You were hired to audit the financial statements of Candace Company. An interim procedure was conducted on
Question:
You were hired to audit the financial statements of Candace Company. An interim procedure was conducted on inventory and you attended the physical count conducted November 30 of the current year.
The following information was obtained from Candace's records:
Inventory, Jan 1 280,000
Inventory, Nov 30 (physical count) 240,000
Sales for 11 months ended Nov 30 3,800,000
Sales for year ended Dec 31 4,500,000
Purchases for 11 months ended Nov 30 2,800,000
Purchases for year ended Dec 31 3,300,000
The audit also disclosed the following information:
1. Shipments received in Nov. and included in the physical count at Nov. 30 but recorded as December purchases P60,000
2. Shipments received in unsalable condition and excluded from physical inventory. The returns were not recorded because no credit memos were received.
Total at Nov. 30 P8,000 Total at Dec 31. (including the Nov 30. unrecorded returns) P12,000
1. Deposit made with vendor and charged to Purchases in Oct. The goods were shipped in January of the following year, P3,000.
The estimated inventory balance on December 31 would be
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