The purchases of Chicken Wings Inc. during the year are as follows: 1st quarter- P1,368,000 2nd quarter- P1,320,000 3rd quarter- P2,175,000 4th quarter- P840,000 The entity's physical count revealed the following balances of cost and NRV, respectively: January 1- P20,000; P19,000 June 30- P40,000; P38,500 December 31- P35,000; P34,600 The gross profit ratio for the year is 35%. If the company uses the allowance method, how much is the loss on inventory write-down to be recognized in the 2nd quarter?

2. On June 7, 2021, Chicken Wings Corporation sold a tract of land for P70,000 that resulted in a P30,000 gain on the sale. Chicken Wings agreed to accept one payment of P35,000 on August 15 and the second payment of P35,000 on December 15. Chicken Wings had a calendar year-end. What amount of gain was reported during the second, third, and fourth quarters of the year from this sale?

3. Chicken Wings Company had the following transactions during the six months ended June 2021: Loss from typhoon- P900,000 and payment of fire insurance premium for the calendar year 2021- P100,000. What amount should be included in the income statement for the six months ended June 30, 2021?

Answer rating: 100% (QA)

1 To calculate the loss on inventory writedown in the 2nd quarter we need to compare the cost and ne... View the full answer