10. 11. 12. 13. Computer parts that cost P50,000 was out on consignment to PC Express and was excluded from the ending inventory. The merchandise was recorded as a sale of P125,000 when shipped to PC Express on December 02, 2018. Computer parts with an invoice cost of P90,000 received from a vendor at 5:00PM on December 31, 2018 were recorded on a receiving report dated January 02, 2019. The goods were not included in the physical count, but the invoice was included in accounts payable at December 31, 2018. A packing case containing a product costing P13,500 was in MARK CORP.'s shipping room when the physical inventory was taken. It was included in the inventory because it was marked \"hold for customer's shipping instruction". Investigations revealed that the customer signed a purchase contract dated December 18, 2018, but the case was shipped and customer billed on January 10, 2019. A sale was recorded on December 18, 2018. A special item fabricated to order for a customer, was finished and in the shipping room on December 31, 2018. The customer had inspected it and was satisfied. The customer was billed in full on that date. The item was included in inventory at cost, P15,000 because it was shipped on January 04, 2019. Computer parts that cost P55,000 and sold on December 31, 2018 for P80,000 was included in the ending inventory. The sale was recorded in 2018. The goods were in transit, however, a clerk failed to note that the goods were shipped FOB Shipping Point. Computer parts returned by customers and held pending inspection in the returned goods area on December 31, 2018, were not included in the physical count. On January 8, 2019, computer parts costing P78,000 were inspected and returned to inventory. Credit memos totaling P120,000 were issued to the customers on the same date. Computer parts that cost P75,000 were included in the ending inventory. The related purchase has not been recorded. The parts had been shipped by the vendor FOB Destination; and the invoice, but not the parts, was received on December 30, 2018. Computer parts in transit that cost P35,000 were excluded from inventory because it was not on hand. The shipment from the vendor was FOB Shipping Point. The purchase was recorded on December 29, 2018 when the invoice was received. Computer parts in transit that cost P65,000 was excluded from inventory because it had not arrived. Although the invoice had arrived, the related purchase was not recorded by December 31,2018. The parts were shipped by the vendor FOB Shipping Point. Computer parts that cost P40,000 were included in the ending inventory because it was on hand. The parts had been rejected because of incorrect specifications and were being held for return to the vendor. The parts were recorded as a purchase on December 26, 2018. 1:55 PM Sat Feb 20 El coursehero.com 2. Prepare any correcting entries to adjust inventory to its proper amount at December 31, 2018. Assume the books have not been closed. **************** Problem 4 On January 03, 2019, MARK CORPORATION, a manufacturer, importer and wholesaler of computer parts and supplies engaged an independent CPA to perform an audit for the year ended December 31, 2018. The company uses a periodic inventory system. The CPA did not observe the inventory count on December 31, 2018, and as a result, a special examination was made of the inventory records. The financial statements prepared by the company (uncorrected) showed the following: Ending inventory P 120,000 Accounts receivable 100,000 Accounts payable 50,000 Sales 650,000 Net purchases 250,000 Pre-tax income 85,000 The following data were found during the audit: 1. Computer parts received on January 02, 2019 costing P15,000 was recorded on December 31, 2018. An invoice on hand showed the shipment was made FOB Supplier's warehouse on December 31, 2018. Because the merchandise was not on hand at December 31, 2018, it was not included in the inventory. Computer parts that cost P90,000 were excluded from the inventory, and the related sale for P115,000 was recorded. The parts had been segregated in the warehouse for shipment; there was no contract for sale but a \"tentative order by phone". Computer parts inventory costing P20,000 were sent to an outside processor for plating on December 30, 2018