Answer the required questions for a rate.

PROBLEM NO. 3 Makati Company is preparing its 2005 nancial statements. Prior to any adjustments, inventory is valued at P1,605.000. During your audit, you found the following information relating to certain inventory transactions from your cutoff test. a. Goods valued at P110.000 are on consignment with a customer. These goods were not included in the ending inventory gure. Goods costing P812000 were received from a vendor on January 5, 2006. The related invoice was received and recorded on January 12. 2005. The goods were shipped on December 31' 2005. terms FOB shipping point. Goods costing P35.000. sold for P102.000. were shipped on December 31. 2005. and were delivered to the customer on January 2, 2006. The terms of the invoice were FOB shipping point. The goods were included in the ending inventory for 2005 and the sale was recorded in 2006. A P35.000 shipment of goods to a customer on December 31. terms FOB destination was not included in the year-end inventory. The goods cost P26.000 and were delivered to the customer on January 3, 2006. The sale was properly recorded in 2005. The invoice for goods costing P35,000 was received and recorded as a purchase on December 31, 2005. The related goods, shipped FOB destination were received on January 2, 2006. and thus were not included in the physical inventory. Goods valued at P154,000 are on consignment from a vendor. These goods are not included in the physical inventory. A 1360.000 shipment of goods to a customer on December 30, 2005, terms FOB destination. was recorded as a sale in 2006. The goods, costing P37,000 and delivered to the customer on January 6. 2006. were not included in the 2005 ending inventory. REQUIRED.\" 1. 2. Compute the proper inventory amount to be reported on Makati's balance sheet for the year ended December 31, 2005. By how much would the net income have been misstated if no adjustments were made for the above transactions? (Disregard tax implications)