Problem #$6$

Initial Cost of Equipment

Allen Marzan Specialists acquired new equipment. Details of the acquisition are as follows:

Invoice cost $$ Terms $2/10,$ n$/30$P $400,000$

Cost of transportation of the equipment$4,000$

Cost of installation$10,000$

Repair cost of new equipment damaged in the process of installation$2,000$

Salary of engineer for the duration of the trial run$20,000$

Cash allowance granted because equipment proved to be of inferior quality$40,000$

Cost of removing old equipment$6,000$

Loss on premature retirement $$ old equipment$10,000$

Gratuity paid to operator of old equipment who was laid off$10,000$

Required:

Determine the initial cost of the equipment.

Problem #$3$

Estimating Inventory Cost $$ Gross Profit Method

Juday Ann Caguioa, a vehicle parts supplier in Dagupan City, was robbed of a portion of its inventory on the night of Aug. $16,2018.$ The company does not keep perpetual records and must, therefore, estimate the loss. To aid in the determination of loss, the accounting staff compiled the following information:

Inventory, Aug. $1,2019$P $800,000$

Inventory, Aug. $17,2019($Based on physical count$)400,000$

Purchases, Aug. $1-16,2019200,000$

Purchases Returns, Aug. $1-16,20195,000$

Sales, Aug. $1-16,2019800,000$

Average gross profit margin$40\%$

Required:

Estimate the amount of the inventory loss using the gross profit method.

Problem # $1$

Ending Inventory

The Dec. $31,2018$ inventory of Jumari Office Systems was P$1,500,000.$ In arriving at this amount, the following items were considered:

$1.$Included in the inventory count were goods on hand costing P$50,000$ owned by Patrick Clarion Furniture but on consignment to Jumari Office Systems.

$2.$Included in the inventory count were goods in transit at Dec. $31$ to Jumari Office Systems from Ordonez Modules. These goods, costing P$150,000$ were shipped FOB destination and arrived on January $3,2019.$

$3.$Excluded from the inventory count goods sitting on Jumari Office Systems$$ shipping dock on Dec. $31.$ These goods, costing $100,000$ were sold FOB Shipping Point to Joy Professional Staffers on Dec. $31$ and were picked up by a Marben truck on Jan. $2,2019.$

$4.$Included in the inventory count were goods in transit at Dec. $31$ to Jumari Office Systems from Merlenda Interiors. The goods, costing P$100,000$ were shipped FOB shipping point and arrived on Jan. $2,2019.$

$5.$Excluded from the inventory count were goods sold

$6.$Excluded from the inventory count were goods out on consignment to a dealer in Ilocos, P$100,000.$

Required:

Determine the correct ending inventory for Sunglao Office Systems.