PROBLEM

You were engaged to perform an audit of the accounts of the Miami Heat for the year ended December
31, 2013, and you observed the taking of the physical inventory of the company on December 29, 2013.
All transactions are made FOB shipping point basis. Assume that the delivery takes one (1) day.

The following lists of invoices are entered in the purchase books for the month of December 2013 and
January 2014, respectively.

DECEMBER 2013
Purchase invoice date Cost Date received
1. December 21, 2013 P200,000 December 31, 2013
2. December 31, 2013 140,000 December 31, 2013
3. December 29, 2013 130, 000 December 30, 2013
4. December 31, 2013 220, 000 January 03, 2014

JANUARY 2014
5. December 31, 2013 P300, 000 December 28, 2013
6. January 02, 2014 215, 000 January 02, 2014
7. January 03, 2014 375, 000 December 31, 2013

Required:
Prepare the necessary adjusting entries at December 31, 2013.