LA CONSOLACION UNIVERSITY PHILIPPINES A.F.

ISIP
FUNDAMENTALS OF ACCOUNTING INVENTORIES

1. On January 1, 2018, Terry Company has 2,000 inventories costing P20 per unit. The following chronological transactions transpired during the year:
1) Purchased on account 3,000 units of inventory at P20 per unit.
2) Sold on account 2,500 units of inventory for P50 per unit.
3) Purchase on account 4,000 units of inventory at P20 per unit.
4) Sold on account 3,000 units of inventory for P50 per unit
5) On December 31, 2018, physical count revealed that 3,500 units were on hand.

Required: Prepare all the necessary journal entries using:

a) Perpetual inventory system
b) Periodic inventory system

2. Sally Company sells blankets for P30 each. The following was taken from the inventory records during July 2018:

Date Transaction Units Unit Cost

07.03.18 Purchase 500 P15
07.10.18 Sale 300
07.17.18 Purchase 1,000 P17
07.20.18 Sale 600
07.23.18 Sale 300
07.30.18 Purchase 1,000 P20

Determine the cost of sales and amount of ending inventory under the following independent assumptions:
a) First In First Out (Periodic)
b) First In First Out (Perpetual)
c) Weighted Average Method
d) Moving Average Method