Reference no: EM132961053
PROBLEM 1 - Banalo Company, your audit client for the current year included the following itemsunder inventories:
Raw materials P 1,400,000
Advances for materials ordered 200,000
Goods in process 650,000
Unexpired insurance on inventories 60,000
Advertising catalogs and shipping boxes 150,000
Finished goods in factory 2,000,000
Finished goods in company owned retail stores including 50% profit on cost 750,000
Finished goods in hands of consignees including 40% profit on sales 400,000
Finished goods in transit to customers, shipped FOB destination, at cost 250,000
Finished goods out on approval, at cost 100,000
Unsalable finished goods, at cost 50,000
Office supplies 40,000
Materials in transit shipped FOB shipping point, excluding freight of P30,000 330,000
Goods held on consignment, at selling price, with a cost of P150,000 200,000
Compute the amount to be presented as inventories under current assets in the statement of financial position for the year.
PROBLEM 2 - Caviar Company included the following items under inventories:
Goods out on consignment at another company's store P1,000,000
Goods held on consignment at the Luanda's stores 750,000
Goods purchased FOB seller that are in transit 300,000
Office supplies not yet used 30,000
Goods purchased FOB buyer that are in transit 200,000
Goods sold where large returns are predictable 60,000
Goods sold FOB shipping point that are in transit 400,000
Freight charges on goods purchased 30,000
Interest cost incurred for inventories that are routinely manufactured 50,000
Costs incurred to advertise goods held for sale 10,000
Factory labor costs incurred on goods still unsold 400,000
Freight paid for transporting goods to consignees 30,000
Materials on hand not yet placed into production 500,000
Raw materials on which the company has started production but not yet completed 450,000
Unused machine lubricants 30,000Costs identified with units completed but not yet sold 330,000
Temporary investment in stocks and bonds that will be resold in the near future 400,000
Goods sold on installment basis due in three equal annual payments 220,000
Goods sold by Luanda with a right to repurchase the same within six months 155,000
Compute the correct amount of inventory to be presented in Caviar's statement of financial position.