The physical inventory of CHUCKIE COMPANY as of December 26, 2020 totaled P1,965,000. You agreed on the

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Question:

The physical inventory of CHUCKIE COMPANY as of December 26, 2020 totaled P1,965,000. You agreed on the December 26 count as the company has a good internal control system. In trying to establish the December 31 inventory, you noted the following transactions from December 27 to December 31, 2019

Sales (20% markup on cost) P600,000

Credit memos issued:

For goods returned on :

December 15 - 27,000

December 20 - 35,000

December 29 - 36,000

For goods delivered to customers not in

accordance with specifications - 9,500

Credit memos received:

For goods returned on:

December 10 - 17,000

December 26 - 23,000

December 28 - 8,000

Purchase:

Placed in stock - 120,000

In transit, FOB shipping point - 50,000

In transit, FOB destination - 33,000

Required:

a. Inventory account balance as of December 31, 2020.
b. Net adjustment to Accounts Payable, if there is any.