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1. The following information pertains to Champ's inventory for January 2016: Cost retail Inventory, January 1 355,000 500,000 Purchases 1,124,000 2,012,500 Purchase returns 69,000 112,500 Freight-in 110,000 Net mark-ups 100,000 Net markdowns 125,000 Sales 2,100,000 Sales returns 50,000 Employee discount grant 25,000 Normal breakage 50,000 The estimated cost of inventory on January 31,2016 using average retail is? a. 160,000 b. 176,000 C. 152,500 d. 144,000 2. Jay corporation uses a periodic inventory system and a fiscal year ending September 30. On September 30,2015, Jay company correctly reported inventory on hand costing 900,000. During the fiscal year ending September 30,2016 Jay company recorded purchases of 5,700,000. A physical count on September 30,2016 revealed that goods costing 1,250,000 were on hand. The following material events occurred between September 25 and October 7,2016: An invoice for goods costing 260,000 was received and recorded on September 29. The goods arrived on October 2. The supplier shipped the goods FOB destination on September 27. Invoice for goods costing 180,000 was received and recorded on September 28. The supplier shipped the goods FOB shipping point on September 26. The receiving report indicates that jay company received the goods on October 1. The correct purchases to be reported in Jay company's income statement for the fiscal year ending September 30,206 should be? a. 960,000 b. 5,440,000 C. 5,700,000 d. 5,520,00016. On April 30, 2015, a fire damaged the office of Golden Moth Chemicals. The following balances were gathered from the general ledger on March 31, 2015: Accounts Receivable 920,000 Inventory, January 1 1,880,000 Accounts Payable 950,000 Sales 3,600,000 Purchases 1,680,000 a. An examination of the April bank statement and canceled checks revealed checks written during the period April 1-30 as follows: Accounts Payable, March 31 240,000 April Merchandise Shipments 80,000 Expenses 160,000 Deposits during the same period amounted to P440,000 which consisted of collections from customers with the exception of P20,000 refund from a vendor for merchandise returned in April. b. Customers acknowledged indebtedness of P1,040,000 at April 30. Customers owed another P60,000 that will never be recovered. Of the acknowledged indebtedness, P40,000 may prove uncollectible. c. Correspondence with suppliers revealed unrecorded obligations at April 30, of P340,000 for April merchandise shipment, including P100,000 for shipments in transit on that date. d. The average gross profit rate is 40%. e. Inventory with a cost of P260,000 was salvaged and sold for P140,000. The balance of the inventory was a total loss. What amount is recognized as loss from fire damage on April 30? a. 1,200,000 b. 1,440,000 C. 1,340,000 d. 1,300,000