INVENTORIES (Costing and Valuation)

1. Invoice price of goods acquired FOB Shipping point (in transit) P50,000
- Excludes P5,000 freight paid by the seller
- Buyer also paid P1,000 insurance
P56,000

2. Invoice price of goods sold FOB Destination (in transit) P20,000

- Mark-up on sale is 20%
- Excludes P2,000 freight paid by the seller
P16,000

3. Foreign-currency denominated purchase of Inventories on Dec. 12 $1,000

- US$ to Peso on Dec. 12 52
- US$ to Peso on Dec. 31 51
- Import Duties and nonrefundable purchase taxes P5,000
- Recoverable purchase taxes P7,000
P57,000

4. Goods delivered to consignee at selling price (120% of cost) P60,000

- Freight paid by consignor in delivering goods to consignee 2,000
- Commission of consignee 10%
P52,000

5. The following items were included in Sasuke’s inventory account at December 31, 2016:

Merchandise out on consignment, at sales price, (including 40% mark-up on cost) P280,000
Goods purchased, in transit, shipped FOB Seller (excluding P3,000 freight and P1,000 insurance)
P180,000
Goods held on consignment by Sasuke 135,000
Imported Inventory acquired on Dec. 15 US$2,000
(exchange rates: 12/15:P50 ; 12/31: P28)
Recoverable purchase taxes on imported goods 12,000

At what amount should Sasuke present its inventory at December 31, 2016? P484,000

6. An entity included the following items in inventory at year-end:

Goods out on consignment, at sales price, including 40% m-up on Cost P1,400,000
Goods purchased in transit, shipped FOB Destination 1,200,000
Goods held on Consignment 900,000
At what amount should the inventory at year-end be reduced? P2,500,000
INVENTORY COSTING TECHNIQUES

1.
UNITS UNIT COST TOTAL COST
Beginning balance 10,000 P150 P1,500,000
Purchase 10,000 180 1,800,000
Sale 15,000
Sale Return 1,000
Purchase 4,000 200 800,000
Purchase Return 2,000 200 400,000

Under FIFO, what amount should be reported as cost of goods sold? P2,220,000
Under weighted average, what amount should be reported as ending inventory? P1,345,440
Under moving average, what amount should be reported as ending inventory? P1,390,000

2. Sakura Trading has the following inventory transactions for the month of July 2016:

- Beginning Balance 100 units @ P100 unit cost

- Purchases 900 units @ P150 unit cost
- Sale 700 units
- Purchases 400 units @ P250 unit cost
- Sale 500 units

Compute for:
Cost of Sales Ending Inventory
FIFO P195,000 P50,000
WEIGHTED AVERAGE (periodic) P210,000 P35,000
MOVING AVERAGE (perpetual) P204,000 P41,000