Page |1
ASSIGNMENT:
1. On October 1, 20x1, the warehouse of ABC Co. and all the inventories contained
therein were damaged by flood. Off-site back up of data base shows the following
information:
Inventory, Jan. 1 10,000
Accounts payable, Jan. 1 3,000
Accounts payable, Sept. 30 2,000
Payments to suppliers 50,000
Freight-in 500
Purchase returns 500
Sales from Jan. to Sept. 80,000
Sales returns 5,000
Sales discounts 2,000
Gross profit rate based on sales 30%
Additional information:
Goods in transit as of October 1, 20x1, purchased FOB shipping point, amounted to
₱1,000, cost of goods out on consignment is ₱1,200, and materials damaged by flood can
be sold at a salvage value of ₱1,800. How much is the inventory loss due to the flood?
a. 3,000 b. 2,500 c. 4,400 d. 4,900
2. On October 1, 20x1, the warehouse of ABC Co. and all the inventories contained
therein were razed by fire. Off-site back up of data base shows the following
information:
Inventory, Jan. 1 20,000
Net purchases 190,000
Net sales from Jan. to Sept. 240,000
Gross profit rate based on cost 25%
Twenty percent of the inventory contained in the warehouse has been salvaged from the
fire, while half is partially damaged and can be sold as scrap at thirty percent of its cost.
How much is the inventory loss due to the fire?
a. 18,000 b. 5,400 c. 9,000 d. 11,700
3. The work in process inventories of ABC Manufacturing, Inc. were completely
destroyed by fire on June 1, 20x1. Amounts for the following accounts have been
established.
January 1, 20x1 June 1, 20x1
Accounts payable 117,000 135,000
Raw materials 15,000 18,000
Work in process 60,000 ?
Finished goods 69,000 87,000
The following additional information was determined:
Payments to suppliers for purchases on account, ₱60,000.
Freight on purchases, ₱3,000.
Purchase returns, ₱7,500.
Direct labor, ₱48,000.
Production overhead, ₱18,000.
Sales from January 1 to May 31, ₱225,000.
Sales returns, ₱45,000.
Sales discounts, ₱15,000.
Gross profit rate based on sales, 25%.
Page |2
How much is the work in process destroyed by fire?
a. 48,000 b. 49,500 c. 58,500 d. 51,000
Use the following information for the next two questions:
Presented below is information pertaining to ABC Co.:
Cost Retail
Inventory, January 1 21,750 35,000
200,75
Purchases 138,250
0
Freight-In 5,000 -
Purchase discounts 1,250 -
Purchase returns 13,000 21,500
Departmental Transfers-In (Debit) 2,500 3,750
Departmental Transfers-Out (Credit) 2,000 3,000
Markups 15,000
Markup cancellations 5,000
Markdowns 30,000
Markdown cancellations 7,500
Abnormal spoilage (theft and casualty
12,500
loss) 17,500
109,50
Sales
0
Sales returns 6,250
Sales discounts 2,500
Employee discounts 1,250
Normal spoilage (shrinkage and breakages) 500
4. How much is the ending inventory under the Average cost method?
a. 60,750 b. 60,000 c. 61,050 d. 62,400
5. How much is the ending inventory using the FIFO cost method?
a. 60,750 b. 60,000 c. 61,050 d. 62,400
“Blessed is the one who perseveres under trial because, having stood the test, that person
will receive the crown of life that the Lord has promised to those who love him.” (James 1:12)
- END -