Question
1) Broder Company purchased merchandise with a list price of P 250,000, term 20: 2/15. n/30. Additional cost incurred in the acquisition of the merchandise
1) Broder Company purchased merchandise with a list price of P 250,000, term 20: 2/15. n/30. Additional cost incurred in the acquisition of the merchandise are as follows: Transportation cost. P 5,000 Handling cost, P 3,000 Insurance cost. P 2.000 Using the gross method of recording inventory, the entry to record the purchase merchandise inventory using the perpetual inventory system would be:
Debit - Merchandise Inventory. P 210000: Credit - Accounts Payable, P 210.000
Debit - Purchases, P 205,000; Debit - Freight-in, P. 5,000; Credit - Accounts Payable. P 210.000
O Debit - Purchases, P 260.000; Credit - Accounts Payable. P 260,000
O Debit - Merchandise Inventory, P 260,000; Credit - Accounts Payable, P 260,000
2) Burton Company's beginning inventory on January 1, 2021 was understated by P 26,000 and its ending inventory was overstated by P 52,000. QUESTION: As a result, Burton's cost of sales for 2021 was O P26,000 understated O P 26.000 overstated O P 78.000 understated O P 78.000 overstated
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