Question:

Based on your analysis and the information above, answer the following:
1. The adjusted balance of the Jan. 1, 2006 inventory is:
a. P 35,000 b. P 35,840 c. P 39,100 d. P 59,100

2. How much is the adjusted balance of the Purchases account at December 31, 2006
assuming the amount of Purchases in the trial balance is P5,176,000?
a. P 5,170,566 b. P 5,180,000 c. P 5,181,500 d. P 5,185,200

3. The corrected December 31, 2006 inventory is

a. P 52,100 b. P 50,600 c. P 32,100 d. P 28,500

4. When auditing inventories, an auditor would least likely verify that

a. All inventory owned by the client is on hand at the time of the count.
b. The client has used properly inventory pricing.
c. Damaged goods and obsolete items have been properly accounted for.
d. The financial statement presentation of inventories is appropriate.