Intermediate Accounting Inventories - Show Complete Solution and Explain:

Question 30

The following were Garcia Corp.'s transactions in November:

Date Purchases Date Sales Nov. 1 700 P8.50 Nov. 2 450 P10.00 5 950 P9.00 8 600 P10.00 9 750 P8.75 11 500 P11.00 16 1,000 P9.00 12 250 P12.00 25 300 P8.40 20 800 P12.00 28 200 @ P11.501. Goods out on consignment at another company's store P950,000 2. Goods sold on installment basis 75,000 3. Goods purchased FOB shipping point that are in transit at Dec. 31 150,000 4. Goods purchased FOB destination that are in transit at Dec. 31 180,000 5. Goods sold to another company, for which our company has signed an agreement to repurchase at a set price that covers all costs related to the inventory 480,000 6. Interest cost incurred for inventories that are routinely manufactured 50,000 7. Costs incurred to advertise goods held for resale 50,000 8. Materials on hand not yet placed into production 500,000 Office supplies 250,000 10. Raw materials on which the company has started production, but which are not completely processed 400,000 11. Factory supplies 40,000 12. Goods held on consignment from another company 500,000 13. Costs identified with units completed but not yet sold 270,000 14. Goods sold FOB destination that are in transit at Dec. 31 30,000 15. Temporary investment in stocks and bonds that will be resold in the near future 400,000 16. Goods sold where large returns are predictable 300,000 17. Goods sold FOB shipping point that are in transit on Dec. 31 150,000 18. Freight charges on goods purchased 100,000 19. Factory labor costs incurred on goods still unsold 80,000Inventory, 12.31.20 P11,278,010 Purchases during 2021 24,786,501 Cash sales during 2021 13,500,000 Shipment received on 12.26.21, included in physical inventory, 180,000 but not recorded as purchases Deposits made with suppliers, entered as purchases. 250,000 Goods were not received in 2021 Collections on accounts receivable, 2021 4,050,382 Accounts receivable, 1.1.21 5,795,875 Accounts receivable 12.31.21 2,745,493 Gross profit percentage on sales 40%\fDirect materials P85,000 Direct materials purchases in transit, FOB destination 15,000 Direct materials purchases in transit, FOB shipping point 25,000 Prepaid insurance on inventory 3,000 Work-in-process 42,000 Finished goods 50,000 Goods shipped on consignment, at selling price with 20% profit on sales 25,000