Test I. Answer each of the following cases below: 1. On May 1, the inventory account had a balance of P60,000. During the first few days of May, the following transactions occurred. May 2- Purchased merchandise on credit from Gay Company, P80,000. 31- Sold merchandise on account, P150,000. The cost of the merchandise was P105,000. Required: a. Prepare entries in general journal form to record the above transactions under both systems of accounting for inventories. b. Compute the cost of ending inventory as of May II. On May 1, ABC Company purchased inventory with a list price of P120,000 from MNO company. Terms of the purchase: trade discounts of 10 and 5, 2/10, n/30. Payment was sent to MNO Company on May 11. Prepare the journal entries to record the purchase and subsequent payment assuming both methods. II1. Barlow Company's Accounts Payable balance at December 31, 2006, was P1,800,000 before considering the following transactions: Goods were in transit from a vendor to Barlow on December 31, 2006. The invoice price was P100,000, and the goods were shipped FOB shipping point on December 29, 2006. The goods were received on January 4, 2007. Goods shipped to Barlow FOB shipping point on December 20, 2006, from a vendor were lost in transit. The invoice price was P50,000. On January 5, 2007, Barlow filed a P50,000 claim against the common carrier. In its December 31, 2006, balance sheet, how much should Barlow report as Accounts Payable? IV. You were furnished the following data relative to Product X of Diana Sales Center: Balance: March 1 400 units @ P2 10 12 28 a b. Weighted Average 300 units @ P4 350 units @ P6 50 units @ P8 Units on hand 500 units Required: Compute the cost of ending inventory using the following methods; FIFO