What is the adjusted inventory? Stasis Smash Company revealed the following information on December 31, 2019:Cash3,700,000Accounts receivable1,500,000Allowance for doubtful accounts(200,000)Inventory2,000,000Prepaid insurance300,000Total current assetsZ.400.000Analysis of cash:Cash in bank1,300,000Bank overdraft in another bank(300,000)Cash set aside for plant addition2,000,000Petty cash fund10,000Cash withheld from wages190,000General cash500,000Total cash3.700,000The accounts receivable included past due account in the amount of P100,000. The account is deemed uncollectible and should be written off. The inventory included goods held orconsignment amounting to P150,000 and goods of P200,000 purchased and received on December 31, 2019, Neither of these items have been recorded as a purchase. The prepaidinsurance included cash surrender value of life insurance of P50,000.

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Description: What is the adjusted inventory? Stasis Smash Company revealed the following information on December 31, 2019:Cash3,700,000Accounts receivable1,500,000Allowance for doubtful accounts(200,000)Inventory2,000,000Prepaid insurance300,000Total current asse

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Business

Accounting

What is the adjusted inventory?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter11: The Statement Of Cash Flows

Section: Chapter Questions

Problem 43E: Determining Cash Flows from Financing Activities Solomon Construction Company reported the following...

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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

What is the adjusted inventory?

Stasis Smash Company revealed the following information on December 31, 2019:
Cash
3,700,000
Accounts receivable
1,500,000
Allowance for doubtful accounts
(200,000)
Inventory
2,000,000
Prepaid insurance
300,000
Total current assets
Z.400.000
Analysis of cash:
Cash in bank
1,300,000
Bank overdraft in another bank
(300,000)
Cash set aside for plant addition
2,000,000
Petty cash fund
10,000
Cash withheld from wages
190,000
General cash
500,000
Total cash
3.700,000
The accounts receivable included past due account in the amount of P100,000. The account is deemed uncollectible and should be written off. The inventory included goods held or
consignment amounting to P150,000 and goods of P200,000 purchased and received on December 31, 2019, Neither of these items have been recorded as a purchase. The prepaid
insurance included cash surrender value of life insurance of P50,000.

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