Mijoo Company reported inventory on December 31, 2021, at P6,000,000 based on a physical count of goods priced at cost and before any necessary year-end adjustments relating to the following:

1. Included in the physical count were goods billed to a customer FOB shipping point on December 30, 2021. These goods had an invoice price of P150,000 at 120% and were picked up by the carrier on January 15, 2022.

2. Goods shipped FOB shipping point on December 31, 2021, from a vendor were received on January 15, 2022. The invoice cost was P300,000.

3. Goods sold to a customer on December 31, 2021, which are being held for the customer to call at the customer's convenience with a cost of P200,000 were included in the count.

4. Goods worth P25,000 bought from a vendor on December 28, 2021,and shipped a day after via Free Carrier are excluded from the count. The shipment is received on January 3, 2022.

5. Goods in the warehouse sold to a loyal customer worth P500,000on December 29, 2021, were excluded. 

Shipping term: Ex-works

 

1. At what amount should Inventories be reported on December 31, 2021?

2. Assuming that Item 5 is sold via CFS and item 4 is inventory sold under a buyback agreement, at what amount should Inventories be reported on December 31, 2021?

Answer rating: 100% (QA)

answer 1 Notes 1 Goods valued at P150000 are duly included in the physical calcula... View the full answer