Question
Problem 1: MonamiCompany uses the weighted average method to determine the cost of its inventory.Monamirecorded the following information pertaining to its inventory: Units Units cost
Problem 1:
MonamiCompany uses the weighted average method to determine the cost of its inventory.Monamirecorded the following information pertaining to its inventory:
Units
Units cost
Total cost
Balance 1/1
160,000
60
P9,600,000
Sold on 1/15
140,000
Purchased on 1/31
80,000
90
7,200,000
- What amount of inventory shouldMonamireport in its January 31, 2021statement of financial positionusing the perpetual inventory system?
Perpetual
A.
P 8,400,000
B.
P 7,000,000
C.
P 8,400,000
D.
P 7,000,000
- What amount of inventory shouldMonamireport in its January 31, 2021 statement of financial position using the periodic inventory system?
Periodic
A.
P 7,000,000
B.
P 8,400,000
C.
P 7,500,000
D.
P 7,500,000
Problem2:
Riptide Company included the following items in its inventory on December 31, 2020:
Merchandise out on consignment, at sales price,including 25% markup on cost
P4,000,000
Goods purchased in transit, FOB destination
2,000,000
Goods held on consignment by Riptide Company
1,000,000
- By what amount should the inventory at December 31, 2020be reduced?
- P3,800,000
- P2,000,000
- P1,800,000
- P1,000,000
Problem 3
GumamelaCompany installs replacement siding, windows, and louvered glass doors for family homes.At December 31, 2020, the balance of inventory account was P502,000, and the allowance for inventory write down was P33,000.The inventory cost and market data at December 31, 2020, are as follows:
Cost
Replacement Cost
Sales Price
NRV
Normal Profit
Aluminum siding
P89,000
P86,000
P91,500
P87,000
P5,000
Mahogany siding
94,000
92,000
93,000
85,000
7,000
Louvered glass door
125,000
135,000
129,000
111,000
10,000
Glass windows
194,000
114,000
205,000
197,000
20,000
Total
P502,000
P427,000
P518,500
P480,000
P32,000
- The correct balance of the inventory after any allowance for write down is
- P427,000
- P486,500
- P480,000
- P477,000
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Intermediate Accounting Reporting and Analysis
Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach
3rd edition
9781337909402, 978-1337788281
