The correct merchandise inventory at December 31, 2020 of SSS Company is:
PROBLEM 7: The accounting staff of SSS Company submitted an inventory list at December 31, 2020 which showed a total of P1,500,000. The following information which may or may not berelevant to the inventory value submitted, are given below:
A. Excluded from the inventory were merchandise costing P24,000 because they weretransferred to the delivery department for packaging on December 28 to be shippedon January 2, 2022.
B. The bill of lading and other import documents on a merchandise were deliveredbythe bank and the trust receipt accepted by the company on December 26, 2020. Taxes and duties have been paid on this shipment but the customs broker has not delivered the merchandise until January 7, 2022. Delivered cost of the shipment totaled P240,000. This shipment was not included in the inventory in December 2020.
C. Supplier’s invoice for P9,000 worth of merchandise dated December 28, 2020 was received though the mails on December 30, 2020 although the goods arrived only onJanuary 4, 2022. Shipment term is FOB shipping point. This item was included in theDecember 31, 2020 inventory by the company.
D. Goods valued at P6,000 were received on December 28, 2020 for approval by SSS Company. The inventory team included this merchandise in the list but did not placeany value on it. On January 4, 2022, the company informed the supplier by longdistance telephone of the acceptance of the goods and the supplier’s invoicewas received on January 7, 2022.
E. On December 27, 2020, an order for P7,500 worth of merchandise was placed. This was included in the year-end inventory although it was received only on January 5, 2022. Seller shipped the goods FOB destination.
F. A review of the company’s purchase orders shows a commitment to buy P30,000 worthof merchandise. This was not included in the inventory because the goods werereceived on January 3, 2022.
- The correct merchandise inventory at December 31, 2020 of SSS Company is:
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