Denim Company is a wholesale distributor of denims. Initial amounts taken from accounting records are as follows:

Inventory at December 31, 2012 (based on physical count

On December 31, 2021) P125,000

Accounts payable 90,000

Sales in 2021 800,000

Additional information is as follows:

The following goods were in transit from a vendor to Denim on December 31, 2021:

Terms Date shipped Cost of inventory Freight Cost

Box A FOB shipping point 12/29/21 P2,500 P 50

Box B FOB shipping point 12/30/21 5,000 100

Box C FOB destination 12/30/21 3,000 75

No records were made on these transactions.

The following goods were in transit to customers on December 31, 2021:

Terms Date shipped Cost of inventory Freight Cost

Box X FOB shipping point 12/28/21 P3,000 P75

Box Y FOB destination 12/30/21 3,000 75

The customers received both boxes on January 5, 2022. The corresponding Sales of P7,000 for each box were recorded by Denim on January 7, 2022. Freight was made on account.

Denims held on consignment from Jeans to Denim, the consignee, amounting to P15,000, were included in the physical count on December 31, 2021, and in accounts payable at December 31, 2021.

P1,500 denims purchased and paid in 2021, were sold in the last week of 2021 and appropriately recorded as sales of P4,000. The denims were included in the physical count on December 31, 2021 because they were on the loading dock waiting to be picked up by the customers.

Questions : show computations.

What is the correct balance of inventory on December 31, 2021? _______

What is the correct balance of sales on December 31, 2021? ________