Correction: Gruel Co. is a merchandiser of metal tools. It uses a PERIODIC inventory system.
Problem 7 Gruel Co. is a merchandiser of metal tools. It uses a perpetual inventory system. The following information was obtained from the company's accounting records for the year ended December 31, 2021: Inventory on December 31, 2021 (based on physical count in Gruel's warehouse) Purchases Net sales (sales less sales returns) P1,870,000 3,415,000 9,693,400 An examination of the company's records reveals the following information: a. The physical count included tools billed to a customer FOB shipping point on December 31, 2021. These tools cost P64,000 and were billed at P78,500. They were still in the warehouse as of December 31, 2021. The sale was already recorded by Gruel. b. Goods shipped FOB shipping point by a vendor were in transit on December 31, 2021. These goods with invoice cost of P93,000 were shipped on December 29, 2021. Since the bookkeeper was on leave during the last week of December 2021, the purchase of the goods were not recorded. Tools having a selling price of P45,000 and costing P27,000 were still with a consignee. d. Not included in the physical count were goods returned by customers on December 31, 2021. These goods costing P49,000 were inspected and returned to inventory on January 7, 2022. Credit memos for P67,800 (selling price of the goods) were issued to the customers at that date. e. In transit to a customer on December 31, 2021, were tools costing P17,000 shipped FOB shipping point on December 26, 2021. A sales invoice for P29,400 was issued and recorded on January 3, 2022, when Gruel was notified by the customer that the tools had been received. C. f. On December 31, 2021, goods costing P31,200 were received from a vendor. These were recorded on a receiving report dated January 2, 2022. The related invoice was recorded on December 31, 2021, but the goods were not included in the physical count. g Included in the physical count were goods received from a vendor on December 27, 2021. However, the related invoice for P36,000 was not recorded because the accounting department's copy of the receiving report was lost. h. The bookkeeper recorded a credit purchase on January 3, 2022, for P32,000. It is specifically related to a merchandise bought on December 2021, term FOB shipping point. The goods were still in transit as of December 31, 2021, so they were not included in the physical count. 18. How much is the correct net sales in 2021? 19. How much is the correct purchases in 2021? 20. How much is the correct balance of Gruel's inventory as of December 31, 2021? Problem 7 Gruel Co. is a merchandiser of metal tools. It uses a perpetual inventory system. The following information was obtained from the company's accounting records for the year ended December 31, 2021: Inventory on December 31, 2021 (based on physical count in Gruel's warehouse) Purchases Net sales (sales less sales returns) P1,870,000 3,415,000 9,693,400 An examination of the company's records reveals the following information: a. The physical count included tools billed to a customer FOB shipping point on December 31, 2021. These tools cost P64,000 and were billed at P78,500. They were still in the warehouse as of December 31, 2021. The sale was already recorded by Gruel. b. Goods shipped FOB shipping point by a vendor were in transit on December 31, 2021. These goods with invoice cost of P93,000 were shipped on December 29, 2021. Since the bookkeeper was on leave during the last week of December 2021, the purchase of the goods were not recorded. Tools having a selling price of P45,000 and costing P27,000 were still with a consignee. d. Not included in the physical count were goods returned by customers on December 31, 2021. These goods costing P49,000 were inspected and returned to inventory on January 7, 2022. Credit memos for P67,800 (selling price of the goods) were issued to the customers at that date. e. In transit to a customer on December 31, 2021, were tools costing P17,000 shipped FOB shipping point on December 26, 2021. A sales invoice for P29,400 was issued and recorded on January 3, 2022, when Gruel was notified by the customer that the tools had been received. C. f. On December 31, 2021, goods costing P31,200 were received from a vendor. These were recorded on a receiving report dated January 2, 2022. The related invoice was recorded on December 31, 2021, but the goods were not included in the physical count. g Included in the physical count were goods received from a vendor on December 27, 2021. However, the related invoice for P36,000 was not recorded because the accounting department's copy of the receiving report was lost. h. The bookkeeper recorded a credit purchase on January 3, 2022, for P32,000. It is specifically related to a merchandise bought on December 2021, term FOB shipping point. The goods were still in transit as of December 31, 2021, so they were not included in the physical count. 18. How much is the correct net sales in 2021? 19. How much is the correct purchases in 2021? 20. How much is the correct balance of Gruel's inventory as of December 31, 2021
