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For the next two Items use the following data:
The are the accounts balance of Pasar Ko Co. for the month ended Dec. 31, 2020:
Net sales 1,687,500
Net purchases 1,078,126
Merchandise inventory, 12/31 534,574
Gross profit 787,500
1. How much is the cost of goods available for sale of Pasar Ko Co.?
a. 1,434,574 b. 986,840 c. 1,321,876 d. 1,134,370
SOLUTION:
Net Sales P1,687,500
Less: Gross Profit (787,500)
Cost of Sales/COGS P 900,000
Add: Mer. Inventory, end 534,574
Cost Of Goods Available For Sale P1,434,574
2. How much is the merchandise inventory beginning on Dec. 1, 2020?

a. 356,248 b. 356,448 c. 525,000 d. 253,126
SOLUTION:
Cost Of Goods Available For Sale P1,434,574
Less: Net Purchases (1,078,126)
Merchandise Inventory, Beginning P 356,448
For the next four Items use the following data:

Information of Mega Mart Enterprises for the year ended Dec. 31, 2020.
Purchases
200,000
Merchandise Inventory, Beginning
50,000
Purchase Returns and Allowances
3,500
Purchase Discounts
4,750
Freight In
2,000
Sales
367,500
Operating Expenses
65,250
Merchandise Inventory, Ending
77,000
Freight Out 6,000
3. How much is the amount of Net Cost of Purchases?

a. 252,000 b. 202,000 c. 198,500 d. 193,750
4. How much is the amount of Cost of Goods Sold or Cost of Sale?
a. 243,750 b. 193,750 c. 166,750 d.
101,500
5. How much is the amount of Gross Profit?
a. 118,700 b. 123,750 c. 166,750 d.
200,750
6. How much is the amount of Net Profit?
a. 58,500 b. 118,700 c. 129,500 d. 135,500
SOLUTION:
Sales P367,500
Merchandise Inventory, Beg. P50,000
Purchases P200,000
Less: Purchase Returns & All. (3,500)
Purchase Discount (4,750)
Net purchases P191,750
Add: Freight-in 2,000
Net Cost of Purchases 193,750
Goods Available for Sale P243,750
Less: Merchandise Inventory, End (77,000)
Cost of Goods Sold (166,750)
Gross Profit P200,750
Less: Operating Expenses (65,250)
Freight – out (6,000)
Net Profit P129,500
NS = Sales – SRA - SD
NP = P – PRA – PD
NCOP = NP + FI
GAFS = MIB + NCOP
COGS = GAFS – MIE
GP = NS – COGS
NP = GP – OE
7. Lee purchased merchandise for P5,000 and paid P200 for freight, FOB destination collect.
The merchandise was sold at 120% of cost. The gross profit
a. P1,000 b. P1,040 c. P6,000 d. P6,240
Sales (P5,000*120%) P6,000

COS (5,000)
Gross Profit P1,000
8. The total purchase is P1,176, net of 2% cash discount. Unsold portion of purchase is P176.
The sale is at mark-up of 10%. The gross profit
a. 117.60 b. 88.24 c. 115.25 d. 100
Sales (P1,000*110%) P1,100

COS (P1,176-176) (1,000)
Gross Profit P100
9. The Dec. 31, 2020 trial balance of Ren Co. included the following: purchases, P40,000;
purchase return and allowances, P2,000; freight in, P3,000; freight out, P3,000; ending
inventory was P8,000. What was the cost of goods sold for 2020?
a. P39,000 b. P33,000 c. P38,000 d. P30,000
SOLUTION:
Merchandise Inventory, Beg. P0
Purchases P40,000
Less: Purchase Returns & All. (2,000)
Net purchases P 38,000
Add: Freight-in 3,000
Net cost of Purchases 41,000
Cost of Goods Sold P33,000
10. A is using periodic inventory system. For the year, its total purchases amounted to
P250,000. Its unsold merchandise at the end of the year has a cost of P5,000 which is 80%
of its beginning inventory. A’s cost of sale is
a. 250,000 b. 251,250 c. 249,000 d. 248,750
SOLUTION:
Merchandise Inventory, Beg. (P5,000 /80%) P6,250
Purchases 250,000
Cost of Goods Sold P251,250
11. Langoy sold merchandise on account amounting P50,000. 10% trade discount is given to
the buyer. Terms: FOB Shipping Point, Freight Collect; 2/10, n/30. Transportation costs
amounted to P500.
How much should recorded as Sales in relation to this transaction?
Please write your answer in this format: Pxx,xxx
SOLUTION:
Value of the Merchandise P50,000
Less: Trade Discount (P50,000*10%) (5,000)
Invoice Price (SALES) P45,000
Journal Entry:
Accounts Receivable P45,000
Sales P45,000
Sold merchandise
12. Langoy sold merchandise on account amounting P50,000. 10% trade discount is given to the buyer.
Terms: FOB Shipping Point, Freight Collect; 2/10, n/30. Transportation costs amounted to P500.
How much is the total cash discount that can be availed?
SOLUTION:
Sales P45,000
Multiply by: Discount rate 2%
Cash discount P 900
13. Langoy sold merchandise on account amounting P50,000. 10% trade discount is given to the buyer.
Terms: FOB Shipping Point, Freight Collect; 2/10, n/30. Transportation costs amounted to P500.
How much cash shall be received by Langoy upon collection assuming that it was collection within
the discount period?
SOLUTION:
Less: Cash discount (900)
Cash received, net of disc. P44,100
Journal Entry:
Cash P44,100
Sales Discount 900
Collected customer’s account.

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For the next two Items use the following data:

2. How much is the merchandise inventory beginning on Dec. 1, 2020?

For the next four Items use the following data:

3. How much is the amount of Net Cost of Purchases?

Sales (P5,000*120%) P6,000

Sales (P1,000*110%) P1,100

Please write your answer in this format: Pxx,xxx

How much is the total cash discount that can be availed?

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