Week 7: Practical Accounting I (Part II) INVENTORIES QUIZ

On June 1, 2019, Compassion Company sold merchandise with a list price of 1,000,000.00 to a customer. The entity
allowed trade discounts of 20% and 10%. Credit terms were 5/10, n/30 and the sale was made FOB shipping point.
The entity prepaid 50,000.00 of delivery cost for the customer as an accommodation.
On June 11, 2019, what amount is received from the customer as full remittance?

Select one:
a. 684,000.00
b. 734,000.00
c. 770,000.00
d. 720,000.00

Amiable Company provided the following data at yearend:

Items counted in the bodega 4,000,000.00

Items included in the count specifically segregated per sales contract 100,000.00
Items in receiving department, returned by customer, in good condition 50,000.00
Items ordered and in the receiving department, invoice not received 400,000.00
Items ordered, invoice received but goods not received. Freight is paid by the seller. 300,000.00
Items shipped today, invoice mailed, FOB shipping point 250,000.00
Items shipped today, invoice mailed, FOB destination 150,000.00
Items currently being used for window display 200,000.00
Items on counter for sale 800,000.00
Items in receiving department, refused by us because of damage 180,000.00
Items included in count, damaged and unsalable 50,000.00
Items in the shipping department 250,000.00
What is the correct amount of inventory?

Select one:
a. 5,700,000.00
b. 6,730,000.00
c. 5,850,000.00
d. 6,580,000.00

Natal Company provided the following information:

Materials 1,400,000.00
Advance for materials ordered 200,00.00
Goods in process 650,000.00
Unexpired insurance on inventories 60,000.00
Advertising catalogs and shipping cartoons 150,000.00
Finished goods in factory 2,000,000.00
Finished goods in company-owned retail store, including 50% profit on cost 750,000.00
Finished goods in hands of consignees including 40% profit on sales 400,000.00
Finished goods in transit to customers, shipped FOB destination at cost 250,000.00
Finished goods out on approval, at cost 100,000.00
Unsalable finished goods, at cost 50,000.00
Office supplies 40,000.00
Materials in transit shipped FOB shipping point, excluding freight of 30,000.00 330,000.00
Goods held on consignment, at sales price, cost 150,000.00 200,000.00
What is the correct amount of inventory?

Select one:
a. 5,500,000.00
b. 6,580,000.00
c. 6,080,000.00
d. 5,140,000.00

Lockout Company revealed the following inventory card on February 28:

Purchases Units used Balance Units

Date
Cost Units
Jan.10 100 2,000   2,000
  31     1,000 1,000
Feb.8 110 3,000   4,000
 9 (return from factory, Jan. 10
lot)     (100) 4,100
 28     1,100 3,000
What is the weighted average cost on the inventory on February 28?

Select one:
a. 312,000.00
b. 315,000.00
c. 318,000.00
d. 330,000.00

On August 1 of the current year, Scuba Company recorded purchases of 800,000.00 and 1,000,000.00 under credit
terms of purchases of 2/15, net 30. The payment due on the P800,000 purchase was remitted on August 16. The
payment due on the 1,000,000.00 p

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?

Select one:
a. 1,800,000.00 and 1,764,000.00
b. 1,764,000.00 and 1,784,000.00
c. 1,784,000.00 and 1,764,000.00
d. 1,764,000.00 and 1,800,000.00
Emerald Company manufactures bath towels. The production comprises 60% of “Class A” which sells for 500.00 per
dozen and 40% of “Class B” which sells for 250.00 per dozen. During the current year, 60,000 dozens were produced
at an average cost of 360.00 a dozen. The inventory at the end of the current year was as follows:

2,200 dozens “Class A” @360.00 792,000.00

3,000 dozens “Class B” @360.00       1,080,000.00
Total Inventory 1,872,000.00
 

Using the relative sales value method which management considers as a more equitable basis of cost distribution,
what is the measurement of the inventory?

Select one:
a. 2,340,000.00
b. 1,872,000.00
c. 1,170,000.00
d. 1,665,000.00

Parrot Company provided the following inventory data:

Materials 300,000.00
Production labor cost 330,000.00
Production overhead 120,000.00
General administration cost 100,000.00
Marketing cost 50,000.00
What is the value of the completed inventory?

Select one:
a. 630,000.00
b. 900,000.00
c. 850,000.00
d. 750,000.00

At yearend, Bailiwick Company purchased goods costing 1,000,000.00 shipped FOB shipping point.
Cost incurred by the entity in connection with the purchase and delivery of the goods were as follows:

Normal freight charge 30,000.00

Handling cost 20,000.00
Insurance on shipment 5,000.00
Abnormal freight charge for express shipping 12,000.00
What is the total cost of inventory?

Select one:
a. 1,050,000.00
b. 1,065,000.00
c. 1,030,000.00
d. 1,055,000.00
Gem Company Measured inventory at the lower of cost and net realizable value. Data regarding the items in the
inventory are as follows

  Markers Pens Highlighters

Historical Cost 240,000.00 188,000.00 300,000.00
Selling Price 360,000.00 250,000.00 360,000.00
Estimated cost to complete 48,000.00 50,0000.00 68,000.00
Replacement cost 208,000.00 168,000.00 318,000.00
Normal profit margin as a percentage of selling price 25.00% 25.00% 10.00%
What is the measurement of the inventory?

Select one:
a. 720,000.00
b. 676,000.00
c. 694,000.00
d. 728,000.00

Dignity Company had the following consignment transactions during the current year:

Inventory shipped on consignment to a consignee 600,000.00

Freight paid by Dignity Company 50,000.00
Inventory received on consignment from a consignor 800,000.00
Freight paid by consignor 50,000.00
No sales of consigned goods were made during the current year.
What amount should be reported as consigned inventory at yearend?

Select one:
a. 1,500,000.00
b. 850,000.00
c. 600,000.00
d. 650,000.00