759
191,759
558,682
4,217,206
F3
4,149,747
(67,459)
Prepared by: Date:
ILW
2/15/2012
Reviewed by: Date:
DBM
2/30/2012
F-1.1
ACCOUNT
DATE
ITEM
2011
Nov. 30 Balance
Dec. 8
Balance
ACCOUNT NO.
DEBIT
P
PB 1
799,971.00
5,464,203.00
4,402,787.00
DATE
2011
Dec. 30
ITEM
GJ 13
106
CREDIT
1,861,387.00
F-1.4
Page 3
Date
Sold To
2011
Dec. 1 Eagle Contractors
3 Dynasty Construction
7 Sampolio Company
10 Benitez Merchandising
15 Ida Coronel
17 Luli Samson
22 Susan de Leon
27 Cora Tayag
29 Conteno, Antonio & Tantoco
Invoice #
1251
1252
1253
1254
1255
1256
1257
1258
1259
1260
1261
1262
1263
Amount
154,545.00
2,714.00
36,364.00
639,427.00
86,659.00
54,409.00
127,955.00
117,041.00
181,205.00
461,068.00
1,861,387.00
ACCOUNT NO.
4486-9156-80
ACCOUNT NAME
GRACE CORPORATION
PAY TO THE
ORDER OF
GENIUS PAPER PRODUCTS
PESOS
Three hundred thousand pesos only
PCI Bank
__________________________
SUCAT ROAD BRANCH
Grac
e
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
Payee:
Amount
in words:
Three hundred thousand pesos only
For
Downpayment fot merchandise purchased per

Invoice No. 111
Date of Check:
Check No.:
December 2, 2011
Prepared by:
Checked By:
Approved by:
Received above amount P
by
Date :
ACCOUNT NO.
4486-9156-80
ACCOUNT NAME
PAY TO THE
ORDER OF
SAPPHIRE CORPORATION
GRACE CORPORATION
Nine hundred seventy two thousand seven hundred fifty pesos
PESOS
PCI Bank
__________________________
SUCAT ROAD BRANCH
Grac
e
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
Payee:
Amount
in words:
Nine hundred seventy two thousand seven hundred fi
For
Partial payment for Invoice No. 920
Date of Check:
Check No.:
December 5, 2011
Prepared by:
Checked By:
Approved by:
by
Date :
ACCOUNT NO.
4486-9156-80
ACCOUNT NAME
GRACE CORPORATION
PAY TO THE
ORDER OF
BUREAU OF INTERNAL REVENUE
PESOS
Thirty four thousand two hundred pesos only
PCI Bank
SUCAT ROAD BRANCH
Grac
e
CORPORATION
__________________________
Grac
e
VAT 2011-002-148 | TIN 4004-009-175
Payee:
BUREAU OF INTERNAL REVENUE
Amount
in words:
Thirty four thousand two hundred pesos o
For
Remittance of Novenber 2011 taxes withheld on wages
Date of Check:
Check No.:
December 7, 2011
Prepared by:
Checked By:
Approved by:
by
Date :
ACCOUNT NO.
4486-9156-80
ACCOUNT NAME
GRACE CORPORATION
PAY TO THE
ORDER OF
SOCIAL SECURITY SYSTEM
PESOS
Eighty seven thousand five hundred pesos only
PCI Bank
__________________________
SUCAT ROAD BRANCH
Grac
e
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
Payee:
Amount
in words:
SOCIAL SECURITY SYSTEM

Eighty seven thousand five hundred pesos
For
Remittance of Medicare, SSS & ECC,

Employer's and Employee's contribution
Date of Check:
Check No.:
December 9, 2011
Prepared by:
Checked By:
Approved by:
by
Date :
ACCOUNT NO.
4486-9156-80
ACCOUNT NAME
GRACE CORPORATION
PAY TO THE
ORDER OF
ARBOLEDA CO., INC.
PESOS
One hundred seventy five thousand pesos only
PCI Bank
__________________________
SUCAT ROAD BRANCH
Grac
e
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
Payee:
ARBOLEDA CO., INC.
Amount
in words:
One hundred seventy five thousand pesos
For
Partial paymenr for invoce No. 101
Date of Check:
Check No.:
December 10, 2011

Prepared by:
Checked By:
Approved by:
by
Date :
ACCOUNT NO.
4486-9156-80
ACCOUNT NAME
GRACE CORPORATION
PAY TO THE
ORDER OF
PESOS
One hundred fourteen thousand nine hundred pesos only
PCI Bank
__________________________
SUCAT ROAD BRANCH
Grac
e
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
Payee:
Amount
in words:
One hundred fourteen thousand nine hundred p
For
Partial paymenr for invoce No. 1082
Date of Check:
Check No.:
December 10, 2011

Prepared by:
Checked By:
Approved by:
by
Date :
ACCOUNT NO.
4486-9156-80
ACCOUNT NAME
GRACE CORPORATION
PAY TO THE
ORDER OF
ARBOLEDA CO., INC
PESOS
One million five hundred fifty four thousand five hundred pesos
PCI Bank
__________________________
SUCAT ROAD BRANCH
Grac
e
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
Payee:
ARBOLEDA CO., INC
Amount
in words:
One million five hundred fifty four thousand five hund
For
Full payment of account with Arboleda Co., Inc.

per Invoice no. 90
Date of Check:
Check No.:
December 10, 2011

Prepared by:
Checked By:
Approved by:
by
Date :
ACCOUNT NO.
4486-9156-80
ACCOUNT NAME
GRACE CORPORATION
PAY TO THE
ORDER OF
CALTEX GAS
PESOS
Fourteen thousand pesos only
PCI Bank
SUCAT ROAD BRANCH
Grac
e
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
__________________________
Grac
e
Payee:
CALTEX GAS
Amount
in words:
Fourteen thousand pesos only
For
560 liters gasoline
Date of Check:
Check No.:
December 12, 2011

Prepared by:
Checked By:
Approved by:
by
Date :
ACCOUNT NO.
4486-9156-80
ACCOUNT NAME
GRACE CORPORATION
PAY TO THE
ORDER OF
PAYMASTER
PESOS
One million eighty thousand pesos only
PCI Bank
__________________________
SUCAT ROAD BRANCH
Grac
e
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
Payee:
CALTEX GAS
Amount
in words:
One million eighty thousand pesos only
For
Salaries for December 1- 15, 2011

Total
Less:
SSS, Medicare & ECC
HDMF
Withholding taxes
1,238,760.00
(72,360.00)
(21,600.00)
(64,800.00)
Date of Check:
Check No.:
December 14, 2011

Prepared by:
Checked By:
Approved by:
by
Date :
ACCOUNT NO.
4486-9156-80
ACCOUNT NAME
GRACE CORPORATION
PAY TO THE
ORDER OF
PESOS
Six hundred twenty five thousand pesos only
PCI Bank
__________________________
SUCAT ROAD BRANCH
Grac
e
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
Payee:
Amount
in words:
Six hundred twenty five thousand pesos o
For
Partial payment per Invoice No. 130
Date of Check:
Check No.:
December 15, 2011

Prepared by:
Checked By:
Approved by:
by
Date :
ACCOUNT NO.
4486-9156-80
ACCOUNT NAME
GRACE CORPORATION
PAY TO THE
ORDER OF
MERALCO
PESOS
Thirteen thousand two hundred fifty pesos only
PCI Bank
__________________________
SUCAT ROAD BRANCH
Grac
e
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
Payee:
MERALCO
Amount
in words:
Thirteen thousand two hundred fifty pesos
For
Additional electric bill for November 2011
Date of Check:
Check No.:
December 15, 2011

Prepared by:
Checked By:
Approved by:
by
Date :
ACCOUNT NO.
4486-9156-80
ACCOUNT NAME
GRACE CORPORATION
PAY TO THE
ORDER OF
ARBOLEDA CO., INC.
PESOS
Eighty three thousand three hundred pesos only
PCI Bank
SUCAT ROAD BRANCH
__________________________
Grac
e
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
Payee:
ARBOLEDA CO., INC.
Amount
in words:
Eighty three thousand three hundred pesos
For
Full payment of Invoice No. 117

Invoice Price
Less:
Discount
Balance
Date of Check:
85,000.00
1,700.00
83,300.00
Check No.:
December 20, 2011

Prepared by:
Checked By:
Approved by:
by
Date :
ACCOUNT NO.
4486-9156-80
ACCOUNT NAME
GRACE CORPORATION
PAY TO THE
ORDER OF
ARCHER SUPPLIES
PESOS
Five thousand pesos only
PCI Bank
__________________________
SUCAT ROAD BRANCH
Grac
e
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
Payee:
Amount
in words:
ARCHER SUPPLIES
Five thousand pesos only
For
500 pieces plastic bags for store supplies
Date of Check:
Check No.:
December 21, 2011

Prepared by:
Checked By:
Approved by:

by
Date :
4486-9156-80
ACCOUNT NO.
ACCOUNT NAME
GRACE CORPORATION
PAY TO THE
ORDER OF
PESOS
Thirty two thousand five hundred pesos only
PCI Bank
__________________________
SUCAT ROAD BRANCH
Grac
e
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
Payee:
Amount
in words:
Thirty two thousand five hundred pesos o
For
Partial payment of invoice no. 145

Invoice price
130,000.00
25% payment
Balance
32,500.00
97,500.00
Date of Check:
Check No.:
December 26, 2011

Prepared by:
Checked By:
Approved by:
by
Date :
4486-9156-80
ACCOUNT NO.
ACCOUNT NAME
GRACE CORPORATION
PAY TO THE
ORDER OF
PESOS
One hundred twenty five thousand three hundred fifteen pesos
PCI Bank
__________________________
SUCAT ROAD BRANCH
Grac
e
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
Payee:
Amount
in words:
One hundred twenty five thousand three hundred fifte
For
Partial payment of invoice no. 140

Invoice price
127,875.00
Discount
Balance
2,560.00
125,315.00
Date of Check:
Check No.:
December 26, 2011

Prepared by:
Checked By:
Approved by:

by
Date :
ACCOUNT NO.
PAY TO THE
4486-9156-80
ACCOUNT NAME
GRACE CORPORATION
ORDER OF
PESOS
Twenty five thousand pesos only
PCI Bank
__________________________
SUCAT ROAD BRANCH
Grac
e
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
Payee:
Amount
in words:
Twenty five thousand pesos only
For
Full payment of asccount with Arboleda Co., Inc

per Invoice No. 90
Date of Check:
Check No.:
December 26, 2011

Prepared by:
Checked By:
Approved by:

by
Date :
ACCOUNT NO.
4486-9156-80
ACCOUNT NAME
GRACE CORPORATION
PAY TO THE
ORDER OF
ARBOLEDA CO., INC.
PESOS
Twenty five thousand four hundred ninety pesos only
PCI Bank
SUCAT ROAD BRANCH
Grac
__________________________
Grac
e
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
Payee:
ARBOLEDA CO., INC.
Amount
in words:
Twenty five thousand four hundred ninety pes
For
Full payment of Invoice No. 127

Invoice price
25,750.00
Discount
Balance
260.00
25,490.00
Date of Check:
Check No.:
December 26, 2011

Prepared by:
Checked By:
Approved by:

by
Date :
ACCOUNT NO.
4486-9156-80
ACCOUNT NAME
GRACE CORPORATION
PAY TO THE
ORDER OF
XYZ ADS
PESOS
Thirteen thousand three hundred twenty five pesos only
PCI Bank
__________________________
SUCAT ROAD BRANCH
Grac
e
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
Payee:
Amount
in words:
For
100 pieces brochures
XYZ ADS
Thirteen thousand three hundred twenty five pe
Date of Check:
Check No.:
December 27, 2011

Prepared by:
Checked By:
Approved by:

by
Date :
ACCOUNT NO.
4486-9156-80
ACCOUNT NAME
GRACE CORPORATION
PAY TO THE
ORDER OF
PESOS
Eighty five thousand pesos only
PCI Bank
__________________________
SUCAT ROAD BRANCH
Grac
e
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
Payee:
XYZ ADS
Amount
in words:
For
In payment for Invoice No. 1095
Date of Check:
Check No.:
December 28, 2011

Prepared by:
Checked By:
Approved by:

by
Date :
ACCOUNT NO.
4486-9156-80
ACCOUNT NAME
GRACE CORPORATION
PAY TO THE
ORDER OF
PAYMASTER
PESOS
Nine hundred forty two thousand eight hundred forty pesos onl
PCI Bank
__________________________
SUCAT ROAD BRANCH
Grac
e
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
Payee:
PAYMASTER
Amount
in words:
Nine hundred forty two thousand eight hundred fort
For
Payroll for December 16-31

Less: SSS, Medicare & ECC
Withholding Taxes
HDMF
1,101,600.00
(72,360.00)
(64,800.00)
(21,600.00)
Date of Check:
Check No.:
December 30, 2011

Prepared by:
Checked By:
Approved by:

by
Date :
ACCOUNT NO.
4486-9156-80
ACCOUNT NAME
PAY TO THE
ORDER OF
MERALCO
PESOS
GRACE CORPORATION
PCI Bank
__________________________
SUCAT ROAD BRANCH
Grac
e
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
Payee:
MERALCO
Amount
in words:
For
Meralco bill for the period December 1-31 2011
Date of Check:
Check No.:
January 3, 2012
Prepared by:
Checked By:
Approved by:

by
Date :
ACCOUNT NO.
4486-9156-80
ACCOUNT NAME
GRACE CORPORATION
PAY TO THE
ORDER OF
PESOS
Two hundred forty nine thousand seven hundred fifty pesos only
PCI Bank
SUCAT ROAD BRANCH
Grac
e
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
__________________________
Grac
e
Payee:
Amount
in words:
Two hundred forty nine thousand seven hundred fift
For
In payment of purchases
Date of Check:
Check No.:
January 3, 2012
Prepared by:
Checked By:
Approved by:

by
Date :
ACCOUNT NO.
4486-9156-80
ACCOUNT NAME
GRACE CORPORATION
PAY TO THE
ORDER OF
PCI BANKARD, INC.
PESOS
Ninety seven thousand pesos only
PCI Bank
__________________________
SUCAT ROAD BRANCH
Grac
e
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
Payee:
PCI BANKARD, INC.
Amount
in words:
For
Representation expenses of the president

incurred in December 2011
Ninety seven thousand pesos only
Date of Check:
Check No.:
January 3, 2012
Prepared by:
Checked By:
Approved by:

by
Date :
ACCOUNT NO.
4486-9156-80
ACCOUNT NAME
GRACE CORPORATION
PAY TO THE
ORDER OF
MUNICIPALITY OF MANILA
PESOS
Seventy thousand pesos only
PCI Bank
__________________________
SUCAT ROAD BRANCH
Grac
e
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
Payee:
MUNICIPALITY OF MANILA
Amount
in words:
Seventy thousand pesos only
For
Property taxes for 2011
Date of Check:
Check No.:
January 4, 2012
Prepared by:
Checked By:
Approved by:

by
Date :
ACCOUNT NO.
4486-9156-80
ACCOUNT NAME
GRACE CORPORATION
PAY TO THE
ORDER OF
PHILIPPINE LONG DISTANCE COMPANY
PESOS
Fifteen thousand pesos only
PCI Bank
__________________________
SUCAT ROAD BRANCH
Grac
e
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
Payee:
PHILIPPINE LONG DISTANCE COMPANY
Amount
in words:
Fifteen thousand pesos only
For
Telephone bill for December 2011
Date of Check:
Check No.:
January 4, 2012
Prepared by:
Checked By:
Approved by:

by
Date :
ACCOUNT NO.
4486-9156-80
ACCOUNT NAME
GRACE CORPORATION
PAY TO THE
ORDER OF
MWSS
PESOS
Forty eight thousand five hundred pesos only
PCI Bank
SUCAT ROAD BRANCH
__________________________
Grace
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
Payee:
MWSS
Amount
in words:
Forty eight thousand five hundred pesos o
For
Water bill for December 2011
Date of Check:
Check No.:
January 4, 2012
Prepared by:
Checked By:
Approved by:

by
Date :
ACCOUNT NO.
4486-9156-80
ACCOUNT NAME
GRACE CORPORATION
PAY TO THE
ORDER OF
ARBOLEDA CO., INC
PESOS
One hundred forty three thousand four hundred fifty pesos only
PCI Bank
__________________________
SUCAT ROAD BRANCH
Grac
e
CORPORATION
VAT 2011-002-148 | TIN 4004-009-175
Payee:
Amount
in words:
For
ARBOLEDA CO., INC
One hundred forty three thousand four hundred fift
In payment of purchases
Date of Check:
Check No.:
January 4, 2012
Prepared by:
Checked By:
Approved by:

by
Date :
F-1.5
12345
CHECK NO.
DATE
December 2, 2011
300,000.00
__________________________
No.
CASH VOUCHER
300
12 Ninoy Aquino Avenue, Paranaque City | Tel: 632 843 7689

Telefax: 632 843 7690 | Website: www.gracecorporation.biz.ph
Date:
December 2, 2011
usand pesos only
300,000.00
12345
d above amount P
CHECK NO.
DATE
12346
December 5, 2011
972,750.00
ndred fifty pesos only

__________________________
No.
CASH VOUCHER
301

Date:
December 5, 2011
d seven hundred fifty pesos only
972,750.00
12346
d above amount P
CHECK NO.
DATE
12347
December 7, 2011
34,200.00
__________________________
CASH VOUCHER
No.
302

Date:
December 7, 2011
o hundred pesos only
34,200.00
12347
d above amount P
CHECK NO.
DATE
12348
December 9, 2011
87,500.00
__________________________
CASH VOUCHER
No.
303

Date:
December 9, 2011
ve hundred pesos only
87,500.00
12348
d above amount P
12349
CHECK NO.
DATE
December 10, 2011
175,000.00
__________________________
No.
CASH VOUCHER
304

Date:
December 10, 2011
e thousand pesos only
d above amount P
175,000.00
12349
12350
CHECK NO.
DATE
December 10, 2011
114,900.00
pesos only
__________________________
No.
CASH VOUCHER
305

Date:
December 10, 2011
nd nine hundred pesos only
114,900.00
12350
d above amount P
CHECK NO.
DATE
12351
December 10, 2011
ve hundred pesos only
1,554,500.00
__________________________
No.
CASH VOUCHER
306

Date:
December 10, 2011
housand five hundred pesos only
1,554,500.00
12351
d above amount P
CHECK NO.
DATE
12352
December 12, 2011
14,000.00
__________________________
CASH VOUCHER
No.
307

Date:
December 12, 2011
nd pesos only
14,000.00
12352
d above amount P
CHECK NO.
DATE
12353
December 14, 2011
1,080,000.00
__________________________
CASH VOUCHER
No.
308

Date:
December 14, 2011
ousand pesos only
1,080,000.00
12353
d above amount P
12354
CHECK NO.
DATE
December 15, 2011
625,000.00
__________________________
No.
CASH VOUCHER
309

Date:
December 15, 2011

thousand pesos only
d above amount P
625,000.00
12354
12355
CHECK NO.
DATE
December 15, 2011
13,250.00
__________________________
No.
CASH VOUCHER
310

Date:
December 15, 2011
undred fifty pesos only
13,250.00
12355
d above amount P
CHECK NO.
DATE
12356
December 20, 2011
83,300.00
__________________________
No.
CASH VOUCHER
311

Date:
December 20, 2011
ee hundred pesos only
83,300.00
12356
d above amount P
CHECK NO.
DATE
12357
December 21, 2011
5,000.00
__________________________
CASH VOUCHER
No.
312

Date:
December 21, 2011

pesos only
5,000.00
12357
d above amount P
12358
CHECK NO.
DATE
December 26, 2011
32,500.00
__________________________
No.
CASH VOUCHER
313

Date:
December 26, 2011
e hundred pesos only
d above amount P
32,500.00
12358
12359
CHECK NO.
DATE
December 26, 2011
125,315.00
red fifteen pesos only

__________________________
No.
CASH VOUCHER
314

Date:
December 26, 2011
three hundred fifteen pesos only
125,315.00
12359
d above amount P
CHECK NO.
DATE
12360
December 26, 2011
25,000.00
__________________________
No.
CASH VOUCHER
315

Date:
December 26, 2011
and pesos only
25,000.00
12360
d above amount P
CHECK NO.
DATE
12361
December 26, 2011
25,490.00
__________________________
CASH VOUCHER
No.
316

Date:
December 26, 2011
undred ninety pesos only
25,490.00
12361
d above amount P
CHECK NO.
DATE
12362
December 27, 2011
13,325.00
pesos only
__________________________
CASH VOUCHER
No.
317

Date:
December 27, 2011
dred twenty five pesos only
13,325.00
12362
d above amount P
12363
CHECK NO.
DATE
December 28, 2011
85,000.00
__________________________
No.
CASH VOUCHER
318

Date:
December 28, 2011
and pesos only
d above amount P
85,000.00
12363
12364
CHECK NO.
DATE
December 30, 2011
942,840.00
ed forty pesos only

__________________________
No.
CASH VOUCHER
319

Date:
December 28, 2011
eight hundred forty pesos only
942,840.00
12364
d above amount P
CHECK NO.
DATE
12365
January 3, 2012
85,000.00
__________________________
No.
CASH VOUCHER
320

Date:
January 3, 2012
and pesos only
85,000.00
12365
d above amount P
CHECK NO.
DATE
12366
January 3, 2012
249,750.00
ed fifty pesos only

__________________________
CASH VOUCHER
No.
321

Date:
January 3, 2012
seven hundred fifty pesos only
249,750.00
12366
d above amount P
CHECK NO.
DATE
12367
January 3, 2012
97,000.00
__________________________
CASH VOUCHER
No.
322

Date:
December 26, 2011
sand pesos only
97,000.00
12367
d above amount P
12368
CHECK NO.
DATE
January 4, 2012
70,000.00
__________________________
No.
CASH VOUCHER
323

Date:
January 4, 2012
nd pesos only
70,000.00
12368
d above amount P
CHECK NO.
12369
DATE
January 4, 2012
15,000.00
__________________________
No.
CASH VOUCHER
324

Date:
January 4, 2012
d pesos only
15,000.00
12369
d above amount P
CHECK NO.
DATE
12370
January 4, 2012
48,500.00
__________________________
No.
CASH VOUCHER
325

Date:
January 4, 2012
e hundred pesos only
48,500.00
12370
d above amount P
12371
CHECK NO.
DATE
January 4, 2012
143,450.00
ed fifty pesos only

__________________________
CASH VOUCHER
No.
326

Date:
d four hundred fifty pesos only
January 4, 2012
d above amount P
143,450.00
12371
GRACE CORPORATION
F-1.6
Purchase Discounts
December 31, 2011
Invoice Number
117
140
127
CV Number
311
314
257
Discount Taken
1700
2560
260
Net of Input Tax

1545
2327
236
4520
4109
Due to the Purchase Discount, there was a change in cost per item of the related invoices.
Invoice Number
117
140
140
127
Item
BIC Ballpen - Blue
Cartolina
Art Paper
Pilot Pen
Old Cost
8.5
8.5
145
103
New Cost
8.33
8.33
142.1
101.96
F1
GRACE CORPORATION
Recalculation of Cost of Sales
December 31, 2011
Invoice number
Invoice
Number
Items
Quantity
Cost
Item Total
Invoice Total (Net of Input

Tax)
1251
1250
70.00
87,500.00
250
90.00
22,500.00
Silver Paper Clips
10
35.00
350.00
20
100.00
2,000.00
Whitey Bond Paper
150
130.00
19,500.00
Milky Onion Skin
200
110.00
22,000.00
Bic Ballpen - Black
750
8.50
6,375.00
Bic Ballpen - Blue
750
8.33
6,247.50
Bic Ballpen - Red
400
8.50
3,400.00
Charcoal Pencil - Steadler
169,872.50
154,430
1252
Fastener
350
1.00
350.00
Folder - regular
350
2.50
875.00
Elmer's Glue
60
22.50
1,350.00
20
20.50
410.00
2,985.00
1253
Quink Ink
70
57.00
3,990.00
Pilot Fountain Pen
70
101.96
7,137.20
100
20
130.00
100.00
13,000.00
2,000.00
Whitey Bond Paper

1251
1252
1253
1254
1255
1256
1257
1258
1259
1260
1261
1262
1263
2,714
1264
1265
1266
Milky Onion Skin

80
50
50
110.00
50.00
50.00
8,800.00
2,500.00
2,500.00
39,927.20
Difference per discount:

36,297
1254
16 column worksheet - vernel
Yellow paper - Old Mill
Bond Paper - Whitey
Onion Skin - Milky
Cartolina
Plastic Cover
Art Paper
Folder - Regular
Folder - Long
800.00
700.00
500.00
500.00
500.00
500.00
1500.00
70.00
90.00
50.00
50.00
50.00
50.00
30.00
500.00
700.00
300.00
2500.00
250.00
500.00
500.00
130.00
110.00
8.33
17.50
142.10
2.50
3.50
56000.00
63000.00
25000.00
25000.00
25000.00
25000.00
45000.00
65000.00
77000.00
2499.00
43750.00
35525.00
1250.00
1750.00
490774.00
1255
Plain pencil- mongol
thumbtacks - golden
Elemer's glue
Carbon paper - blackie
Typewriter Ribbon - Roll-o
scissors
thick notebook
thin notebook
Bic ballpen - black
Bic ballpen - blue
Bic Ballpen - red
Fastener
100.00
150.00
300.00
150.00
240.00
300.00
1500.00
1000.00
2500.00
2500.00
2500.00
1000.00
35.00
40.00
22.50
100.00
20.50
12.00
32.50
27.50
8.50
8.33
8.50
1.00
3500.00
6000.00
6750.00
15000.00
4920.00
3600.00
48750.00
27500.00
21250.00
20825.00
21250.00
1000.00
446,158
Difference per error in cost of sales shee
Intermediate Pad - old mill

Ink - Quink
1500.00
150.00
15.00
57.00
22500.00
8550.00
211395.00
192,177
1256
scissors
Fountain pen - pilot
thumbtacks - golden
paper clips - silver
cartolina
16 column worksheet
14 column worksheet
12 column worksheet
10 column worksheet
200
50
20
20
150
300
500
400
500
vernal
vernal
vernal
vernal
12.00
101.96
40.00
35.00
8.33
50.00
50.00
50.00
50.00
2,400.00
5,098.00
800.00
700.00
1,249.50
15,000.00
25,000.00
20,000.00
25,000.00
95,247.50
86,589
1257
Onion Skin - milky
Bond Paper - Whitey
Scissors
Thick Notebook
Thin Notebook
250
450
100
100
50
300
300
15
30
110
130
12
32.5
27.5
3750
13500
11000
13000
600
9750
8250
59850
1258
Plastic Cover
Cartolina
Folder - regular
Folder - long
Leaf notebook - Thick
Bind Notebook - Thin
Fastener
Scissors
1500
1250
1300
450
250
274
300
300
500
150
15
30
17.5
8.33
2.5
3.5
32.5
27.5
1
12
22500
37500
22750
3748.5
625
959
9750
8250
500
1800
54,409
Art Paper
Elmer's Glue
200
150
142.1
22.5
28420
3375
140177.5
127,434
16800
10800
1050
800
4000
1230
2082.5
2125
1275
2100
1500
8156.8
51919.3
47,199
1200
8550
1350
26000
39600
76700
69,727
1259
Silver Paper Clips
Golden Thumbstacks
Bic Ballpen - Blue
Bic Ballpen - Black
Bic Ballpen - Red
Folder - Long
Folder - Regular
Pilot Fountain Pen
240
120
30
20
40
60
250
250
150
600
600
80
70
90
35
40
100
20.5
8.33
8.5
8.5
3.5
2.5
101.96
1260
Fastener
Quick Ink
Elmer's Glue
Bond Paper - Whitey
Onion Skin - Milky
1200
150
60
200
360
1
57
22.5
130
110
1261
Silver Paper Clips
Golden Thumbstacks
Intermediate pad - old mill
Cartolina
Elmer's Glue
10 CW
50
100
50
50
500
500
250
120
500
70
90
35
40
15
30
8.33
22.5
50
3500
9000
1750
2000
7500
15000
2082.5
2700
25000
12 CW
14 CW
16 CW
500
500
500
50
50
50
25000
25000
25000
143532.5
130,484
6375
6247.5
6375
14625
22000
55622.5
50,566
1262
Bic Ballpen - Black
Bic Ballpen - Blue
Bic Ballpen - Red
Thick Notebook
Thin Notebook
750
750
750
450
800
8.5
8.33
8.5
32.5
27.5
1263
10 CW
12 CW
14 CW
16 CW
Type writer Ribbon
Bic Ballpen - Black
Bic Ballpen - Blue
Bic Ballpen - Red
Bond Paper - whitey
Carbon Paper - Blackie
1500
1250
2000
1250
100
500
250
1250
1250
750
1200
600
60
50
50
50
50
20.5
70
90
8.5
8.33
8.5
30
130
100
75000
62500
100000
62500
2050
35000
22500
10625
10412.5
6375
36000
78000
6000
506962.5
460,875
1,859,060
1264
Bond Paper - Whitey
Bic Ballpen - Black
Bic Ballpen - Blue
Bic Ballpen - Red
500
300
1500
1500
500
90
130
8.5
8.33
8.5
45000
39000
12750
12495
4250
113495
103,177
SALES
1265
Elmer's Glue
Typewriter Ribbon - Roll-O
Bond Paper - Whitey
1600
1200
500
22.5
20.5
130
36000
24600
65000
125600
114,182
30000
130000
160000
145,455
1266
Bond Paper - Whitey
1000
1000
30
130
F-1.7
Cost of Sales Balances per
sales invoice per Cost of
Sales Sheet (GJ 13)
154,545
2,714
36,364
639,427
86,659
54,409
127,955
117,041
181,205
461,068
1,861,387
Cost of Sales Balances per

Sales invoice per auditors'
recalculation
154,430
2,714
36,297
446,158
192,177
86,589
54,409
127,434
47,199
69,727
130,484
50,566
460,875
1,859,058
103,177
114,182
145,455
2,221,872
ce per discount:
ce per error in cost of sales sheet:
2,328.18 F1
F1
362,814
STOCK CARD
Pencil
Mongol Plain
ITEM
DESCRIPTION
REFERENCE
DATE
PURCHASE INV.
SALES INV.
2011
Nov.
Dec.
30 Balance
1 PI 101
4
12
26
30
31
31
29
31
1/4/2012
final adjustment
RECEIVED
5,000
SI
SI
SI
SI
SI
SI
SI
1251
1254
1259
1261
1265
1265
1255
STOCK CARD
ITEM
DESCRIPTION
DATE
2011
Nov.
Dec.
Pencil
Steadler charcoal
REFERENCE
PURCHASE INV.
30
3 PI 1082
4
12
26
30
31
29 PI 7729
29
SALES INV.
RECEIVED
5,000
SI
SI
SI
SI
SI
1251
1254
1259
1261
1265
500
SI 1263
31
1/4/2012
STOCK CARD
Ballpen
BIC-Red
ITEM
DESCRIPTION
REFERENCE
DATE
PURCHASE INV.
SALES INV.
2011
Nov.
Dec.
30 Balance
1 PI 101
4
12
26
30
31
30
31
29 PI 101
30
31
1/3/2012
1/3/2012 PI 770
1/4/2012
final adjustment
RECEIVED
7,500
SI
SI
SI
SI
SI
SI
SI
1251
1254
1259
1262
1263
1259
1263
90
1,500
SI 1264
SI 1267
2,000
STOCK CARD
ITEM
DESCRIPTION
DATE
2011
Nov.
Dec.
Ballpen
BIC-Blue
REFERENCE
PURCHASE INV.
30 Balance
4
12
16 PI 117
26
30
SALES INV.
RECEIVED
SI 1251
SI 1255
10,000
SI 1259
SI 1262
31
29 PI 7729
30
31
1/3/2012 PI 770
1/3/2012
1/4/2012
SI 1263
1,500
SI 1264
3,000
SI 1267
STOCK CARD
Ballpen
BIC-Black
ITEM
DESCRIPTION
REFERENCE
DATE
PURCHASE INV.
SALES INV.
2011
Nov.
Dec.
30 Balance
4
12
18 PI 1095
26
30
31
29 PI 7729
30
31
1/3/2012 PI 770
1/3/2012
1/4/2012
RECEIVED
SI 1251
SI 1254
10,000
SI 1259
SI 1262
SI 1263
1,500
SI 1264
2,500
SI 1267
STOCK CARD
ITEM
DESCRIPTION
DATE
2011
Nov.
Dec.
Fountain Pen
Pilot
REFERENCE
PURCHASE INV.
30 Balance
7
17
24 PI 127
26
SALES INV.
RECEIVED
SI 1253
SI 1256
250
SI 1259
31
1/4/2012
final djustment
STOCK CARD
ITEM
DESCRIPTION
DATE
Worksheet
Vernal - 16 columns
REFERENCE
PURCHASE INV.
SALES INV.
2011
Nov.
Dec.
30 Balance
2 PI 117
12
17
30
31
31
1/4/2012
RECEIVED
15,000
SI
SI
SI
SI
1254
1256
1261
1263
STOCK CARD
ITEM
DESCRIPTION
DATE
Worksheet
Vernal - 14 columns
REFERENCE
PURCHASE INV.
SALES INV.
2011
Nov.
Dec.
30 Balance
2 PI 111
12
17
30
31
31
1/4/2012
STOCK CARD
RECEIVED
13,500
SI
SI
SI
SI
1254
1256
1261
1263
ITEM
DESCRIPTION
DATE
Worksheet
Vernal - 12 columns
REFERENCE
PURCHASE INV.
SALES INV.
2011
Nov.
Dec.
30 Balance
6 PI 127
10
12
17
30
31
30
31
1/4/2012
RECEIVED
17,000
SI
SI
SI
SI
SI
SI
1253
1254
1256
1261
1263
1261
STOCK CARD
ITEM
DESCRIPTION
DATE
Worksheet
Vernal - 10 columns
REFERENCE
PURCHASE INV.
SALES INV.
2011
Nov. 30 Balance
Dec. 6 PI 127
10
12
17
30
31
31
1/4/2012
RECEIVED
15,000
SI
SI
SI
SI
SI
1253
1254
1256
1261
1263
STOCK CARD
ITEM
DESCRIPTION
DATE
Pad Paper
Old Mill - intermediate
REFERENCE
PURCHASE INV.
SALES INV.
RECEIVED
2011
Nov. 30 Balance
Dec. 10 PI 130
12
19
23
30
31
1/4/2012
7,500
SI
SI
SI
SI
1255
1257
1258
1261
STOCK CARD
Pad Paper
Old Mill - yellow
ITEM
DESCRIPTION
REFERENCE
DATE
PURCHASE INV.
SALES INV.
2011
Nov.
Dec.
30 Balance
10 PI 130
12
19
23
30
31
30
30 PI 825
31
1/3/2012 PI 770
1/3/2012
1/4/2014
RECEIVED
8,500
SI
SI
SI
SI
SI
SI
1254
1257
1258
1261
1263
1266
1,000
250
SI 1268
STOCK CARD
ITEM
DESCRIPTION
DATE
2011
Nov.
Dec.
Bond Paper
Whitey
REFERENCE
PURCHASE INV.
30 Balance
4
SALES INV.
SI 1251
RECEIVED
10 PI 130
4,250
SI
SI
SI
SI
SI
12
17
26
31
29 PI 7729
30 PI 825
30
30
30
31
1/3/2012 PI 770
1/3/2012
1/4/2012
1253
1254
1257
1260
1263
1,300
500
SI 1265
SI 1266
SI 1264
100
SI 1268
STOCK CARD
ITEM
DESCRIPTION
DATE
Onion Skin
Milky
REFERENCE
PURCHASE INV.
SALES INV.
2011
Nov.
Dec.
30 Balance
4
8
10 PI 130
12
19
26
31
1/4/2012
final adjusment
RECEIVED
SI 1251
SI 1253
3,000
SI 1254
SI 1257
SI 1260
100
STOCK CARD
Cartolina
ITEM
DESCRIPTION
DATE
REFERENCE
PURCHASE INV.
SALES INV.
RECEIVED
2011
Nov.
Dec.
30 Balance
12
17
20 PI 130
23
30
20 PI 140
31
1/4/2012
fInal adjustment
SI 1254
SI 1256
2,250
SI 1258
SI 1261
250
STOCK CARD
Plastic Cover
ITEM
DESCRIPTION
REFERENCE
DATE
PURCHASE INV.
SALES INV.
2011
Nov.
Dec.
30 Balance
9 PI 112
12
23
31
1/4/2012
RECEIVED
5,000
SI 1254
SI 1258
STOCK CARD
Art Paper
ITEM
DESCRIPTION
DATE
2011
Nov.
Dec.
REFERENCE
PURCHASE INV.
30 Balance
12
20 PI 140
23
20 PI 140
31
SALES INV.
RECEIVED
SI 1254
750
SI 1258
1,250
1/4/2012
final adjustment
STOCK CARD
ITEM
DESCRIPTION
DATE
Ink
Quink
REFERENCE
PURCHASE INV.
SALES INV.
RECEIVED
2011
Nov.
Dec.
30 Balance
7 PI 107
10
12
26
31
1/4/2012
final adjustment
600
SI 1253
SI 1255
SI 1260
20
STOCK CARD
ITEM
DESCRIPTION
DATE
Folder
Regular
REFERENCE
PURCHASE INV.
2011
Nov.
Dec.
30 Balance
7
12
15 PI 135
23
26
31
1/4/2012
final adjustment
STOCK CARD
ITEM
Folder
SALES INV.
RECEIVED
SI 1252
SI 1254
2,500
SI 1258
SI 1259
100
DESCRIPTION
DATE
Long
REFERENCE
PURCHASE INV.
SALES INV.
2011
Nov.
Dec.
30 Balance
12
15 PI 135
23
26
31
1/4/2012
final adjustment
RECEIVED
SI 1254
2,000
SI 1258
SI 1259
STOCK CARD
ITEM
DESCRIPTION
DATE
Paper Clips
Silver
REFERENCE
PURCHASE INV.
SALES INV.
2011
Nov.
Dec.
30 Balance
4
12
17
23 PI 1099
26
30
23 PI 1099
31
1/4/2012
final adjustment
RECEIVED
SI 1251
SI 1255
SI 1256
250
SI 1259
SI 1261
100
10
STOCK CARD
ITEM
DESCRIPTION
DATE
Thumb Tacks
Golden
REFERENCE
PURCHASE INV.
SALES INV.
RECEIVED
2011
Nov.
Dec.
30 Balance
4
12
17
23 PI 1099
26
30
4
23 PI 1099
12 PI 1090
31
1/4/2012
final adjustment
SI 1251
SI 1255
SI 1256
250
SI 1259
SI 1261
SI 1251
(250)
350
40
STOCK CARD
ITEM
DESCRIPTION
DATE
Glue
Elmer's
REFERENCE
PURCHASE INV.
SALES INV.
2011
Nov.
Dec.
30 Balance
7
12
23
26
29 PI 130
30
30 PI 825
30
31
1/4/2012
final adjustment
SI
SI
SI
SI
RECEIVED
1252
1255
1258
1260
850
SI 1261
1,600
SI 1265
STOCK CARD
ITEM
DESCRIPTION
DATE
Carbon paper
Blackie
REFERENCE
RECEIVED
DATE
PURCHASE INV.
SALES INV.
2011
Nov.
Dec.
30 Balance
4
8
12
26 PI 147
26
30
31
1/4/2012
RECEIVED
SI 1251
SI 1253
SI 1255
450
SI 1259
SI 1263
STOCK CARD
Typewritter Ribbon
Rollo-O
ITEM
DESCRIPTION
REFERENCE
DATE
PURCHASE INV.
SALES INV.
2011
Nov.
Dec.
30 Balance
7
12
26
27 PI 1100
31
30 PI 805
30
31
1/4/2012
final adjustment
RECEIVED
SI 1252
SI 1255
SI 1259
650
SI 1263
1,200
SI 1265
STOCK CARD
Scissors
ITEM
DESCRIPTION
DATE
2011
Nov.
REFERENCE
PURCHASE INV.
30 Balance
SALES INV.
RECEIVED
Dec.
3 PI 1082
12
17
19
23
31
1/4/2012
800
SI
SI
SI
SI
1251
1253
1255
1259
STOCK CARD
Notebook
Leaf Thick
ITEM
DESCRIPTION
REFERENCE
DATE
PURCHASE INV.
SALES INV.
2011
Nov.
Dec.
30 Balance
12
19
22 PI 145
23
31
31
1/4/2012
RECEIVED
SI 1255
SI 1257
4,000
SI 1258
SI 1262
STOCK CARD
ITEM
DESCRIPTION
DATE
2011
Nov.
Dec.
Notebook
Bind Thin
REFERENCE
PURCHASE INV.
30 Balance
12
19
23
28 PI 151
30
12
SALES INV.
RECEIVED
SI 1255
SI 1257
SI 1258
6,000
SI 1262
SI 1255
19
23
30
31
1/4/2012
SI 1257
SI 1258
SI 1262
STOCK CARD
Fastener
ITEM
DESCRIPTION
DATE
2011
Nov.
Dec.
REFERENCE
PURCHASE INV.
30 Balance
12
19
22 PI 120
23
31
31
1/4/2012
SALES INV.
RECEIVED
SI 1252
SI 1255
5,000
SI 1258
SI 1260
F-1.8
1001
box
STOCK NO.
UNIT
ISSUED
BALANCE
200
5,200
3,950
3,150
2,910
2,860
2,360
2,860
2,760
2,760
2,360
2,360
1,250
800
240
50
500
(500)
100
400
1002
box
STOCK NO.
UNIT
ISSUED
BALANCE
250
700
120
100
500
250
100
5,100
4,850
4,150
4,030
3,930
3,430
3,930
3,680
3,680
3,680
1003
piece
STOCK NO.
UNIT
ISSUED
BALANCE
500
8,000
7,600
5,100
4,860
4,710
3,960
4,050
3,450
4,950
4,450
4,450
2,450
4,450
3,450
3,450
400
2,500
240
150
750
600
500
2,000
1,000
1004
piece
STOCK NO.
UNIT
ISSUED
BALANCE
750
2,500
250
750
4,000
3,250
750
10,750
10,500
9,750
1,250
8,500
10,000
8,500
8,500
11,500
8,500
8,500
1,500
3,000
1005
piece
STOCK NO.
UNIT
ISSUED
BALANCE
5,000
4,250
1,750
11,750
11,500
10,750
9,500
11,000
9,500
9,500
12,000
9,500
9,500
750
2,500
250
750
1,250
1,500
2,500
1006
piece
STOCK NO.
UNIT
ISSUED
BALANCE
70
50
80
200
130
80
330
250
250
230
230
20
1007
pads
STOCK NO.
UNIT
ISSUED
BALANCE
100
15,100
14,600
14,300
13,800
12,550
12,550
12,550
500
300
500
1,250
1,008
STOCK NO.
pads
UNIT
ISSUED
BALANCE
500
500
500
2,000
200
13,700
13,200
12,700
12,200
10,200
10,200
10,200
1009
pads
STOCK NO.
UNIT
ISSUED
BALANCE
100
17,100
17,050
16,550
16,150
15,950
14,700
14,400
14,400
14,400
50
500
400
200
1,250
300
1010
pads
STOCK NO.
UNIT
ISSUED
BALANCE
200
15,200
15,150
14,650
14,150
13,650
12,150
12,150
12,150
50
500
500
500
1,500
STOCK NO.
UNIT
ISSUED
1011
pads
BALANCE
100
7,600
6,100
5,850
4,350
3,850
3,850
3,850
1,500
250
1,500
500
1012
pads
STOCK NO.
UNIT
ISSUED
BALANCE
200
8,700
7,200
6,750
5,500
5,000
3,800
2,800
3,800
3,800
4,050
3,800
3,800
1,500
450
1,250
500
1,200
1,000
250
1013
reams
STOCK NO.
UNIT
ISSUED
BALANCE
150
200
50
4,300
4,200
3,700
3,600
3,400
2,800
4,100
4,600
4,100
3,100
2,800
2,800
2,900
2,800
2,800
100
500
100
200
600
500
1,000
300
100
1014
reams
STOCK NO.
UNIT
ISSUED
BALANCE
300
100
20
3,020
2,320
2,220
1,860
1,860
1,960
1,960
200
80
700
100
360
STOCK NO.
UNIT
ISSUED
1015
rolls
BALANCE
500
200
50
2,300
1,850
1,600
1,850
1,850
1,540
1,540
300
150
450
250
310
1,016
STOCK NO.
meters
UNIT
ISSUED
BALANCE
100
5,100
2,600
1,300
1,300
1,300
2,500
1,300
1017
reams
STOCK NO.
UNIT
ISSUED
BALANCE
250
200
300
50
800
600
1,850
1,850
600
600
1,250
1018
bottle
STOCK NO.
UNIT
ISSUED
BALANCE
100
700
630
480
330
330
350
350
70
150
150
1019
piece
STOCK NO.
UNIT
ISSUED
BALANCE
350
500
250
600
STOCK NO.
1,000
650
150
2,650
2,400
1,800
1,800
1,900
1,900
1,020
piece
UNIT
ISSUED
BALANCE
600
100
2,100
1,850
1,250
1,250
1,200
1,200
500
250
600
50
1021
box
STOCK NO.
UNIT
ISSUED
BALANCE
150
140
40
20
270
240
190
290
290
300
300
10
100
20
30
50
STOCK NO.
UNIT
ISSUED
1022
box
BALANCE
200
190
40
20
270
250
200
210
(40)
310
310
350
350
10
150
20
20
50
(10)
1023
bottle
STOCK NO.
UNIT
ISSUED
BALANCE
600
540
240
90
30
880
760
2,360
760
760
660
660
60
300
150
60
120
1,600
100
STOCK NO.
UNIT
ISSUED
1024
bottle
BALANCE
ISSUED
BALANCE
200
180
160
10
460
420
360
360
360
20
20
150
40
60
1025
box
STOCK NO.
UNIT
ISSUED
BALANCE
600
580
340
280
930
830
2,030
830
830
630
630
20
240
60
100
1,200
200
STOCK NO.
UNIT
ISSUED
1026
pair
BALANCE
50
850
550
350
300
150
150
150
300
200
50
150
1027
piece
STOCK NO.
UNIT
ISSUED
BALANCE
2,000
500
200
4,200
3,900
3,450
3,450
3,450
1,500
300
300
450
1028
piece
STOCK NO.
UNIT
ISSUED
BALANCE
4,000
1,200
1,200
3,200
(3,000)
7,000
3,000
1,800
600
6,600
3,400
6,400
(900)
(900)
(2,400)
7,300
8,200
10,600
10,600
10,600
1029
piece
STOCK NO.
UNIT
ISSUED
BALANCE
350
1,000
500
1,200
1,500
1,150
150
5,150
4,650
3,450
3,450
3,450
GRACE CORPORATION
Observation of Physical Count
December 31, 2011
I. OBJECTIVES
1
2
3
To obtain evidence of the existence and condition of the inventory and the security of its storage
To observe how the client company conducts the inventory count
To test the accuracy of the counting
1
2
3
Existence
Completeness
Accuracy
1
2
3
4
5
6
Read inventory count manual

Performed inventory count on selected inventory items
Collected the physical inventory list
Footed and cross footed the recorded quantity per stock cards
Traced transactions recorded on the stock cards with corresponding purchase and sales invoices
Completed the test count sheet
II. ASSERTIONS
III. PROCEDURES
F-2
IV. FINDINGS
INVENTORY COUNT SHEET

DATE OF COUNT:
CLIENT'S NAME
STOCK LOCATION
JANUARY 4, 2012
GRACE CORPORATION
BALANCE SHEET DATE:
STORE
DECEMBER 31, 2011

DESCRIPTION
QUANTITY
AUDITOR'S
BRAND & STOCK
UNIT
STOCK
COUNT
PER CLIENT'S
WP REF
PER COUNT
WP REF
COUNT LIST
DIFFERENCE
REMARKS
Bic Ballpen
- Red
pcs.
3,450
F1.8
###
F2.1
3,450
Sale of 2500 pieces recorded on December

12 was erroneusly referred to IS 1254.
Proper ref - 1255.
- Blue
pcs.
8,500
F1.8
###
F2.1
8,500
Ok.
- Black
pcs.
9,500
F1.8
###
F2.1
9,500
Sale of 2500 pieces recorded on December

12 was erroneusly referred to IS 1254.
Proper ref - 1255.
Charcoal Pencil
box
3,680
F1.8
###
F2.1
3,680
Error in recording a sale of 250 boxes on

December 31 as 500 boxes, and should be
with reference to SI 1263 and not SI 1265.
Plain Pencil
box
2,360
F1.8
###
F2.1
2,360
Error in referring sale of 500 boxes recorded

on December 31 to SI 1265. Proper ref - SI
1263.
Whitey Bond paper

Yellow pad
ream
pad
2,800
3,800
F1.8
F1.8
###
###
F2.1
F2.1
2,800
3,800
0
0
Glue Elmer's
botl.
660
F1.8
F2.1
660
Roll-O Typewiter ribbo
box
630
F1.8
F2.1
630
760
-
Ok.
Ok.
Not recorded in any of the sales invoices.
Possibility of theft.
No stock card.
Calculator
- fx-39
- fx-40
- hl-807
Max Stapler
Worksheet
- 16 columns
- 14 columns
pcs.
pcs.
pcs.
pcs.
0
0
0
5
F1.8
F1.8
F1.8
F1.8
pads
pads
12,550
10,200
F1.8
F1.8
- 12 columns
pads
14,400
- 10 columns
pads
12,150
F2.1
F2.1
F2.1
F2.1
0
0
0
5
No stock card.
No stock card.
No stock card.
No stock card.
12,550
10,200
F2.1
F2.1
12,550
10,200
0
0
Ok.
Ok.
F1.8
14,700
F2.1
14,400
(300)
Sale of 500 pads dated November 30 with

ref to SI 1261 was recorded in the stock
card as 200.
F1.8
12,100
F2.1
12,150
50
Error in footing.
TAKEN BY
SHEET NO. _____ OF _____ SHEETS
AUDITOR'S
CLIENT'S
REPRESENTATIVE
REPRESENTATIVE
COMPLETE CHECK
FOR AUDITOR
TEST CHECK
FOR CLIENT
LEGEND:
V. CONCLUSION
Compared the per-transaction amounts recorded on the stock cards to that of the referred purchase and sales invoices.
The performed inventory counts (by both the auditor and the client) have proven the existence of the different inventory items of the company, and that the quantity as per
auditor's count and as per client's count are accurate. However, some balances that were recorded on the stock cards are either incorrect or referring to the wrong Sales Invoice.
Moreover, the missing inventory of 100 bottles of glue with no record in any of the company's sales invoices for the month is a possible indication of theft. Some stock cards
were not available for audit as well.
Prepared by:
JGN
Reviewed by:
MZB
Date:
1/12/2012
Date:
1/16/2012
per
s Invoice.
ards
GRACE CORPORATION
Physical Inventory List
January 4, 2012
UNIT COST
ITEM
BRAND
(VAT Inclusive)
Plain Pencil
Charcoal Pencil
Red Ballpen
Blue Ballpen
Black Ballpen
Mongol
Staedler
Bic
Bic
Bic
Fountain Pen
Worksheet
16 columns
14 columns
12 columns
10 columns
Intermediate pad
Yello Pad
Bond Paper
Onion Skin
Cartolina
Plastic Cover
Art Paper
Ink
Regular Folder
Long Folder
Paper Clips
Thumbtacks
Glue
Carbon Paper
Typewriter Ribbon
Scissors
Thick Notebook
Thin Notebook
Fastener
Envelope - short
Envelope - long
Calculator
fx-39
fx-40
Pilot
103.50
Vernal
Vernal
Vernal
Vernal
Old Mill
Old Mill
Whitey
Milky
50.00
50.00
50.00
50.00
15.00
30.00
130.00
110.00
9.00
17.50
150.00
57.00
2.50
3.50
30.00
40.00
22.50
100.00
20.50
12.00
32.50
27.50
1.10
2.50
3.50
Quink
Carona
Carona
Silver
Golden
Elmer's
Blackey
Roll-O
Mayon
Carona
Carona
Casio
Casio
70.00
90.00
8.50
8.50
8.50
1,800.00
2,000.00
UNITS
2,360
3,680
3,450
8,500
9,500
boxes
boxes
pieces
pieces
pieces
230 pieces
12,550
10,200
14,400
12,150
3,850
3,800
2,800
1,960
1,540
1,300
600
350
1,900
1,200
300
350
660
360
630
150
3,450
10,600
3,450
0
0
pads
pads
pads
pads
pads
pads
reams
reams
rolls
meters
reams
bottles
pieces
pieces
boxes
boxes
bottles
boxes
boxes
pairs
pieces
pieces
pieces
pieces
pieces
0 pieces
0 pieces
hl-807
Stapler
Casio
Max
1,000.00
152.50
0 pieces
5 pieces
F-2.1
TOTAL
165,200.00
331,200.00
29,325.00
72,250.00
80,750.00
23,690.00
627,500.00
510,000.00
720,000.00
607,500.00
57,750.00
114,000.00
360,000.00
215,600.00
13,500.00
22,750.00
90,000.00
18,240.00
4,750.00
4,200.00
9,000.00
12,800.00
14,850.00
36,000.00
12,915.00
1,800.00
112,125.00
227,900.00
37,950.00
762.50
4,522,787.00
1015
1016
1017
1018
1019
1020
1021
1022
1023
1024
1025
1026
1027
1028
1029
no stock card
no stock card
no stock card
no stock card
no stock card
no stock card
Cartolina
Plastic Cover
Art Paper
Ink
Regular Folder
Long Folder
Paper Clips
Thumbtacks
Glue
Carbon Paper
Typewriter Ribbon
Scissors
Thick Notebook
Thin Notebook
Fastener
Envelope - short
Envelope - long
Calculator
fx-39
fx-40
hl-807
Stapler
TOTAL
Input VAT
Total Ending Inventory, net of tax
Quink
Carona
Carona
Silver
Golden
Elmer's
Blackie
Roll-O
Mayon
F2.1
F2.1
F2.1
F2.1
F2.1
F2.1
F2.1
F2.1
F2.1
F2.1
F2.1
F2.1
F2.1
F2.1
F2.1
F2.1
F2.1
F2.1
F2.1
F2.1
F2.1
We assumed that cost is equal to NRV.

LEGEND:
Footed
Extended
V. CONCLUSIONS
PAS 2 Inventories state that measurement of inventories should be at the lower of cost and net realizable
The objective to determine whether inventories are properly measured in accordance with PAS have been
The inventories are properly valued where we assumed that cost is equal to NRV.
1,540
1,300
600
350
1,900
1,200
300
350
660
360
630
150
3,450
10,600
3,450
F1.6
F1.3
F1.6
F1.3
F1.3
F1.3
F1.6
F1.3
F1.3
F1.3
F1.3
F1.3
F1.3
F1.3
0
0
F1.3
F2.1
F2.1
0
0
0
5
F2.1
F2.1
F2.1
F2.1
8.33
17.50
142.10
57.00
2.50
3.50
35.00
40.00
22.50
100.00
20.50
12.00
32.50
27.50
1.00
2.50
3.50
1,800.00
2,000.00
1,000.00
152.50
12,828.20
22,750.00
85,260.00
19,950.00
4,750.00
4,200.00
10,500.00
14,000.00
14,850.00
36,000.00
12,915.00
1,800.00
112,125.00
291,500.00
3,450.00
8.33
17.50
142.10
57.00
2.50
3.50
35.00
40.00
22.50
100.00
20.50
12.00
32.50
27.50
1.00
2.50
3.50
1,800.00
2,000.00
1,000.00
152.50
762.50
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
###
4,564,721.50
(414,974.68)
4,149,746.82 F-1
t and net realizable value.

with PAS have been met.
Prepared by:
RIT
Reviewed by:
BAG
Date:
2/23/2012
Date:
2/28/2012
GRACE CORPORATION
Purchase Cut-Off
December 31, 2011
I. OBJECTIVE
1
To determine that all transactions relative to purchases have been recorded in the proper accounting period
To determine that all recorded transactions relative to purchases exist.
Completeness
Cut-off
Existence
Examined all purchase and sales invoices from December 2011 to January 4, 2012.
Traced purchases invoices to the purchase book to determine whether the purchase transactions are recorded in the proper accounting
Traced sales invoices to the sales book to determine whether the sales transactions are recorded in the proper accounting period.
II. ASSERTIONS
III. PROCEDURES
IV. FINDINGS
SALES TRANSACTIONS
Date
SALES
INVOICE
TERMS
1251
2/10. n/30
Eagle Contractors
E-1.3
1252
2/10. n/30
Dynasty
Construction
E-1.3
4,625
1253
2/10. n/30
Sampollo Company
E-1.3
58,035
1254
2/10. n/30
Benitez
Merchandising
E-1.3
711,950
E-1.3
309,525
rc
E-1.3
138,285
rc
CLIENT
AMOUNT
2011
Dec 1
246,825
rc
3
7
10
1255
15
1256
2/10, n/30
Ida Coronel
17
1257
2/10, n/30
Luli Samson
E-1.3
86,850
23
1258
2/10, n/30
Susan de Leon
E-1.3
204,975
23
1259
Cash
E-1.3
75,085
1260
Cash
E-1.3
111,395
1261
2/10, n/30
Buillding Blocks,
Inc.
Buillding Blocks,
Inc.
Cora Tayag
E-1.3
208,600
1262
2/10, n/30
E-1.3
81,275
1263
2/10,n/30
Centeno, Antonio
& Tantoco
E-1.3
736,000
1264
C.O.D
Eagle Contractors
E-1.5
165,550
1265
C.O.D
Dynasty
Construction
E-1.5
186,250
1266
2/10,n/30
Benitez
Merchandising
E-1.5
232,000
27
Cora Tayag
rc
29
30
CUT OFF
2012
Jan
1267
C.O.D
1268
2/10,n/30
Benitez
Merchandising
Luli Samson
E-1.5
93,750
E-1.5
29,725
Adjusting entries already recorded in procedure 1.
PURCHASE TRANSACTIONS
PURCHASE INVOICES
SUPPLIER
DATE
AMOUNT PER
INVOICE
101
Arboleda Co., Inc.
12/1/2011
F-1.2
111
Genius Paper Products
12/2/2011
F-1.2
1082
Sapphire Corporation
12/3/2011
F-1.2
127
12/6/2011
F-1.2
107
Arboleda Co., Inc.
12/7/2011
F-1.2
112
Arboleda Co., Inc.
12/9/2011
F-1.2
130
12/10/2011
F-1.2
1090
12/12/2011
F-1.2
135
12/15/2011
F-1.2
117
Arboleda Co., Inc.
12/16/2011
F-1.2
1095
12/8/2011
F-1.2
140
12/20/2011
F-1.2
120
Arboleda Co., Inc.
12/21/2011
F-1.2
145
12/22/2011
F-1.2
1099
12/23/2011
F-1.2
127
Arboleda Co., Inc.
12/24/2011
F-1.2
147
12/15/2011
F-1.2
1100
12/27/2011
F-1.2
151
12/28/2011
F-1.2
130
Arboleda Co., Inc.
12/29/2011
F-1.2
12/29/2011
F-1.3
7729
825
Arboleda Co., Inc.
12/30/2011
F-1.3
1/3/2011
F-1.3
CUT OFF
Proposed Adjusting Entries:
Inventory
229,318
22,932
Input Tax
Accounts Payable- Genius Paper Products
252,250
To record purchase on account made on December 29, 2011.
Inventory
141,455
Input Tax
14,145
Accounts Payable- Arboleda Co., Inc.

To record purchase on account made on December 30, 2011.
Verified computation
Vouched with sales invoice
155,600
Vouched with purchase invoice
V. CONCLUSIONS
Except for the three unrecorded sales in December (Sales Invoice No. 1264, 1265, and 1266) and two unrecorded purchases (Purchase Invoice 77
month, other sales and purchase transactions are recorded in the proper accounting period. Necessary adjusting entries are proposed by the aud
are noted.
ecorded in the proper accounting period.
e proper accounting period.
F-4
PROPERLY
RECORDED
REMARKS
YES
No exceptions noted
YES
Total amount of SI should be P4,625

but recorded as 46.25.
YES
No exceptions noted
YES
No exceptions noted
YES
Correct amount is 309, 450 but

recorded as 309250. Corrections
made in Procedure E-1
YES
Immaterial difference of 10 exists due

to a mistake in footing the Sales
Invoice. Corrections made in
Procedure E-1.
YES
No exceptions noted
YES
Correct amount is 202, 975 but

recorded as 204, 475 due to a mistake
in footing the Sales Invoice.
Corrections made in Procedure E-1.
YES
No exceptions noted
YES
No exceptions noted
YES
No exceptions noted
YES
No exceptions noted
YES
No exceptions noted
NO
*
NO
NO
*
*
YES
No Exceptions Noted
YES
No Exceptions Noted
AMOUNT PER
INVOICE
P
R
O
P
E
R
L
Y
R
E
C
Y
O
376,136 E
R
S
Y
D
1,295,455 E
E
Y
S
D
417,818 E
Y
S
1,454,545 E
S
REMARKS
No Exceptions Noted
No Exceptions Noted
No Exceptions Noted
No Exceptions Noted
31,091
79,545
1,136,364
12,727
12,045
77,273
77,273
116,250
4,545
118,182
11,136
23,409
40,909
Y
E
Y
S
E
Y
S
E
Y
S
E
Y
S
E
Y
S
E
Y
S
E
Y
S
E
Y
S
E
Y
S
E
Y
S
E
Y
S
E
Y
S
E
S
No Exceptions Noted
No Exceptions Noted
No Exceptions Noted
No Exceptions Noted
No Exceptions Noted
No Exceptions Noted
No Exceptions Noted
No Exceptions Noted
No Exceptions Noted
No Exceptions Noted
No Exceptions Noted
No Exceptions Noted
No Exceptions Noted
Amount in the invoice showed a

Ytotal amount of Php 19,125 gross
12,114 Eof input tax but correctly recorded
S by the entity at Php 12,114 net
of input tax.
Y
150,000 E
No Exceptions Noted
Y
S
17,386 E
No Exceptions Noted
S
229,318NOAdjusting entries recommended
141,455NOAdjusting entries recommended
No Exceptions Noted
ed purchases (Purchase Invoice 7729 and 825) on the same
g entries are proposed by the auditor. No other exceptions
Prepared by:
Date:
LCC
2/1/2012
Reviewed by:
Date:
DBM
2/5/2012
GRACE CORPORATION
Analytical Procedures - Inventory
December 31, 2011
I. OBJECTIVES
1
2
3
To determine the validity of inventory account balances.

To determine significant ratios in the accounts related to inventory transactions.
To evaluate fluctuations or unusual changes on the inventory account balances.
Accuracy
Obtained audited financial information from comparable prior periods and audited balances of accounts related
to inventories as of December 31, 2011.
Computed significant financial ratios for both prior and current period audited financial information.
Compared differences between prior and current period ratios.
Evaluated the company's performance based on the financial analysis ratios.
II. ASSERTIONS
III. PROCEDURES
2
3
4
F-5
IV. FINDINGS
Grace Corporation
Analytical Review Ratios
For the Period Ended December 31, 2011
December 31, 2009
700,000 F
-
December 31, 2010

December 31, 2011
900,000 F-3
4,149,747
29%
361%
Inventory, End
Net Sales
UA
47,916,000 UA
53,439,000 UA
12%
110,957,707
108%
Cost of Sales
VA
29,085,000 VA
-
34,785,500 VA
20%
57,050,382
64%
Gross Profit
18,831,000
Inventory Turnover
Days in Inventory
Gross Profit Margin
18,653,500
53,907,325
21.74
11.30
16.79
32.31
39%
35%
49%
It is observed in the ratios displayed above that there is a substantial increase of 361% in the ending balance of inventory
which means that the company has invested in more inventories and thus resulting to an increase in net sales of 108%.
However, there is a signficant decline in the company's inventory turnover this year which could indicate a decrease in the
company's efficiency in inventory management. On the other hand, this could indicate that the company had taken
advantage of the prior year's high turnover by investing in more inventories in order to avoid lost orders.
It is also observed that there is a significant increase in the number of days the company takes in clearing its inventory.
This may be an indication that the company may have invested too much on inventories. But, considering the increase in
the company's gross profit margin, we can infer that the increase in inventory levels had not resulted to an unfavorable
company performance this year.
III. CONCLUSION
The objectives for this procedure were met. Inventory account balances were found to be reasonable based on the evaluation
made on the significant financial ratios above. No exceptions noted.
Prepared by:
BAG
Reviewed by:
RIT
Date:
2/21/2012
Date:
2/26/2012
F-5
Date:
2/21/2012
Date:
2/26/2012
Unadjusted balances
Adjustments:
TOTAL
ADJUSTED BALANCES
Net Sales
COS
110,244,403 Debit
-1363.6363636364
-300000
-68
9
210909
484000
150500
169318.181818182
###
-2,328
362,814
43,009
403,495
GRACE CORPORATION
Inspection of PPE
December 31, 2011
I. OBJECTIVES
1
To determine whether property, plant, and equipment included in
Existence
1
2
3
4
Obtained a list of property, plant and equipment that the compan

Selected certain property, plant and equipment to inspect
Went to the location of the chosen propery, plant and equipment
Inspected the selected property, plant and equipment
II. ASSERTIONS
III. PROCEDURES
IV. FINDINGS
Classification
Type
Land
2,000 square meters more or

less
Building
2,000 square meters
Furniture & Fixture
Air Conditioning System
Delivery Vans
Isuzu Crewcab
Office Equipment
Olympia Electric Typewriter

SN 41226
III. CONCLUSION
No exceptions noted.
K-1
ment included in the statement of financial position physically exist
hat the company owns or leases
and equipment
Inspected
Remarks
Exists
Exists
Exists
Exists
Exists
Prepared by:
MGM
Reviewed by:
JGN
Date:
3/15/2012
Date:
3/17/2012
GRACE CORPORATION
Schedule of Plant, Property & Equipme
December 31, 2011
Ledger
Classification
Land
Description
A parcel of land, Lot 4, Blk 2 of the consolidation-subdivision plan PCS 12456 situated
in Sucat, Municipality of Paraaque, Province
of Rizal containing an area of two thousand
(2,000) square meters more or less
Building
2,000 sq.m. concrete building
Additional improvements
Furniture
& Fixture
80 showcases for the store

@ P 5,000
40 office tables & 40 office
chairs @ P 24,000
10 conference tables with 80
chairs
30 four-drawer steel cabinets
1 office safe fire proof Hobart
50 venetian blinds FineLine
Air-conditioning System
Delivery
6 Isuzu Crewcab
Vans
Model 1993, Motor #123456

Chassis #821618
Office
Equipment
10 Personal Computers
Pentium 6
SN 41226
SN 41231
41227
41232
41228
41233
41229
41234
41230
41235

SN 41226
18" Carriage. Model 142C
SN 528376
12" Carriage. Model 215
10 Electric Fans
SN 15381
SN 15386
15382
15387
15383
15388
15384
15389
15385
15390
Footed/Cross-Footed
Extended
Traced to General Ledger
K-1.1
GRACE CORPORATION
e of Plant, Property & Equipment
December 31, 2011
Reference/
Date
CV-11-182
Estimated Life from

Acquisition Date
Cost
P
16,500,000.00
11.02.2010
CV-11-182
33,000,000.00
20 years
11.02.2010
20,000,000.00
CV-1-5
01.05.2011
P
53,000,000.00
CV-6-2
06.01.2010
400,000.00
40 years
CV-6-3
06.02.2010
480,000.00
5 years
CV-8-10
08.20.2010
600,000.00
CV-7-10
07.10.2010
240,000.00
CV-7-11
07.11.2010
280,000.00
CV-8-13
08.15.2010
320,000.00
1,230,000.00
CV-3-16
08.18-2010
CV-12-20
12.20-2010
3,550,000.00
6,000,000.00
10 years
CV-8-01
08.01-2010
2,050,000.00
CV-8-02
08.01-2010
25,000.00
10 years
CV-8-03
08.01-2010
25,000.00
10 years
CV-8-03
08.01-2010
30,000.00
5 years
d/Cross-Footed
d to General Ledger
2,130,000.00
5 years
GRACE CORPORATION
Vouching of Acquisitions and Disposals
December 31, 2011
I. OBJECTIVES
1
2
To determine that all property, plant, and equipment recorded in the

To determine that all property, plant, and equipment are reported at
1
2
Existence
Valuation
1
2
3
Obtained property, plant, and equipment balances as of January 1, 2

Obtained Schedule of Property, Plant, and Equipment accounts.
Verified amounts recorded in general ledger control accounts by exa
a. Investigated amounts of items listed in the Schedule of Pro
b. Checked footings, cross-footings, and extensions.
Noted current year acquisitions and/or additions and disposals.
II. ASSERTIONS
III. PROCEDURES
IV. FINDINGS
Balance per
Ledger, as of
January 1, 2011
PPE Item
Land
Building
Furnitures & Fixtures
Office Equipment
Total PPE
K-2.1
K-2.1
K-2.1
K-2.1
K-2.1
16,500,000
33,000,000 K-1.1
3,550,000
6,000,000
2,130,000
61,180,000
LEGEND:
1
2
3
Vouched to Schedule of PPE
Property, plant, and equipment items are found to be recorded a

Additions in building account of P20,000,000 represent additiona
There are no further acquisitions and disposals this year.
However, certain items are to be noted. The supporting document gi

Furthermore, some items when crossfooted are wrong, but the audit
as it was presented in the 2009, 2010 and 2011 balances.
III. CONCLUSION
The existence of all property, plant, and equipment items recorded in the St
were properly valued at its cost. No adjustments were made. No exceptions
ipment recorded in the Statement of Financial Position exists.

ipment are reported at the appropriate amount.
ances as of January 1, 2011 and as of December 31, 2011

uipment accounts.
ontrol accounts by examining Schedule of Property, Plant, and Equipment accounts.
d in the Schedule of Property, Plant and Equipment.
nd extensions.
ns and disposals.
Acquisitions or
Additions
20,000,000
Balance per
Ledger, as of
Dec 2011
Disposals
K-1.1
K-1.1
K-1.1
K-1.1
K-1.1
Adjustments
Dr.
16,500,000
53,000,000
3,550,000
6,000,000
2,130,000
81,180,000
Cr.
hedule of PPE
found to be recorded at their historical costs as per Schedule of Property, Plant and Equipment.
000 represent additional improvements made this year and was capitalized.
osals this year.
upporting document given indicated the date of the cash voucher and not the acquisition date.
re wrong, but the auditors decide that the item description was at fault so the balance remained correct
11 balances.
tems recorded in the Statement of Financial Position were determined. It was also determined that property, plant, and equ
e made. No exceptions noted.
K-2
Balance per Audit,

as of December 31,
2011
16,500,000
53,000,000
3,550,000
6,000,000
2,130,000
81,180,000
mained correct
ned that property, plant, and equipment items
Prepared by:
BAG
Reviewed by:
JGN
Date:
2/14/2012
Date:
2/16/21012
ACCOUNT
DATE
Land
ITEM
2011
Nov. 30 Balance
ACCOUNT
DATE
DATE
ACCOUNT
DATE
ITEM
DATE
DEBIT
53,000,000.00

ITEM
DEBIT

ITEM
2011
Nov. 30 Balance
ACCOUNT
16,500,000.00
Building
2011
Nov. 30 Balance
ACCOUNT
DEBIT
DEBIT
3,550,000.00

ITEM
DEBIT
ACCOUNT
DATE
ITEM
2011
Nov. 30 Balance
ACCOUNT
DATE
ACCOUNT
DATE
DATE
6,000,000.00

ITEM
DEBIT
DEBIT
Office Equipment
ITEM
2011
Nov. 30 Balance
ACCOUNT
DEBIT
2,130,000.00

ITEM
DEBIT
K-2.1
ACCOUNT NO.
DATE
ITEM
CREDIT
ACCOUNT NO.
DATE
ITEM
ITEM
2011
Dec. 31
GJ 14
ITEM
2011
Dec. 31
ITEM
GJ 14
650,000.00
203
CREDIT
ACCOUNT NO.
DATE
202-A
CREDIT
ACCOUNT NO.
DATE
202
CREDIT
ACCOUNT NO.
DATE
201
203-A
CREDIT
355,000.00
Balance
355,000.00
ACCOUNT NO.
DATE
ITEM
quipment
CREDIT
ACCOUNT NO.
DATE
ITEM
2011
Dec. 31
GJ 12
ITEM
2011
Dec. 31
ITEM
GJ 12
1,200,000.00
205
CREDIT
ACCOUNT NO.
DATE
204-A
CREDIT
ACCOUNT NO.
DATE
204
205-A
CREDIT
426,000.00
GRACE CORPORATION
Capitalization of Property, Plant and Equipment
December 31, 2011
I. OBJECTIVES
1
2
To determine that property, plant and equipment transactions a

To determine that capitalizable costs of property, plant and equi
Completeness
1
2
3
4
Obtained Schedule of Plant, Property & Equipment

Selected sample items of property, plant & equipment for tracin
Checked footings and extended the amounts
Traced the property, plant & equipment accounts reflected on th
II. ASSERTIONS
III. PROCEDURES
IV. FINDINGS
Ledger Classification
Land
Building
Furniture & Fixture
Delivery Vans
Office Equipment
LEGEND:
After extending the amounts recorded in the Schedule of PPE, we fo

its total amount. Due to insufficient supporting documents, we ass
III. CONCLUSION
The 2011 additional improvement in Building is capitalized and is n

PPE. Transactions in relation with property, plant and equipement a
the Schedule of PPE, the number of items of office tablets and chai
are noted.
ORPORATION
operty, Plant and Equipment
e that property, plant and equipment transactions are recorded

e that capitalizable costs of property, plant and equipment are included and are not expensed.
hedule of Plant, Property & Equipment

mple items of property, plant & equipment for tracing
tings and extended the amounts
roperty, plant & equipment accounts reflected on the schedule to the General Ledger
Description
K-1.1
2,000 sq.m. Concrete building
K-1.1
K-1.1
80 showcases for the store @ P 5,000

40 Office tablets & 40 office chairs @ P24000
K-1.1
K-1.1
K-1.1
Air conditioning System
K-1.1
Isuzu Crewcab
Chassis #821618
K-1.1
10 Personal Computers Pentium 6

SN 41226
41227
41228
41229
41230
K-1.1
SN 41231
41232
41233
41234
41235
K-1.1
10 Electric Fans
SN 15381
15382
15383
15384
15385
SN 15386
15387
15388
15389
15390
Traced to General Ledger

Extended
amounts recorded in the Schedule of PPE, we found out that the 40 office tablets and 40 office chairs does not c
ue to insufficient supporting documents, we assumed that the amount recorded in the schedule is correct.
improvement in Building is capitalized and is not expensed. No repair and maintenance expense and leases as
relation with property, plant and equipement are also recorded in the general ledger. Upon applying the audit p
, the number of items of office tablets and chairs does not correspond with its total amount. Other than that, n
K-3
Cost
16,500,000.00
33,000,000.00
20,000,000.00
400,000.00
480,000.00
280,000.00
1,230,000.00
60,000,000.00
2,050,000.00
30,000.00
ts and 40 office chairs does not correspond to

in the schedule is correct.
ntenance expense and leases associated with

edger. Upon applying the audit procedure in
otal amount. Other than that, no exceptions
Prepared by:
RIT
Reviewed by:
LCC
Date:
4/1/2012
Date:
4/5/2012
GRACE CORPORATION
Property, Plant and Equipment Review
December 31, 2011
I. OBJECTIVES
1
2
To determine the legal ownership of property, plant and equipment.

To determine that property, plant and equipment were properly reco
1
2
Presentation and Disclosure

Rights and Obligation
II. ASSERTIONS
III. PROCEDURES
1
2
3
4
Obtained Schedule of Plant, Property & Equipment

Obtained copy of contracts, agreement, loans and the like relating t
Reviewed the loan agreement on property and equipment.
Examined evidence of legal ownership of property and equipment.
IV. FINDINGS
Ledger Classification
Land
Description
Building
2,000 sq.m. Concrete building

Furniture & Fixture
80 showcases for the store @ P 5,000

40 Office tablets & 40 office chairs @ P24000
10 conference tablets with 80 chairs
30 four-drawer steel cabinets
50 venetian blinds FineLine
Air conditioning System
Delivery Vans
Isuzu Crewcab
Chassis #821618
Office Equipment
10 Personal Computers Pentium 6

18" Carriage. Model 142C
12" Carriage. Model 215
10 Electric Fans
After reviewing the contracts, agreements and loans recorded in connection with PPE, w
was Land. No reclassification of the account is needed but the disclosure of the fact is n
III. CONCLUSION
No exceptions noted. Sufficient and appropriate evidence were gathered to su
K-4
plant and equipment.

ent were properly recorded and disclosed.
and the like relating to PPE.

d equipment.
perty and equipment.
ription
k 2 of the consoli-
Cost
Pledged as Collateral,
Lien, Endorsed, Etc.
16,500,000.00 C-3.1
Yes
33,000,000.00
No
20,000,000.00
No
CS 12456 situated
araaque, Province
a of two thousand
e @ P 5,000
400,000.00
No
ce chairs @ P24000
480,000.00
No
600,000.00
No
240,000.00
No
280,000.00
No
320,000.00
No
1,230,000.00
No
60,000,000.00
No
2,050,000.00
25,000.00
No
25,000.00
No
30,000.00
No
No
connection with PPE, we found out that the only property being pledged as collaterral for a bank loan
closure of the fact is needed.
ce were gathered to support the assertions made.
Prepared by:
MZB
Reviewed by:
LCC
Date:
4/1/2012
Date:
4/5/2012
1. We hereby report that at the close of business on
DECEMBER 31, 2011 our records showed the following balances to the
CREDIT
of the abovementioned client:

AMOUNT
DESCRIPTION
ACCOUNT NUMBER
14,267,272 Regular Checking Acct.
INTERES
RATE (P.A.)
775
Regular Checking Acct.

Savings Acct.
6,500,000 Time Deposits
18%
2. Direct liabilities, assets and related balances of said clients as at the

date above mentioned date were as follows: (attached details by LC)
AMOUNT
ACCOUNT
PESO
FOREIGN CURRENCY
Acceptance
Drafts
Trust Receipts
Marginal Deposits
Special Time Deposits
Import Letters of Credit
Domestic Letters of Credit
3. We further report that the acove-mentioned client was directly liable to us by way of overdrafts, loans, etc. at the close of business on that d
AMOUNT
DESCRIPTION OF LIABILITY
DATE GRANTED
10,000,000 Loans
DUE DATE
2011
2005
12.28
12.28
Other (Specify)
4. Other direct and/or contingent liabilities were:
AMOUNT
DECRIPTION OF ACCOUNT
NAME OF MAKER
Except as stated above, according to our records, said client had no other account with us at the above-mentioned date.
Date filled in:
Jan. 2, 2005
C-3.1
Grace Corporation
Re:
balances to the
CREDIT
INTEREST
RATE (P.A.)
PAID UP TO
18%
maturity
RESTRICTION ON WITHDRAWAL OF AMOUNT AND

OTHER REMARKS
1 year%
Due Date: June 30, 2005
5. Other accounts with the bank on that date were:

(details attached)*
a)
b)
c)
d)
Securities held for safekeeping

Items held for collection
Trust accounts
Others (specify)
he close of business on that date as follows:

INTEREST
RATE (P.A.)
PAID UP TO
21%
12.28
DESCRIPTION OF COLLATERALS, LIENS, ENDORSERS, ETC.

OTHER REMARKS
2005
NAME OF MAKER
Land
K-4
DUE DATE
DATE OF NOTE
REMARKS
ve-mentioned date.
Yours Truly,
Bank:
By:
PCIB
Jbiao Comptroller
GRACE CORPORATION
Recomputation of Depreciation Expense
December 31, 2011
I. OBJECTIVES
1
2
To ascertain that depreciation was properly computed.

To ascertain that the depreciation expense and accumulated deprec
1
2
Valuation
1
2
3
4
5
Obtained a copy of supporting documents for each item PPE.

Examined the terms in the supporting documents (acquisition date)
Determined the companies policy in depreciation their Property, Pla
Checked if the accumulated depreciation and depreciation expanes
Determined appropriate adjustments.
II. ASSERTIONS
III. PROCEDURES
IV. FINDINGS
For the purpose of computing depreciation and due to the lack sufficient supporting docu
1
Because there is no known acquisition date, the auditors assumed all PPEs
2
For the furniture and fixtures with no given useful life, the auditors assume
3
Straight-line method on depreciation was used for the recomputation.
Land
YEARLY DEPRECIATION
Acquisition Cost:
Average Useful life per class
Yearly Depreciation
Additions/capitalized Improvements (2022)
Useful life
Depreciation of additions
Depreciation Expense, 2011
2009 Depreciation (8 months)
2010 Depreciation
K-1.1
16,500,000.00
-
Accumulated Depreciation (1/11)
COST
January 1, 2011
Additions:
Disposals
K-1.1
December 31,2011
16,500,000.00
16,500,000.00
ACCUMULATED DEPRECIATION
January 1, 2011
Current Year Depreciation
December 31, 2011
Net Book Value, December 31, 2011
16,500,000.00
ADJUSTMENTS
2009
Per book
Per auditors' recomputation
Adjustments
2010
Per book
Per auditors' computation
Adjustments
2011
Per book
Per auditors' computation
Adjustments
The adjustments marked red will not be readjusted because the auditors' deemed this am
PROPOSED JOURNAL ENTRIES
For 2009-related adjustments:
Retained Earnings
Retained Earnings
Retained Earnings
Retained Earnings
Because these are prior-year adjustments, retained earnings account was u

Retained Earnings
Retained Earnings
Retained Earnings
Retained Earnings
Because these are prior-year adjustments, retained earnings account was u


Depreciation expense was credited instead because the recorded d
was more than the recomputed depreciation.
LEGEND:
Footed
Cross-Footed
Computed from supporting documents
From computed adjustments
III. CONCLUSION
The auditors have discovered that Grace Corporation did not recognize dep
between the recorded expense and the recomputed expense during the ye
accumulated depreciation were properly presented in the Financial Statements.
ach item PPE.

ts (acquisition date).
on their Property, Plant and Equipments
epreciation expanese for the year coincides
ent supporting documents, the following assumptions were made.

rs assumed all PPEs were acquired at the date of incorporation (April 30, 2011).
he auditors assumed it to be 10 years.
ecomputation.
Building
K-1.1
K-1.1
33,000,000.00 K-1.1
20
1,650,000.00
20,000,000.00
18
1,111,111.11
2,761,111.11
1,100,000.00
1,650,000.00
Furniture and Fixtures
3,550,000.00 K-1.1
10
373,000.00
373,000.00
248,666.67
373,000.00
Transportation
Equipment
6,000,000.00 K-1.1
10
600,000.00
###
###
600,000.00
400,000.00
600,000.00
2,750,000.00
621,666.67
1,000,000.00
K-1.1
K-1.1
33,000,000.00 K-1.1
20,000,000.00
53,000,000.00
2,750,000.00
2,761,111.11
5,511,111.11
47,488,888.89
1,100,000.00
1,100,000.00
1,650,000.00
1,650,000.00
650,000.00
2,761,111.11
2,111,111.11
3,550,000.00 K-1.1
3,550,000.00
621,666.67
373,000.00
994,666.67
2,555,333.33
248,666.67
248,666.67
373,000.00
373,000.00
6,000,000.00 K-1.1
###
###
6,000,000.00
1,000,000.00
600,000.00
1,600,000.00
4,400,000.00
###
400,000.00
400,000.00
###
600,000.00
600,000.00
355,000.00
373,000.00
18,000.00
1,200,000.00
600,000.00
(600,000.00)
1,100,000.00
1,100,000.00
248,666.67
400,000.00
280,666.67
tors' deemed this amounts to be immaterial.
248,666.67
400,000.00
280,666.67
nings account was used instead of the corresponding depreciation expense.
1,650,000.00
373,000.00
600,000.00
421,000.00
1,650,000.00
373,000.00
600,000.00
421,000.00
2,111,111.11
600,000.00
nings account was used instead of the corresponding depreciation expense.
2,111,111.11
600,000.00
ause the recorded depreciation
d not recognize depreciation in the previous year 2009 and 2010, and that there are material differences
pense during the year 2011. Adjustments for the said differences were proposed.
K-5
Office Equipment
2,130,000.00 K-1.1
5
421,000.00
421,000.00
280,666.67
421,000.00
Total
61,180,000.00
45
3,044,000.00
20,000,000.00
18.00
1,111,111.11
4,155,111.11
2,029,333.33
3,044,000.00
701,666.67
5,073,333.33
2,130,000.00 K-1.1
- K-1.1
2,130,000.00
701,666.67
421,000.00
1,122,666.67
1,007,333.33
280,666.67
280,666.67
421,000.00
421,000.00
426,000.00
421,000.00
(5,000.00)
61,180,000.00
20,000,000.00
81,180,000.00
5,073,333.33
3,044,000.00
8,117,333.33
73,062,666.67
2,029,333.33
2,029,333.33
###
3,044,000.00
3,044,000.00
2,631,000.00
4,155,111.11
1,524,111.11
Prepared by:
ILW
Reviewed by:
LCC
Date:
1/25/2012
Date:
2/10/2012
GRACE CORPORATION
Analytical Procedures - Property, Plant, & Equipment
December 31, 2011
I. OBJECTIVES
1
2
To determine the validity and accuracy of property, plant and equipment account balances.
To evaluate fluctuations or unusual changes on the property, plant and equipments and their related depreciation account balances.
1
2
Accuracy
Valuation
Obtained audited financial information from comparable prior periods and audited balances of accounts related
to property, plant, & equipment as of December 31, 2011.
Compared differences between prior and current period ratios.
II. ASSERTIONS
III. PROCEDURES
IV. FINDINGS
.
Grace Corporation
Analytical Review Ratios
For the Period Ended December 31, 2011
2009
NET CARRYING BALANCES
Land
K-5
16,500,000.00
2010
K-5
16,500,000.00
K-5
Building
Furniture and Fixtures
Office Equipment
TOTAL NET PROPERTY, PLANT & EQUIPMENT
Total Net Property, Plant & Equipment Variance
Annual Depreciation Expense Variance
l
l
l
l
w
31,900,000.00
3,301,333.33
5,600,000.00
1,849,333.33
59,150,666.66
l
l
l
l
w
30,250,000.00
2,928,333.33
5,000,000.00
1,428,333.33
56,106,666.66
-5%
50%
l
l
l
l
w
BUILDING
Carrying Amount, Beginning
Capitalized Improvement
Depreciation
Carrying Amount, Ending
FURNITURE AND FIXTURES
Depreciation
TRANSPORTATION EQUIPMENT
Depreciation
OFFICE EQUIPMENT
Depreciation
RATIO ANALYSIS
Depreciation Expense as Percentage of PPE
Total Annual Depreciation Expense
Total Net Property, Plant & Equipment
RATIO
Property, Plant & Equipment Turnover
Sales
Total Net Property, Plant & Equipment
RATIO
K-5
K-5
w
K-5
33,000,000.00
(1,100,000.00)
31,900,000.00
3,550,000.00
(248,666.67)
K-5
w
K-5
31,900,000.00
(1,650,000.00)
30,250,000.00
3,301,333.33
(373,000.00)
K-5
K-5
w
K-5
3,301,333.33
2,928,333.33
K-5
K-5
6,000,000.00
(400,000.00)
5,600,000.00
(600,000.00)
K-5
K-5
w
K-5
K-5
5,600,000.00
5,000,000.00
2,130,000.00
(280,666.67)
1,849,333.33
(421,000.00)
1,849,333.33
K-5
w
1,428,333.33
K-5
w
w
w
2,029,333
59,150,667
3%
w
w
3,044,000
56,106,667
5%
w
w
p
w
48,766,000
59,150,666.66
0.82
p
w
54,539,000
56,106,667
0.97
F-5
w
It is observed that the total net PPE variance has significantly increased by 35% in 2011 due to the major improvement made with the building during 2011. Also,
significant variance in annual depreciation expense was due to the different time apportionment of the annual depreciation expense in 2009.
LEGEND:
l
Recomputed
w
Footed
p
Verified with prior year's trial balance
III. CONCLUSION
The objectives for this procedure were met. The Property, Plant & Equipment account balances and the annual depreciation expense were found to be reasonable
evaluation.
K-6
2011
16,500,000.00
47,488,888.89
2,555,333.33
4,400,000.00
1,007,333.33
71,951,555.55
28%
36.5017%
30,250,000.00
20,000,000.00
(2,761,111.11)
47,488,888.89
2,928,333.33
(373,000.00)
2,555,333.33
5,000,000.00
(600,000.00)
4,400,000.00
1,428,333.33
(421,000.00)
1,007,333.33
4,155,111
71,951,556
6%
110,927,707
71,951,556
1.54
uilding during 2011. Also, the

2009.
re found to be reasonable based on the
Prepared by:
DAM
Reviewed by:
RIT
Date:
2/21/2012
Date:
2/26/2012
GRACE CORPORATION
Accounts Payable General and Subsidiary Ledger Reconciliation
December 31, 2011
I. OBJECTIVES
1
2
3
4
5
To
To
To
To
To
substantiate the existence of recorded accounts payable and the occurrence of purchase transactions
establish the completeness of accounts payable and purchase transactions
determine the appropriate valuation of accounts payable
determine if the presentation and disclosure of accounts payable and purchases are appropriate
determine that the client has obligations to pay the recorded accounts payable
1
2
3
4
5
Existence
Completeness
Accuracy
Rights and Obligation
II. ASSERTIONS
III. PROCEDURES
1
2
3
4
5
6
7
Obtained from the client the listing of accounts payable

Reconciled accounts payable beginning balance in subsidiary ledger with general ledger
Tested cross footing and footings of purchase invoices
Traced purchase invoices to subsidiary ledger and purchase book
Traced cash vouchers to the subsidiary ledger and cash disbursement book
Reconciled balance in subsidiary ledger to the accounts payable confirmation
Reconciled subsidiary ledger to the general ledger
IV. FINDINGS
WP
Ref
Beginning Balance
Total Credits
Purchases
General Ledger Unadjusted Balances

12/31/11
N-1.1
F-1.2
Adjusted Balances
6,743,240
N-1.1
N-1.3
6,010,625
6,010,625 N-1.1 F-4
Unrecorded Purchases
Total Debits
C-2.2
Cash Disbursements
N-1.4
Reclassification to Note Payable
(1,906,500) N-1.1
N-1.4
(1,600,000) N-1.1
(4,123,275)
Ending Balance
(7,629,775)
5,124,090
Total Difference
Unrecorded Purchases
Less:
Cash Purchases included in credit to GL
Cash Voucher
107
112
1090
135
120
147
1100
F-4
F-4
252,250
155,600
F-1.2
F-1.2
F-1.2
F-1.2
F-1.2
F-1.2
34,200
87,500
14,000
13,250
5,000
45,000
F-1.2
13,325
12/31/11
6,743,240
5,798,350
407,850 N-1.3 N-1.3
C-2.2
N-1.4
(1,906,500) N-1.1
N-1.4
-1.3
(1,600,000) N-1.1 N
###
(4,123,275)
(7,629,775)
5,319,665
407,850
212,275
Effect
LEGEND:
Footed/Cross-Footed
ADJUSTING JOURNAL ENTRIES
a.
Adjusting entries of two unrecorded purchases of P252,250 and P155,600 already made in F-4 Purchase Cut Off
Additionally, the following errors were noted:

1. The General Ledger November 30 balance does not equal the total Subsidiary Ledger November 30 balances. A difference of P1,181,770 exists.
*The auditors deemed it appropriate to follow the General Ledger balance.
2. Cash Voucher 306 of P1,554,500 was erroneously recorded as P155,450 in the subsidiary ledger.
3. Purchase Invoice 147 was recorded as a credit purchase in the subsidiary ledger when in fact it is a cash purchase.
4. Cash purchases were included as credit purchases in the Accounts Payable General Ledger.
III. CONCLUSION
Adjusting entries of the unrecorded purchases for December are already proposed in F-4 Inventory Purchase Cut Off.
The difference of P1,181,770 between the General Ledger and Subsidiary Ledger beginning balances can be an overstatement of the GL beginning balance or an
understatement of the SL beginning balance but such cannot be determined with certainty because only December supporting documents are available to the
auditors. The slide error of the recording of CV 306 was committed only in the subsidiary ledger. It was properly recorded as P1,554,500 in the Cash Disbursements
Book and the General Ledger. The recording of the cash purchase of P45,000 in the SL and all the other cash purchases of P212, 275 included as credit to the GL
should be removed in the Accounts Payable Ledgers.
No exceptions noted in the other payables: SSS, Medicare Premiums Payable, Withholding Taxes Payable and HDMF Premiums Payable.
The account of Gwendo Reyes has a credit balance of P50,000. The entry for Advances from Customers is already proposed in E-1 AR General and Subsidiary Ledg
Reconciliation.
Prepared by:
MGR
Reviewed by:
LCC
N-1
Difference
-
###
195,575
195,575
195,575
ts.
ing balance or an
vailable to the
ash Disbursements
credit to the GL
and Subsidiary Ledger
Date:
2/19/2012
Date:
2/23/2012
ACCOUNT
DATE
2011
Dec. 1
6
31
Accounts Payable
ITEM
ACCOUNT NO.
GJ 11
GJ 11
GJ 11
DEBIT
1,906,500.00
1,600,000.00
4,123,275.00
DATE
2011
Nov. 30
Dec. 31
ITEM
Balance
Footed/Cross-Footed
CREDIT
P
PJ 12
Balance
N-1.1
1001
CREDIT
6,743,240.00
6,010,625.00
5,124,090.00
ACCOUNTS PAYABLE SUBSIDIARY LEDGERS

Arboleda Co., Inc.
456 Quezon Boulevard Extension, Quezon City
NAME:
ADDRESS:
DATE
PARTICULARS
DEBIT
2011
Nov. 30 Balance
Dec. 1 PI 101
CV 304
CV 306
PI 117
CV 311
PI 127
CV 316
175,000.00
155,450.00
85,000.00
25,750.00
PI 130
85 Quarry Avenue, Paraaque City
NAME:
ADDRESS:
DATE
PARTICULARS
DEBIT
2011
Nov. 30 Balance
Dec. 3 PI 1082
5 CV 301
10 CV 305
18 PI 1095
23 PI 1099
972,750.00
114,900.00
28 CV 318
85,000.00

951 Del Sol Avenue, Pasay City
NAME:
ADDRESS:
DATE
PARTICULARS
2011
Nov. 30 Balance
Dec. 1 converted to 90-day
DEBIT
1,906,500.00
2 PI 111
2 CV 300
6 PI 127
6 converted to 27% 150
10 PI 130
15 CV 309
20 PI 140
22 PI 145
26 PI 147
26 CV 313
26 CV 314
26 CV 315
300,000.00
1,600,000.00
625,000.00
32,500.00
127,875.00
25,000.00
28 PI 151
Footed/Cross-Footed
N-1.2
UBSIDIARY LEDGERS
ACCOUNT NO.:
1001
CREDIT
BALANCE
Quezon City
413,750.00
85,000.00
25,750.00
19,125.00
1,554,500.00
1,968,250.00
1,793,250.00
1,637,800.00
1,722,800.00
1,637,800.00
1,663,550.00
1,637,800.00
1,656,925.00
ACCOUNT NO.:
1002
CREDIT
BALANCE
459,600.00
85,000.00
12,250.00
2,100,470.00
2,560,070.00
1,587,320.00
1,472,420.00
1,557,420.00
1,569,670.00
1,484,670.00
ACCOUNT NO.:
1003
CREDIT
BALANCE
1,906,500.00
--
s-Footed
1,425,000.00
1,600,000.00
1,200,000.00
127,870.00
130,000.00
45,000.00
165,000.00
1,425,000.00
1,125,000.00
2,725,000.00
1,125,000.00
2,325,000.00
1,700,000.00
1,827,870.00
1,957,870.00
2,002,870.00
1,970,370.00
1,842,495.00
1,817,495.00
1,982,495.00
BEGINNING
PURCHASE BOOK
CASH
1
2
3
6
7
8
9
10
12
15
15
16
20
21
22
23
24
27
28
29
101
111
1082
127
107
1095
112
130
1090
135
147
117
140
120
145
1099
127
1100
151
130
AP
413,750.00
1,425,000.00
459600
1,600,000.00
34,200.00
85,000.00
87,500.00
1,250,000.00
14,000.00
13,250.00
45,000.00
85,000.00
127,875.00
5,000.00
130,000.00
12,250.00
25,750.00
13,325.00
165,000.00
19,125.00
212,275.00
PURCHASE INVOICES
29
30
7729
825
5,798,350.00
252,250.00
155,600.00
212,275.00
6,206,200.00
DISBURSEMENTS
Non-AP
2
5
7
9
10
12
14
15
20
21
26
27
28
300
301
302
303
304
305
306
307
308
309
310
311
312
313
314
315
316
317
318
319
AP
300000
972750
34200
87500
175000
114900
1554500
14000
1080000
625000
13250
85000
5000
32500
127875
25000
25750
13325
85000
942840
Footed/Cross-Footed
BEGINNING
CREDITS
Arboleda
1,554,500.00
Sapphire
2,100,470.00
413,750.00
459,600.00
85,000.00
85,000.00
12,250.00
25,750.00
19,125.00
543,625.00
556,850.00
155,600.00
TOTAL CREDITS
699,225.00
556,850.00
oss-Footed
DEBITS
972,750.00
175,000.00
114,900.00
1,554,500.00
85,000.00
25,750.00
85,000.00
to Note Payable
to Note Payable
1,840,250.00
-
1,172,650.00
-
TOTAL DEBITS
1,840,250.00
1,172,650.00
AP AUDITED
413,475.00
1,484,670.00
N-1.3
1,906,500.00
5,561,470.00
1,425,000.00
1,600,000.00
1,250,000.00
127,875.00
130,000.00
165,000.00
4,697,875.00
5,798,350.00 N-1
6,206,200.00 N-1
252,250.00
4,950,125.00
300,000.00
625,000.00
32,500.00
127,875.00
25,000.00
1,110,375.00
1,906,500.00
1,600,000.00
4,123,275.00
4,616,875.00
7,629,775.00 N-1
2,239,750.00
4,137,895.00
PURCHASE BOOK
DATE
PURCHASED FROM
2011
Dec. 1 Arboleda Co., Inc.
2 Genius Paper Products
3 Sapphire Corporation
7 Arboleda Co., Inc.
ACCOUNTS
PAYABLE
TERMS
INV. NO.
2/10, n/30
P 300,000 down.
bal. 2/10, n/45
2/10, n/30
27% - 150 day note
n/30
n/30
2/10, n/45
n/30
n/30
2/10, n/45
n/30
2/10, n/45
n/30
1/10, n/30
n/15
1/10, n/20
P 2,500 down, bal. n/15
n/30
2/10, n/30
1/10, n/15
101
413,750.00
111
1082
127
107
112
130
1090
135
117
1095
140
120
145
1099
127
147
1100
151
130
1,425,000.00
459,600.00
1,600,000.00
34,200.00
87,500.00
1,250,000.00
14,000.00
13,250.00
85,000.00
85,000.00
127,875.00
5,000.00
130,000.00
12,250.00
25,750.00
45,000.00
13,325.00
165,000.00
19,125.00
6,010,625.00
(1001)
CR.
N-1
N-1
N-1
N-1
N-1
N-1
N-1
MERCHANDISE
INVENTORY
DR.
INPUT TAX DR.
376,136.00
1,295,455.00
417,818.00
1,454,545.00
31,091.00
79,545.00
1,136,364.00
12,727.00
12,045.00
77,273.00
77,273.00
116,250.00
4,545.00
118,182.00
11,136.00
23,409.00
40,909.00
12,114.00
150,000.00
17,386.00
37,614.00
129,545.00
41,782.00
145,455.00
3,109.00
7,955.00
113,636.00
1,273.00
1,205.00
7,727.00
7,727.00
11,625.00
455.00
11,818.00
1,114.00
2,341.00
4,091.00
1,211.00
15,000.00
1,739.00
5,464,203.00
(106)
546,422.00
(111)
F-1.2
Adjustments
0.09090909
0.09090909
0.09090909
0.09090909
0.09090909
0.09090909
0.09090909
0.09090909
0.09090909
0.09090909
0.09090909
0.09090909
0.09090909
0.09090909
0.09090909
0.09090909
0.09090909
0.09090909
0.09090909
0.09090909
0.09090909
37,614
129,545
41,782
145,455
3,109
7,955
113,636
1,273
1,205
7,727
7,727
11,625
455
11,818
1,114
2,341
4,091
1,211
15,000
1,739
0.09090909
546,420

951 Del Sol Avenue, Pasay City | VAT 2011-005-219 | TIN 4004-0070356
CHARGED TO:
GRACE CORPORATION
ADDRESS:
TERMS:
bal 2/10, n/45
DATE:
PARTICULARS
15,000 pads 16 column worksheet - Vernal
UNIT PRICE
50.00
50.00
VAT INCLUDED
Received the above products in good order and condition.

BY:
RES. CERTIFICATE NO.:
arboleda company, inc.

456 Quezon Boulevard Extension, Quezon City | VAT 2011-013-357 | TIN 4004-099-951
CHARGED TO:
ADDRESS:
GRACE CORPORATION
DETAILS
5,000 boxes Pencil Plain - Mongol

7,500 pieces Bic Ballpen - Red
VAT INCLUDED
UNIT PRICE
70.00
8.50

BY:
82 Quarry Avenue, Pananaque City | VAT 2011-053-852 | TIN 4004-064-456
GRACE CORPORATION
CHARGED TO:
ADDRESS:
PARTICULARS
UNIT PRICE
5,000 boxes Charcoal Pencil - Staedler

800 pairs Scissors
90.00
12.00
VAT INCLUDED

BY:

CHARGED TO:
GRACE CORPORATION
ADDRESS:
TERMS:
99.150 day note
DATE:
PARTICULARS

VAT INCLUDED
UNIT PRICE
50.00
50.00

BY:

CHARGED TO:
GRACE CORPORATION
ADDRESS:
TERMS:
2/10, n/45
DATE:
PARTICULARS
7,500 pads Intermediate Pad - Old Mill

8,500 pads Yellow paper - Old Mill
4,250 reams Bond Paper - Whitey
UNIT PRICE
3,000 reams Onion Skin - Milky
15.00
30.00
130.00
110.00
VAT INCLUDED

BY:
82 Quarry Avenue, Pananaque City | VAT 2011-053-852 | TIN 4004-064-456
CHARGED TO:
ADDRESS:
GRACE CORPORATION
PARTICULARS
350 boxes Thumbtacks - Golden

VAT INCLUDED
UNIT PRICE
40.00

BY:

CHARGED TO:
ADDRESS:
GRACE CORPORATION
DETAILS
UNIT PRICE
600 bottles Quink Ink
57.00
VAT INCLUDED

BY:

CHARGED TO:
ADDRESS:
GRACE CORPORATION
DETAILS
5,000 meters Plastic Cover

VAT INCLUDED
UNIT PRICE
17.50

BY:
F-1.3
No. 111
2 December 2011
UNIT PRICE
50.00
AMOUNT
50.00
750,000.00
675,000.00
1,425,000.00
ISSUED AT:
No.
DATE:
101
1 December 2011
ORDER NO.:
UNIT PRICE
70.00
AMOUNT
8.50
350,000.00
63,750.00
413,750.00
ISSUED AT:
No.
DATE:
1082
Dec. 3, 2011
ORDER NO.:
UNIT PRICE
AMOUNT
90.00
12.00
450,000.00
9,600.00
459,600.00
ISSUED AT:
No. 127
6 December 2011
UNIT PRICE
50.00
AMOUNT
50.00
850,000.00
750,000.00
1,600,000.00
ISSUED AT:
No. 130
10 December 2011
UNIT PRICE
15.00
30.00
130.00
AMOUNT
110.00
112,500.00
255,000.00
552,500.00
330,000.00
1,250,000.00
ISSUED AT:
1090
No.
DATE:
Dec. 12, 2011
ORDER NO.:
UNIT PRICE
40.00
AMOUNT
14,000.00
14,000.00
ISSUED AT:
No.
DATE:
107
7 December 2011
ORDER NO.:
UNIT PRICE
57.00
AMOUNT
34,200.00
34,200.00
ISSUED AT:
No.
DATE:
112
9 December 2011
ORDER NO.:
UNIT PRICE
17.50
AMOUNT
87,500.00
87,500.00
ISSUED AT:
CASH DISBURSEMENTS BOOK

DATE
PAID TO
EXPLANATION
CV#
CHECK NO.
Dec. 2 Genius Paper Products
BANK
CR.
PURCH. DISC.
CR.
2011
Downpayment, 2/10, n/45
300
12345
5 Sapphire Corp.
Partial payment
301
12346
972,750.00
7 Bureau of Internal Revenue
Remittance for November
302
12347
34,200.00
9 Social Security System
Remittance for November
303
12348
87,500.00
Partial payment
304
12349
175,000.00
Sapphire Corp.
Partial payment
305
12350
114,900.00
Arboleda Co., Inc.
Full payment
306
12351
1,554,500.00
12 Caltex Gas
25 liters gasoline
307
12352
14,000.00
14 Paymaster
Salaries 12.01-12.15
308
12353
1,080,000.00
Partial payment
309
12354
625,000.00
Light bill
310
12355
13,250.00
Full payment
311
12356
83,300.00
21 Archer Supplies
plastic bags
312
12357
5,000.00
Partial payment
313
12358
32,500.00
Full payment
314
12359
125,315.00
Downpayment
315
12360
25,000.00
Arboleda Co., Inc.
Full payment
316
12361
25,490.00
27 XYZ Ads
100 pcs. Brochures
317
12362
13,325.00
28 Sapphire Corp.
Full payment
318
12363
85,000.00
30 Paymaster
Salaries 12.15-12.31
319
12364
942,840.00
MERALCO
300,000.00
1,700.00
2,560.00
260.00
###
P
6,308,870.00
4,520.00
(101)
(3005)
C-2.2
MENTS BOOK
ACCOUNTS PAYABLE (DR.)
AMOUNT
P
ACCOUNT NAME
SUNDRY DR. (CR.)

F
AMOUNT
300,000.00
972,750.00
1005 P
34,200.00
SSS Premiums Payable
1004
87,500.00
Gasoline Expense
4007
14,000.00
Salaries Expense
4002
1,238,760.00
1005
(64,800.00)
1004
(72,360.00)
1006
(21,600.00)
Light, Water and Telephone
4008
13,250.00
Supplies Expense
4003
5,000.00
Advertising Expense
4016
13,325.00
Salaries Expense
4002
1,101,600.00
1004
(72,360.00)
1005
(64,800.00)
175,000.00
114,900.00
1,554,500.00
625,000.00
85,000.00
32,500.00
127,875.00
25,000.00
25,750.00
85,000.00

P
4,123,275.00
(1001)
N-1
1006
(21,600.00)
P
2,190,115.00
N-1.4
Page 1
GENERAL JOURNAL
Date
Particulars
2011
Dec. 1 Accounts Payable
1001
Notes Payable
1002
Issuance of 90-day 24% note to
Genius Paper Products.
6 Accounts Payable
1001
Notes Payable
1002
Issuance of 150-day 27% note to
Genius Paper Products.
Debit
Credit
1,906,500.00
1,906,500.00
1,600,000.00
1,600,000.00
GRACE CORPORATION
Accounts Payable Confirmation
December 31, 2011
I. OBJECTIVES
1
To verify the accuracy and existence of the accounts payable balanc
1
2
Accuracy
Existence
1
2
3
Obtain a list of the company's creditors and its balances (or check su
Request and collect from the creditors a statement of account indica
Compare the balances taken from the subsidiary ledger to those ind
II. ASSERTIONS
III. PROCEDURES
IV. FINDINGS
Creditor Name
Conf #
WP
REF
AP - 1 N-1.2
AP - 2 N-1.2
Arboleda Co., Inc.
AP - 3 N-1.2
III. CONCLUSION
In conclusion, the balaces included in the accounts payable confirmations a

given the lack of signatures, the auditor decided that further substantive p
TION
of the accounts payable balances
ors and its balances (or check subsidiary ledger if not provided)
rs a statement of account indicating the company's liability balance
he subsidiary ledger to those indicated in the creditor's statement of account
Balance per SL
WP
REF
Balance per
Statement of
Account
Difference
Remarks
1,982,495.00
N-2.1
1,982,495.00
Balance is OK but with no

signature
1,484,670.00
N-2.1
1,484,670.00
1,656,925.00
N-2.1
1,656,925.00

signature

signature
accounts payable confirmations are equal to those indicated in their corresponding subsidiary ledgers. However,
cided that further substantive procedures must be performed to support the assertions presented.
Prepared by:
JGN
Reviewed by:
MGR
N-2
Date:
2/25/2012
Date:
2/29/2012
Our records show that the balance of

was due from
Name of Supplier / Creditor :
By (in print) :
Signature :

was due from
By (in print) :
Signature :

was due from
P
GRACE CORPORATION
as of
1,982,495.00
December 31, 2011
Jordan Miguel
Position :
Date :
P
GRACE CORPORATION
as of
January 25
1,484,670.00
December 31, 2011
Samantha Reyes
Position :
Date :
P
GRACE CORPORATION
as of
January 10
1,656,925.00
December 31, 2011

By (in print) :
Signature :
ARBOLEDA CO., INC.

Joshua Madrigal
Position :
Date :
January 20
N-2.1
N-2
Conf. No. AP - 1
as itemizes in the attached statement

ber 31, 2011
CTS
Chief Accountant
January 25, 2005
N-2
Conf. No. AP - 2

ber 31, 2011
ION
Chief Accountant
January 10, 2005
N-2
Conf. No. AP - 3

ber 31, 2011
C.
Chief Accountant
January 20, 2005
GRACE CORPORATION
Purchase Cut-Off
December 31, 2011
I. OBJECTIVES
1
To determine whether purchases and corresponding payables are re
Completeness
1
2
Examined all purchases from December 2011 to January 4, 2012.

Traced purchases invoices to the purchase book to determine wheth
II. ASSERTIONS
III. PROCEDURES
IV. FINDINGS
There are two Purchase Invoices (7729 and 825) that are not recorded as p
the Purchase Cut-off table.
III. CONCLUSION
The December purchases and its corresponding payables have been determ
Cut-off (please refer to F4) except for the Purchase Invoice Nos. 7729 and 8
N-3
ng payables are recorded in the appropriate period
anuary 4, 2012.
o determine whether the purchase transactions are recorded in the proper accounting period.
not recorded as purchases and payables in the proper accounting period. Please Refer to F-4 for
s have been determined to be recorded in the appropriate accounting period using the Purchase
ce Nos. 7729 and 825. Necessary adjusting entries have been made. No other exceptions noted.
Prepared by: Date:

RIT
3/13/2012
Reviewed by: Date:
BAG
3/20/2012
GRACE CORPORATION
Client Inquiry
December 31, 2011
I. OBJECTIVES
1
2
To determine if there are pledges for liabilities.

To determine if such pledges are properly presented and disclose
1
2

1
2
Obtained copy of contracts, agreement, loans and the like relatin

Reviewed such contracts and agreements.
Inquired client for further information regarding pledges for liabili
II. ASSERTIONS
III. PROCEDURES
IV. FINDINGS
Only the loan balance of 10,000,000 have a collateral.

* For full document and full audit discussion of such pledge, please refer to t
III. CONCLUSION
No exceptions noted. Sufficient and appropriate evidence were gathered to
N-4
ed and disclosed in the financial statements.
d the like relating to the payable accounts.
edges for liabilities.
please refer to the audit of Property, Plant and Equipment WP REF K-4.
ere gathered to support the assertions made.
Prepared by:
ILW
Reviewed by:
LCC
Date:
6/3/2012
Date:
6/9/2012
GRACE CORPORATION
Analytical Procedures - Accounts Payable
December 31, 2011
I. OBJECTIVES
1
2
To be able to evaluate the fluctuations or unusual changes on the

To assess whether amounts and other data relating to recorded t
1
2
3
4
Accuracy
Valuation
Compared the difference between the audited balance of payabl

(Balance of 2010 from 2009 and Balance of 2011 from 2010).
The differences on the account balances where expressed in perc
II. ASSERTIONS
III. PROCEDURES
IV. FINDINGS
Accounts Payable
TB
Turnover
Days outstanding
Notes Payable
TB
Notes Payable to Officer

TB

TB

TB

TB

For purposes on analyzing the payable accounts, the auditors mainly calcu
Accounts Payable account wherein the auditors calculated for the
1 Accounts Payable Turnover:
measures the number of ti
accounting period.
Formula:
Cost of Sales*/Average Ac
2 Days in Accounts Payable
Formula:
measures the average nu

365/Accounts Payable Tur
As seen in the table above, Accounts Payable turnover have decreas

of payments to suppliers have decreased compared to the last perio
As is evident in the Days in Accounts Payable ratio, the number of d
9 days to 20 days. Though 20 days is not a very poor figure, it still s
on a more effcient and timely manner.
Percentage changes in payables does not call any special attention,

increase, from below a million to more than 5 million. This explains t
days oustanding. Maybe Grace Corporation's decreased performanc
larger balances.
* Cost of Sales was used instead of total purchases because the au

to determine the entire year's PURCHASES ON ACCOUNT.
III. CONCLUSION
Except for the analysis discussed in the findings, no other exceptions were
TION
tions or unusual changes on the balances of the payable accounts.

other data relating to recorded transactions and events have been recorded appropriately.
n the audited balance of payables of the current year from the audited balance of the preceding years
Balance of 2011 from 2010).
lances where expressed in percentage by diving the variance from the prior balance of an account.
2009
900,000.00
-
TB
Payables
2010
906,500.00
0.72%
2011
5,319,665.00
487%
38.51
9.48
18.33
19.92
14,000,000.00
-
TB
21,000,000.00
50%
14,000,000.00
-
TB
21,000,000.00
50%
52,000.00
-
TB
62,000.00
19%
144,720.00
133%
40,500.00
-
TB
52,500.00
30%
129,600.00
147%
21,500.00
-
TB
29,500.00
37%
63,200.00
114%
66,565.00
-
###
###
13,506,500.00
-36%
1,700,000.00
-92%
unts, the auditors mainly calculated the percentage changes, except for the
n the auditors calculated for the AP Turnover and Days in AP oustanding.
measures the number of times a company pays its suppliers during a specific
accounting period.
Cost of Sales*/Average Accounts Payable
measures the average number of days a payable is outstanding.
365/Accounts Payable Turnover
yable turnover have decreased from 28 days to 18 days. This means that the frequency
ed compared to the last period. This is also considered a decrease in operational performance.
yable ratio, the number of days a payable is oustanding have lengthened from
ot a very poor figure, it still suggests a decrease in the companies ability to pay their payables
ot call any special attention, except that of the accounts payable which had a 487%
han 5 million. This explains the decrease in the turnover and the increase in the
tion's decreased performance in paying off payables was because of the now
total purchases because the auditors do not have enough documents

RCHASES ON ACCOUNT.
dings, no other exceptions were noted.
Prepared by:
ILW
Reviewed by:
LCC
N-5
ceding years
34785500
57050382
erformance.
heir payables
Date:
1/25/2012
Date:
2/10/2012
GRACE CORPORATION
Notes Payable
December 31, 2011
I. OBJECTIVES
1
2
3
To determine that notes payable exist as of the balance sheet date.

To determine whether all notes payable were recorded properly.
To determine whether amounts of notes payable were accurate.
1
2
3
Existence
Completeness
Valuation
1
2
3
4
5
6
Obtained a copy of accounts payable supporting documents such as

Vouchedfrom general ledger to supporting documents.
Compared amounts per contracts and agreements with the general l
Recalculated Interest.
II. ASSERTIONS
III. PROCEDURES
IV. FINDINGS
Payee
Alfredo P. Cacho- Officer
Felicisimo Rey- Genius Paper Products
PCI Bank
BALANCE PER AUDIT
Balance per Ledger
Audit adjustment
Date of Note
10.01.11
12.01.11
12.05.11
12.28.11
Term
360 days
90 days
150 days
360 days
(a) Cash
Notes Payable
To record proceeds from bank loan.
*This entry were already reflected in Bank Reconcillation (C2)
(b) Notes Payable
Notes Payable to Officer

*This entry was made to reclassify the notes payable to officer separ
required for it to be presented separately. No discount was reclassifi
be noted than on the contract, the Payee should be the name of the
Grace Corp can't have a liability payable to itself.
III. CONCLUSION
In conclusion, notes payable recorded in the ledger do exist and properly valu
journal entry given by the auditor, no other exceptions noted.
O-1
e sheet date.
properly.
accurate.
ments such as promisory notes and bank confirmation.
h the general ledger.
Interest Rate
Non-Interest Bearing Note
24%
27%
21%
Recorded or
Not?
O-1.1
Yes
O-1.1
Yes
O-1.1
Yes
C-3.1
No
O-1.2
Amount
1,700,000
1,906,500
1,600,000
10,000,000 (a)
15,206,500
5,206,500
10,000,000
7,900,000
2,100,000
10,000,000
om bank loan.
on (C2)
1,700,000
1,700,000
o officer separately from the notes payable account as it is
was reclassified because the note was short-term. It should also
e name of the officer and not Grace corporation. Simply because,
d properly valued, however a note payable to PCI bank were not recorded. Aside from the proposed adjusting
Prepared by:
MZB
Reviewed by:
DAM
Date:
4/2/2012
Date:
4/13/2012
-1
PROMISSORY NOTE
(Note Payable- Officer)
P
1,700,000.00 O-1

Grace Corporation
thousand
1,700,000.00
pesos (P
none
12 Ninoy Aquino Ave
interest rate of
% payable at
addition, pay 25% of the amount due as attorney's fees and costs of collection (aside from the
litigation allowed by the Rules of Court).
Signature
Alfredo P. Cacho
Name in Print
58 Rizal Avenue, Manila

Mailing Address
Place of Issue: Manila
PROMISSORY NOTE
(Note Payable)
P
1,906,500.00 O-1

One million nine h
thousand five hundred
1,906,500.00
pesos (P
24
565 Solana Aven
interest rate of
% payable at
Signature
Felicisomo Rey
for Genius Paper Products
Name in Print
565 Solana Avenue
Pasay City
Mailing Address
Place of Issue: Pasay City
PROMISSORY NOTE
(Note Payable)
P
1,600,000.00 O-1

One million six hu
thousand
1,600,000.00
pesos (P
27
565 Solana Aven
interest rate of
% payable at
Signature
Felicisomo Rey
for Genius Paper Products
Name in Print
565 Solana Avenue
Pasay City
Mailing Address
Place of Issue: Pasay City
O-1.1
RY NOTE
le- Officer)
October 1, 2011
360
days after date
One million seven hundred
),
.
the makes and endorsers shall, in

collection (aside from the costs of
Signature
Sarah B. Tuason
Name in Print
Paranaque City
Mailing Address
RY NOTE
ayable)
December 1, 2011
ninety
days after date
One million nine hundred six
),
565 Solana Avenue, Pasay City
.

Signature
Sarah B. Tuason
Name in Print
Paranaque City
Mailing Address
RY NOTE
ayable)
December 5, 2011
150
days after date
One million six hundred
),
565 Solana Avenue, Pasay City
.

Signature
Sarah B. Tuason
Name in Print
Paranaque City
Mailing Address
ACCOUNT
DATE
Notes Payable
ITEM
DEBIT
DATE
2011
Dec. 1
6
ACCOUNT
DATE

ITEM
DEBIT
DATE
2011
Nov. 30
O-1.2
ACCOUNT NO.
ITEM
GJ 11
GJ 11
CREDIT
Balance
ACCOUNT NO.
ITEM
Balance
1002
1,906,500.00
1,600,000.00
3,506,500.00
1003
CREDIT
1,700,000.00
GRACE CORPORATION
December 31, 2011
I. OBJECTIVES
1
2
3
To determine that accrued interest payable exist as of the bala

To determine whether all accrued interest payable were record
To determine whether amounts of accrued interest payable we
1
2
3
Existence
Completeness
Valuation
1
2
3
4
5
Obtained a copy of notes payable contracts.

Recalculated interest.
Determined the amount of accrued interest payable recorded
II. ASSERTIONS
III. PROCEDURES
IV. FINDINGS
Payee
Alfredo P. Cacho- Officer
PCI Bank
BALANCE PER AUDIT
Balance per Ledger
Audit adjustment

Interest Expense
To adjust acrrued interest on
(a) No accrual of interest were made for short non-interest be
(b) Amortization of the discounted note were not necessarily b
III. CONCLUSION
In conclusion, accrued interest payable recorded in the ledger do exist

exceptions noted. Sufficient and appropriate evidence were gathered to
ble exist as of the balance sheet date.

st payable were recorded properly.
ed interest payable were accurate.
est payable recorded for the period
Principal
1,700,000
1,906,500
1,600,000
10,000,000
Date of Note
10.01.11
12.01.11
12.05.11
12.28.11
Term
360 days
90 days
150 days
360 days
Interest Rate
Non-Interest Bearing Note
24%
27%
21%
1,815
1,815
st acrrued interest on notes payable.

short non-interest bearing note due to immateriality.
were not necessarily be made considering the materiality level and the days it was outstanding. No need to acrrue interest
n the ledger do exist , however there was an understatement in the account . Aside from the proposed adjusting journal en
nce were gathered to support the assertions made.
O-2
Days Outstanding
30
26
-
Interest Accrued
(a)
37,608
30,773
(b)
O-2.1
68,380
66,565
1,815
ing. No need to acrrue interest.
e proposed adjusting journal entry given by the auditor, no other
Prepared by:
MZB
Reviewed by:
DEF
Date:
3/5/2012
Date:
3/15/2012
ACCOUNT
DATE

ITEM
DEBIT
O-2.1
ACCOUNT NO.
DATE
2011
Dec. 31
ITEM
GJ 12
1007
CREDIT
66,565.00 O-2

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Account No.

Subscribed Ordinary Share Capital

December 31, 2009

December 31, 2010

ecember 31, 2010

December 31, 2011

Lead Schedule - Trade and Other Receivables

Lead Schedule - Cash and Cash Equivalents

and Cash Equivalents

Lead Schedule - Prepayments and Other Current A

ments and Other Current Assets

Lead Schedule - Property, Plant and Equioment

Working Income Statement - Lead Schedule

Ordinary Share Capital

TOTAL LIABILITIES AND EQUITY

Working Statement of Financial Position- Le

Balances (Php) December

nt of Financial Position- Lead Schedule

Working Cash Flow Statem

Changes in Operating Assets and Liabilities

Net Cash (used) provided by Investing Activities

Cash Flow Statement - Lead Schedule

Cash Short and Over

Accounts Receivable - Gwendo Reyes

Accounts Receivable - Sampollo Company

Accounts Receivable - J.R. Alano Trading

Accounts Receivable - Susan de Leon

Accounts Receivable - Chad Acosta

Accounts Receivable - Ida Company

Accounts Receivable - Benitez Merchandising

Bad Debts Expense

Accounts Receivable - Gwendo Reyes

Accounts Receivable - Susan de Leon

Accounts Receivable - Benitez Merchandising

Accounts Receivable - Benitez Merchandising

Performed surprise cash count

TOTAL BILLS AND COINS

Total Amount of Fund per Count

A check with OR # 119 is erroneously included as P165,560 in the cas

Proposed Adjusting Journal Entries:

on hand and petty cash fund at year end

CASH COUNT SHEET

ecording telephone bill not supported by a PCV.

8:00 AM and the same was returned to

ed in the cash count for the year-ended December 31, 2011.

g entries are recommended.

uary 5, 2012 at 8:00 AM yielded the

able on this date and found in order.

PETTY CASH BOO

TTY CASH BOOK

PETTY CASH VOUCHER

PETTY CASH VOUCHER

MOBILSHEL GASOLINE STATION

Gasoline expense for delivery of merchandise

PETTY CASH VOUCHER

MR. JOSE CASTRO

PETTY CASH VOUCHER

MANILA WATER WORKS & SEWERAGE SYSTEM (MWSS)

PETTY CASH VOUCHER

PETTY CASH VOUCHER

MOBILSHEL GASOLINE STATION

PETTY CASH VOUCHER

PETTY CASH VOUCHER

December 10, 2011