Problem 1

Hardy Company is a wholesale electronics distributor. On December 31, 2020, it prepared the following partial income statement:

Gross sales P600,400

Sales returns 400

Net sales P600,000

Cost of goods sold:

Beginning inventory P200,000

Net purchases 300,000

Hardy Company's gross margin is 30 percent on net sales.

Required: Compute for the correct ending inventory balance. (3 points)

Problem 2

Following are the account balances form Fulton COmpany's income statement:

Inventory, January 1, 2020 P30,000

Purchases 40,000

Purchase returns and allowances 5,000

Purchase discounts 4,000

Freight-in 5,000

Freight-out 6,000

Inventory, December 31, 2020 15,000

Required: Compute the cost of goods sold during 2020. (3 points)

Problem 3

Campbell's Clothing Store sells jeans. During January 2020, its inventory records for one brand of designer jeans were as follows:

Beginning Inventory 10 pairs @ P20 = P200

January 6 Purchase 4 pairs @ 25 = 100

January 10 Sale 5 pairs

January 15 Purchase 7 pairs @ 30 = 210

January 20 Sale 10 pairs

January 25 Purchase 4 pairs @ 30 = 120

Required: Compute the Cost of Goods Sold and ending inventory for each cost formula: FIFO, weighted average and moving average. (3 points each)

Problem 4

The following purchase transactions occurred during the last few days of Whilczel Company's business year, which ends October 31, or in the first few days after that date. A periodic inventory system is used.

An invoice for P6,000, terms FOB shipping point, was received and entered November 1. The invoice shows that the material was shipped October 29, but the receiving report indicates receipt of goods on November 3.

An invoice for P2,700, terms FOB destination, was received and entered November 2. The receiving report indicates that the goods were received October 29.

An invoice for P3,150, terms, FOB shipping point, was received October 15, but never entered. Attached to it is a receiving report indicating that the goods were received October 18. Across the face of the receiving report is the following notation: "Merchandise not of the same quality as ordered - returned for credit October 19".

An invoice for P3,600 terms FOB shipping point, was received and entered October 27. The receiving report attached to the invoice indicates that the shipment was received October 27 in satisfactory condition.

An invoice for P4,800, terms FOB destination, was received and entered October 28. The receiving report indicates that the merchandise was received November 2.

Inventory was determined by physical count on October 31 as P77,500.

Required: Compute the correct amount of Inventory on October 31. (3 points)

Problem 5

The following data is available for Corona Trading:

Cost Retail

Inventory, Jan. 1, 2014 P 47,075 P 70,025

Purchases (net) 213,327 306,375

Freight In 3,400

Sales 320,500

Additional markups 18,900

Cancellation of additional markups 7,800

Markdowns 10,640

Physical inventory, Dec. 31, 2014,

at retail 39,390

Corona uses the average retail method.

Required: Compute for the estimated loss of inventory shortage. (3 points)

Problem 6

Blazing Red Company began operating in 2011. On August 31, 2014, a fire broke out in the company's warehouse destroying all inventory and most of the accounting records. The following information was assembled from the microfilmed records. All sales and purchases are on account.

January 1, 2020 August 31, 2020

Inventory P575,400

Accounts Receivable 522,360 P 515,560

Accounts Payable 352,560 491,400

Collections from customers

Jan. 1 to Aug. 31, 2020 3,015,200

Payments to suppliers

Jan. 1 to Aug. 31, 2020 1,950,000

Goods out on consignment on

Aug. 31, 2020, at cost 195,000

Goods in transit, FOB shipping

point on August 31, 2020 69,500

The company's average gross profit percentage for the past three years is 30%.

Required: Compute for the following: Sales, Purchases and Inventory Fire Loss for the current year. (3 points each)