Download Intermediate Accounting - Inventory Recognition and Measurement and more Assignments Accounting in PDF only on Docsity!
Financial Accounting and Reporting Assignment: Inventory Recognition and Measurement Gregorio, Wynona Jean C. BACC1A
1. Bakura Company had the following items in its accounting records for December 31, 2016: Solutions:
Inventories in the warehouse per physical count on 12/31/16: Problem 1: Goods completed and ready for sale 1,000,000 Inventories in the Warehouse: Raw materials 800,000 Goods completed and ready for sale ( Finished Goods) 1,000, Indirect materials (included in the raw materials) 300,000 Raw materials 800, Goods started to process but not yet completed 1,200,000 Goods started to process but not yet completed (WIP) 1,200, Goods sold in transit under FOB shipping point 500,000 Less: Unsalable Finished Goods (50,000) Goods sold in transit under FOB buyer 200,000 Indirect Materials (300,000) 2,650, Goods sold under sales return agreement at selling price (cost - P300,000) 450,000 Good sold under sales approval agreement 100, Goods sold under sales approval agreement at selling price (cost
- P100,000) 150, Goods being used for window display 80,
Materials purchased, sales invoice already received but goods were in transit. Including freight paid by Bakura P20,
520,000 Goods in the counter for sale 400,
Insurance paid on materials purchased in transit 10,000 Goods held by salesmen 180, 1-year insurance on inventories located in the warehouse 90,000 Goods out on consignment 350, Goods being used for window display 80,000 Materials purchased in transit-CIF^ 520, Goods in the counter for sale 400,000 Inventory-Dec.31 4,280, Office supplies 20, Advertising and shipping supplies 30, Goods held by salesmen, at selling price (cost - P180,000) 252, Goods held on consignment 750, Goods out on consignment, excluding shipping cost paid by Bakura, P10,000 350,
Unsalable finished goods (included in the physical count above) 50, Materials in the receiving department refused by us due to damage 120,
Interest expense on loans payable used to purchase inventories 15, Goods sold on installment basis 460,
What is the correct amount of “Inventory” that should be presented in 2016 Statement of financial position? a. P4,872, b. P5,100, c. P4,280, d. P4,800,
2. (^) The trial balance of WHOGOAT Corporation showed P8,000,000 inventory balance per physical count performed on December 30, 2015. Additional information gathered were as follows: Problem 2: Unadjusted Inventory 8,000, 1) On December 28, 2015, WHOGOAT received and recorded invoice from a vendor amounting to P300,000. The related goods were received on January 3, 2016. Per inspection of the invoice, the shipment was made by the vendor FOB destination on December 30, 2015. -purchased
Goods out of Consignment (252,000 - (252,000/140%)) (72,000) Adjusted Inventory, Dec. 31 7,928,
- On December 30, 2015, WHOGOAT sold goods under FOB shipping point with a selling price of P500,000 but costing P400,
- The inventory was not included in the physical count. Per inspection, the goods were not shipped until January 5, 2016. - sold
- On January 6, 2016, goods amounting to P100,000 were received from a vendor. The related invoice was received and recorded on January 8, 2016. Per inspection of the invoice, the goods were shipped FOB seller on December 30, 2015. - purchased Problem 3:
- Included in the physical count is a special item ordered by a buyer amounting to P200,000. The order was already completed as of December 31, 2015 but not shipped until January 4, 2016.
Perpetual System Periodic System Aug. 7 Inventory 180,000 Aug. 7 Purchases 180, Accounts Payable 180,000 Accounts Payable 180,
- Included in the physical count were goods out on consignment at selling price of P252,000. WHOGOAT has gross profit ratio of 40% (based on cost) throughout the year. 10 Accounts Receivable - 280,000- 10 Accounts Receivable - 280,000- Sales (8,000 x P35) - 280,000- Sales (8,000 x P35) - 280,000-
- Goods costing P200,000 were sold and delivered on December 23, 2015. The sale was under in a repurchase agreement that WHOGOAT will repurchase (“buyback”) the inventory on June 2016. Cost of Goods Sold - 160,000- Inventory (8,000 x P20) - 160,000- On its 2015 Statement of financial position, WHOGOAT should present inventory amounting to a. P8,228,000 13 Accounts Payable - 20,000- 13 Accounts Payable - 20,000-
b. P8,300,000 Inventory ((180,000/9,000)x1,000) - 20,000-
Purhase Return ((180, /9,000)x1,000) - 20,000- c. P8,428, d. P7,928,000 14 Accounts Payable 160,000 14 Account Payable 160, Cash 160,000 Cash 160,
3. BILLS Inc. had the following transactions for the month of August 2015: 18 Sales Return (3,000 x P35) - 105,000- 18 Sales Return (3,000 x P35) - 105,000- Aug. 1 Inventory at the beginning of the month consisted of 1,000 units @ P20 each. Accounts Receivable - 105,000- Accounts Receivable - 105,000- 7 Purchased 9,000 units from AA Supplier for P180,000 on account. 10 Sold 8,000 units @ P35 each on account. Inventory (3,000 x 20) - 60,000- 13 Returned 1,000 defective units to AA Supplier. Cost of Goods Sold - 60,000- 14 Paid AA supplier in full. 18 The customer returned 3,000 units from August 10 sale. The goods were in good condition. 20 Cash 140,000 20 Cash 140, 20 Collected accounts receivable amounting to P140,000. Accounts Receivable 140,000 Accounts Receivable 140, 30 Conducted physical count of inventory. Units on hand consisted of 3,500 units. 30 No Entry. All the inventroy related to transaction is directly debited and credited to the accunt
30 Inventory, End (3,500 xP20) - 70,000- Q1. Using the periodic inventory system , what is the amount of Cost of goods sold on August 31, 2015? Cost of Goods Sold - 110,000- a. P150,000 Purchase Return 20, b. P110,000 Inventory overage 10,000 Purchases - 180,000- c. P100,000 Inventory 10,000 Inventory, beg. (1,000 x P20) - 20,000- d. P130,
Q2. Using the perpetual inventory system , what is the amount of Cost of goods sold on August 31, 2015? a. P150, b. P110, c. P100, d. P160,
4. On January 30, CRYSTAL LANCER Company purchased 5,000 units of Class A inventory at P100 each and 10,000 units of Class B inventory at P80 each under credit terms of 3/10, EOM. The Class A type was paid on February 9 and the Class B type on February 14.
Problem 4: Q Class A Purchases (5,000 x 100) - 500,000- Q1. Under the gross method, what amount of net purchases should be included in computing total goods available for sale? Less: Purchase Discount (500,000 x 3%) (15,000) - 485,000- a. P1,300, b. P1,261,000 Class B Purchases (10,000 x 80) - 800,000- c. P1,285,000 Net Purchases - 1,285,000- d. P1,276, Q Q2. Under the net method, what amount of net purchases should be included in computing total goods available for sale? Class A Invoice Price - 500,000- a. P1,300,000 Less: Cash Discount (15,000) - 485,000- b. P1,261, c. P1,285,000 Class B Invoice Price - 800,000- d. P1,276,000 Less: Cash Discount (800,000 x 3%) (24,000) - 776,000- Net Purchases - 1,261,000- 5.
LEVIATAN Company is using perpetual inventory system and net method. On May 1, the company purchased P200,000 worth of inventory on account with terms of 2/10, n/30; FOB shipping point, freight prepaid of P10,000. On May 5, the company returned P60,000 defective units. On May 11, the company paid in full the amount due. There were no other transactions during the month.
Problem 5: May 1 Merchandise Inventory [(200,000 + 10,000) - (200,000 x 2%)]
Q1. What is the amount paid on May 11? Accounts Payable 206, a. P147, b. P147,000 5 Accounts Payable - 58,800- c. P137,200 Merchandise Inventory - 58,800- d. P150, 11 Accounts Payable - 147,200- Q2. What is the general ledger balance of “Merchandise Inventory” account for the month ended May 30? Cash - 147,200-
19 Sales Return 500 units @ P30 - 15,000- Ending Inventory 3,000 57, 22 Purchase 5,000 units @ P19 - 95,000- 23 Purchase Return 1,000 units @ P19 - 19,000- Q3 Weighted Average 28 Sales 3,500 units @ P35 - 122,500- Date Qty Unit Cost Total Cost 29 Sales Return 500 units @ P35 - 17,500- Dec.1 Balance 2,200 20 44, 5 Purchases 2,300 22 50, Q1. Using periodic system and FIFO costing method, what is the amount of ending inventory as of December 31? 22 Purchase 5,000 19 95, a. P59,000 23 Purchase Return (1,000) 19 (19,000) b. P57,000 Ending Inventory 8,500 20.07 170, c. P61, d. P60,210 Cost of ending inventory (3,000 units x P20.07) - 60,210-
Q2. Using perpetual system and FIFO costing method, what is the amount of ending inventory as of December 31? Q4 Moving Average a. P59,000 Date Qty Unit Cost Total Cost b. P57,000 Dec.1 Beginning inventory 2,200 20 44, c. P61,600 5 Purchases 2,300 22 50, d. P60,210 Balance 4,500 21 94, 9 Sales (3,000) 21 (63,000) Q3. Using weighted average costing method, what is the amount of ending inventory as of December 31? Balance 1,500 21 31, a. P59,000 19 Sales Return 500 21 10, b. P57,000 Balance 2,000 21 42, c. P61,600 22 Purchase 5,000 19 95, d. P60,210 Balance 7,000 19.59 137, 23 Purchase Return (1,000) 19 (19,000) Q4. Using moving average costing method, what is the amount of ending inventory as of December 31? Balance 6,000 19.68 118, a. P59,010 28 Sales (3,500) 19.68 (68,892) b. P60,210 Balance 2,500 19.68 49, c. P60,900 29 Sales Return 500 19.68 9, d. P57,000 Balance 3,000 19.68 59,
Q5. Using specific identification costing method, (assuming the ending inventory comes from Dec. 5 purchases, 1,300 units and Dec. 22 purchases, 1,700 units) what is the amount of ending inventory as of December 31? Q5 Specific Identification a. P59,010 Dec. 5 1,300 22 28, b. P60,210 Dec. 22 - 1,700- 19 32, c. P60,900 Ending Inventory 3,000 60, d. P57, Q6 Periodic (LIFO) Q6. Using periodic system and LIFO costing method, what is the amount of ending inventory as of December 31? Qty Unit Cost Total Cost a. P59,000 Inventory- Dec.1 2,200 20 44, b. P57,000 From Dec. 5 purchases 800 22 17, c. P61,600 Ending Inventory 3,000 61, d. P60, Q7 Perpetual (LIFO) Q7. Using perpetual system and LIFO costing method, what is the amount of ending inventory as of December 31? Date Qty Unit Cost Total Cost a. P59,000 Dec.1 Beginning inventory 2,200 20 44, b. P57,000 5 Purchases 2,300 22 50, c. P61,600 9 Sales (2,300) 22 (50,600) d. P60,210 (700) 20 (14,000) 19 Sales Return 500 20 10,
10. Johann Company provided the following information for 2015 and 2016: 22 Purchase 5,000 19 95, 23 Purchase Return (1,000) 19 (19,000) 2015 2016 28 Sales (3,500) 19 (66,500) Beginning inventory - at cost - 200,000- - 300,000- 29 Sales Return 500 19 9, Beginning inventory - at net realizable value - 140,000- - 180,000- Ending Inventory 3,000 59, Purchases - 800,000- - 900,000- Problem 10: Transportation In - 60,000- - 40,000- Q1 Beg Inventory- cost 140, Purchase discount lost - 10,000- -- Net Purchases Ending inventory - at cost - 300,000- - 400,000- Purchases 800, Ending inventory - at net realizable value - 180,000- - 380,000- Transportation In 60, Purchase discount lost (10,000) 850, Q1. How much is the amount of "Cost of Goods Sold" to be reported in the 2015 Statement of comprehensive income assuming the company’s policy is to charge loss on inventory write-down to Cost of Goods Sold? (^) Goods Available for sale 990,
a. P820,000 Ending Inventory-cost (180,000) b. P760,000 COGS 810, c. P810, d. P750,000 Q2 Beg Inventory- cost 200, Net Purchases Q2. How much is the amount of "Cost of Goods Sold" to be reported in the 2015 Statement of comprehensive income assuming the company’s policy is to charge loss on inventory write-down to other expense? Purchases 800, a. P820,000 Transportation In 60, b. P760,000 Purchase discount lost (10,000) 850, c. P810,000 Goods Available for sale 1,050, d. P750,000 Ending Inventory-cost (300,000) COGS 750, Q3. How much is the amount of "Cost of Goods Sold" to be reported in the 2016 Statement of comprehensive income? Write-down a. P840,000 Required Allowance- ending b. P760,000 Ending inventory - at cost - 300,000- c. P810,000 Ending inventory - at net realizable value - 180,000- - 120,000- d. P740,000 Required alloowance-beg Beginning inventory - at cost - 200,000-
11. During the first quarter of 2016, SHINGEKI Corporation purchased a tract of land for P40,000,000. SHINGEKI incurred additional cost of P10,000,000 during the remainder of the year in preparing the land for sale. The land was subdivided into residential lots as follows:
Beginning inventory - at net realizable value - 140,000- - 60,000- - 60,000- COGS -^ 810,000-
Q3 Beg Inventory- NRV 180, Lot class Number of lots Sales price per lot Net Purchases Maria 10 600,000 Purchases 900, Rose 20 250,000 Transportation In 40,000 940, Sina 40 100,000 Goods Available for sale 1,120, Ending Inventory-NRV (380,000) Using the relative sales price method, what amount should be allocated to class lot “Sina”? COGS 740, a. P4,000,000 Problem 11: b. P10,666,667 Sales Price Fraction Purchase Price Allocated Cost c. P13,333,333 Maria (10 x 600,000) - 6,000,000- 6 / 15 - 50,000,000- - 20,000,000- d. P20,000,000 Rose (20 x 250,000) - 5,000,000- 5/ 15 - 50,000,000- - 16,666,666.67- Sina (40 x 100,000) - 4,000,000- 4 / 15 - 50,000,000- - 13,333,333.33-
12. In September 15, 2015, MARK Company signed two non-cancellable purchase commitments. The first requires MARK to purchase inventory of 1,000 units at P950 each (total cost P950,000) by January 15, 2016. The second requires the company to purchase inventory of 1,000 units at P1,200 each (total cost P1,200,000) by March 15, 2016. MARK’s fiscal year end is December 31. The company uses perpetual inventory system.
Total - 15,000,000- - 50,000,000-
Problem 12: Q1 Purchase inventory for January 15 950, Movements in the price of the inventory are summarized below: Purchase inventory for March 15 1,200, Total 2,150, December 31, 2015 1,100 Realizable Value (2,000 x 1,100) - 2,200,000- January 15, 2016 900 Gain on Purchase Commitment - 50,000- March 15, 2016 1,
Q1. What is the amount of net gain (loss) on purchase commitment to be reported in 2015 Statement of comprehensive income? a. (P100,000) Q2 Purchase inventory for January 15 950, b. P50,000 Purchase inventory for March 15 1,200, c. (P150,000) Total 2,150, d. P100,000 Realizable Value Jan. 15 (900 x 1,000) - 900,000- Q2. What is the amount of net gain (loss) on purchase commitment to be reported in 2016 Statement of comprehensive income? Mar. 15 (1,300 x 1,000) - 1,300,000- a. (P250,000) Total - 2,200,000- b. P300,000 Gain on Purchase Commitment 50, c. (P50,000) d. P50,
