In connection with your audit of the Samantha Manufacturing Company, you reviewed its inventory as of
December 31, 2018 and found the following items:
(a) A packing case containing a product costing P100,000 was standing in the shipping room when the physical
inventory was taken. It was not included in the inventory because it was marked “Hold for shipping instructions.”
The customer’s order was dated December 18, but the case was shipped and the costumer billed on
January 10, 2019.
(b) Merchandise costing P600,000 was received on December 28, 2018, and the invoice was recorded. The invoice
was in the hands of the purchasing agent; it was marked “On consignment”.
(c) Merchandise received on January 6, 2019, costing P700,000 was entered in purchase register on January 7. The
invoice showed shipment was made FOB shipping point on December 31, 2018. Because it was not on hand during
the inventory count, it was not included.
(d) A special machine costing P200,000, fabricated to order for a particular customer, was finished in the shipping
room on December 30. The customer was billed for P300,000 on that date and the machine was excluded from
inventory although it was shipped January 4, 2019.
(e) Merchandise costing P200,000 was received on January 6, 2019, and the related purchase invoice was recorded
January 5. The invoice showed the shipment was made on December 29, 2018, FOB destination.
(f) Merchandise costing P150,000 was sold on an installment basis on December 15. The customer took possession
of the goods on that date. The merchandise was included in inventory because Samantha still holds legal title.
Historical experience suggests that full payment on installment sale is received approximately 99% of the time.
(g) Goods costing P500,000 were sold and delivered on December 20. The goods were included in the inventory
because the sale was accompanied by a purchase agreement requiring Samantha to buy back the inventory in February
2019.
Based on the above and the result of your audit, how much of these items should be included in the
inventory balance at December 31, 2018?