BUDOTS Company reported current assets of P3,900,000 and current liabilities of P2,000,000 on its statement of financial position as of December 31, 2017. The following items may have been recorded incorrectly. The company uses the periodic inventory system. a. Goods purchased costing P220,000 were shipped FOB shipping point by a vendor on December 26, 2017. BUDOTS received and recorded the invoice on December 29, 2017, but the goods were not included in BUDOTS’ physical count of inventory because they were not received until January 4, 2018. b. Goods purchased costing P200,000 were shipped FOB destination by a supplier on December 28, 2017. BUDOTS received and recorded the invoice on December 31, 2017, but the goods were not included in BUDOTS’ 2017 physical count of inventory because they were not received until January 2, 2018. c. Goods held on consignment from Jason Company were included in BUDOTS’ December 31, 2017, physical count of inventory at P130,000. By what amount will income (before taxes) be adjusted up or down as a result of the corrections? A. 110,000 decrease B. 290,000 decrease C. 110,000 increase D. 290,000 increase
16. BUDOTS Company reported current assets of P3,900,000 and current liabilities of P2,000,000 on its
a. Goods purchased costing P220,000 were shipped FOB shipping point by a vendor on December 26, 2017. BUDOTS received and recorded the invoice on December 29, 2017, but the goods were not included in BUDOTS’ physical count of inventory because they
were not received until January 4, 2018.
b. Goods purchased costing P200,000 were shipped FOB destination by a supplier on December 28, 2017. BUDOTS received and recorded the invoice on December 31, 2017, but the goods were not included in BUDOTS’ 2017 physical count of inventory because they were not received until January 2, 2018.
c. Goods held on consignment from Jason Company were included in BUDOTS’ December 31, 2017, physical count of inventory at P130,000.
By what amount will income (before taxes) be adjusted up or down as a result of the corrections?
A. 110,000 decrease
B. 290,000 decrease
C. 110,000 increase
D. 290,000 increase
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