Reference no: EM132729270

The Karen Company values its inventory at the lower of FIFO cost or net realizable value (NRV). The inventory accounts at December 31, 2017, had the following balances.

Raw materials P 650,000

Work in process 1,200,000

Finished goods 1,640,000

The following are some of the transactions that affected the inventory of the Company during 2018.

1. Jan. 8 Karen purchased raw materials with a list price of P200,000 and was given a trade discount of 20% and 10%; terms 2/15, n/ 30. Karen values inventory at the net invoice price
2. Feb. 14 Karen repossessed an inventory item from a customer who was overdue in making payment. The unpaid balance the sale is P15,200 The repossessed merchandise is to be refinished and placed on sale. It is expected that the item can be sold for P24,000 after estimated refinishing cost of P6,000. The normal profit for this item is considered to be P3,200. 
3. Mar. 1 Refinishing costs of P6,400 were incurred on the repossessed item.
4. Apr. 3 The repossessed item was resold for P24,000 on account, 20% down.
5. Aug. 30 A sale on account was made of finished goods that have a list price of P59,200 and a cost P38,400. A reduction of P8,000 off the list price was granted as a trade-in allowance. The trade in item is to be priced to sell at P6,400 as is. The normal profit on this type of inventory is 25% of the sales price.

Based on the above and the result of your audit, answer the following

Problem 1: The entry on Jan. 8 will include a debit to Raw Materials Inventory of

Problem 2: The repossessed inventory on Feb. 14 is most likely to be valued at

Problem 3: The journal entries on April 3 is

Problem 4: The trade-in inventory on Aug. 30 is most likely to be valued at

Problem 5: How much will be recorded as Sales on Aug. 30?