1. An entity is selling three products - books, pen,

and case. The following information is available for the month of

May:

Beginning inventory, 500 books @ P600.

Purchased from supplier, 300 pen@ P270

Purchased from supplier, 400 case @ P80.

Sold 200 books, 200 pens,

and 100 case during the month.

The selling price of each product is P900 for books, P350 pens, and P120 case.

Compute for the following:

* Cost of goods sold

* Cost of ending inventory

* Gross profit

2. On January 1, 2019, NTO Company borrowedP6,000,000 at an annual interest rate of 10% tofinance specifically the cost of building an electricitygenerating plant. Construction commenced on

January 1, 2019 with a cost of P6,000,000. Interestincome of P80,000 was generated by temporarily

investing some of the borrowed funds prior to use.The project was completed on December 31, 2019.

How much is the capitalized interest cost to be addedto the cost of the asset?

3. Kai Company was constructing an asset thatqualified for interest capitalization. The constructionbegan at the beginning of the current year and wascompleted at the end of the current year. Theconstruction cost totaled P12,000,000 and wasincurred evenly throughout the year, where weightedaverage accumulated expenditures amounted toP6,000,000. The entity had outstanding notespayable during the entire year of constructioncomprising P6,000,000 8% interest and P9,000,0009% interest. None of the borrowings were specifiedfor the construction of the qualified asset. How muchis the capitalizable interest?

4. Wai Ying Company borrowed P4,000,000 on a 10%note payable to finance a new warehouse which theentity is constructing for own use. The only other debtof the entity is a P6,000,000 12% mortgage payableon an office building. At the end of the current year,average accumulated expenditures on the newwarehouse totaled P4,750,000. How much is thecapitalizable interest?

5. Abc Company has acquired the right to use aproperty to explore a natural resource. Theacquisition cost is P5,000,000, the related explorationcosts is P3,000,000 and development costs incurredin drilling the resource deposit is P2,000,000. It isestimated that the resource deposit is approximately1,000,000 units. 350,000 units were extracted in thefirst year of operations. Additional development costsof P4,000,000 are incurred at the beginning of thesecond year and estimated extraction increased to1,250,000. 400,000 units were extracted thereafter.How much depletion should be reported in the firstyear?

how much depletionshould be reported in the second year?

6.At the end of the asset's second year, MemeCompany's machinery has a cost of P6,000,000 andaccumulated depreciation of P2,400,000. Due tophysical damage, the machinery is found to beimpaired. The fair value less cost of disposalamounted to P3,000,000 and the value in use isP2,800,000. Compute for the impairment loss.