On December 31, 2020, a fire broke out in the warehouse of Cialete Company, destroyingall its inventory. The following information is presented for 2020:January 1December31InventoryAccounts ReceivableAccounts PayableCollection on accountsP 750,000510,000350,000P 490,000590,0003,100,000receivablePayment to suppliersGoods out on consignment at sales priceSalvage value of inventory1,950,000310,00045,0002019P3,000,0001,200,00020182017SalesGross ProfitP2,750,000 P2,100,0001,045,000756,000Requirements: Compute the following on December 31, 20201. Purchases2. Sales3. Inventory Loss

Name: On December 31, 2020, a fire broke out in the warehouse of Cialete Co
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Description: On December 31, 2020, a fire broke out in the warehouse of Cialete Company, destroyingall its inventory. The following information is presented for 2020:January 1December31InventoryAccounts ReceivableAccounts PayableCollection on accountsP 750,00051

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On December 31, 2020, a fire broke out in the warehouse of Cialete Company, destroying all its inventory. The following information is presented for 2020: December 31 January 1 P 750,000 510,000 350,000 Inventory Accounts Receivable Accounts Payable Collection on accounts receivable Payment to suppliers Goods out on consignment at sales price Salvage value of inventory P 490,000 590,000 3,100,000 1,950,000 310,000 45,000 2019 2018 2017 Sales Gross Profit P3,000,000 1,200,000 P2,750,000 P2,100,000 1,045,000 756,000 Requirements: Compute the following on December 31, 2020 1. Purchases 2. Sales 3. Inventory Loss

On December 31, 2020, a fire broke out in the warehouse of Cialete Company, destroying all its inventory. The following information is presented for 2020: December 31 January 1 P 750,000 510,000 350,000 Inventory Accounts Receivable Accounts Payable Collection on accounts receivable Payment to suppliers Goods out on consignment at sales price Salvage value of inventory P 490,000 590,000 3,100,000 1,950,000 310,000 45,000 2019 2018 2017 Sales Gross Profit P3,000,000 1,200,000 P2,750,000 P2,100,000 1,045,000 756,000 Requirements: Compute the following on December 31, 2020 1. Purchases 2. Sales 3. Inventory Loss

FINANCIAL ACCOUNTING

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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

On December 31, 2020, a fire broke out in the warehouse of Cialete Company, destroying
all its inventory. The following information is presented for 2020:
January 1
December
31
Inventory
Accounts Receivable
Accounts Payable
Collection on accounts
P 750,000
510,000
350,000
P 490,000
590,000
3,100,000
receivable
Payment to suppliers
Goods out on consignment at sales price
Salvage value of inventory
1,950,000
310,000
45,000
2019
P3,000,000
1,200,000
2018
2017
Sales
Gross Profit
P2,750,000 P2,100,000
1,045,000
756,000
Requirements: Compute the following on December 31, 2020
1. Purchases
2. Sales
3. Inventory Loss

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