Compute the amount to be presented as inventories

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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.

Reference no: EM132961053

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