Grass Company's inventory at December 31, 2023 was P570,000 based on a physical count of goods priced at cost and before any necessary year-end adjustments relating to the following: Included in the physical count were goods billed to a customer FOB shipping point on December 31, 2023. These goods had a cost of P15,000 and were picked up by the carrier on January 10, 2024.Goods shipped FOB shipping point on December 28, 2023 from a vendor to Grass Company were received on January 4, 2024. The invoice cost was P25,000.Goods shipped from Grass Company to a customer, terms FOB destination, are still in transit at December 31, 2023. The goods, with a selling price of P120,500, were received by the customer on January 5. 2024. The company sells goods at a 25% markup on cost.What amount should Grass Company report as inventory in its December 31, 2023 statement of financial position? A. P715,500 B. P700,500 C. P691,400 D. P676,400

Lets understand the basics. Goods can be shipped to customer using various modes. i.e. On FOB…

Answered: Grass Company's inventory at December…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Grass Company's inventory at December 31, 2023 was P570,000 based on a physical count of goods priced at cost and before any necessary year-end adjustments relating to the following:

Included in the physical count were goods billed to a customer FOB shipping point on December 31, 2023. These goods had a cost of P15,000 and were picked up by the carrier on January 10, 2024.
Goods shipped FOB shipping point on December 28, 2023 from a vendor to Grass Company were received on January 4, 2024. The invoice cost was P25,000.
Goods shipped from Grass Company to a customer, terms FOB destination, are still in transit at December 31, 2023. The goods, with a selling price of P120,500, were received by the customer on January 5. 2024. The company sells goods at a 25% markup on cost.

What amount should Grass Company report as inventory in its December 31, 2023 statement of financial position?

A. P715,500
B. P700,500
C. P691,400
D. P676,400

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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