XYZ Company revealed an unadjusted balance of inventory of P3,000,000. It was also disclosed following purchase transactions occurred during the last few days of the fiscal year, which ends December 31, and in the first few days after that date. 1. An invoice for P50,000, FOB shipping point, was received and recorded on December 27. The shipment was received in satisfactory condition on January 2. The merchandise was not included in the inventory. 2. An invoice for P75,000, FOB destination, was received and recorded on December 28. The shipment was received in satisfactory condition on January 3. The merchandise was met included in the inventory.
XYZ Company revealed an unadjusted balance of inventory of P3,000,000. It was also disclosed following purchase transactions occurred during the last few days of the fiscal year, which ends December 31, and in the first few days after that date.
1. An invoice for P50,000, FOB shipping point, was received and recorded on December 27. The shipment was received in satisfactory condition on January 2. The merchandise was not included in the inventory.
2. An invoice for P75,000, FOB destination, was received and recorded on December 28. The shipment was received in satisfactory condition on January 3. The merchandise was met included in the inventory.
3. An invoice for P30,000, FOB shipping point, was received and recorded on January 4. The invoice shows that the goods had been shipped on December 28 and the receiving report indicates that the goods had been received on January 4. The merchandise was excluded from inventory.
4. An invoice for P90,000, FOB shipping point, was received on December 15. The receiving report indicates that the goods were received on December 18 but across the face of the report is the notation "merchandise not of the same quality as ordered - returned for credit, December 19". The merchandise was included in the inventory.
5. An invoice for P140,000, FOB destination, was received and recorded on January 4. The receiving report indicates that the goods were received on December 29. The merchandise was included in inventory.
Required: Compute the adjusted balance of inventory on December 31. Books are still.
ABCCompany reported inventory on December 31, 2020 at P2,000,000 based on physical count priced at cost and before any necessary adjustment for the following:
- Merchandise costing P100,000, shipped FOB shipping point from a vendor on December 30, 2020 was received and recorded on January 5, 2021
- Goods in the shipping area were excluded from inventory although shipment was not made until January 5, 2021. The goods billed to the customer FOB shipping point on December 30, 2020 had a cost of P400,000.
- Goods received under consignment amounting to P50,000 were included in the physical count.
What amount should be reported as inventory on December 31, 2020?
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