Problem 10-20 (AICPA Adapted)Empty Company reported inventory on December 31, 2021 atP2,500,000 based on physical count priced at cost and befoeany necessary adjustment for the following:Merchandise costing P100,000, shipped FOB shipping pointfrom a vendor on December 30, 2021 was received andrecorded on January 5, 2022.• Goods in the shipping area were excluded from inventoryalthough shipment was not made until January 6, 2022The goods billed to the customer FOB shipping point onDecember 30, 2021 had a cost of P400,000.What amount should be reparted as inventory on December31, 2021?a. 2,500,000b. 2,600,000c. 2,900,000d. 3,000,000

P3,000,000 (Option D) should be reported as inventory on December 31, 2021.

Answered: What amount should be reported as…

Business

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What amount should be reported as inventory on December 31, 2021?

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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Concept explainers

Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.

Question

Problem 10-20 (AICPA Adapted)
Empty Company reported inventory on December 31, 2021 at
P2,500,000 based on physical count priced at cost and befoe
any necessary adjustment for the following:
Merchandise costing P100,000, shipped FOB shipping point
from a vendor on December 30, 2021 was received and
recorded on January 5, 2022.
• Goods in the shipping area were excluded from inventory
although shipment was not made until January 6, 2022
The goods billed to the customer FOB shipping point on
December 30, 2021 had a cost of P400,000.
What amount should be reparted as inventory on December
31, 2021?
a. 2,500,000
b. 2,600,000
c. 2,900,000
d. 3,000,000

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