Bianca Regina Lizardo Mr.

Tadiwan
BS Accountancy

Chapter 4
Problem 1:
1. F – lower of cost and
2. F – may not equal
3. T
4. F – added > deducted
5. T
6. T
7. F – may > shall not
8. T
9. F - not
10. T

Problem 2:

1. D
2. A
3. C
4. D
5. C
6. A
7. D
8. D
9. A
10. A

Problem 3:

1. C
 2. A

Ending inventory, in units = (3,000 + 2,250 + 10,200 – 2,700 – 7,200) = 5,550

Units Unit cost Total cost

Ending inventory in units 5,550

Allocation to latest purchases:

Jan. 26 2,250 20.60 46,350

Jan. 6 (balance) 3,300 21.50 70,950
Ending inventory in pesos 117,300
TGAS (58,650 + 219,300 + 46,350) 324,300
Less: Ending inventory in pesos (117,300)
COGS 207,000

3. C

TGAS in pesos
Weighted average unit cost =
TGAS in units

Weighted average unit cost = (58,650 + 219,300 + 46,350) =

324,300
(3,000 + 10,200 + 2,250) = 15,450

Weighted average unit cost = 20.99

Ending inventory in units 5,550

Multiply by: Weighted average unit cost 20.99
Ending inventory in pesos 116,495
TGAS in pesos 324,300
Less: Ending inventory in pesos (116,495)
COGS 207,805
 4. B

Units Unit Cost Total Cost

Balance at January 1 3,000 19.55 58,650
January 6 10,200 21.5 219,300
TGAS 13,200 21.06 277,950

January 7 (2,700) 21.06 (56,862)

January 26 2,250 20.6 46,350
TGAS 12,750 20.98 267,438
January 31 (7,200) 20.98 (151,056)

Ending Inventory 5,550 116,382

COGS = (56,862 + 151,056) = 207,918

5. D

Product A Product B Product C Total

Purchase price 100,000 250,000 300,000
Freight-in 12,000 30,000 36,000
Cost 112,000 280,000 336,000

Selling price 210,000 300,000 570,000

Freight-out (10,500) (75,000) (11,400)
NRV 199,500 225,000 558,600

Lower 112,000 225,000 336,000 673,000