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Assessment Inventories

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Rojun Kristufer Medenilla
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6 views3 pages

Assessment Inventories

Uploaded by

Rojun Kristufer Medenilla
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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L.V.

L UP ACCOUNTING TUTORIALS
FAR
CONTACT #0951 913 5318

TOPIC: INVENTORIES M.LIMHEYA

ASSESSMENT INVENTORIES

1. Ash Company revealed inventory on December 31, 2020 at P5,255,000 based on a physical count priced at cost and before any
necessary adjustment for the following:

❖ Merchandise costing P255,000 shipped FOB shipping point from a vendor on December 31, 2020 was received on January 5, 2021.
❖ Merchandise costing 370,000 shipped FOB destination from a vendor on December 28, 2020 was received on January 3, 2021
❖ Merchandise costing P485,000 shipped to a customer FOB destination on December 28, 2020 arrived at the customer location on
January 6, 2021
❖ Merchandise costing P125,000 was being held on consignment by Ley Company, a consignee of Ash Company.

What amount should be reported as inventory on December 31, 2020?


a. 5,625,000
b. 6,365,000
c. 6,120,000
d. 5,510,0000

2. Liza Company has incurred the following costs during the current year:
Cost of purchases based on vendor’s invoices 6,000,000.00
Trade discounts on purchases already deducted from vendor’s invoices 500,000.00
Import duties 450,000.00
Freight and insurance on purchases 150,000.00
Other handling costs relating to imports 1,000,000.00
Salaries of accounting department 550,000.00
Brokerage commission paid to agents for arranging imports 250,000.00
Sales commission paid to sales agents 350,000.00
After-sales warranty costs 300,000.00

What is the total cost of purchases?


a. 9,550,000
b. 7,850,000
c. 6,650,000
d. 7,700,000

3. Wico Company is a wholesaler of office supplies. The FIFO periodic inventory is used. The entity reported the following activity for
inventory of calculator during the month of August:

August Units Cost


1 Inventory 12,000 35
7 Purchase 35,000 36.5
12 Sale 30,000
21 Purchase 45,000 37
22 Sale 35,000
29 Purchase 23,000 38.5

What is the ending inventory on August 31?


a. 1,961,000
b. 2,040,500
c. 1,857,500
d. 1,884,500

FAR Page 1 of 3
L.V.L UP ACCOUNTING TUTORIALS
FAR
CONTACT #0951 913 5318

TOPIC: INVENTORIES M.LIMHEYA

4. Alfonso Company provided the following inventory data at year-end:

Cost NRV
Skis 2,250,000.00 2,300,000
Boots 1,182,000.00 1,180,000
Ski equipment 705,000.00 840,000
Ski apparel 390,000.00 410,000

What amount should be reported as inventory at year-end?


a. 4,525,000
b. 4,527,000
c. 4,730,000
d. 4,732,000

Chang’e Company provided the following information:


Finished goods in factory P 2,000,000
Materials 1,400,000
Finished goods in company-owned retail store, including 50% profit on cost 750,000
Goods in process 650,000
Finished goods in hands of the consignees including 40% profit of sales 400,000
Materials in transit shipped FOB shipping point, Excluding freight of P 30,000 330,000
Finished goods in transit to customers, shipped FOB destination at cost 250,000
Advance for materials ordered 200,000
Goods held on consignment, at sales price, cost P 150,000 200,000
Advertising catalogs and shipping cartons 150,000
Finished goods out on approval, at cost 100,000
Unexpired insurance on inventories 60,000
Unsalable finished goods, at cost 50,000
Office supplies 40,000

5. What is the correct amount of inventory?


A. 5,500,000 B. 5,700,000 C. 5,760,000 D. 5,850,000

6. On June 1, 2020 Diligent Company sold merchandise with a list price of P 1,000,000 to a customer. The entity allowed trade
discounts of 20% and 10%. Credit terms were 5/10, n/30 and the sale was made FOB shipping point. The entity prepaid P 50,000 of
the delivery cost for the customer as an accommodation. The customer paid in full on June 11, 2020.

What amount is received from the customer as full remittance?


A. 684,000 B. 720,000 C. 734,000 D. 770,000

NeyNey Company used the average cost retail inventory method.


Cost Retail .
Beginning Inventory 1,650,000 2,200,000
Net purchases 3,725,000 4,950,000
Departmental transfer – credit 200,000 300,000
Net markup 150,000
Inventory shortage – sales price 100,000
Employee discounts 200,000
Sales, including sales of P 40,000 of items
which were marked down from P 500,000 4,000,000

7. What is the estimated cost of ending inventory?


A. 1,924,000 B. 1,950,000 C. 2,300,000 D. 2,700,000
E.

8. What is the estimated retail of ending inventory?


A. 1,700,000 B. 1,900,000 C. 2,400,000 D. 2,600,000

FAR Page 2 of 3
L.V.L UP ACCOUNTING TUTORIALS
FAR
CONTACT #0951 913 5318

TOPIC: INVENTORIES M.LIMHEYA

On the night of September 30, 2020, a fire destroyed most of the merchandise inventory of Bukid Company. All goods were completely
destroyed except for partially damaged goods that normally sell for P 100,000 and that had an estimated net realizable value of P
25,000 and undamaged goods that normally sell for P 60,000.

Inventory – January 1, 2020 660,000


Net purchases, January 1 through September 30, 2020 4,240,000
Net sales, January 1 through September 30, 2020 5,600,000

2019 2018 2017


Net sales 5,000,000 3,000,000 1,000,000
Cost of goods sold 3,840,000 2,200,000 710,000

9. What is the amount of fire loss to be recognized on September 30, 2020?

A. 630,000 B. 1,125,000 C. 930,000 D. 550,000

Bininsag company has a recent gross profit history of 40% of net sales.

The following data are available from the accounting records for the three months ended March 31:

Inventory – January 650,000


Purchases 3,200,000
Net sales 4,500,000
Purchase return 75,000
Freight in 50,000

9. Using the gross profit method, what is the estimated cost of inventory on March 31?

A. 630,000
B. 1,125,000
C. 930,000
D. 550,000

ANSWER

1 C
2 C
3 D
4 A
5 A
6 C
7 B
8 D
9 A
10 B

FAR Page 3 of 3

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