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    EXAMINATION ON INVENTORY Ma

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    criszel4sobejana
    1. The document provides purchase and sales transaction data for a company in June. It then calculates the ending inventory on a FIFO basis as P4,470. 2. A second company, Bell Inc., took a physical inventory count and determined additional inventory amounts that were not included in the count. The appropriate ending inventory to report is P500,000. 3. Given various expense and inventory amounts for Naab Company in 2010, the cost of goods sold is calculated to be P860,000.

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    EXAMINATION ON INVENTORY Ma

    Uploaded by

    criszel4sobejana
    232 views5 pages
    1. The document provides purchase and sales transaction data for a company in June. It then calculates the ending inventory on a FIFO basis as P4,470. 2. A second company, Bell Inc., took a physical inventory count and determined additional inventory amounts that were not included in the count. The appropriate ending inventory to report is P500,000. 3. Given various expense and inventory amounts for Naab Company in 2010, the cost of goods sold is calculated to be P860,000.

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    EXAMINATION ON INVENTORY ma

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    1. The document provides purchase and sales transaction data for a company in June. It then calculates the ending inventory on a FIFO basis as P4,470. 2. A second company, Bell Inc., took a physical inventory count and determined additional inventory amounts that were not included in the count. The appropriate ending inventory to report is P500,000. 3. Given various expense and inventory amounts for Naab Company in 2010, the cost of goods sold is calculated to be P860,000.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    232 views5 pages

    EXAMINATION ON INVENTORY Ma

    Uploaded by

    criszel4sobejana
    1. The document provides purchase and sales transaction data for a company in June. It then calculates the ending inventory on a FIFO basis as P4,470. 2. A second company, Bell Inc., took a physical inventory count and determined additional inventory amounts that were not included in the count. The appropriate ending inventory to report is P500,000. 3. Given various expense and inventory amounts for Naab Company in 2010, the cost of goods sold is calculated to be P860,000.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 5

    EXAMINATION ON INVENTORY - MA

    Transactions for the month of June were:


    Purchases Sales
    DATE UNITS COST/UNIT DATE UNITS PRICE
    June 1 800 3.20 June 2 600 5.50
    3 2,200 3.10 6 1,600 5.50
    7 1,200 3.30 9 1,000 5.50
    15 1,800 3.40 10 400 6.00
    22 500 3.50 18 1,400 6.00
    25 200 6.00

    Purchases Sales
    June 1 (balance) 800 @ P3.20 June 2 600 @ P5.50
    3 2,200 @ 3.10 6 1,600 @ 5.50
    7 1,200 @ 3.30 9 1,000 @ 5.50
    15 1,800 @ 3.40 10 400 @ 6.00
    22 500 @ 3.50 18 1,400 @ 6.00
    25 200 @ 6.00

    Assuming that perpetual inventory records are kept in pesos, the ending inventory on a FIFO
    basis is
    a. P4,110.
    b. P4,160.
    c. P4,290.
    d. P4,470.

    d (500 × P3.5) + (800 × P3.4) = P4,470.

    2. Bell Inc. took a physical inventory at the end of the year and determined that P475,000
    of goods were on hand. In addition, the following items were not included in the physical
    count. Bell, Inc. determined that P60,000 of goods were in transit that were shipped
    f.o.b. destination (goods were actually received by the company three days after the
    inventory count).The company sold P25,000 worth of inventory f.o.b. destination. What
    amount should Bell report as inventory at the end of the year?
    a. P475,000.
    b. P535,000.
    c. P500,000.
    d. P560,000.

    c P475,000 + P25,000 = P500,000.

    3. The following information is available for Naab Company for 2010:


    Freight-in P 30,000
    Purchase returns 75,000
    Selling expenses 150,000
    Ending inventory 260,000
    The cost of goods sold is equal to 400% of selling expenses. What is the cost of goods
    available for sale?
    a. P600,000.
    b. P890,000.
    c. P815,000.
    d. P860,000.

    d P260,000 + (4 × P150,000) = P860,000.

    4. The following information was derived from the 2010 accounting records of Perez Co.:

    Perez 's Goods


    Perez 's Central Warehouse Held by Consignees
    Beginning inventory P130,000 P 14,000
    Purchases 575,000 70,000
    Freight-in 10,000 -
    Transportation to consignees - 5,000
    Freight-out 30,000 8,000
    Ending inventory 145,000 20,000

    Perez 's Central Warehouse Held by Consignees


    Beginning inventory P130,000 P 14,000
    Purchases 575,000 70,000
    Freight-in 10,000
    Transportation to consignees 5,000
    Freight-out 30,000 8,000
    Ending inventory 145,000 20,000
    Perez's 2010 cost of sales was
    a. P570,000.
    b. P600,000.
    c. P634,000.
    d. P639,000.

    d P130,000 + P14,000 + P575,000 + P70,000 + P10,000 + P5,000 –


    P145,000 – P20,000 = P639,000.

    5. Dole Corp.'s accounts payable at December 31, 2010, totaled P800,000 before any
    necessary year-end adjustments relating to the following transactions:
     On December 27, 2010, Dole wrote and recorded checks to creditors totaling
    P350,000 causing an overdraft of P100,000 in Dole's bank account at December 31,
    2010. The checks were mailed out on January 10, 2011.
     On December 28, 2010, Dole purchased and received goods for P150,000, terms
    2/10, n/30. Dole records purchases and accounts payable at net amounts. The
    invoice was recorded and paid January 3, 2011.
     Goods shipped f.o.b. destination on December 20, 2010 from a vendor to Dole were
    received January 2, 2011. The invoice cost was P65,000.
    At December 31, 2010, what amount should Dole report as total accounts payable?
    a. P1,362,000.
    b. P1,297,000.
    c. P1,050,000.
    d. P950,000.

    b P800,000 + P350,000 + P147,000 = P1,297,000.

    6. On June 1, 2010, Penny Corp. sold merchandise with a list price of P20,000 to Linn on
    account. Penny allowed trade discounts of 30% and 20%. Credit terms were 2/15, n/40
    and the sale was made f.o.b. shipping point. Penny prepaid P400 of delivery costs for
    Linn as an accommodation. On June 12, 2010, Penny received from Ison a remittance in
    full payment amounting to
    a. P10,976.
    b. P11,368.
    c. P11,376.
    d. P11,196.
    c P20,000 × .7 × .8 = P11,200
    (P11,200 × .98) + 400 = P11,376.

    7. Groh Co. recorded the following data pertaining to raw material X during January 2010:

    Date Received Cost Issued On Hand


    1/1/20 Inventory P 8.00 3,200
    1/11/20 Issue 1,600 1,600
    1/22/20 Purchase 4,000 P 9.40 5,600

    Units
    Date Received Cost Issued On Hand
    1/1/10 Inventory P8.00 3,200
    1/11/10 Issue 1,600 1,600
    1/22/10 Purchase 4,000 P9.40 5,600
    The moving-average unit cost of X inventory at January 31, 2010 is
    a. P8.70.
    b. P8.85.
    c. P9.00.
    d. P9.40.

    c [(1,600 × P8.00) + (4,000 × P9.40)] ÷ 5,600 = P9.00

    8. The following information is available for October for Norton Company.


    Beginning inventory P100,000
    Net purchases 300,000
    Net sales 600,000
    Percentage markup on cost 66.67%
    A fire destroyed Norton’s October 31 inventory, leaving undamaged inventory with a cost
    of P6,000. Using the gross profit method, the estimated ending inventory destroyed by
    fire is
    a. P34,000.
    b. P154,000.
    c. P160,000.
    d. P200,000.

    A (P100,000 + P300,000) – (P600,000 ÷ 5/3) – P6,000 = P34,000.

    Plank Co. uses the retail inventory method. The following information is available for the current
    year.
    Cost Retail

    Cost Retail
    Beginning inventory P 78,000 P122,000
    Purchases 295,000 415,000
    Freight-in 5,000 —
    Employee discounts — 2,000
    Net markups — 15,000
    Net Markdowns — 20,00
    Sales —

    Purchases 295,000 415,000


    Freight-in 5,000 —
    Employee discounts — 2,000
    Net markups — 15,000
    Net Markdowns — 20,000
    Sales — 390,000

    9. The approximate cost of the ending inventory by the conventional retail method is
    a. P95,900.
    b. P94,920.
    c. P98,000.
    d. P102,480.

    A P140,000 × .685 = P95,900.

    Winsor Co. records purchases at net amounts. On May 5 Winsor purchased merchandise on
    account, P16,000, terms 2/10, n/30. Winsor returned P1,200 of the May 5 purchase and
    received credit on account. At May 31 the balance had not been paid.

    10. The amount to be recorded as a purchase return is


    a. P1,080.
    b. P1,224.
    c. P1,200.
    d. P1,176.

    d P1,200 – (P1,200 × .02) = P1,176.

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