Reference no: EM132729268

The accounting staff of Karen Company submitted an inventory list at December 31, 2018 which showed a total of Pl,500,000. The following information which may or may not be relevant to the inventory value submitted, are given below:

1. Excluded from the inventory were merchandise costing P24,000 because they were transferred to the delivery department for packaging on December 28 to be shipped on January 2, 2019
2. The bill of lading and other import documents on a merchandise were delivered by the bank and the trust receipt accepted by the company on December 26, 2018. Taxes and duties have been paid on this shipment, but the customs broker has not delivered the merchandise until January 7, 2019. Delivered cost of the shipment totaled P240,000. This shipment was not included in the inventory in December 2018. 
3. A review of the company's purchase orders shows a commitment to buy P30,000 worth of merchandise. This was not included in the inventory because the goods were received on January 3, 2019. 
4. Suppliers invoice for P9,000 worth of merchandise dated December28, 2018 was received through the mails on December 30, 2018 although the goods arrived only on January 4, 2019. Shipment term 'is f.o.b. shipping point. This item was included in the December 31, 2018 inventory by the company. 
5. Goods valued at Php 196,000 were received on December 28,2018 for approval by Karen Company. The inventory team included this merchandise in the list but did not place any value on it. On January 4, 2091 the company informed the supplier by long distance telephone of the acceptance of the goods and the supplier's invoice was received on January 7, 2019. 
6. On December 27, 2018, an order for Php 197,500 worth of merchandise was placed. This was included in the year-end inventory although it was received only on January 5, 2019. Seller shipped' the goods f.o.b. destination.

Problem 1: The correct merchandise inventory at December 31, 2018.