1. How much is the cost of merchandise sales returns to be recorded?

2. What is the inventory balance on December 31, 2010?

Computation of Year-end Inventory The physical inventory of BULL, INC. as of December 26, 2010. totalled P 945,000. You agreed on the December 26 count as the company has a good internal control system. In trying to establish the December 31 inventory, you noted the following transactions from December 27 to December 31, 2010. Sales (30% marks up on cost) P 390,000 Credit memos issued: For goods returned on: December 15 10,800 December 20 18,000 December 29 15.600 Credit memos received: For good returned on: December 10 5.400 December 27 4,200 December 28 6.000 Purchases: Placed in stock 90,000 In transit, FOB sidestination. 124,500 In transit. FOB Shipping point.ooo