2016 Vol 1 Ch 4 Answers

Chapter4-I nvent ori es

CH HA APTER4 I NVENTOR ORI ES PROBLEMS MS Di scuss i on Quest i on No.15 ( Hams mst erComp mpany

I ncl ude Excl ude √

Goodsdi spl ayedi nt hest ore Goodsst ockedi nt hewarehouse,notcoveredbyanysal es cont ract √ Goodspur chased,i nt ransi t ,shi ppedFOBsel l er √ Goodspur chased,i nt ransi t ,shi ppedFOB dest i nat i on Frei ghtcostongoodsrecei ved,goodsar est i l lunsol d √ Goodshel donconsi gnme ment Goodsoutonconsi gnment √ Goodsoutt ocust omersonapproval √ Goodsi nt hehandsoft ravel i ngsal esmen √ Goodssol dwi t habuybackarrangeme mentf ort hef ul lsel l i ng  √ pri ceandot hercost si ncurr edbyt hebuyer Unusedf act orysuppl i esandi ndi rectmat eri al s √ Goodswhi chrequi readdi t i onalprocessi ng √ Di rectmat eri al sst ockedi nt hewarehouse √ St oragecost sofgoodscompl et ed I nsurancepremi umspai donst ockedgoods Goodscomp mpl et ed,manuf actur edt ocust ome mer’ sspeci ficati on, awai t i ngi nst ruct i onf ordel i verybyt hecust omer Frei ghtpai dongoodssol d Unusedsuppl i esf oradmi ni st rat i vepurposes Unusedst or esuppl i es Goodssol dwi t hari ghtt oret urngrant edt obuyer s,amo mountof ret urni sreasonabl ypr edi ct abl e. Goodssol dunderFAS,att heportdesi gnat edbyt hebuyer Goodsatt heport ,pur chasedCI F √

√ √

√ √ √ √ √ √ √ √

PROBLEMS MS 41.

( Cros si ngsComp mpany)

I nvoi cepri ce ( 150, 000x0. 80x0. 90) Frei ghtcharge  Tot alcostofmerchandi sepur chases 42.

P 108, 000 2, 500 P 110, 500

( Jane,I nc. )

Report eduni t sonApri l30,2016  Adj ust ment s: No.1i t em –Pur chasedFOBshi ppi ngpoi nt st i l li nt ransi tnoti ncl udedi npurchases No.3i t em –Sol dFOB dest i nati on st i l li nt ransi tnot i ncl udedi ni nvent ory Correcti nvent oryquant i t y

31

10, 200 250 500 10, 950

Chapter4-I nvent ori es

43.

( Or i entTr adi ng)

Report edi nvent ory Merchandi sei nt ransi tpur chasedFOB dest i nat i on Goodshel donconsi gnment Mar kupongoodsoutonconsi gnment Sal espri ce 600, 000 Cost( 600, 000÷1. 5) 400, 000 Mer chandi sei nt ransi tt ocust omer sFOB dest i nati on 400, 000x( 100% -40%) Merchandi sepurchasedi nt ransi tFAS Correcti nvent ory 44.

240, 000 150, 000 P8, 770, 000

P 172, 000 31, 500 12, 500 P 216, 000

( Cent erpoi nt,I nc. )

Report edi nvent ory  Adj ust ment s: a. Goodsoutonconsi gnment b. Goodspur chasedi nt ransi tFOB shi ppi ngpoi nt c. Goodssol di ntransi tFOB shi ppi ngpoi nt i ncl udedi ni nvent ory d. Goodssol di nt ransi tFOB dest i nati on e. noti ncl udedi ni nventory g. Goodssol di nt ransi tFOB dest i nati on noti ncl udedi ni nvent ory Correcti nvent ory 46.

( 200, 000)

( Ti nt i nCompany)

Physi cali nvent oryatDecember31,2016 Mer chandi sei nt ransi tshi ppedFOB shi ppi ngpoi nt Merchandi sesol dFOB dest i nat i onst i l li nt ransi t Correcti nvent oryatDecember31,2016 45.

P9, 500, 000 ( 420, 000) ( 500, 000)

P562, 500 110, 000 27, 000 ( 85, 000) 26, 000 37, 000 P677, 500

( MegaCompany)

FI FO  Wei ght edaverage Movi ngaverage

CostofEI 3, 506 3, 333 3, 370

CostofGoodsSol d 4, 550 4, 723 4, 686

GrossPr ofit 1, 955 1, 782 1, 819

FIFO Costofendi ngi nvent ory: 275x11. 75 25x11. 00 Costofgoodssol d:

3, 231. 25 275. 00

32

3, 506. 25

Chapter4-I nvent ori es

Costofgoodsavai l abl ef orsal e Lessendi ngi nvent ory Gr osspr ofit : Sal es Lesscostofgoodssol d Wei ght edaver age Costofendi ngi nvent ory: Costofgoodsavai l abl ef orsal e Numberofuni t savai l abl ef orsal e  Wei ght edaveragecostperuni t Uni t si nendi ngi nvent ory Costofgoodssol d: Costofgoodsavai l abl ef orsal e Lessendi ngi nvent ory Gr osspr ofit : Sal es Lesscostofgoodssol d

8, 056. 25 3, 506. 25

4, 550. 00

6, 505. 00 4, 550. 00

1, 955. 00

8, 056. 25 ÷ 725 11. 11 x 300

3, 333. 00

8, 056. 25 3, 333. 00

4, 723. 25

6, 505. 00 4, 723. 25

1, 781. 75

Movi ngav er age Costofendi ngi nvent ory: I nvent ory ,January1 250x10. 50=2, 625. 00 Pur chase,March7 200x11. 00=2, 200. 00 Tot al 450x10. 72=4, 825. 00 Sal e,May20 ( 120x10. 72=1, 286. 40) Sal e,June30 (55 x10. 72= 589. 60) Bal ance 275x10. 72=2, 949. 00 Pur chase,Jul y15 275x11. 75=3, 231. 25 Tot al 550x11. 24=6, 180. 25 Sal e,Sept ember17 ( 250x11. 24=2, 810. 00) Bal ance 300x 11. 24= Costofgoodssol d: Costofgoodsavai l abl ef orsal e Lessendi ngi nvent ory Gr osspr ofit : Sal es Lesscostofgoodssol d 47.

( Landmar kEnt erpri ses)

a.

Costofendi ngi nvent ory 1/1 2, 400@ 10. 75 25, 800 1/5 1, 900@ 11. 35 21, 565 4, 300@ 11. 02 47, 365 1/8 2, 200@ 11. 02 24, 244 2, 100@ 11. 01 23, 121 1/24 3, 800@ 11. 80 44, 840 5, 900@ 11. 52 67, 961 1/30 3, 600@ 11. 52 41, 472 2, 300@ 11. 52 26, 489

33

3, 370. 25

8, 056. 25 3, 370. 25

4, 686. 00

6, 505. 00 4, 686. 00

1, 819. 00

Chapter4-I nvent ori es

 b.

48.

Costofgoodsavai l abl ef orsal e( 25, 800+21, 565+44, 840) Numberofuni t savai l abl ef orsal e( 2, 400+1, 900+3, 800)  Wei ght edaveragecostperuni t Numberofuni t si nendi ngi nvent ory Costofendi ngi nvent ory

( Rockwel lCl ub,I nc. )

Costofsal es: Sal es( 160, 500x12) 1, 926, 000 Lessgrossprofit 738, 600  Addendi ngi nvent ory 42, 000x7. 40 310, 800 3, 000x7. 20 21, 600  Avai l abl ef orsal e Deductpurchases I nvent ory,January1  Averagecostperuni t( 369, 750÷51, 000uni t s) 49.

P92, 205 ÷ 8, 100 P 11, 38 x 2, 300 P26, 174

 Amount

Uni t s

P1, 187, 400

160,500

332, 400 P1, 519, 800 1, 150, 050 P 369, 750

 45, 000 205, 500 154, 500 51, 000 P 7. 25

2015 P18, 800, 000 12, 760, 000 P 6, 040, 000

2016 P29, 400, 000 20, 250, 000 P 9, 150, 000

( MazdaCor por at i on)

( a)

( b)

FI FO 2014 Sal es P12, 000, 000 Costofgoodssol d 7, 000, 000 Grossprofit P 5, 000, 000 Costofgoodssol d: 2014 10, 000x700= 2015 3, 000x700= 2, 100, 000 13, 000x820=10, 660, 000 2016 5, 000x820= 4, 100, 000 19, 000x850=16, 150, 000 Wei ght edaverage Sal es Costofgoodssol d Grossprofit

2014 P12, 000, 000 7, 000, 000 P 5, 000, 000

7, 000, 000 12, 760, 000 20, 250, 000 2015 2016 P18, 800, 000 P29, 400, 000 12, 845, 760 20, 211, 360 P 5, 954, 240, P 9, 188, 640

Costofgoodssol d: 2014 10, 000x700 7, 000, 000 2015 ( 3, 000x700)+( 18, 000x820) x 16, 000* 12, 845, 760 21,000 2016 ( 5, 000x802. 86)+( 25, 000x850)x24, 000* 20, 211, 360   30, 000 *uni tcost swer er oundedofft onearestcent avo:802. 86and842. 14,f or 2015and2016,respecti vel y. 410. ( St a.Luci aCompany)

Report edpr ofitunderaveragemet hod Di ffer encei ni nvent oryusi ngFI FO Begi nni ngi nvent ory Endi ngi nvent ory Pr ofitunderFI FO basi s

34

2014 P3, 600, 000

2015 P5, 000, 000

2016 P7, 000, 000

40, 000 P3, 640, 000

( 40, 000) 120, 000 P5, 080, 000

( 120, 000) 650, 000 P7, 530, 000

Chapter4-I nvent ori es

411. ( Ci t yCompany)

Cost( underFI FO basi s) Netreal i zabl eval ue( 40, 000–12, 000) Lowerofcostandnetr eal i zabl eval ue

P26, 000 P28, 000 P26, 000

412. ( Rust an’ sTr adi ng)

Product  A B C D  Tot al

Cost 102 45 24 9

NRV 105 42 22 10

Lower 102 42 22 9

Quant i t y 4, 000 6, 000 5, 500 7, 200

Amount P408, 000 252, 000 121, 000 64, 800 P845, 800

413. DechavezCompany ( a)Di r ectMet hod

 Theprofiti scomput edasf ol l ows: Sal es Costofgoodssol d Grosspr ofit Sel l i ngexpenses Generalandadmi ni st rat i veexpenses Pr ofit Costofgoodssol d: Begi nni ngi nvent ory Purchases Tot alcostofgoodsavai l abl ef orsal e Endi ngi nvent ory Costofgoodssol d

2016 2015 P3, 200, 000 P2, 900, 000 ( 1, 280, 000) ( 1, 020, 000) P1, 920, 000 P1, 880, 000 ( 450, 000) ( 330, 000) ( 300, 000) ( 310, 000) P 1, 170, 000 P 1, 240, 000 P 480, 000 1, 400, 000 P1, 880, 000 600, 000 P1, 280, 000

P 300, 000 1, 200, 000 P1, 500, 000 480, 000 P1, 020, 000

( b)Al l owancemet hod

 Theprofiti scomput edasf ol l ows: Sal es Costofgoodssol d Grosspr ofit Sel l i ngexpenses Generalandadmi ni st rat i veexpenses Decl i nei nNRV Gai nonadj ust mentofal l owance Pr ofit

2016 2015 P3, 200, 000 P2, 900, 000 ( 1, 240, 000) ( 1, 080, 000) P1, 960, 000 P1, 820, 000 ( 450, 000) ( 330, 000 ( 300, 000) ( 310, 000) ( 40, 000 __________60, 000 P 1, 170, 000 P 1, 240, 000

Costofgoodssol d: Begi nni ngi nvent ory Purchases Tot alcostofgoodsavai l abl ef orsal e Endi ngi nvent ory Costofgoodssol d 414. ( Pur pl eCompany)

35

P 500, 000 1, 400, 000 P1, 900, 000 ( 660, 000) P1, 240, 000

P 380, 000 1, 200, 000 P1, 580, 000 500, 000 P1, 080, 000

Chapter4-I nvent ori es

Cost Netreal i zabl eval ue( 204, 000–10, 000) Loss

P200, 000 194, 000 P 6, 000

415. ( PowderBl ueCompany)

I nvent ory,January1 Purchasesduri ngt heyear Costofgoodsavai l abl ef orsal e LessI nvent ory,December31 Costofgoodssol d

P1, 400, 000 6, 600, 000 P8, 000, 000 1, 200, 000 P6, 800, 000

416. ( Phi l am Gr ocer sCompany)

( a)CostofproductX andproductY  January1i nvent ory Purchases Sol d December31i nvent ory Uni tcost( al lcomi ngf rom l at estpurc hasepri ce,as endi ngi nvent oryi sl esst hanl at estpur chases) Endi ngi nvent oryatFI FO cost

ProductX Pr oductY 2, 500uni t s 1, 500uni t s 7, 400uni t s 4, 500uni t s ( 7, 000uni t s) ( 5, 000uni t s) 2, 900uni t s 1, 000uni t s P125 P362, 500

P98 P98, 000

( b) Sal espri ce( effect i ve2015)90% xprevi ousSP Est i mat edsel l i ngcost Netreal i zabl eval ue Lowerofcostandnetreal i zabl eval ue,peruni t Numberofuni t si nendi ngi nvent ory I nvent oryval ueatl owerofcostandNRV Tot ali nvent oryval ueatDecember31,2016

ProductX ProductY P135. 00 P111. 60 ( 13. 50) ( 11. 16) P121. 50 P100. 44 P121. 50 P98 2, 900uni t s 1, 000uni t s P352, 350 P98, 000 ( 352, 350+98, 000) =

P450, 350 ( c) Costofgoodssol di nthest at ementofcompr ehensi vei ncome ProductX ProductY Tot al I nvent oryJan.1 P 300, 000 P135, 000 P 435, 000 Purchases 916, 600 432, 500 1, 349, 100 Goodsavai l abl ef orsal e P1, 216, 600 P567, 500 P1, 784, 100 Endi ngi nvent oryatcost 362, 500 98, 000 460, 500 Costofgoodssol d P1, 323, 600 ( d) I nvent oryatcost P460, 500 I nvent oryatl owerofcostandNRV 450, 350 Requi redal l owance P 10, 150 Exi st i ngal l owance 15, 000 Gai nonadj ust mentofal l owance P 4, 850 ( e)

I nvent ory I ncomeSummary

460, 500 460, 500

( orusi ngt hecostofgoodssol dmet hod)

36

Chapter4-I nvent ori es

I nvent ory,December31 Costofgoodssol d Pur chases I nvent ory,January1

460, 500 1, 323, 600 1, 349, 100 435, 000

 Al l owancet oReduceI nvent oryt oNRV Gai nonAdj ust mentofAl l owancet o ReduceI nvent oryt oNRV

4, 850 4, 850

417. ( DEC Company)

( a)

( b)

Grossprofiti s40% basedonsal es Mer chandi sei nvent ory,January1,2016 Purchasesf ort heyear Costofgoodsavai l abl ef orsal e Lessest i mat edcostofgoodssol d( 4, 200, 000x60%) Est i mat edcostofendi ngi nvent ory Physi cali nvent oryonDecember31,2016 Est i mat edcostoft hemi ssi ngi nvent ory

P 450, 000 3, 150, 000 P3, 600, 000 2, 520, 000 P1, 080, 000 500, 000 P 580, 000

Grossprofiti s40% basedoncostofsal es Mer chandi sei nvent ory,January1,2016 Purchasesf ort heyear Costofgoodsavai l abl ef orsal e Lessest i mat edcostofgoodssol d( 4, 200, 000/1. 40) Est i mat edcostofendi ngi nvent ory Physi cali nvent oryonDecember31,2016 Est i mat edcostoft hemi ssi ngi nvent ory

P 450, 000 3, 150, 000 P3, 600, 000 3, 000, 000 P 600, 000 500, 000 P 100, 000

418. Es t i mat edcostofgoodssol d( 705, 000–18, 000) /1. 20

 AddI nvent oryatJul y20,2016 Costofgoodsavai l abl ef orsal e Lessnetpurchasesf ort heperi od ( 650, 000–12, 000+6, 000) Est i mat edcostofJune30,2016i nvent ory

P572, 500 205, 000 P777, 500 644, 000 P133, 500

419. ( Manel ’ sCompany)

Merchandi sei nvent ory,January1 Pur chases( 1, 000, 000+40, 000–60, 000) Costofgoodsavai l abl ef orsal e Est i mat edcostofgoodssol d( 3, 200, 000x70%) Est i mat edendi ngi nvent ory Lessgoodsundamaged l ocat edi nshowroom ( 200, 000+80, 000) Est i mat edcostofmerchandi sedest royedbyt heflood

P2, 000, 000 980, 000 P2, 980, 000 2, 240, 000 P 740, 000 280, 000 P 460, 000

420. ( Her mi ni aCompany)

I nvent ory,January1 Purchases Purchaser et urns  Tot al

P 200, 000 P5, 000, 000 ( 80, 000)

37

4, 920, 000 P5, 120, 000

Chapter4-I nvent ori es

Est i mat edcostofgoodssol d( 7, 380, 000–180, 000)x60%) Est i mat edcostofendi ngi nvent ory Goodsi nt ransi t Est i mat edcostofendi ngi nvent ory

4, 320, 000 P 800, 000 ( 100, 000) P 700, 000

421. ( Ol dRos eCompany)

I nvent ory,January1,2016 Purchases Frei ghti n Costofgoodsavai l abl ef orsal e Est i mat edcostofgoodssol d( 2, 200, 000–50, 000)x70% Est i mat edcostofendi ngi nvent ory I nvent oryperact ualcount Short agei ni nvent ory

P1, 000, 000 800, 000 20, 000 P1, 820, 000 1, 505, 000 P 315, 000 160, 000 P 155, 000

422. ( Bl az i ngRedCompany)

I nvent ory,January1,2016 Purchases: Payment st osuppl i ers Account sPayabl e,8/28/16 Account sPayabl e,1/1/16 Costofgoodsavai l abl ef orsal e Est i mat edcostofgoodssol d: Col l ect i onsf rom cust omers Account sRecei vabl e,8/28/16 Account sRecei vabl e,1/1/16   Sal es Costpercent age Est i mat edcostofendi ngi nvent ory Lessundamagedgoods: Goodsoutonconsi gnment Goodsi nt ransi t Est i mat edi nvent oryfirel oss

P 575, 400 P1, 950, 000 491, 400 ( 352, 560) P3, 015, 200 515, 560 ( 522, 360) P3, 008, 400 70% P 195, 000 69, 500

2, 088, 840 P2, 664, 240

2, 105, 880 P 558, 360 264, 500 P 293, 860

423. ( Chi cDepar t mentSt or e)

( a)

( FI FOcostbasi s I nvent ory,June1 Purchases  Avai l abl ef orsal e Sal es I nvent ory,June30atret ai l Costpercent age ( 2, 400, 000/4, 000, 000) Est i mat edcostofi nvent ory Costofgoodsavai l abl ef orsal e Lessest i mat edcostofendi ngi nvent ory Est i mat edcostofgoodssol d

38

Cost P 355, 000 2, 400, 000 P2, 755, 000

Ret ai l P 750, 000 4, 000, 000 P4, 750, 000 3, 500, 000 P1, 250, 000 60% P 750, 000 P2, 755, 000 750, 000 P2, 005, 000

Chapter4-I nvent ori es

( b)

Averagecostbasi s I nvent ory,June30atret ai l Costpercent age( 2, 755, 000/4, 750, 000) Est i mat edcostofi nvent ory Costofgoodsavai l abl ef orsal e Lessest i mat edcostofendi ngi nvent ory Est i mat edcostofgoodssol d

P1, 250, 000 58% P 725, 000 P2, 755, 000 725, 000 P2, 030, 000

424. ( LondonCompany)  Aver agecostr et ai l

Cost P145, 000 283, 920

Begi nni ngI nvent ory Purchases  Addi t i onalmar kups Mar kupcancel l at i ons Mar kdown Mar kdowncancel l at i ons ________  Tot alavai l abl ef orsal e P428, 920 Costt oret ai lrat i o428, 920/565, 600=75. 8% Sal es,netofsal esr et urns Endi ngi nvent oryatret ai l Endi ngi nvent or yataveragecos tret ai l( 130, 800x75. 8%)

Ret ai l P160, 000 420, 800 25, 200 ( 9, 200) ( 38, 100) 6, 900 P565, 600 ( 434, 800) 130, 800 P 99, 146

425. ( Al emar sDr ygoods,I nc. )

Ret ai l P1, 050, 000 735, 000 80, 000 (15, 000) ( 105, 000) P1, 745, 000 ( 1, 050, 000) P 695, 000 665, 000 P 30, 000

Begi nni ngI nvent ory Purchases Mar kups ( 1, 600x50) Mar kupcancel l at i ons( 300x50) Mar kdowns  Tot al Sal esRevenue Endi ngI nvent ory,atret ai l Physi cali nvent oryonJanuary31,2016 I nvent oryshort ageatr et ai lval ue 426. ( Uni wi deSal es )

( a)( 1) Averager etai l Cost P185, 700 339, 380 (11, 000) 7, 300 2, 000

Begi nni ngI nvent ory Purchases PurchaseAl l owance Fr ei ghtI n Depart ment alTransf ersI n  Addi t i onalMar kups Mar kupCancel l at i ons Mar kdowns( 6, 000–4, 500)

_________

39

Ret ai l P202, 000 458, 000 3, 000 12, 000 (2, 500) ( 1, 500)

Chapter4-I nvent ori es

 Tot al Sal es I nvent oryShort age Endi ngI nvent ory,atret ai l Costt oret ai lrat i o( 523, 380/671, 000) Endi ngI nvent ory,atest i mat edaveragecost

P523, 380

P671, 000 ( 374, 000) ( 7, 000) P290, 000 78% P226, 200

( 2)FI FO r et ai l( excl udethebegi nni ngi nvent oryi ncomput i ngthecostr ati o) 337, 680/469, 000=72% Endi ngi nvent oryatFI FO cost 72% xP290, 000 =P208, 800 ( b)Costofgoodssol d  Average P523, 380 ( 226, 200) P297, 180

Goodsavai l abl ef orsal e Endi ngi nvent ory Costofgoodssol d

FI FO P523, 380 ( 208, 800) P314, 580

427. ( Gr andCentr al ,I nc. )

( a) Profitreport edf or2016  Adj ust ment s: Overst at ementofbegi nni ngi nvent ory Underst at ementofendi ngi nvent ory Goodsst i l li nt ransi tshi ppedt ocust omersFOB dest i nati on recordedassal es( 40% x60, 000) ;rel at edcostwasexcl uded i nendi ngi nvent ory( 40% x52, 000) ,net Purchasesof2015recordedi n2016 100, 000 Correctneti ncomef or2016 ( b) Underst at ed2015endi ngi nvent ory Underst at ed2015pur chases Ne toverst at ementi n2015pr ofit

P658, 000 71, 000 96, 000 ( 3, 200) P921, 800

Effecton2015profit P71, 000underst at ed 100, 000overst at ed P 29, 000

428. ( USTFUCompany)

( a) December31,2016 LossonPurchaseCommi t ment s 50, 000 Est i mat edLi abi l i t yonPur chaseCommi t ment s 1, 000x( 1, 200–1, 150)

50, 000

February28,2017 Purchases Est i mat edLi abi l i t yonPurchaseCommi t ments  Account sPayabl e

40

1, 150, 000 50, 000 1, 200, 000

Chapter4-I nvent ori es

( b) December31,2016 LossonPurchaseCommi t ment s 50, 000 Est i mat edLi abi l i t yonPur chaseCommi t ment s

50, 000

February28,2017 Purchases Est i mat edLi abi l i t yonPurchaseCommi t ment s LossonPurchaseCommi t ment s   Account sPayabl e

1, 100, 000 50, 000 50, 000 1, 200, 000

( c) December31,2016 LossonPurchaseCommi t ment s 50, 000 Est i mat edLi abi l i t yonPur chaseCommi t ment s

50, 000

February28,2017 Purchases 1, 200, 000 Est i mat edLi abi l i t yonPurchaseCommi t ments 50, 000  Account sPayabl e RecoveryofLossonPur chaseCommi t ment s

1, 200, 000 50, 000

MULTI PLE CHOI CE QUESTI ONS  Theor y

MC1 MC2 MC3 MC4 MC5

B A D B D

MC6 MC7 MC8 MC9 MC10

A A D A A

MC11 MC12 MC13 MC14 MC15

C A A C D

MC16 MC17 MC18 MC19 MC20 MC21

A D D C D D

Probl ems

MC22

D

I nvoi cepri ce ( 90, 000x. 80x. 90) Frei ghtchar ge  Tot alcostofi nvent or y

MC23

C

MC24  A

P64, 800 5, 000 P69, 800

I nvoi cepri ce ( 150, 000x. 85x. 90x. 95)

P109, 012. 50

I nvoi cepri ce Cashdi scount( 109, 012. 50x2%)

P109, 012. 50 ( 2, 180. 25)

Cashpaymentwi t hi nt hedi scountper i od

P106, 832. 25

41

Chapter4-I nvent ori es

MC25

B

Pur chasesofcompat i bl es Pur chasesofsof t warepackage Ret urnsandal l owances Netpurchases  Tot aldi scount savai l abl e( 4, 100, 000x3%) Pur chasedi scount st aken Di scount sl ost

MC26

MC27

MC28

MC29

MC30

D

B

C

B

C

P96, 000

Report edi nvent ory,December31 Goodsst i l li nt ransi tpurchasedFOB shi ppi ngpoi nt

P1, 500, 000 50, 000

Cor r ectamountofi nvent or y

P1, 550, 000

Report edamountofi nvent ory Goodssol di nt ransi tshi ppedFOB dest i nati onnoti ncl udedi n i nvent ory( 490, 000–40, 000=450, 000;450, 000÷1. 5) Goodspur chasedi nt ransi tshi ppedFOB shi ppi ngpoi ntpl us f r ei ghtcost( 600, 000+60, 000) Goodsoutonconsi gnment ( 300, 000÷1. 5=200, 000;200, 000+30, 000)

P3, 000, 000

Cor r ecti nvent or y,December31

P4, 190, 000

Report edamountofi nvent ory Mer chandi sei nthedel i verydepart mentexcl udedi ni nvent ory I mport edgoodsnoti ncl uded,t rustr ecei pt sal readyaccept ed Goodsi ntransi tshi ppedFOB dest i nat i oni ncl udedi ni nvent or y

P5, 000, 000 80, 000 800, 000 ( 25, 000)

Cor r ectmer chandi sei nvent or y

P5, 855, 000

C

MC32  A

C

660, 000 230, 000

P77, 500 6, 000

Cor r ectamountofi nvent or y

P83, 500

Di rectmat eri al s Di rectmat eri al spur chasedi nt ransi t ,FOBshi ppi ngpoi nt  Wor ki nprocess Fi ni shedgoods Goodsonconsi gnment( 150, 000x80%)

P550, 000 90, 000 380, 000 450, 000 120, 000 P1, 590, 000

Mar kuponmer chandi seonconsi gnment ( 104, 000÷1. 3=80, 000;80, 000x. 30) Goodshel donconsi gnment Mar kupongoodsoutonapproval( 32, 500–25, 000)

P24, 000 56, 000 7, 500

Reduct i oni ni nvent or yatDecember31

P87, 500

Sal es( 3, 000x35)+( 2, 000x36)+( 1, 000x37) Costofsal es( 4, 000x25)+( 2, 000x26) Gr osspr ofitonsal es

MC33

300, 000

I nvent oryt akenbyphysi calcount Goodspur chasedi nt ransi tFOB shi ppi ngpoi ntexcl uded

 Tot alcostofi nvent or y

MC31

P3, 280, 000 900, 000 ( 80, 000) P4, 100, 000 P123, 000 ( 27, 000)

1/12 1/22  Tot al

P214, 000 152, 000 P62, 000

1, 600@ 8. 00 12, 800 4, 800@ 9. 60 46, 080 6, 400 58, 880/6, 400uni t s

42

P9. 20

Chapter4-I nvent ori es

MC34

B

Confidence:cost22;NRV=30–3=27 Posi t i veat t i t ude:cost55;NRV=80–28=52

MC35

C

ProductH ProductO ProductP ProductE

1, 000x25 2, 000x36 3, 000x120 4, 000x18

P 25, 000 72, 000 360, 000 72, 000

 Tot ali nvent or yval ue

MC36

C

P529, 000

Begi nni ngi nvent ory Pur chases( 400, 000+500, 000+600, 000)  Avai l abl ef orsal e Costofgoodssol d( 2, 240, 000÷1. 4) Costofi nvent or ybef or et hefir e

MC37

C

I nvent ory,begi nni ng Pur chases( 2, 550, 000+250, 000–300, 000) Costofgoodssol d( 2. 8M +900, 000–700, 000=3. 0M sal es 3. 0M /1. 25 I nvent ory,endi ng Physi cali nvent ory  Amountofi nvent or yshor t age

MC38

MC39

alcostofgoodssol df or2014and2015( 1. 04M +1. 55M) B  Tot

D

C

P 600, 000 1, 600, 000 P2, 200, 000 1, 600, 000 P 500, 000

P180, 000 2, 500, 000 ( 2, 400, 000) P280, 000 110, 000 P170, 000

 Tot alsal esf or2014and2015( 1. 7M +2. 0M)  Averagecostrat e( 2, 590, 000/3, 700, 000)

P2, 590, 000 P3, 700, 000 70%

I nvent ory,January1,2016 Pur chases  Tot alcostofgoodsavai l abl ef orsal e Est i mat edcostofgoodssol d( 2, 500, 000x70%) Est i mat edcostofendi ngi nvent ory Costofmerchandi seoutonconsi gnment( 150, 000x70%) Costofgoodsundamaged( i nt ransi tFOB shi ppi ngpoi nt )

P 520, 000 2, 180, 000 P2, 700, 000 1, 750, 000 P950, 000 ( 105, 000) ( 95, 000)

Costofi nvent or yl ostbyfir e

P750, 000

Begi nni ngi nvent ory Netpurchases( 378, 245–10, 295) Est i mat edcostofgoodssol d( 450, 200–5, 100)x78%* Est i mat edcostofendi ngi nvent ory Costofundamagedi nvent ory Real i zabl eval ueofdamagedmer chandi se

P105, 650 367, 950 ( 347, 178) P126, 422 ( 69, 738) ( 5, 000)

Est i mat edfir el oss

MC40

Lower–P22 Lower–P52

P51, 684

* Costrat ei n2015 Costofgoodssol d( 120, 160+394, 366–105, 650= 408,876 Netsal es( 530, 180–5, 980) =524, 200 Di rectmat eri al sused( 400, 000+1, 280, 000–740, 000) Di rectl abor Manuf act uri ngover head( 50% x960, 000)

43

= 78% P940, 000 960, 000 480, 000

Chapter4-I nvent ori es

 Tot almanuf act uri ngcost  Wor ki nprocess,begi nni ng  Tot alcostputi nt opr ocess Costofgoodssol d( 4. 0M x75%) Fi ni shedgoods,end Costofgoodsavai l abl ef orsal e Fi ni shedgoods,begi nni ng

P2, 380, 000 1, 100, 000 P3, 480, 000 P3, 000, 000 1, 310, 000 P4, 310, 000 ( 1, 500, 000)

Costofwor ki nprocessl ostbyfir e

MC 41

C

I nvent ory,January1 Pur chases Pur chaseret urns Frei ghti n  Avai l abl ef orsal e Costt oret ai lrati o( 1, 908, 000/3, 180, 000=60%) Netsal es( 2, 365, 000–62, 000) Endi ngi nvent ory,atr et ai l Physi calcountofi nvent oryatr et ai l I nvent orypi l f erage,atret ai l

P670, 000

Cost P 617, 000 1, 281, 000 ( 21, 000) 31, 000 P1, 908, 000

P58, 200

Cost P47, 075 213, 327 3, 400

D

I nvent ory,January1 Pur chases Frei ghti n Netmarkups( 18, 900–7, 800) Mar kdowns  Avai l abl ef orsal e Costt oret ai lrati o( 263, 802/376, 860=70%)

_________ P263, 802

Costofgoodssol d( 70% x320, 500)

MC43  A  Avai l abl ef orsal eatr et ai l Sal es Endi ngi nvent ory,atr et ai l Physi calcountofi nvent ory I nvent oryshort age,atret ai l

C

Ret ai l P70, 025 306, 375 11, 100 ( 10, 640) P376, 860 P224, 350

P376, 860 ( 320, 500) P56, 360 39, 390 P16, 970

Est i mat edl ossf r om i nvent or ys hor t age( 16, 970x70%)

MC44

Ret ai l P1, 057, 000 2, 158, 000 ( 35, 000) ___________ P3, 180, 000 ( 2, 303, 000) P877, 000 780, 000 P 97, 000

Costofi nvent or ypi l f er age( 97, 000x60%)

MC42

2, 810, 000

Begi nni ngi nvent ory,atret ai l Pur chases Netmarkups Netmar kdowns Costofgoodsavai l abl ef orsal e,atret ai l Sal esr evenue Endi ngi nvent ory,atr et ai l Costt or et ai lrat i o( 143, 000/260, 000=55%) Endi ngi nvent ory,atest i mat edcost

44

P11, 879

P60, 000 220, 000 20, 000 ( 40, 000) P260, 000 ( 180, 000) P80, 000 55% P44, 000

Chapter4-I nvent ori es

MC45

D

Report edpr ofit Overst at edendi ngi nvent ory Underst at edbegi nni ngi nvent ory Underst at edpurchases  Adj ust edpr ofitf ort heyear

P600, 000 ( 10, 000) ( 4, 000) ( 100, 000) P486, 000

45