On April 30, 2020, a fire damaged the office of Bianca Company. The following
balances were gathered from the general ledger on March 31, 2020:
Accounts Receivable P1,050,000
Inventory – January 1 2,100,000
Accounts Payable 800,000
Sales 4,000,000
Purchases 2,000,000
Additional information:
a. An examination of the April bank statement and canceled checks revealed checks written during
April 1-30 as follows:
Accounts payable as of March 31 P300,000
April merchandise shipments 120,000
Expenses 190,000
Deposits during the same period amounted to P500,000, which consisted of collections from
customers with the exception of a P50,000 refund from a vendor for merchandise returned in April.
b. Customers acknowledged the indebtedness of P1,100,000 on April 30. Customers owned another
P60,000 that will never be recovered. Of the acknowledged indebtedness, P55,000 may prove
uncollectible.
c. Correspondence from the suppliers revealed unrecorded obligations on April 30, of P410,000 for
April merchandise shipment, including P60,000 for shipments in transit on that date.
d. The average gross profit rate is 40%.
e. Inventory with a cost of P300,000 was salvaged and sold for P150,000. The balance of the inventory
was a total loss.
Requirements: Compute the following accounts
4. Inventory Loss