A. B. C. D.

Use the following information for the next two (2) questions:
During a move to a new location, the inventory records of 98 Degrees were misplaced. The bookkeeper has been able to
gather some data for the July purchases:

Units Unit cost Total cost

July 5 10,000 65 650,000
10 12,000 70 840,000
15 15,000 60 900,000
25 14,000 55 770,000
On July 31, 17,000 units were on hand. The sales for July amounted to P6,000,000 or 60,000 units at P100 per unit. The
entity always used a perpetual FIFO inventory costing system. Gross profit on sales for July was P2,400,000.

1) What was the cost of the inventory on July 31?

A. 3,600,000 B. 1,670,000 C. 770,000 D. 950,000
2) What was the cost of inventory on July 1?
A. 1,390,000 B. 2,400,000 C. 950,000 D. 760,000

1. Ending inventory, in units 17,000

Last purchases (14,000)
Inventory coming from the second to the last purchases, 3,000
Unit cost 60
Inventory coming from the second to the last purchases, in peso 180,000
Inventory coming from the last purchases, in peso 770,000
Total ending inventory 950,000 B
2. Inventory, beginning squeeze 1,390,000 A
Purchases (650,000 + 840,000 + 900,000 + 770,000) 3,160,000
CGS (3,600,000
Inventory, ending 950,000
Sales 6,000,000
CGS Squeeze 3,600,000
Gross profit 2,400,000

Use the following information for the next two (2) questions:
The following information was available from the inventory records of Bago Company for January:

Units Unit cost

Balance at January 1 30,000 9.77
Purchases: January 6 20,000 10.30
January 26 27,000 10.71
Sales: January 7 25,000
January 31 40,000
1) What amount of inventory should be reported under FIFO?
A. 128,520 B. 117,240 C. 123,600 D. 122,880
2) What amount of inventory should be reported under the moving average method? (use two decimal unit cost)
A. 126,060 B. 122,880 C. 123,120 D. 124,370

1. Ending inventory, (30,000 + 20,000 + 27,000 – 25,000 – 40,000) 12,000

Unit cost of last purchases 10.71
Ending inventory, at peso 128,520 A
2. 1/1 balance 30,000 9.77 293,100
1/6 purchase 20,000 10.30 206,000
Total 50,000 9.98 499,100
1/7 sale (25,000) 9.98 (249,500)
1/26 purchase 27,000 10.71 289,170
Total 52,000 10.36 538,720
1/31 sale (40,000) 10.36 (414,400)
Balance 12,000 124,370 D

Use the following information for the next two (2) question:
Heavy Company reported the following information for the current year:

Sales (100,000 units at P150) 15,000,000

Sales discount 1,000,000
Purchases 9,300,000
Purchase discount 400,000

The inventory purchases during the year were:

Units Unit cost Total cost
Beginning inventory, January 1 20,000 60 1,200,000
Purchases, quarter ended March 31 30,000 65 1,950,000
Purchases, quarter ended June 30 40,000 70 2,800,000
Purchases, quarter ended September 30 50,000 75 3,750,000
Purchases, quarter ended December 31 10,000 80 800,000
150,000 10,500,000
The accounting policy is to report inventory at the lower of cost and net realizable value. Cost is determined under the first-
in, first-out method. At year-end, the entity has determined that the replacement cost of inventory was P65 per unit and the
net realizable value was P70 per unit. The normal profit margin is P10 per unit.

1) What is the amount of FIFO inventory on December 31?

A. 3,250,000 B. 3,500,000 C. 3,800,000 D. 3,000,000
2) What amount should be reported as cost of goods sold for the current year?
A. 7,000,000 B. 6,600,000 C. 6,300,000 D. 6,700,000

1) The following data have been accumulated for Grace Manufacturing Inc.:

Raw materials – beginning inventory (Jan. 1, 2022) 10,000 units @ P6.000

Purchases: 8,500 units @ P7.00
11,000 units @ P7.50
Transferred 21,500 units of raw materials to work in process
Work in process – beginning inventory (January 1, 2022) 5,600 units @ P13.50
Direct labor 250,000
Manufacturing overhead 325,000
Work in process – ending inventory (March 31, 2022) 4,200 units @ P13.75
If Grace uses the FIFO method for valuing raw materials inventories, compute for the cost of goods manufactured for the
quarter ended March 31, 2022
A. 699,150 B. 717,000 C. 734,850 D. 746,850

2) Inventory records for Epstein’s Chemicals revealed the following:

March 1, 2022, inventory: 1,000 gallons @ P7.20 = P7,200

Purchases Sales
Mar. 10 600 gals @ P7.25 Mar. 5 400 gals
16 800 gals @ P7.30 14 700 gals
23 600 gals @ P7.35 20 500 gals
26 700 gals
Ending inventory assuming FIFO in a perpetual inventory system would be:
A. 4,960 B. 5,060 C. 5,080 D. 5,140

1) Orang Dampuan Co. wholesales bicycles. It uses the perpetual inventory system. The company's reporting date is 31
December. At 1 December 2020, inventory on hand consisted of 350 bicycles at P820 each and 43 bicycles at P850
each. During the month ended 31 December 2020, the following inventory transactions took place (all purchase and
sales transactions are on credit):
Dec. 02 Sold 300 bicycles for P1,200 each.
03 Five bicycles were returned by a customer. They had originally cost P820 each and were for P1,200 each.
09 Purchased 55 bicycles at P910 each.
13 Purchased 76 bicycles at P960 each.
15 Sold 86 bicycles for P1,350 each.
16 Returned one damaged bicycles to the supplier. This bicycle had been purchased on 9 December.
22 Sold 60 bicycles for P1,250 each.
26 Purchased 72 bicycles at P980 each.
29 Two bicycles, sold on 22 December, were returned by a customer. The bicycles were badly damaged so it
was decided to write them off. They had originally cost P910 each.

The cost of inventory as of December 31, 2020 using moving average method is (Round unit costs to the nearest peso)
A. 133,672 B. 143,485 C. 145,349 D. 145,285
Use the following information for the next four (4) questions:
Records of the Brayden New Products Co. show the following data relative to Product 143:
Units Unit cost Total cost
April 1 balance 20,000 10 200,000
Apr. 2 Purchase 30,000 12 360,000
Apr. 4 Sale 25,000
Apr. 10 Purchase 15,000 14 210,000
Apr. 15 Sale 21,000
Apr. 17 Sales return 1,000
Apr. 28 Purchase 20,000 16.75 335,000
1) Using the moving average method, how much is the cost of inventory at the end of April?
A. 580,000 B. 605,000 C. 520,000 D. 525,000
2) Using the moving average method, how much is the cost of goods sold in April?
A. 525,000 B. 500,000 C. 585,000 D. 520,000
3) Using the weighted average method, how much is the cost of inventory at the end of April?
A. 580,000 B. 605,000 C. 520,000 D. 525,000
4) Using the weighted average method, how much is the cost of goods sold in April?
A. 525,000 B. 500,000 C. 585,000 D. 520,000
ANSWER: A, A, C, C
Units Unit cost Total cost
April 1 balance 20,000 10 200,000
Apr. 2 Purchase 30,000 12 360,000
Update 50,000 11.2 560,000
Apr. 4 Sale (25,000) 11.2 (280,000)
Apr. 10 Purchase 15,000 14 210,000
Update 40,000 12.25 490,000
Apr. 15 Net sale (20,000) 12.25 (245,000)
Apr. 28 Purchase 20,000 17 335,000
End 40,000 14.5 580,000
TGAS (1,105,000)
CGS 525,000
April 1 balance 20,000 10 200,000
Apr. 2 Purchase 30,000 12 360,000
Apr. 10 Purchase 15,000 14 210,000
Apr. 28 Purchase 20,000 17 335,000
TGAS 85,000 13 1,105,000

Units sold 25T+21T-1T 45,000

Average unit cost 13
Cost of goods sold 585,000

TGAS 85,000 13 1,105,000

Cost of goods sold 585,000
Ending inventory 520,000

1) White Farm Supply’s records for the first 3 months of its existence show purchases of Commodity A as follows:
Number of units Cost
August 5,500 280,500
September 8,000 416,000
October 5,100 270,300
Total 18,600 966,800

The inventory of Commodity A at the end of October using FIFO is valued at P363,900. Assuming that none of
commodity A was sold during August and September, what value would be shown at the end of October if average cost
was assumed?
A. 351,900 B. 353,300 C. 358,662 D. 365,700

1) Beginning inventory, purchases and sales data for tennis rackets of MINALIN Co are as follows:
Units Unit cost Total cost
Balances in December 1 20,000 25 500,000
Sold on December 15 17,500
 Purchased on December 26 10,000 40 400,000

MINALIN Co uses the moving average method to determine the cost of its inventory. What amount of inventory should
MINALIN report on December 31?
A. 500,000 B. 462,500 C. 406,250 D. 375,000

2) The following lots of a particular commodity were available for sale during the year:
Beginning inventory 10 units at P61
First purchase 25 units at P63
Second purchase 30 units at P64
Third purchase 15 units at P73

The firm uses the periodic system and there are 20 units of the commodity on hand at the end of the year. What is the
amount of the inventory at the end of the year according to the average cost method?
A. 1,300 B. 1,305 C. 1,415 D. 1,236

3) GUAGUA Inc. is a wholesaler of office supplies. The activity for Model III calculators during August is shown below:
Date Transaction Units Cost
August 1 Inventory 2,000 36.00
7 Purchase 3,000 37.20
12 Sales 3,600
21 Purchase 4,800 38.00
22 Sales 3,800
29 Purchase 1,600 38.60
Assume FIFO periodic inventory system, the ending inventory of Model III calculators at August 31 is reported as
A. 150,080 B. 150,160 C. 152,288 D. 152,960

1) The AAA Company is selling Product A. During the year, the company moved to a new location, the inventory records
for Product A were misplaced. The bookkeeper has been able to gather some information from the sales records and
gives you the data shown below:
July sales: 57,200 units at P100
July purchases:
Date Quantity Unit Cost
5 10,000 P 65.00
9 12,000 62.50
12 15,000 60.00
23 14,000 62.00
On July 31, 16,000 units were on hand with a total value of P983,000. AAA has always used a periodic FIFO inventory
system. Gross profit on sales for July was P2,058,750. What is the unit cost of the beginning inventory?
A. 62.00 B. 62.38 C. 63.00 D. 66.82

Use the following information for the next four (4) questions:
Records of the Brayden New Products Co. show the following data relative to Product 143:
Units Unit cost Total cost
April 1 balance 20,000 10 200,000
Apr. 2 Purchase 30,000 12 360,000
Apr. 4 Sale 25,000
Apr. 10 Purchase 15,000 14 210,000
Apr. 15 Sale 21,000
Apr. 17 Sales return 1,000
Apr. 28 Purchase 20,000 17 335,000
1) Using the moving average method, how much is the cost of inventory at the end of April?
A. 580,000 B. 605,000 C. 520,000 D. 525,000
2) Using the moving average method, how much is the cost of goods sold in April?
A. 525,000 B. 500,000 C. 585,000 D. 520,000
3) Using the weighted average method, how much is the cost of inventory at the end of April?
A. 580,000 B. 605,000 C. 520,000 D. 525,000
4) Using the weighted average method, how much is the cost of goods sold in April?
A. 525,000 B. 500,000 C. 585,000 D. 520,000

ANSWER: A, A, C, C
Moving average Units Unit cost Total cost
April 1 balance 20,000 10 200,000
 Apr. 2 Purchase 30,000 12 360,000
Balance 50,000 11 560,000
Apr. 4 Sale (25,000) 11 (280,000)
Balance 25,000 11 280,000
Apr. 10 Purchase 15,000 14 210,000
Balance 40,000 12 490,000
Apr. 15 Sales (21,000) 12 (257,250)
Balance 19,000 12 232,750
Sales
Apr. 17 return 1,000 12 12,250
Apr. 28 Balance 20,000 245,000
Apr. 28 Purchase 20,000 17 335,000
Balance 40,000 15 580,000

Cost of goods sold 525,000

Balance of ending inventory 580,000

Weighted average
Weighted Average
Unit cost TGAS 1,105,000
Units Available for sale 85,000
13

Cost of goods sold 585,000

Balance of ending inventory 520,000

Use the following information for the next two (2) questions:
1) During January of the current year, Cherry Company recorded the following information pertaining to inventory:
Units Unit cost Total cost Units on hand
Balance on 1/1 10,000 100 1,000,000 10,000
Purchased on 1/7 6,000 300 1,800,000 16,000
Sold 1/20 9,000 7,000
Purchased on 1/25 4,000 500 2,000,000 11,000

Under the moving average, what amount should be reported as inventory on January 31?
A. 2,640,000 B. 3,225,000 C. 3,300,000 D. 3,900,000

ANSWER: B
Date Units Unit cost Total cost
Purchase 1/1 10,000 100 1,000,000
Purchase 1/7 6,000 300 1,800,000
Total 16,000 175 2,800,000
Sale 1/20 (9,000) 175 (1,575,000)
Purchase 1/25 4,000 500 2,000,000
Balance 11,000 293 3,225,000

1) Natomi Company uses the moving average cost method of valuing inventories. During August 2022, the following
inventory details were recorded:
Opening balance 300 units valued at P20 each
August 5 Purchase of 500 units at P24 each
August 10 Issue of 400 units
August 18 Purchase of 600 units at P25 each
August 23 Issue of 250 units

How much is the value of the month-end inventory for August 2022?
A. 17,678 B. 18,600 C. 18,000 D. 18,750

Use the following information for the next two (2) questions:
During January 2022, IIAP Company recorded the following information pertaining to its inventory:
Units Unit cost Total cost
January 1 balance 20,000 10 200,000
January 15 sales 15,000
January 18 purchase 20,000 11 220,000
January 20 purchase 15,000 12 180,000
January 25 sales 24,000
January 30 purchase 14,000 15 210,000
January 31 sales 10,000
1) How much is the cost of inventory should IIAP report in its January 31, 2022 balance sheet assuming the company
maintains perpetual inventory records?
A. 240,000 B. 260,000 C. 280,000 D. 300,000
2) Using FIFO method, what amount of inventory should IIAP report in its January 31, 2022 balance sheet?
A. 240,000 B. 260,000 C. 280,000 D. 282,000

1) Pahirap uses the perpetual inventory system. Pahirap’s inventory transactions for the month of August were as follows:
Date Transaction # of Unit Unit cost Total cost
Aug 01 Beg. Inventory 20 P4.00 P80.00
Aug 07 Purchases 10 4.20 42.00
Aug 10 Purchases 20 4.30 86.00
Aug 12 Sales 15 ? ?
Aug 16 Purchases 20 4.60 92.00
Aug 20 Sales 40 ? ?
Aug 28 Sales returns 3 ? ?

Which statement is incorrect?

A. Assuming that Pahirap uses the weighted average cost flow method, the August 12 sales should be costed at P4.16
per unit.
B. Assuming that Pahirap uses the FIFO cost flow method, the August 12 sales should be costs at P4.00 per unit.
C. Assuming that Pahirap uses the FIFO cost flow method and that the sales returns relate to the August 20 sales, the
sales return should be costed back into inventory at P4.60 per unit.
D. None of the above.

ANSWER: D
Date Transaction # of Unit Unit cost Total cost
Aug 01 Beg. Inventory 20 P4.00 P80.00
Aug 07 Purchases 10 4.20 42.00
Aug 10 Purchases 20 4.30 86.00
Total 50 208.00

 Weighted average cost for all sale transaction during the month = 208/70 units = 4.16 choice A is true
 All sale from Aug 12 came from beginning inventory. Choice B is true

Use the following information for the next three (3) questions:
Snoopdog Company’s purchases in its first four months of operations were as follows:
First Quarter Second Quarter Third Quarter Fourth Quarter
Number of units 3,500 9,200 6,400 3,700
Cost 27,300 77,280 64,960 36,815
Inventory balance at the end of the year using LIFO – periodic is valued at P39,060.
1) The inventory balance under FIFO perpetual is
A. 39,060 B. 44,348 C. 47,660 D. 48,995
2) The cost of sales under the Weighted-Average cost flow assumption is
A. 167,295 B. 162,006 C. 157,360 D. 158,695
3) Assuming that the percentage of the total goods sold were 10% in first quarter; 45% in second quarter; 20% in third
quarter and 25% in December, the ending inventory to be reported under the Moving-Average cost flow assumption is
A. 39,060 B. 44,348 C. 47,660 D. 48,995

Use the following information for the next three (3) questions:
Magdalena Company is a wholesaler of perfume. The activity for product Bebebe during June is presented below
Date Transaction Units Selling Price Unit Cost
01 Inventory, begin 240 1,075
04 Purchases 190 1,135
12 Sales 220 1,200
19 Purchases 380 1,180
22 Sales 360 1,250
27 Purchases 200 1,200
4) Under FIFO method, how much is the ending inventory of product Bebebe at June 30?
A. 511,400 B. 516,000 C. 494,732 D. 504,976
5) How much is the cost of goods sold under Weighted Average method?
A. 667,318 B. 1,162,050 C. 657,074 D. 1,150,540
6) How much is the gross profit under Moving Average method?
A. 657,074 B. 504,976 C. 657,074 D. 56,926

Use the following information for the next two (2) questions:
Seahawks used the perpetual system. The following information has been extracted from the records about one product:
Date Transaction Units Unit cost Total cost
January 1 Beginning balance 8,000 70 560,000
6 Purchase 3,000 75 225,000
February 5 Sale 10,000
March 5 Purchase 11,000 80 880,000
March 8 Purchase return 800 80 64,000
April 10 Sale 7,000
April 30 Sale return 300
7) If the FIFO cost flow method is used, what is the cost of the inventory on April 30?
A. 360,000 B. 315,000 C. 337,500 D. 400,000
8) If the weighted average cost flow method is used, what is the cost of the inventory on April 30?
A. 337,500 B. 339,840 C. 353,430 D. 348,750

9) Oreo Company started operations in 2021. The following data are abstracted from the purchases and sales records:
2021 2022 2023
Number of units purchased 160,000 155,000 135,000
Number of units sold 100,000 145,000 130,000
Unit cost 40 50 60

The entity used FIFO method. What amount should be reported as cost of goods sold for 2023?
A. 7,100,000 B. 7,800,000 C. 7,700,000 D. 8,300,000

Use the following information for the next two (2) questions:
Charlotte Company started operations in 2016. The entity used FIFO cost flow to determine cost of goods sold and ending
inventory. The following data are abstracted from the entity’s production and sales records:
2016 2017 2018
Number of units produced 160,000 155,000 135,000
Ending inventor units 60,000 35,000 25,000
Units production cost 7.50 9.00 10.00
Sales revenue 1,500,000 1,800,000 2,000,000

10) What is the cost of goods sold in 2017?

A. 1,530,000 B. 1,395,000 C. 1,620,000 D. 1,507,500

11) What is the gross profit in 2018?

A. 270,000 B. 585,000 C. 550,000 D. 685,000