Reference no: EM132841199

The inventory control account balance of NEVERGIVEUP Company at June 30, 2020 was P221,020 using the perpetual inventory system. A physical count conducted on that day found inventory on hand worth of P220,200. Net realizable value for each inventory item held for sale exceeded cost.

An investigation of the discrepancy revealed the following:

A. Goods worth P6,600 held on consignment from Port Company had been included in the physical count.

B. Goods costing P1,200 were purchased on credit from Rome Company on June 27, 2020 FOB shipping point. The goods were shipped on June 28, 2020 but, as they had not arrived by June 30, 2020, were not included in the physical count. The purchase invoice was received and processed on June 29, 2020.

C. Goods costing P2,400 were sold on credit to Althea Company for P3,900 on June 28, 2020, FOB destination. The goods were still in transit on June 30, 2020. The sales invoice was processed on June 29, 2020.

D. Goods costing P2,730 were purchased on credit FOB destination from SanMig Company on June 28, 2020. The goods were received on June 30, 2020 and included in the physical count. The purchase invoice was received on July 2, 2020.

E. On June 30, 2020, NEVERGIVEUP Company sold goods costing P6,300 on credit FOB shipping point to Pizza Company for P9,600. The goods were dispatched from the warehouse on June 30, 2020 but the sales invoice had not been processed at that date.

F. Damaged inventory items valued at P2,650 were discovered during the physical count. These items were still recorded on June 30, 2020 but were omitted from the physical count records pending their write-off.

Problem 1: What is the adjusted inventory account?