Problem8

On January 1, a store had inventory ofP48,000. January purchases wereP46,000 and January sales wereP90,000. On February 1 a fire destroyed most of the inventory. The rate of gross profit was 25% of cost.Merchandise with a selling price ofP5,000 remained undamaged after the fire.

1. Compute the amount of the fire loss, assuming the store had no insurance coverage.

Problem9

VogtsCompany sells TVs. The perpetual inventory was stated asP28,500 on the books at December 31, 2020. At the close of the year, a new approach for compiling inventory was used and apparently a satisfactory cut-off for preparation of financial statements was not made. Some events that occurred are as follows.

1.TVs shipped to a customer January 2, 2021 costingP5,000 were included in inventory at December 31, 2020.The sale was recorded in 2021.

2.TVs costingP12,000 received December 30, 2020, were recorded as received on January 2, 2021.

3.TVs received during 2020 costingP4,600 were recorded twice in the inventory account.

4.TVs shipped to a customer December 28, 2020, f.o.b. shipping point, which costP10,000, were not received by the customer until January 2021.The TVs were included in the ending inventory.

5.TVs on hand that costP6,100 were never recorded on the books.

Instructions

Compute the correct inventory at December 31, 2020.