1. The inventory on hand on December 31, 2020 for Univ Company is valued at P1,500,000. The entity's policy on its selling is 150% of cost. The following were not included in the inventory: 1. Purchases of goods still in transit, shipped FOB Destination, with price of P150,000, which includes freight charge of P25,000 2. Goods held on consignment by Univ at a sales price of P100,000, excluding 20% commission based on sales price. Freight paid by Univ is P10,000. 3. Goods sold in transit FOB Destination with invoice price of P245,000 which includes a freight charge of P20,000 to deliver the goods. 4. Purchases of goods still in transit FOB Shipping point with invoice of P300,000. Freight cost, P50,000 5. Goods out on consignment with sales price of P300.000. Shipping cost to consignee is P20,000. What is the correct amount of inventory at December 31 2020?

1. The inventory on hand on December 31, 2020 for Univ Company is valued at P1,500,000. The entity's policy on its selling is 150% of cost. The following were not included in the inventory: 1. Purchases of goods still in transit, shipped FOB Destination, with price of P150,000, which includes freight charge of P25,000 2. Goods held on consignment by Univ at a sales price of P100,000, excluding 20% commission based on sales price. Freight paid by Univ is P10,000. 3. Goods sold in transit FOB Destination with invoice price of P245,000 which includes a freight charge of P20,000 to deliver the goods. 4. Purchases of goods still in transit FOB Shipping point with invoice of P300,000. Freight cost, P50,000 5. Goods out on consignment with sales price of P300.000. Shipping cost to consignee is P20,000. What is the correct amount of inventory at December 31 2020?

Name: 1. The inventory on hand on December 31, 2020 for Univ Company is val
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Description: 1. The inventory on hand on December 31, 2020 for Univ Company is valued atP1,500,000. The entity's policy on its selling is 150% of cost. The following werenot included in the inventory:1. Purchases of goods still in transit, shipped FOB Destinatio

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

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Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Concept explainers

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.

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Question

1. The inventory on hand on December 31, 2020 for Univ Company is valued at
P1,500,000. The entity's policy on its selling is 150% of cost. The following were
not included in the inventory:
1. Purchases of goods still in transit, shipped FOB Destination, with price of
P150,000, which includes freight charge of P25,000
2. Goods held on consignment by Univ at a sales price of P100,000, excluding 20%
commission based on sales price. Freight paid by Univ is P10,000.
3. Goods sold in transit FOB Destination with invoice price of P245,000 which
includes a freight charge of P20,000 to deliver the goods.
4. Purchases of goods still in transit FOB Shipping point with invoice of P300,000.
Freight cost, P50,000
5. Goods out on consignment with sales price of P300.000. Shipping cost to
consignee is P20,000.
What is the correct amount of inventory at December 31 2020?

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