INVENTORIES
1. MARINA Company, a manufacturer of ready-to-wear apparels, reported following information
as of the end of 2023:
Unused direct materials in the warehouse 1,600,000
Cost of unfinished goods in the warehouse 2,600,000
Cost of finished goods in the warehouse S 4,000,000
Storage costs of direct materials and unfinished goods 200,000
Storage costs of finished goods 300,000
Advances received from customers 800,000
Advances to suppliers for undelivered materials 450,000
Small tools and lubricants for production equipment 180,000
Lubricants for delivery vehicles 80,000
Office supplies 320,000
Selling price of finished goods in the retail store 900,000
Property insurance for the retail store 90,000
Advertising and selling supplies 120,000
Goods held out of consignment, at selling price 1,000,000
The Company consistently applies 40% gross profit rate based on sales.
Required: From the above information, determine the amount to be included in the inventory
balance.
2. December 31, 2023. 7. Based on its physical count, DANDELION Company reported
unadjusted inventory balance of P6,600,000. Upon inspection of its detailed records, the
following data were gathered.
a. Included in the count are the goods with selling price of P650,000 that were held on
consignment from THISTLE Company.
b. Excluded in the count are the goods with selling price of P700,000 out on consignment to
CAMIA Company. The Company applies 40% gross profit sale on goods to be sold on
consignment
c. Included in the count are goods with billed price of P400,000 that were covered by a bill-
and-hold arrangement. The Company maintains 30% gross profit rate to all other sales
transaction aside from consignment sales.
d. Excluded from the physical count are the goods sold for P1,400,000 under installment
basis. It is probable that all of the buyers will pay the whole installment price.
e. Included in the physical count are goods with total selling price of P1,000,000 covered by
lay-away sales. So far, the customers have already paid P450,000 of the total selling price.
f. Excluded from the physical count are goods costing P600,000 that were sold to customers
on trial
g. Excluded from the physical count are the goods sold to PEACH Company for P1,500,000.
The Company is required to repurchase these on January 31, 2024 for P1,600,000.
Required: Based on this information, determine the adjusted inventory balance as of
December 31, 2023.
3. At the beginning of June 2023, LOMBARDY Company had inventory composing of 3,200 units
costing P28 per unit. During the month, it had the following transactions:
Purchases Sales
Date Units Unit Cost Date Units Unit Sales
6/3 1,000 P27.20 6/9 2,400 P42.00
6/8 2,300 26.80 6/17 3,100 41.20
6/15 800 26.20 6/19 2,500 40.90
6/16 3,000 25.90 6/21 2,900 40.20
6/20 1,600 25.50 6/28 2,700 38.80
6/22 900 25.00
6/26 3,200 24.50
Required: Determine the amounts of (a) cost of goods sold; (b) gross profit, and (c) ending
inventory for each of the following cost flow scenarios:
a. FIFO-periodic
b. FIFO-perpetual
c. Weighted average - periodic
d. Weighted average-perpetual
4. During November 2023, a flood devastated EMIRATE Company's accounting records. Luckily,
some of its accounting information were uploaded in its cloud drive. Upon downloading the
data from the drive, the following information were extracted
Total sales for the month amounted to P1,274,000 at P70 unit selling price.
Ending inventory had a value of P83,016.
Gross profit amounted to P434,616.
The following are the purchases during the month:
Date Units Unit Cost
11/4 1,800 45
11/18 4,000 47
11/23 6,000 46
11/26 5,500 48
Required: Assuming that the Company uses the weighted average method. determine the
following:
a. Number of units sold
b. Number of units in the ending inventory
c. Average unit cost
d. Cost of goods sold
e. Total goods available for sale
f. Number of units in the beginning inventory
g. Cost of beginning inventory