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Inventory Sample Problem

The beginning inventory of Beta company was 100 units at P60 each. In March 2013, Beta company: 1) Purchased 300 units at P60 each on March 05 2) Returned 10 units purchased on March 05 to the supplier on March 06 3) Sold 250 units at P100 each on March 28 The ending inventory on March 31, 2013 was 140 units based on a physical count.

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John Rey Bantay Rodriguez
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471 views

Inventory Sample Problem

The beginning inventory of Beta company was 100 units at P60 each. In March 2013, Beta company: 1) Purchased 300 units at P60 each on March 05 2) Returned 10 units purchased on March 05 to the supplier on March 06 3) Sold 250 units at P100 each on March 28 The ending inventory on March 31, 2013 was 140 units based on a physical count.

Uploaded by

John Rey Bantay Rodriguez
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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SAMPLE PROBLEM

The beginning inventory of Beta company consisted of 100 units @ P60 each. The following transactions
occurred during the month of March 2013.
 Mar. 05: Purchased 300 units @ P60 each.
 Mar. 06: Out of 300 units purchased on March 05, 10 units were returned to supplier.
 Mar: 28: Sold 250 units @ P100 each.
On March 31, 2013, 140 units were found by a physical count.
Required: Make journal entries for the month of June assuming the Beta company uses:
1. perpetual inventory system.
2. periodic inventory system.
Solution:
(1) If perpetual inventory system is used:
March, 05 – entry to record purchase of 300 units on account:

*(300 units × P60) = P18,000

March, 06 – entry to record return of 10 units to supplier:

*(10 units × P60) = P18,000

March, 28 – entries to record sale of 250 units to customers:


a. Entry to realize sales revenue:

*(250 units × P100) = P25,000


b. Entry to update inventory account:

*(250 units × P60) = P15,000


(2). If periodic inventory system is used:
March, 05 – entry to record purchase of 300 units on account:

March, 06 – entry to record return of 10 units to supplier:

March, 28 – entry to record sale of 250 units to customers:

March, 31 – closing entry to create cost of goods sold account and to update inventory
account :

*140 × P60 = 8,400

SEATWORK (1 whole sheet of paper)

The Pharma company is a single product company. The company presents the following information
regarding its activities during the month of December 2013.
 Dec. 01: Beginning inventory; 200 units @ P10 each.
 Dec. 02: Sold 160 units @ P16 each.
 Dec. 12: Purchased 300 units @ P12 each.
 Dec. 18: Sold 240 units @ P17.50 each.
 Dec. 22: Purchased 320 units @ P14 each.
 Dec. 29: Sold 200 units @ P18 each.
At the end of December, there were 220 units on hand according to a physical count of inventory.
Pharma company uses a first-in, first-out (FIFO) cost flow assumption. All purchases and sales are made
on account.
Required:
1. Prepare journal entries and compute gross profit assuming the company uses a periodic
inventory system.
2. Prepare journal entries and compute gross profit assuming the company uses a perpetual
inventory system.

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