Determine the required balance of the allowance

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Reference no: EM133050830

PROBLEM - On December 31, 2013, the balance of Panganiban's inventory account was P251,000, while its Allowance for Inventory Writedown account has a balance of P16,000. On December 31, 2014, the following inventory details were shown:

Product

Cost

Replacement Cost

Sales Price

Net Realizable Value

Normal Profit

U

P44,500

P43,000

P45,750

P43,500

P3,200

S

47,000

46,000

45,000

42,500

3,720

T

62,500

67,500

69,000

55,500

5,805

F

97,000

57,000

8,000

98,500

10,250

Required -

1. Determine the required balance of the Allowance to Reduce Inventory to NRV account on December 31, 2014.

2. Determine the amount of inventory to be shown in the December 31, 2014 Statement of Financial Position.

Reference no: EM133050830

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