A. Compute the correct amount of inventory.

Items counted in the bodega 4,000,000

Items included in the count specifically segregated per sales contract (100,000)
Items returned by customer 50,000
Items ordered and in receiving department 400,000
Items shipped today, FOB destination 150,000
Items for display 200,000
Items on counter for sale 800,000
Damaged and unsalable items included in count (50,000)
Items in shipping department 250,000
Amiable Company, Inventories 5,700,000

B. Compute the correct amount of inventory.

Material 1,400,00
Goods in Process 650,000
Finished goods in factory 2,000,000
Finished goods in company-owned retail store,
Including 50% profit on cost [450,000/(100%+50%)] 500,000
Finished goods in hands of consignees
including 40% profit on sales [400,000x(100%-40%)] 240,000
Finished goods in transit to consumers shipped
FOB destination at cost 250,000
Finished goods out on approval at cost 100,000
Materials in transit shipped FOB shipping point,
Excluding freight of P30,000 (330,000+30,000) 360,000
Natal Company, Inventories 5,500,000
C. Compute cost of inventory at current year-end.

Finished goods 2,000,000

Finished goods held by salesmen 100,000
Goods in process (720,000/80%) 900,000
Materials 1,000,000
Defective materials for replacement 100,000
Gasoline and oil for testing finished goods 110,000
Machine lubricants 60,000
Luminous Company, Inventory 4,270,000

D. Prepare the adjustments on December 31, 2021. Books are still open.

1. Merchandise Inventory 50,000

Income Summary 50,000

2. Accounts Payable 75,000

Purchases 75,000

3. Purchases 30,000
Accounts Payable 30,000

Inventory 30,000
Income Summary 30,000

4. Income Summary 90,000

Inventory 90,000

5. Purchases 140,000
Accounts Payable 140,000