In: Accounting
Grass Company’s inventory at December 31, 2021 was P570,000 based on a physical count of goods priced at cost and before any necessary year-end adjustments relating to the following:
• Included in the physical count were goods billed to a customer FOB shipping point on December 31, 2p016. These goods had a cost of P15,000 and were picked up by a carrier on January 10, 2022.
• Goods shipped FOB shipping point on December 28, 2021 from a vendor to Grass Company were received on January 4, 2022. The invoice cost was P25,000.
• Goods shipped from Grass Company to a customer, terms FOB destination, are still in transit at December 31,2 016. The goods, with a selling price of P120,500, were received by the customer on January 5, 2022. The company sells goods at a 25% markup cost.
What amount should Grass Company report as inventory in its December 31, 2021 statement of financial position?
C. Grass Company | |
Inventory - Physical count | ₱ 570,000.00 |
FOB Shipping Point billed to customer | ₱ 25,000.00 |
FOB Destination in transit (125,500/1.25) | ₱ 96,400.00 |
Adjusted Inventory | ₱ 691,400.00 |
• Included in the physical count were goods billed to a customer FOB shipping point on December 31, 2p016. These goods had a cost of P15,000 and were picked up by a carrier on January 10, 2022. (this is not included in the computation)
The Adjusted Inventory is
₱ 691,400.00 |