Reference no: EM132972530

You were assigned to audit the inventories of Titanuim Corp. in relation to your audit firm's audit of the company's financial statements as of and for the period ended December 31, 2020. Since internal control over inventories were good, you audit manager simply asked you to render analytical procedure to test the reasonableness of the inventory balance.

The following information were made available by Titanuim Corp.'s accountant:

                                                       Cost                   Retail

Beginning inventory                 1,020,000      1,920,000

Purchases                             13,072,500          22,155,000

Freight in 300,000

Purchase return                         450,000                 750,000

Purchase allowance 270,000

Departmental transfer debit              300,000             425,000

Departmental transfer credit                600,000        1,200,000

Net markup 450,000

Net markdown 1,425,000

Sales 19,800,000

Sales returns and allowance 450,000

Sales discounts 500,000

Employee discount 300,000

Normal Spoilage and breakages 600,000

Abnormal Spoilages and breakages              120,000                  200,000

Problem 1: The company reported inventories at P400,000 as a result of its physical count on December 31, 2020, what is the amount of estimated ending inventory shortage/overage as a result of your audit procedures? (round off cost% to nearest whole number, eg: xx%)