Intermediate Accounting I

Inventories

1. Bell Inc. took a physical inventory at the end of the year and determined that P780,000 of goods were on hand. In
addition, Bell, Inc. determined that P60,000 of goods that were in transit that were shipped f.o.b. shipping point
were actually received two days after the inventory count and that the company had P90,000 of goods out on
consignment. What amount should Bell report as inventory at the end of the year?
a. P780,000.
b. P840,000.
c. P870,000.
d. P930,000.

2. Gold Inc. took a physical inventory at the end of the year and determined that P760,000 of goods were on hand.
In addition, the following items were not included in the physical count. Gold, Inc. determined that P96,000 of
goods were in transit that were shipped f.o.b. destination (goods were actually received by the company three
days after the inventory count).The company sold P40,000 worth of inventory f.o.b. destination. What amount
should Gold report as inventory at the end of the year?
a. P760,000.
b. P856,000.
c. P800,000.
d. P896,000.

3. The following information is available for Gloxinia Company for 2012:

Freight-in P 30,000
Purchase returns 75,000
Selling expenses 200,000
Ending inventory 260,000
The cost of goods sold is equal to 400% of selling expenses. What is the cost of goods available for sale?
a. P800,000.
b. P1,090,000.
c. P1,015,000.
d. P1,060,000.

Use the following information for questions 98 and 99.

The following information was available from the inventory records of Rich Company for January:
Units Unit Cost Total Cost
Balance at January 1 3,000 P9.77 P29,310
Purchases:
January 6 2,000 10.30 20,600
January 26 2,700 10.71 28,917

Sales:
January 7 (2,500)
January 31 (4,300)
Balance at January 31 900

4. Assuming that Rich does not maintain perpetual inventory records, what should be the inventory at January 31,
using the weighted-average inventory method, rounded to the nearest dollar?
a. P9,454.
b. P9,213.
c. P9,234.
d. P9,324.

5. Assuming that Rich maintains perpetual inventory records, what should be the inventory at January 31, using the
moving-average inventory method, rounded to the nearest dollar?
a. P9,454.
b. P9,213.
c. P9,234.
d. P9,324

Niles Co. has the following data related to an item of inventory:

 Inventory, March 1 100 units @ P2.10
Purchase, March 7 350 units @ P2.20
Purchase, March 16 70 units @ P2.25
Inventory, March 31 130 units

6. The value assigned to cost of goods sold if Niles uses FIFO is

a. P290.
b. P276.
c. P862.
d. P848.

7. Chess Top uses the periodic inventory system. For the current month, the beginning inventory consisted of 300
units that cost P65 each. During the month, the company made two purchases: 450 units at P68 each and 225
units at P70 each. Chess Top also sold 750 units during the month. Using the average cost method, what is the
amount of ending inventory?
a. P15,750.
b. P50,655.
c. P50,100.
d. P15,197.

8. Checkers uses the periodic inventory system. For the current month, the beginning inventory consisted of 2,400
units that cost P12 each. During the month, the company made two purchases: 1,000 units at P13 each and
4,000 units at P13.50 each. Checkers also sold 4,300 units during the month. Using the FIFO method, what is the
ending inventory?
a. P40,146.
b. P37,200.
c. P41,850.
d. P37,900.

9. The following information applied to Howe, Inc. for 2012:

Merchandise purchased for resale P350,000
Freight-in 8,000
Freight-out 5,000
Purchase returns 2,000
Howe's 2012 inventoriable cost was
a. P350,000.
b. P353,000.
c. P356,000.
d. P361,000.

10. The following information was derived from the 2012 accounting records of Perez Co.:
Perez 's Goods
Perez 's Central Warehouse Held by Consignees
Beginning inventory P130,000 P 14,000
Purchases 475,000 70,000
Freight-in 10,000
Transportation to consignees 5,000
Freight-out 30,000 8,000
Ending inventory 145,000 20,000
Perez's 2012 cost of sales was
a. P470,000.
b. P500,000.
c. P534,000.
d. P539,000.

11. Walsh Retailers purchased merchandise with a list price of P75,000, subject to trade discounts of 20% and 10%,
with no cash discounts allowable. Walsh should record the cost of this merchandise as
a. P52,500.
b. P54,000.
c. P58,500.
d. P75,000.