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Gon Incorporated reported its inventory balance on December 31, 2016 at P5,000,000. During the audit, the following information was obtained and was not accounted for by the company. 1. Purchased merchandise during 2016 on credit for P600,000.The inventory was sold in the same year. The company uses a periodic system. 2. Goods in transit amounting to P230,000 shipped "f.o.b. destination" by supplier were recorded as a purchase but were excluded from ending inventory. The goods were received in 2017. 3. Goods held on consignment were included in inventory count and recorded as a purchase totaling P300,000. 4. Goods in transit shipped "f.o.b. shipping point" were not recorded as a sale and were included in ending inventory. The goods amounted to P540,000 and shipped on December 29, 2016. 5. Goods were shipped and appropriately excluded from ending inventory but sale was not recorded. The cost of goods cold P100 000 sold at 25% above cost.

Gon Incorporated reported its inventory balance on December 31, 2016 at P5,000,000. During the audit, the following information was obtained and was not accounted for by the company. 1. Purchased merchandise during 2016 on credit for P600,000.The inventory was sold in the same year. The company uses a periodic system. 2. Goods in transit amounting to P230,000 shipped "f.o.b. destination" by supplier were recorded as a purchase but were excluded from ending inventory. The goods were received in 2017. 3. Goods held on consignment were included in inventory count and recorded as a purchase totaling P300,000. 4. Goods in transit shipped "f.o.b. shipping point" were not recorded as a sale and were included in ending inventory. The goods amounted to P540,000 and shipped on December 29, 2016. 5. Goods were shipped and appropriately excluded from ending inventory but sale was not recorded. The cost of goods cold P100 000 sold at 25% above cost.

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter8: Inventories: Special Valuation Issues
Section: Chapter Questions
Problem 13P: Errors As controller of Lerner Company, which uses a periodic inventory system, you discover the...
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How much is the adjusted balance of inventory?

Gon Incorporated reported its inventory balance on December 31, 2016 at P5,000,000. During the audit, the following information was obtained and was not accounted for by the company. 1. Purchased merchandise during 2016 on credit for P600,000.The inventory was sold in the same year. The company uses a periodic system. 2. Goods in transit amounting to P230,000 shipped "f.o.b. destination" by supplier were recorded as a purchase but were excluded from ending inventory. The goods were received in 2017. 3. Goods held on consignment were included in inventory count and recorded as a purchase totaling P300,000. 4. Goods in transit shipped "f.o.b. shipping point" were not recorded as a sale and were included in ending inventory. The goods amounted to P540,000 and shipped on December 29, 2016. 5. Goods were shipped and appropriately excluded from ending inventory but sale was not recorded. The cost of goods sold P100,000 sold at 25% above cost.
Transcribed Image Text:Gon Incorporated reported its inventory balance on December 31, 2016 at P5,000,000. During the audit, the following information was obtained and was not accounted for by the company. 1. Purchased merchandise during 2016 on credit for P600,000.The inventory was sold in the same year. The company uses a periodic system. 2. Goods in transit amounting to P230,000 shipped "f.o.b. destination" by supplier were recorded as a purchase but were excluded from ending inventory. The goods were received in 2017. 3. Goods held on consignment were included in inventory count and recorded as a purchase totaling P300,000. 4. Goods in transit shipped "f.o.b. shipping point" were not recorded as a sale and were included in ending inventory. The goods amounted to P540,000 and shipped on December 29, 2016. 5. Goods were shipped and appropriately excluded from ending inventory but sale was not recorded. The cost of goods sold P100,000 sold at 25% above cost.
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