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How much is the inventory adjustment related to letters

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Question - The records of COVID Inc. showed that it has P20,000 inventory as of the year end of 2020. Careful analysis of the account showed that the following items were included in that amount:

a. An inventory acquired costing P1,500 under FOB shipping point. This was shipped by the vendor last December 30, 2020 and expected to be received by January 2, 2021.

b. Inventory sold to a customer costing P2,000 under FOB destination. This was shipped by COVID last December 29, 2020 and reached the customer's premises on January 1, 2021.

A follow-up procedure showed that the item below was not included in the unadjusted inventory above. This was acquired last December 26 from across the border and was shipped via vessel on December 27, 2020 under the terms CIF. The cost of the inventory was P2,500, insurance related to shipment was P200 and the related freight was P100. A cost of loading amounting to P1,000 was paid by the seller and this shipment reached COVID's docking area on January 1, 2021.

Required - How much is the inventory adjustment related to letters a and b?

Reference no: EM132525267

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