SM3 Inventory analysis and proposed adjusting journal entryOslo Inc. uses a perpetual inventory system and reports inventory using the First-In-First-Out(FiFo) basis. Oslo's inventory per record on December 31, 2023 was P820,000. A physicalcount conducted on that day found inventory on hand of P800,000. An investigation of thediscrepancy revealed the following information:[1.] Goods worth P50,000 held on consignment from Kana Co. had been included in thephysical count.[2.] Goods costing P15,000 were purchased on credit from Sakura Co. on December 27.Freight term of the purchase was FOB Shipping Point. The goods were shipped onDecember 28 but remained in transit as of December 31 and thus, was not included in thephysical count. The purchase invoice was received and processed on December 31, 2023.[3.] Goods costing P60,000 were sold on credit to Naruto Co. for P75,000 on December 28,2023 under FOB Destination freight terms. The goods were still in transit on December 31.The sales invoice was processed and recorded on December 29, 2023.[4.] Goods costing P25,000 were purchased on credit (FOB Destination) from Shibuya Co.on December 28, 2023. The goods were received on December 30, 2023 and were includedin the physical count. The purchase invoice was received and processed on shipment date.[5.] On December 31, 2023, Nagasaki sold goods costing P40,000 on credit (FOB ShippingPoint) to Onoki Corporation for P85,000. The goods were dispatched from the warehouse onDecember 31, 2023 but the sales invoice had not been processed at that date. [6.] Damagedinventory items valued at P15,000 were discovered during the physical count. These itemswere omitted from the physical count but write-off of these items was still pending.Determine the following as a result of your audit:1. What is the adjusted inventory balance as of December 31, 2023?2. What adjustment should be made to the reported sales of Oslo in its December 31, 2023statement of comprehensive income?Please prepare a working paper.

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Description: SM3 Inventory analysis and proposed adjusting journal entryOslo Inc. uses a perpetual inventory system and reports inventory using the First-In-First-Out(FiFo) basis. Oslo's inventory per record on December 31, 2023 was P820,000. A physicalcount cond

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Oslo Inc. uses a perpetual inventory system and reports inventory using the First-In-First-Out (FiFo) basis. Oslo's inventory per record on December 31, 2023 was P820,000. A physical count conducted on that day found inventory on hand of P800,000. An investigation of the discrepancy revealed the following information: [1.] Goods worth P50,000 held on consignment from Kana Co. had been included in the physical count.

Oslo Inc. uses a perpetual inventory system and reports inventory using the First-In-First-Out (FiFo) basis. Oslo's inventory per record on December 31, 2023 was P820,000. A physical count conducted on that day found inventory on hand of P800,000. An investigation of the discrepancy revealed the following information: [1.] Goods worth P50,000 held on consignment from Kana Co. had been included in the physical count.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 50E: Inventory Costing Methods Crandall Distributors uses a perpetual inventory system and has the...

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