Problem 13

Four Company, which maintains it inventory using the perpetual system, had the following balances at the end of the year:

Cost of Goods Sold 4,500,000

Net Sales 6,000,000

Inventory 1,200,000

Accounts Payable 3,000,000

Accounts Receivable 4,000,000

Compute the adjusted balances of the above items after considering the following information:

Four consigned to Ellie, at the beginning of December 2020, goods costing P100,000 and paid freight of P5,000. The relevant commission is 5% of the selling price of P200,000. By the end of the year, Ellie has not remitted yet any of the sales but reported on January 5, 2021 that by December 31, 2020, all of the goods were sold. The said inventory was included in the physical count of the company.

The company sold on FOB shipping point goods costing P200,000 at selling price which is 150% of cost on December 29, 2020, sale was recognized on the said date, and goods were excluded from the inventory count. It was later found out that said goods were kept by the sales clerk because it was reserved for the customer and was only shipped on January 3, 2021.

The company sold on FOB destinations goods costing P300,000 at selling price which is 120% of cost on December 26, 2020, sale was recognized on the said date, and goods were excluded from the inventory count. It was later found out that said goods reached the customer on January 6, 2021.

The company sold on FOB shipping point goods costing P100,000 at selling price which is 150% of cost on December 29, 2020, sale was recognized on the said date, and goods were excluded from the inventory count. Goods reached the customer on January 3, 2021. Four received and recorded an invoice on December 30, 2020 for goods costing P450,000 FOB destination. The company received the inventories on January 3, 2021 but were included in the inventory ending balance