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[Mollynana]

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1. To compute the adjusted balance of ending inventory as of December 31, 2015, we need to consider the errors discovered in March 2016:

a. The merchandise which cost ₱50,000 and was sold for ₱64,000 on December 28, 2015, was not included in the ending inventory. Therefore, we need to deduct ₱50,000 from the ending inventory.

b. The merchandise costing ₱19,000, which was overlooked and excluded from the 2015 inventory count, needs to be added to the ending inventory.

c. The merchandise purchased from a supplier costing ₱23,500, which was still in transit on December 31, 2015, and not included in the inventory count, needs to be deducted from the ending inventory.

d. The merchandise costing ₱25,800, which was included in the 2015 ending inventory, but the sale was recorded in 2016, needs to be deducted from the ending inventory.

Therefore, the adjusted balance of ending inventory as of December 31, 2015, can be calculated as follows:

Ending Inventory (as per physical count) = ₱500,000
- Merchandise sold for ₱50,000 but not included in ending inventory = -₱50,000
+ Overlooked merchandise costing ₱19,000 = +₱19,000

• In-transit merchandise costing ₱23,500 not included in ending inventory = -₱23,500
• Merchandise custom-built and sold in 2016 for ₱25,800 = -₱25,800

Adjusted Balance of Ending Inventory = ₱500,000 - ₱50,000 + ₱19,000 - ₱23,500 - ₱25,800 = ₱420,700

Therefore, the adjusted balance of ending inventory as of December 31, 2015, is ₱420,700.

The correct option is d. 474,200.