The Pub Company purchased a tract of land for P12,000,000 and incurred an additional cost of P3,000,000 during the remainder of the year in preparing the land for sale. The tract was subdivided into residential lots as follows:

Lot class                Number of lots                Sales price per lot

A                                  100                                       240,000

B                                  100                                       160,000 

C                                 200                                        100,000

Using the relative sales value method, what amount of cost should be allocated to Class C lots?

 

PROBLEM II

Big Bang is a wholesaler of printing equipment.

The entity used the periodic average cost method to account for inventory. The activity for the inventory of printers during July is

		Unit	Unit Cost
July 1	Inventory	20,000	36.00
July 7	Purchase	30,000	37.00
July 12	Sale	36,000
July 21	Purchase	50,000	37.88
July 22	Sale	38,000
July 29	Purchase	16,000	38.11

What is the unit cost of ending inventory on July 31?

 

PROBLEM 3

Wesley Company reported that a flood recently destroyed many of the financial records. The entity used an average cost inventory valuation system. The entity måde a physical count at the end of each month in order to determine monthly ending inventory value. By examining various documents, the following data are gathered:

 

Ending inventory at July 31                                    60,000 units

Total cost of units available for sale in July          1,452,100

Cost of goods sold during July                              1,164,100

Cost of beginning inventory, July 1                        4.00 per unit

Gross profit on sales for July                                 935,900

	Units	Unit Cost	Total Cost
July 5	55,000	5.10	280,500
July 11	53,000	5.00	265,000
July 5	45,000	5.50	247,500
July 5	47,000	5.30	249,100
Total Purchases	200,000		1,042,100

What is the number of units on July 01?

How many units were sold during the month?

What is the cost of the inventory on July 31?

PROBLEM 4
Mythic Company provided the following data for the current year: 

Inventory - January 1: 

Cost                                            3,000,000 

Net realizable value                   2,800,000 

Net purchases                           8,000,000 

Inventory - December 31: 

Cost                                  4,000,000 

Net realizable value                      3,700,000 

What amount should be reported as the cost of goods sold? 

How much is the balance of Allowance for Inventory write-down as at December 31?

PROBLEM 5

Cardo Company used the lower cost or NRV method to value  the inventory. Data regarding the items in WIP Inventory are presented below.

	T-shirts	Bags	Shoes
Historical Cost	240,000	188,000	300,000
Selling Price	360,000	250,000	360,000
Estimated cost to complete	48,000	50,000	68,000
Replacement Cost	208,000	168,000	318,000
Normal Profit Margin as % of Selling Price	25%	25%	10%

What is the measurement of WIP Inventory?