Question: CASE STUDY 1: RETAIL & WHOLESALE SECTOR Scenario Background Blu-Mix Supermarket, operates a chain of retail and grocery stores across Metro Manila and Northern Luzon. As of December 31, 2024, the year-end accounts include the following account and amounts: • Cash in Banks (BDO & Metrobank), P15,000,000 • Petty Cash Fund (P500,000; P100,000 cash on hand; balance temporarily advanced to office supplies) • Trade Receivable (P11,000,000; P1,000,000 likely not collectible) • Allowance for Expected Credit Losses (P400,000) • Merchandise Inventory at Cost (P3,500,000) • Gift/Points (Customer Redemptions) … • Unapplied Input VAT (P234,500) • Store Equipment (P30,000,000) (accumulated depreciation P1,500,000) Year-End Audit Information & Adjustments 1. Inventory Valuation (P35.5M Merchandise Inventory should be measured at lower of cost or NRV) 2. Expected selling price is P42.0M, with disposal costs and selling costs at P2.5M 3. Receivables & A/R: gross amount is P11.0M less the required allowance for ECL on Dec. 31, 2024 is P1.5M 4. Petty Cash: Employee Otto of P450,000 outstanding reimbursements Required Tasks: 1. Calculate Net Realizable Value (NRV) of total Merchandise Inventory balance under PFRS 9. 2. Determine adjusted balances for Cash & Cash Equivalents and Net Trade & Other Receivables. 3. Prepare the Current Assets section of the Statement of Financial Position in proper form. Task 1: Inventory Valuation & NRV Computation Task 2: Adjusted Cash & Receivables Balance Task 3: Statement of Financial Position (Current Assets) The graph/table is a bottom-center table with columns for Current Assets and Amount (P), and rows including cash and cash equivalents, trade and other receivables, inventories, and total current assets. User: this is for accounting can you please give me the correct answer fro this?

1. **Problem Statement:** Calculate the Net Realizable Value (NRV) of Merchandise Inventory, adjust Cash & Cash Equivalents and Trade Receivables balances, and prepare the Current Assets section of the Statement of Financial Position as of December 31, 2024. 2. **Inventory Valuation & NRV Computation:** - Given Merchandise Inventory at cost: P35,500,000 - Expected selling price: P42,000,000 - Disposal and selling costs: P2,500,000 Formula for NRV: $$\text{NRV} = \text{Expected Selling Price} - \text{Disposal and Selling Costs}$$ Calculate NRV: $$\text{NRV} = 42,000,000 - 2,500,000 = 39,500,000$$ Compare cost and NRV: - Cost = P35,500,000 - NRV = P39,500,000 Lower of cost or NRV is P35,500,000 (cost), so inventory is valued at P35,500,000. 3. **Adjusted Cash & Cash Equivalents:** - Cash in Banks: P15,000,000 - Petty Cash Fund total: P500,000 - Cash on hand: P100,000 - Outstanding reimbursements (Employee Otto): P450,000 (not cash, exclude) Adjusted Petty Cash = Cash on hand = P100,000 Total Cash & Cash Equivalents = Cash in Banks + Adjusted Petty Cash $$15,000,000 + 100,000 = 15,100,000$$ 4. **Adjusted Trade & Other Receivables:** - Gross Trade Receivables: P11,000,000 - Likely not collectible: P1,000,000 - Allowance for Expected Credit Losses (ECL) required: P1,500,000 Adjusted Trade Receivables = Gross Receivables - Allowance for ECL $$11,000,000 - 1,500,000 = 9,500,000$$ 5. **Prepare Current Assets Section:** | Current Assets | Amount (P) | |-----------------------------|--------------| | Cash and Cash Equivalents | 15,100,000 | | Trade and Other Receivables | 9,500,000 | | Inventories | 35,500,000 | | **Total Current Assets** | **60,100,000** | **Summary:** - Inventory valued at cost P35,500,000 (lower of cost or NRV). - Cash & Cash Equivalents adjusted to P15,100,000. - Trade Receivables net of allowance P9,500,000. - Total Current Assets P60,100,000. This completes the required tasks.