Advanced Accounting by Guerrero

1

CHAPTER 2 Multiple Choice Questions – Theoretical 1. 2. 3. 4. 5.

c b a b a

6. 7. 8. 9. 10.

b c b b a

11. 12. 13. 14. 15.

a a a a a

Multiple Choices - Computational 1.

(a) 10,000 x P500 10,000

2.

+

P1 x .20 x 10,000 2

=

(a) 1,000 + 1,500 = (100x 20) + SSQ SSQ = 500 units

3.

(a) EOQ =

2 x 5,200 x P250 P5

= 721 4.

(a) 5,200/721 = 7.2

5.

(a) D = 10,000, P = P225, C = P225 EOQ =

2 DP C

=

2 x 10,000 x P225 10

= 670.82 = 671 jerseys 6.

(a) Number of orders per year = = =

D EOQ 14.90 15 orders

=

10,000 671

P1,500

2 7.

(a) Demand each Working day

=

D Number of working days

=

10,000 365 27.40 jerseys per day

=

Purchase lead time = 7 days Reorder point = 27.40 x 7 = 191.80 or 192 jerseys 8.

(a) 2

9.

x 50,000 x P5 P2

=

500

(a) [(10,000 / 250) x 30]

+ [(70 - 30) x 40]

30 ( 10,000 / 250) + 40 ( 70 - 30) = 2,800 10.

11.

(a) Safety Stock

Expected Stockout

Stockhout Cost

10 20 50 55

2.5 1.5 .5 .25

P200 120 40 20

P 20 60 100 110

(a) (1,400 - 600)

12.

Carrying Cost

+ 2,000 = 2,800

(a) P800 P.12 + P.10 + 10,000 = .30

13.

(a) SS OP

= =

(7,200 / 2,400) x (45 – 20) 20 (7,200 / 240) + 750

= 750 = 1,350

Stockhout and Carrying costs P220 180 140 130

3 14.

(a) 2 x RU x CO CU x CC 2 x 1,000 x P50 P100 x .15625 EOQ

=

6,400

= 6400 = 80 15.

(a) Order Cost

= RU x CO EOQ = 1,000 x P50 80 = P625

16.

(a) CC

17.

= = =

½ x EOQ x CU x CC ½ x 80 x P100 x .15625 P625

(a) 140 + (100 x 7 days) = 840

18.

(a) 140 + (1,000 / 2) = 640

19.

(a) 140 + 1,000 = 1,140

20.

(a) 1,000 =

2 x 25,000 x CO P1

1,000 =

50,000 x CO

1,000,000 = P50,000 x CO CO = P20

4 21.

(a) EOQ

22.

=

2 x 20,000 x P160 P1.60

=

2,000 yards.

(a) 20,000 / 2,000 = 10 order

23.

(a) Demand each working day

= = = =

Annual demand / No. of working days 20,000/250 80 yards per day 400 yards per weedl

Purchasing lead time Reorder point

= =

2 weeks 400 x 2 = 800 yards

5

SOLUTIONS TO PROBLEMS Problem 2-1 1.

Purchase Order: Big Manufacturers 123 Molave Street Fairview Ave., QC

Purchase Order 144 Date 4/4/08

To:

Shipping Instructions Date Wanted 4/17/08

Small Products 54 West Avenue Cebu City

Quantity

Description

4,390 840 1,890

By

2.

103 – 2” x 4” plastic sheeting 122 – 3” x 5” plastic sheeting 142 – 4” x 6” plastic sheeting

Unit Price

Amount

P1.20 1.90 2.60

P5,268.00 1,596.00 4,914.00 P11,778.00

(Student’s Name) Purchasing Agent

Charge: ACCT. 121 Job________ Dept. ______

Receiving Report Big Manufacturers 123 Molave Street Fairview Ave., QC

Receiving Report

Received From:

Date Received 4/4/08 Purchase Order No. 144 Invoice No. 539

Ship Via Quantity Received 4,390 84 1,890

Small Products 54 West Avenue Cebu City

Fedex

Tansport Charges

Quantity Accepted 4,250 840 1,890

Prepaid Received By

Quantity Rejected 140 -0-0-

403

(Student’s Name)

Description

Weight

103-2”x4” plastic sheeting 102-3”x5” plastic sheeting 103-4”x6” plastic sheeting

425 k 210 k 945 k

Inspection Record Quantity Accepted 4,250 Date

Quantity Returned 140

Reason for Rejection Imperfections in the sheets. Do not replace Inspected by

( Student’s Name)

6 3.

4.

Debit Memorandum Big Manufacturers 123 Molave Street Fairview Ave., QC

Debit Memorandum No.

To:

Date 4/19/2008 Invoice No. 539 Invoice Date 4/17/2008

Small Products 54 West Avenue Cebu City

Quantity

Purchase Order No.

Description

Unit Price

Amount

140

644

103 – 2” x 4” plastic sheeting

P1.20

P168.00

Explanation

Crack in the sheets. Do not replace.

Returned Via

Fedex

085

(Student’s Nam) Purchasing Agent

Disbursement Voucher DISBURSEMENT VOUCHER Big Manufacturers 123 Molave Street Fairview Ave., QC Payee

Voucher No. Issued Date Due Date

0740 4/19/2008 5/27/2008

Small Products 54 West Avenue Cebu City

Invoice Date

Terms

4/17/2008

2/10, n/30

Invoice No. 539 Less DM 085

Amount P 11,778.00 168.00 P 11,610.00

Destribution Account No. 121

5.

Amount P11,610.00

Check No. BPI 000127 Approved By

A request for a purchase must be made by an authorized person. A purchase order must be prepared and approved by an authorized person. All materials must be checked to see that they correspond to the purchase order and are in good condition. Payment is made only after proper approval. Various steps in the purchasing procedures are delegated to different persons to lessen the risk of fraud or error.

7 Problem 2-2 2008 Oct. 24:

25:

Materials Vouchers payable To record voucher to Veterans Corp. On invoice of October 21 for 4,800 units, Of which 510 were returned.

92,235.00

Vouchers payable Purchase discounts Cash To record payment of Voucher 014 Note: No journal entries are needed for the Transactions on October 4, 5, and 21.

92,235.00

92,235.00

922.35 91,131.65

Problem 2-3

VOUCHER REGISTER

Date March

Voucher No. 031 032 033 034

Payable to Lim Supply Company Tan Corporation Sy Company Ong Company

For the Month of March, 2008 Paid Date Check. No.

Voucher Payable Cr 201

Materials Dr. 121

P17,871.00 42,930.50 16,896.00 208,821.00 286,518.50

P17,871.00 42.930.50 16,896.00 208,821.00 286,518.50