STEPHANIE DEANNE E.

LUMAKANG MODULE 2 INVENTORIES

INTERMEDIATE ACCOUNTING 1

Problem 10-3, page 290

Given:
Finished goods in store room, at cost including P 2,000,000
overhead of P 400,00
Finished goods in transit, including freight charge of 250,000
P20,000, FOB shipping point
Finished goods held by salesmen, at selling price, cost, 140,000
P 100,000
Goods in process, at cost of materials and direct labor 720,000
Materials 1,000,000
Materials in transit, FOB destination 50,000
Defective materials returned to suppliers for a 100,00
replacement
Shipping supplies 20,000
Gasoline and oil for testing finished goods 110,000
Machine Lubricants 60, 000
Solution:
Finished goods in store room, at cost including P 2,000,000
overhead of P 400,00
Finished goods held by salesmen, at selling price, cost, 100,000
P 100,000
Goods in process, at cost of materials and direct labor 720,000
Materials 1,000,000
Defective materials returned to suppliers for a (100,000)
replacement
Gasoline and oil for testing finished goods 110,000
Machine Lubricants 60,000
Ending Inventory-current year P 3,890,000

Answer: Cost of Ending Inventory P 3,890,000

Problem 10-4, page 291

STEPHANIE DEANNE E. LUMAKANG MODULE 2 INVENTORIES
INTERMEDIATE ACCOUNTING 1

Merchandise Inventory, beginning P 90,000

Periodic Perpetual
Particulars Debit Credit Particulars Debit Credit
1 Purchases P 800,000 Merchandise P 800,000
Inventory
Accounts Payable 800,000 Accounts Payable 800,000

2 Accounts payable 50,000 Accounts Payable 50,000

Purchase Return 50,000 Merchandise 50,000
biiand Allowances iiiiiInventory

3 Accounts Payable 600,000 Accounts payable 600,000

Cash 600,000 Cash 600,000

4 Accounts 1,580,000 Accounts 1,580,000

Receivable Receivable
Sales revenue 1,580,000 Sales revenue 1,580,000

Cost of Goods Sold 790,000

Merchandise 790,000
iiiiiInventory

5 Sales Return and 40,000 Sales Return and 40,000

Allowances Allowances
Accounts 40,000 Accounts 40,000
iiiiReceivable iiiiiReceivable

Merchandise 20,000
Inventory
Cost of Goods 20,000
STEPHANIE DEANNE E. LUMAKANG MODULE 2 INVENTORIES
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iiiiiSold

6 Cash 1,360,000 Cash 1,360,000

Accounts 1,360,000 Accounts 1,360,000
iiiiReceivable iiiiReceivable

7 Merchandise 60,000 Inventory Shortage 10,000

Inventory, end
Income Summary 60,000 Merchandise 10,000
iiiiiInventory

Cost of Goods Sold 10,000

Inventory 10,000
iiiiiShortage
Solution:
Periodic Perpetual
Merchandise Inventory, beg P 90,000 Cost of Goods Sold
Add: Net Purchases 790,000 20,000
Purchases 800,000 10,000
Less: P 780,000
Purchase Return and 50,000 750,000
iiiiiiiiiiAllowances
Cost of goods Available for sale 840,000
Less:
Merchandise Inventory, end 60,000
Cost of Goods Sold P 780,00
Problem 10-17, page 299
Given:
Ending Inventory, December 31, 2020 P 2,000,000
Goods located in the entity’s warehouse are on 150,000
STEPHANIE DEANNE E. LUMAKANG MODULE 2 INVENTORIES
INTERMEDIATE ACCOUNTING 1

consignment from another entity

Goods sold by the entity and shipped FOB destination 200,000
were in transit on December 31, 2020 and received by
the customer on January 02, 2021
Goods purchased by the entity and shipped FOB 300,000
shipping point were in transit on December 31, 2020
and received by the entity on January 02, 2021
Goods sold by the entity and shipped FOB shipping 400,000
point were in transit on December 31, 2020 and
received by the customer on January 02, 2021

Solution:
Inventory P 2,000,000
Add:
Goods sold, FOB destination 200,000
Goods purchased, FOB Shipping Point 300,000
Total Inventories P 2,500,000

Answer: A. 2,500,000

Problem 11-4, page 323

Given:

Units Unit cost

March 1 Beginning 1,000 270
6 Purchases 3,000 250
14 Purchases 6,000 280
25 Purchases 4,000 210

March 9 Sale 2,000

31 Sale 8,000
STEPHANIE DEANNE E. LUMAKANG MODULE 2 INVENTORIES
INTERMEDIATE ACCOUNTING 1

Solution:
1. FIFO Method, Perpetual System
Purchases Sales Balance
Date Units Units Cost Total Cost Units Unit Cost Total Cost Units Unit Cost Total Cost
1 1,000 270 270,000 1,000 270 270,000
6 3,000 250 750,000 3,000 250 750,000
9 2000 260 520,000 2,000 250 500,000
14 6,000 280 1,680,000 6,000 280 1,680,000
25 4,000 210 840,000 4,000 210 840,000
31 8,000 272.5 2,180,000 4,000 210 P 840,000
COGS P 2,700,000
Answer:
1. Cost of Goods Sold
2. Ending Inventory
March 9 Sale P 520,000
31 Sale 2,180,000 P 840,000
Cost of Goods Sold P 2,700,000
2. Moving Average, Perpetual System
Date Particulars Units Units Cost Total Cost
March 1 Beginning Balance 1,000 270 P 270,000
6 Purchases 3,000 250 750,000
Total 4,000 255 1,020,000
9 Sale (2,000) 255 510,000
Balance 2,000 255 510,000
1 Purchases 6,000 280 1,680,000
STEPHANIE DEANNE E. LUMAKANG MODULE 2 INVENTORIES
INTERMEDIATE ACCOUNTING 1

4
Total 8,000 273.75 2,190,000
2 Purchases 4000 210 840,000
5
Total 12,000 252.5 3,030,000
3 Sale 2,020,000
(8,000) 252.5
1
Balance 4,000 252.5 P 1,010,000
Answer:
1. Cost of Goods Sold
2. Ending Inventory
March 9 Sale 255 P 510,000
31 Sale 252.5 2,020,000 P 1,010,000
Cost of Goods Sold P 2,530,000

Problem 11-8, page 325

Given:

Quantity Unit Cost Total Cost

July 5 10,000 65 650,000
9 12,000 63 756,000
12 15,000 60 900,000
 15,000 were on hand on July 31
Gross Profit on sales for July, P 2,400,000
STEPHANIE DEANNE E. LUMAKANG MODULE 2 INVENTORIES
INTERMEDIATE ACCOUNTING 1 Units Unit Cost Total Cost
Sales 60,000 100 P 6,000,000
25 14,000 62 868,000
51,000 P 3,174,000
Solution:
Sales P 6,000,000
Less: Gross Profit 2,400,000
Cost of Goods Sold P 3,600,000
Checking:
Units Unit Cost Total unit cost
Units Unit Cost
Cost of Goods Sold 60,000 P 3,600,000 Beginning Balance 24,000 56.42 1,354,000
Less: Jul 5 10,000 65 650,000
Total Units 9 12,000 63 756,000
51,000 3,174,000
iiiiiiiiiiPurchased 12 14,000 60 840,000
Merchandise Cost of Goods Sold P 3,600,000
14,000 62 868,000
iiiiiiiiiiInventory end
1,000 60 60,000 2,246,000
Merchandise Inventory,
24,000 56.42 P 1,354,000
beg

Answer: Merchandise Inventory, July 01 = P 1,354,000 (24 units)

Problem 11-15, page 329

Given:
Number of Lots Sales Price per lot
Purchased lot P 18,000,000 Highland 20 P 1,000,000
Independent 500,000 Mainland 40 750,000
Appraiser
Development Cost 41,500,000 Lowland 100 500,000

Solution:
STEPHANIE DEANNE E. LUMAKANG MODULE 2 INVENTORIES
INTERMEDIATE ACCOUNTING 1

Purchased lot P 18,000,000

Independent 500,000
Appraiser
Development Cost 41,500,000
Total Cost P 60,000,000

Number of Lots Sales Price per lot Total Cost Cost of each land classification
Highland 20 1,000,000 20,000,000 0.2 P 12,000,000
Mainland 40 750,000 30,000,000 0.3 18,000,000
Lowland 100 500,000 50,000,000 0.5 30,000,000
Total 100000000 P 60,000,000

Answer: Highland P 12,000,000; Mainland P 18,000,000; Lowland P 30,000,000

Problem 13-9, page 372

Given:
2019 2020
Sales P 7,500,000 P 4,500,000
Beginning Inventory 1,260,000 ?
Purchases 6,450,000 3,180,000
Freight in 350,000 220,000
Purchase discounts 90,000 45,000
Purchase returns 120,000 40,000
Purchase Allowances 20,000 15,000
Ending inventory 2,355,000 ?
 STEPHANIE DEANNE E. LUMAKANG MODULE 2 INVENTORIES
INTERMEDIATE ACCOUNTING 1

Solution:
For GPR
Beginning Inventory P 1,260,000
Purchases 6,450,000 Net sales P 7,500,000
Add: Less: COGS 5,475,000
Freight In 350,000 Gross Profit P 2,025,000
Total 6,800,000
Less:
Purchase Discount 90,000 GPR on sales 0.27
Purchase Returns 120,000 (2,025,000/7,500,000)
Purchase Allowances 20,000 230,000 6,570,000
Goods Available for Sale P 7,830,000 GPR on Cost 0.37 (0.369863)
Less: Cost of goods Sold 5,475,000
Ending Inventory P 2,355,000

For Ending Inventory

Beginning Inventory P2,355,000
Purchases 3,180,000 Net sales 4,500,000 100%
Add:
Freight In 220,000 Less: COGS 3,285,000 73%
Total 3,400,000 Gross Profit 1,215,000 27%
Less:
Purchase Discount 40,000
Purchase Returns 15,000
Answer: A. P 2,370,000
Purchase Allowances 45,000 100,000 3,300,000
Goods Available for Sale P 5,655,000
Less: Cost of goods Sold 3,285,000
Ending Inventory P2,370,000
STEPHANIE DEANNE E. LUMAKANG MODULE 2 INVENTORIES
INTERMEDIATE ACCOUNTING 1

Problem 14-12, page 399

Given:
Cost Retail
2020
Beginning Inventory P 556,800 P 928,000
Purchases 4,576,000 7,028,000
Net Markup 42,000
Net markdown 30,000
Sales 6,840,000
2021
Purchases 4,760,00 6,812,000
Net markup 56,000
Nat markdown 68,000
Sales 6,928,000
2020
Cost Retail
Beginning Inventory 556,800 928,000
Purchases 4,576,000 7,028,000
Net Markup 42,000
Net Markdown (30,000)
Net Purchases 4,576,000 7,040,000
Current year cost ratio
(4,576,000/7,040,000) 65%
Goods available for sale 5,132,800 7,968,000
Less: Net sales (6,840,000)
Ending Inventory at retail P 1,128,000
FIFO Cost ending (1,128,000x65%) P 733,200
2021
Cost Retail
Beginning Inventory 733,200 1,128,000
STEPHANIE DEANNE E. LUMAKANG MODULE 2 INVENTORIES
INTERMEDIATE ACCOUNTING 1

Purchases 4,760,000 6,812,000

Net Markup 56,000
Net Markdown (68,000)
Net Purchases 4,760,000 6,800,000
Current year cost ratio
(4,760,000/6,800,000) 70%
Goods available for sale 5,493,200 7,928,000
Less: Net sales (6,928,000)
Ending Inventory at retail P 1,000,000
FIFO Cost ending (1,128,000x65%) P 700,000

Answer: Cost of inventory ending 2020: P 733,200 and 2021: P 700,000