Reference no: EM132899804

Cost of transportation in for merchandise purchase during the period Black Leg Sanji Company reported P5,000,000 of inventory on December 31, 2013, based on physical count. Additional information is as follows:

1. Goods sold to a customer on December 31, 2013 which are being held for the customer to call at the customer's convenience with a cost of P150,000 and included in the count
2. Excluded from the physical count were goods billed to a customer, FOB shipping point, on December 31, 2013. The goods had a cost of P200,000 and had been billed at P350,000. The shipment is ready for pick-up by the delivery contractor on January 15, 2014
3. Goods were in transit from a vendor. The invoice cost was P300,000 and goods were shipped FOB seller on December 31, 2013 -Work in Process costing P400,000 was sent to an outside processor for finishing on December 31, 2013.
4. work in process costing P400,000 was sent to an outside processor for finishing on December 31, 2013
5. Goods out of consignment with sales price of P1,000,000 and mark up 25% on Cost. Shipping costs amounted to P50,000.

Problem 1: What is the Correct amount of inventory on December 31, 2013?

A. 6,850,000
B. 6,750,000
C. 6,600,000
D. 6,900,000