A.

Amiable company provided the following data:

Items counted in the bodega 4,000,000

Items included in the count specifically segregated per sale contract 100,000
Items in receiving department, returned by customer, In good condition 50,000
Items ordered and in the receiving department 400,000
Items ordered, invoice received but goods not received. Freight is on account of seller 300,000
Items shipped today, invoice mailed, FOB shipping point 250,000
Items shipped today, invoice mailed, FOB destination 150,000
Items currently being used for window display 200,000
Items on counter sale 800,000
Items in receiving department, refused because of damage 180,000
Items included in count, damaged and unsalable 50,000
Items in the shipping department 250,000

What should be reported as inventory?

B. Clem Company provided the following for the current year:

Central Warehouse Held by Consignees
Beginning inventory 1,100,000 120,000
Purchases 4,800,000 600,000
Freight in 100,000
Transportation to consignees 50,000
Freight out 300,000 80,000
Ending inventory 1,450,000 200,000

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

C. On July 1, 2023. Star Company recorded purchases of inventory of P4,000,000 and 5,000,000 under credit items of 2/15, net 30. The payment
due on the P4,000,000 purchase was remitted on July 16, 2023. The payment due on the P5,000,000 purchase was remitted on July 31,
2023.

Under the net method and the gross method, these purchases should be included at what respective amounts in the determination of cost of goods
available for sale?

D. Empire Company revealed inventory on December 31, 2023 at P3,250,000 based on a physical count priced at cost and before any necessary
adjustment for the following:

● Merchandise costing P300,000 shipped FOB shipping point from a vendor on December 31, 2023 was received on January 5, 2024.
● Merchandise costing P380,000 shipped to a customer FOB destination on December 28, 2023 arrived at the customer location on January 6,
2024
● Merchandise costing P120,000 was being held on consignment by a consignee of Empire Company.

What should be reported as inventory on December 31, 2023?

E. Hilltop Company sells a new product. During a move to a new location, the inventory records for the product were misplaced. The entity has
been able to gather some information from the purchases and sales records. The July purchases are as follows:

Quantity Unit cost Total cost

July 5 10,000 65 650,000

10 12,000 70 840,000
15 15,000 60 900,000
25 14,000 55 770,000

On July 31, 17,000 units were on hand.

The sales for July amount to P6,000,000, or 60,000 units at P100 per unit. Gross profit on sales for July was P2,400,000. The entity has always used a
periodic FIFO inventory costing system.

What amount should be reported as cost of the inventory on July 31?

What amount was reported as cost of inventory on July 1
WHat is the number of units available for sale on July 1?
 F. Lane company provided the following inventory card during February:

Purchase Units Balance

Price Units Used Units

Jan. 10 100 20,000

31 10,000 10,000

Feb. 8 110 30,000 40,000

9 Returns from factory (Jan 10 lot) (1,000) 41,000

28 11,000 30,000

Using the weighted average method, what amount should be reported as the cost of inventory?

G. Casa Company purchased a tract of land for P12,000,000. The entity incurred additional cost of P3,000,000 during the remainder of the year
in preparing the land for sale. The tract of land was subdivided into residential lots.

Lot Class Number of Lots Sale 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 A lots?

H. Solid Company purchased a plot of ground for P18,000,000. The entity also paid an independent appraiser for the land the amount of
P500,000.

The land was developed as residential lots at a total cost of P41,500,000.

Number of lots Sales price per lot

Highland 20 1,000,000
Midland 40 750,000
Lowland 100 500,000

What total cost should be allocated to Highland lots?

I. Winter company provided the following inventory data at year-end:

Cost NRV
Skis 2,200,000 2,500,000
Boots 1,700,000 1,500,000
Ski equipment 700,000 800,000
Ski apparel 400,000 500,000

What amount should be reported as inventory at year-end?

J. Chicago Company has two products in the inventory.

Product X Product Y
Selling price 2,000,000 3,000,000
Materials and conversion costs 1,500,000 1,800,000
General administration costs 300,000 800,000
Estimated selling cost 600,000 700,000

What amount should be reported as inventory using the LCNRV individual approach?
What amount should be reported as inventory using the LCNRV total approach?
 K. Ate year-end, Pamela Company reported that a flood caused severe damage to the entire inventory. Based on recent history, the entity had a
gross profit of 25% of sales.

The entity provided the following information for the current year:

Inventory, January 1 500,000

Purchases 4,000,000
Purchase returns 200,000
Sales 5,600,000
Sales returns 400,000
Sales allowances 100,000

What amount should be reported as the cost of goods sold for the year?
What amount should be reported as the cost of ending inventory damaged by flood?

L. On September 30, 2023, Brock Company reported that a fire caused severe damage to entire inventory. The entity had a gross profit of 30%
on cost. The entity provided the following data for nine months ended September 30, 2023:

Inventory at January 1 1,100,000

Net purchase 6,000,000
Net Sales 7,280,000

A Physical inventory disclosed usable damaged goods which can sold for P100,000.
What amount should be reported as estimated cost of goods sold for the nine months ended September 30, 2023?
What amount should be reported as estimated amount of fire loss?

M. Empress Company used the retail inventory method to approximate the ending inventory.

Cost Retail
Beginning inventory 650,000 1,200,000
Purchases 9,000,000 14,700,000
Freight in 200,000
Purchase returns 300,000 500,000
Purchase allowances 150,000
Departmental transfer in 200,000 300,000
Markup 400,000
Markup cancellation 100,000
Markdown 1,200,00
Markdown cancellation 200,000
Sales 9,500,000
Sales discounts 100,000
Employee discounts 500,000
Estimated normal shoplifting loss 600,000
Estimated normal shrinkage 400,000

What amount should be reported as estimated cost of ending inventory using the conservative approach?
What amount should be reported as estimated cost of ending inventory using the average cost approach?

N. Dean Company used the retail inventory method to estimate inventory at year-end:

Cost Retail
Beginning inventory 700,000 1,000,000
Purchases 4,100,000 6,300,000
Net Markups 700,000
Net markdowns 500,000
Sales 6,800,000
Estimated normal shoplifting losses 100,000

Under the average cost retail method. What amount should be reported as estimated cost of ending inventory?
 O. Union Company used the FIFO retail method of inventory valuation. The entity provided the following information for the current year:

Cost Retail
Beginning inventory 600,000 1,500,000
Purchases 3,000,000 5,500,000
Net markups 500,000
Net markdowns 1,000,000
Sales revenue 4,500,000

What amount should be recognized as estimated cost of ending inventory?