Accounting (PT - Nonfinancial Assets)
Accounting (PT - Nonfinancial Assets)
Accounting (PT - Nonfinancial Assets)
Inventory
Problem 26 – (1-15)
Brilliant Company has incurred the following costs during the current year:
Cost of purchases based on vendors’ invoices 5,000,000
Trade discounts on purchases already deducted from
vendors’ invoices 500,000
Import duties 400,000
Freight and insurance on purchases 1,000,000
Other handling costs relating to imports 100,000
Salaries of accounting department 600,000
Brokerage commission paid to agents for arranging imports 200,000
Sales commission paid to sales agents 300,000
After-sales warranty costs 250,000
What is the total cost of purchases?
Corolla Company incurred the following costs:
Materials 700,000
Storage costs of finished goods 180,000
Delivery to customers 40,000
Irrecoverable purchase taxes 60,000
At what amount should the inventory be measured?
A
On December 1, 2018, Alt Department Store received 505
sweaters on consignment from Todd. Todd’s cost for the
sweaters was P800 each, and they were priced to sell at
P1,000.
Alt’s commission on consigned goods is 10%. On December
31, 2018, 5 sweaters remained.
On December 31, 2018, what amount should be reported as
payable for consigned goods?
Problem 27 – (1-9)
A
W
Bakun Company began operations late in 2017. For the first quarter
ended March 31, 2018, the entity provided the following information:
Total merchandise purchased through March 15, 2018
recorded at net 4,900,000
Merchandise inventory on January 1, 2018, at selling price 1,500,000
Problem 28 – (1-9)
Lewis Company’s usual sales terms are net 60 days, FOB shipping
point. Sales, net of returns and allowances, totaled P9,200,000 for
the year ended December 31, 2018, before year-end adjustments.
On December 27, 2018, Lewis authorized a customer to
return for full credit, goods shipped and billed at P200,000 on
December 15, 2018. The returned goods were received by
Lewis on January 4, 2019, and a P200,000 credit memo was
issued and recorded on the same date.
Goods within an invoice amount of P300,000 were billed and
recorded on January 3, 2019. The goods were shipped on
December 30, 2018.
Goods with an invoice amount of P400,000 were billed and
recorded on December 30, 2018. The goods were shipped on
January 3, 2019.
On January 5, 2019, a customer notified Lewis that goods
billed and shipped on December 21, 2018 were lost in transit.
The invoice amount was P500,000.
What is the correct amount of net sales for 2018?
On December 15, 2018, Bagani Company sold 20,000 units at
P250 per unit or a total of P5,000,000. The entity granted the
customers a right to return within 30 days if not satisfied and
will receive either a full refund if cash was already paid or a
full credit for the amount owed to the entity.
It estimated that 6% of the units sold will be returned within
the 30-day period. The cost for each unit is P175. The entity
uses the perpetual method.
a. Prepare the journal entries on December 15, 2018.
b. What amount of sales revenue should be recognized on
December 15, 2018?
c. What amount of refund liability should be recorded on
December 15, 2018?
d. What is the cost of recover asset on December 15, 2018?
e. What amount of cost of goods sold should be reported on
December 15, 2018?
A
W
A
W
A
W
A
W
Illustration - FIFO
The following data pertain to an inventory item:
Units Unit cost Total cost Sales in units
Jan. 1 Beginning bal. 800 200 160,000
8 Sale 500
18 Purchase 700 210 147,000
22 Sale 800
31 Purchase 500 220 110,000
The ending inventory is 700 units
Prepare the Statement of Cost of Goods Sold under periodic and perpetual system.
The following information has been extracted from the records about one
product:
Units Unit cost Total cost
Jan. 1 Beginning balance 8,000 70.00 560,000
T
6 Purchase 3,000 70.50 211,500
Units Unit cost Total cost
Feb. 5 Sale 10,000
Mar. 5 Purchase 11,000 73.50 808,500
Mar. 8 Purchase return 800 73.50 58,800
Apr. 10 Sale 7,000
Apr. 30 Sales return 300
If the FIFO cost flow method is used, what is the cost of the inventory at April 30?
I
Mildred Company is a wholesaler of office supplies. The FIFO periodic inventory
is used. The entity provided the following activity for inventory of calculators
during the month:
Units Total cost
Aug. 1 Inventory 20,000 36.00
7 Purchase 30,000 37.20
12 Sale 36,000
21 Purchase 48,000 38.00
22 Sale 38,000
29 Purchase 16,000 38.60
What is the ending inventory on August 31?
Lagoon Company accumulated the following data for the current year.
Raw materials – beginning inventory 90,000 units @ P7.00
Purchases 75,000 units @ P8.00
Purchases 120,000 units @ P8.50
The entity transferred 195,000 units of raw materials to work in
process during the year.
Work in process – beginning inventory 50,000 units @ P14.00
Direct labor 3,100,000
Manufacturing overhead 2,950,000
Work in process – ending inventory 48,000 units @ P15.00
The entity used the FIFO method for valuing inventory.
What is the cost of raw materials used?
What is the total manufacturing cost?
What is the cost of goods manufactured for the current year?
During the month of January, Metro Company which used a perpetual inventory
system recorded the following information pertaining to inventory:
Units Unit cost Total cost Units on hand
Balance on 1/1 10,000_ 100 1,000,000 10,000____
Purchased on 1/7 6,000_ 300 1,800,000 16,000____
Sold on 1/20 9,000_ 7,000____
Purchased 1/25 4,000_ 500 2,000,000 11,000____
Under the moving average method, what amount should Metro report as
inventory on January 31?
Units
Dat Received Cost Issued On hand
e
1/1 Inventor 200 8,000
y
1/8 Issue 4,000 4,000
1/20 Purchase 12,000 240 16,000
Yakal Company reported that a flood recently destroyed many of the financial
records. The entity used an average cost inventory valuation system.
The entity made a physical count at the end of each month in order to
determine monthly ending inventory value. By examining various documents,
the following data are granted:
Ending inventory at July 31 60,000 units
Total cost of units available for sale in July 1,452,100
Cost of goods sold during July 1,164,100
Cost of beginning inventory, July 1 4.00 per unit
Gross profit on sales for July 935,900
Problem 30 – (1-5)
Casa Company purchased a tract of land for P12,000,000. The
entity incurred additional cost of P3,000,000 during the
remainder of the year in preparing the land for sale.
The tract of land was subdivided into residential lots.
Lot class Number of lots Sales price per lot
A 100 240,000
B 100 160,000
C 200 100,000
Using the relative sales value method, what amount of cost
should be allocated to Class A lots?
At the year-end, the manufacture of items of inventory has been completed but
no selling costs have yet been incurred.
What amount should be reported as inventory using LCNRV individual
approach?
What amount should be reported as inventory using the LCRNV total approach?
White Company carried four items in inventory. The following per unit data relate to
these items at the end of first year of operations:
Units Cost Sale price Selling cost Normal profit
Category 1
A 25,000 105 130 15 20
B 20,000 85 90 10 10
Category 2
A 40,000 50 45 5 5
B 30,000 65 75 15 10
Atlis Company reported the following information for the current year:
Sales (100,000 units at 15,000,000
P150) 1,000,000
Sales discount 9,300,000
Purchases 400,000
Purchase discount
The inventory purchases during the year were as follows:
Units Unit cost Total cost
Beginning inventory, January 1 20,000 60 1,200,000
Purchases, quarter ended March 30,000 65 1,950,000
31 40,000 70 2,800,000
Purchases, quarter ended June 30 50,000 75 3,750,000
Purchases, quarter ended Sept. 30 10,000 80 800,000
Purchases, quarter ended Dec. 31 150,000 10,500,000
The accounting policy is to report inventory in the financial statements at
the lower of cost and net realizable value.
Cost is determined under the first-in, first-out method.
At year-end, the entity has determined that the replacement cost of
inventory was P70 per unit and the net realizable value was P72 per unit.
The normal profit margin is P10 per unit.
What amount should be reported as cost of goods sold for the current
year?
Problems 32-(1-5)
Problem 33 – (1-6)
Robles-Empleo