8.

Transactions for the month of June were:

Purchases Sales
June 1 400 @ P3.20 June 2 300 @ P5.50
(Balance)
3 1,100 @ 3.10 6 800@ 5.50
7 600 @ 3.30 9 500@ 5.50
15 900 @ 3.40 10 200 @ 6.00
22 250 @ 3.50 18 700@ 6.00
25 150@ 6.00
Assuming that perpetual inventory records are kept in.pesos, the ending inventory on a FIFO basis is
a. P1,900 b. P1,920 c. P2,065 d. P2,100

9. Flavia Manufacturing began operations 3 years ago. On October 1, 2009, a fire broke out in the warehouse destroying all
inventories. The information available is presented below.
January 1 October 1
Inventory 500, 000
Accounts Receivable 800, 000 500, 000
Accounts payable 400 000 650, 000
Collection on actounts recivable, January 1 to October 1 6, 500, 000
Payments to suppliers, Januaryl to October 1 5, 200, 000
Goods out on consignment at October 1, at cost 400, 000

2006 2007 2008

Sales 6, 000, 000 7, 500, 000 8, 000, 000
Gross profit on sales 1, 650, 000 1, 725, 000 2, 000, 000
What is the inventory loss suffered because of the fire?
a. P900,000 b. P425, 000 c. P200,000 d. P825,000

10. At December 31,2007, thefollowing information was available from Huff Company’s accounting records:
Cost Retail
Inventory 735,O00 1,015,000
Purchases 4,165,000 5,775,000
Additional markups 210,000
4,900,000 7,000,000
Sales for the year totalled P5,530,000. Markdowns amounted to P70,000. Under the average cost approach of retail method.
Huff’s inventory at December 31,2007 was
a. 1,540,000 b. 1,400,000 c. 994,000 d. 980,000

11. Lin Company reported the following marketable security held as available for sale on its December 31, 2007 statement of
financial position:
New company ordinary shares, at cost 1,000,000
Market adjustment for unrealized loss (200,000)
Market value 800,000
At December 31, 2008, the market value of Lin’s investment in the New Company was P850,000. As a result of the increase in
market value, Lin’s statement shareholders’ equity for the year 2008 should report
a. An unrealized gain of P150,000 b. A realized gain of P50,000