CHAPTER 4 MULTIPLE CHOICE- COMPUTATIONAL

1. AMG Manufacturing Company which uses the periodic inventory system

showed the following transactions during the month of May.

DATE UNITS PURCHASED UNITS COST UNITS ISSUED

5/1 (BI) 10 P15 -
5/5 20 20 -
5/15 - - 15
5/19 - - 10
5/24 15 18 -
5/30 - - 15
What is the cost of ending inventory under the specific identification method
assuming that materials issued on 5/15 came from the 5/5 purchase, materials
issued on 5/19 came from beginning inventory, and those issued on 5/30 came
from the 5/5 and 5/24 purchases?
a. P90
b. P85
c. P95
d. P80

MATERIALS LEDGER CARD

Material _________ Reorder Point _____________

Number _____ Reorder Quantity __________
Date Ref Received Issued Balance
Units Price Amount Unit Price Amount Unit Price Amount
5/1 Bal. 10 15 150
5/5 20 20 400 10 15 150
20 20 400
5/15 15 20 300 10 15 150
5 20 100
5/19 10 15 150 5 20 100
5/24 15 18 270 5 20 100
15 18 270
5/30 5 20 100 5 18 90
10 18 180
 2. Using the data in No. 1, what is the cost of ending inventory under the
weighted average costing method?
a. P91.11
b. P89.12
c. P90.50
d. P88.50

Received Issued Actual Unit Cost Actual Total Cost

Beginning Inv 10 - 15 150
Purchase 20 - 20 400
Sale - 15 - -
Sale - 10 - -
Purchase 15 - 18 270
Sale - 15 - -
Ending InV. 45 units 40 units P820

Ending Inventory Units = 45 units – 40 units = 5 units

Weighted Average = Total Cost / Total units of Inventory
= P820 / 45 units
= 18.22
ENDING INVENTORY = Weighted Average x Ending Inventory Units
= 18.22 x 5 units
= P91.11
3. Using the data in No.1, what is the cost of the units issued under the FIFO
Costing method?
a. P730
b. P850
c. P830
d. P700

MATERIALS LEDGER CARD

Material _________ Reorder Point _____________

Number _____ Reorder Quantity __________
Date Ref Received Issued Balance
Units Price Amount Unit Price Amount Unit Price Amount
5/1 Bal. 10 15 150
5/5 20 20 400 10 15 150
20 20 400
5/15 10 15 150
 5 20 100 15 20 300
5/19 10 20 200 5 20 100
5/24 15 18 270 5 20 100
15 18 270
5/30 5 20 100
10 18 180 5 18 90

4. Assuming the same data in No.1, except that AMG Company now uses a
perpetual inventory under the moving average method?
a. P75.50
b. P80.65
c. P90.42
d. P91.11

MATERIALS LEDGER CARD

Material ________ Reorder Point _____________

Number ______ Reorder Quantity __________
Date Ref Received Issued Balance
Units Price Amount Unit Price Amount Unit Price Amount
5/1 Bal. 10 15 150
5/5 20 20 400 30 18.33 550
5/15 15 18.33 274.95 15 18.33 275.05
66
5/19 10 18.33 183.367 5 18.33 91.68
66 67
5/24 15 18 270 20 18.08 361.68
4
5/30 15 18.08 271.26 5 18.08 90.42
4 4

5. Using the same assumption in No. 4 what is the cost of ending inventory
under the LIFO Costing method?
a. P75
b. P85
c. P80
d. P70
 MATERIALS LEDGER CARD

Material __________ Reorder Point _____________

Number _______ Reorder Quantity __________
Date Ref Received Issued Balance
Units Price Amount Unit Price Amount Unit Price Amount
5/1 Bal. 10 15 150
5/5 20 20 400 10 15 150
20 20 400
5/15 15 20 300 10 15 150
5 20 100
5/19 5 20 100
5 15 75 5 15 75
5/24 15 18 270 5 15 75
5/30 15 18 270
15 18 270 5 15 75

6. The following information was available from the inventory records of the
Anthony Company for January 2018:

UNITS UNIT COST TOTAL COST

Balance at Jan.1 2,000 P9,775 P19,550
Purchase Orders:
January 6 1,500 10.30 15,450
January 26 3,400 10.75 36,550
Issues:
January 27 1,800
January 31 3,200
Balance at January 31,2018 1,900

Assuming that Anthony maintains perpetual inventory records, what should be

the inventory at January 31, 2018, using the moving average costing method
rounded to the nearest peso?
a. P19,998
b. P19,523
c. P19,703
d. P19,950
 MATERIALS LEDGER CARD

Material ________ Reorder Point _____________

Number ______ Reorder Quantity __________
Date Ref Received Issued Balance
Units Price Amount Unit Price Amount Unit Price Amount
1/1 Bal. 2,000 9.775 19,550
1/6 1,500 10.30 15,450 3,500 10 35,000
1/7 1,800 10 18,000 1,700 10 17,000
1/26 3,400 10.75 36,550 5,100 10.5 53,550
1/31 3,200 10.5 33,600 1,900 10.5 19,950

7. Assuming that Anthony does not maintain perpetual inventory records,

what should be the cost of inventory at January 31, 2018, using the
average cost inventory costing method rounded to the nearest peso?
a. P19,505
b. P19,306
c. P19,702
d. P18, 704

Received Issued Actual Unit Cost Actual Total Cost

Beginning Inv 2,000 - 9.775 19,550
Purchase 1,500 - 10.30 15,450
Sale - 1,800 - -
Purchase 3,400 - 10.75 36,550
Sale - 3,200 - -
Ending InV. 6,900 units 5000 units P71,550

Ending Inventory Units = 6,900 units – 5,000 units = 1,900 units

Weighted Average = Total Cost / Total units of Inventory
= P71,550 / 6,900 units
= 10.3695
ENDING INVENTORY = Weighted Average x Ending Inventory Units
= 10.3695 x 1,900 units
= P19,702.05
= P19,702
 8. The data given below relate to Material XXX used by Joe Shoes Factory
Inc.

Beginning Balance 480 at P4.80 each

Purchase Order 30 600 at P4.90 each
Requisition 46 175
Requisition 49 225
Requisition 50 280
Purchase Order 96 400 at P 4.95 each
Requisition 52 310
Returned Material Report 24
(from Requisition 50) 20

What is the cost of ending inventory using the FIFO costing method?
a. P2,519.00
b. P2,421.00
c. P2,500.00
d. P2,400.00

MATERIALS LEDGER CARD

Material _________ Reorder Point _____________
Number _____ Reorder Quantity __________
Ref Received Issued Balance
Units Price Amount Unit Price Amount Unit Price Amount
Bal. 480 4.80 2,304
PO 30 600 4.90 2,940 480 4.80 2,304
600 4.90 2,940
R46 175 4.80 840 305 4.80 1,464
600 4.90 2,940
R49 225 4.80 1,080 80 4.80 384
600 4.90 2,940
R50 80 4.80 384
200 4.90 980 400 4.90 1,960
PO 96 400 4.95 1980 400 4.90 1,960
400 4.95 1,980
R52 310 4.90 1,519 90 4.90 441
400 4.95 1,980
RM 24 (20) 4.90 98 110 4.90 539
400 4.95 1,980
 9. Based on the data given in No. 8, what is the cost of ending inventory
using the moving average inventory costing method?
a. P2,499.59
b. P2,450.59
c. P2,459.60
d. P2,949.60

MATERIALS LEDGER CARD

Material ________ Reorder Point _____________

Number ______ Reorder Quantity __________
Ref Received Issued Balance
Units Price Amount Unit Price Amount Unit Price Amount
Bal. 480 4.80 2,304
PO30 600 4.90 2,940 1,080 4.86 5,244
R46 175 4.86 850.5 905 4.86 4,393.5
R49 225 4.86 1,093.5 680 4.85 3,300
R50 280 4.85 1,358 400 4.86 1,942
PO96 400 4.95 1,980 800 4.90 3,922
R52 310 4.90 1,519 490 4.90 2,403
RM24 (20) (4.85) (97) 510 4.90 2,499.59

10. The following data relates to the materials inventory of the Manual
Garments Factory:

Units Unit Costs NRV per Unit

Group I
Material AA 460 P140 P130
Material BB 830 85 90
Group II
Material CC 1,290 120 145
Material DD 580 65 55

What is the value of the inventory if the lower of the cost or net realizable value
method is applied to the individual items?
a. P317,050
b. P237,500
c. P327,050
d. P371,050
Description Quantity Cost/Unit NRV/Unit Valuation Lower of
Basis Cost or
NRV
Group I
Material AA 460 P140 P130 NRV P59,800
Material BB 830 85 90 Cost 70,550
Group II
Material CC 1,290 120 145 Cost 154,800
Material DD 580 65 55 NRV 31,900
Inventory Valuation P317,050

11. Based on the data given in No. 19, what is the value of the inventory if the
lower of cost or net realizable value rule is applied to the inventory as a
whole?
a. P327,450
b. P353,450
c. P307,450
d. P327,050

Description Quantity Cost/Unit NRV/Unit Total Cost Total NRV

Group I
Material AA 460 P140 P130 P64,400 P59,800
Material BB 830 85 90 70,550 74,700
Group II
Material CC 1,290 120 145 154,800 187,050
Material DD 580 65 55 37,700 31,900
Inventory Valuation P327,450 P353,450

12. Using the same data in No. 10, what is the value of the inventory if the
lower of cost or net realizable value rule is applied to the inventory by
groups?
a. P327,000
b. P372,000
c. P218,950
d. P317,000

Description Quantity Cost/Unit NRV/Unit Total Cost Total NRV

Group I
Material AA 460 P140 P130 P64,400 P59,800
Material BB 830 85 90 70,550 74,700
 134,950 134,500
Group II
Material CC 1,290 120 145 154,800 187,050
Material DD 580 65 55 37,700 31,900
192,500 218,950

13. Maria Plastic Company presented the following data for the month of
May 2018;

Finished Goods, May 1, 2018 P129,640

Finished Goods, May 31, 2018 142,840
Cost of Goods Manufactured 395,440
Loss on Inventory Write-Down 9,740
Compute the cost of goods sold to be shown in the statement of
comprehensive income for the month ended May 31, 2018:
a. P372,500
b. P391,980
c. P327,500
d. P372,000

Finished Goods Inventory, May 1, 2018 P129,640

Cost of Goods Manufactured 395,440
Total Goods Available for sale 525,080
Finished Goods Inventory, May 31,2018 (142,840)
Cost of goods sold before Inventory Write-Down 382,240
Add Loss on Inventory Write-Down 9,740
Cost of Goods sold after Inventory Write-Down P391,980

14. The following data pertain to Alpha Company for the month of June 2018:

Finished Goods, May 1, 2018 P290,540

Finished Goods, May 31, 2018 276,760
Cost of Goods Manufactured 805,820
Recovery from Inventory Write-Down 10,720
Determine the cost of goods sold to be shown in the statement of
comprehensive income of Alpha Company for the month of June 2018:
a. P808,880
b. P880,880
c. P830,320
d P808,080

Finished Goods Inventory, May 1, 2018 P290,540

Cost of Goods Manufactured 805,820
Total Goods Available for sale 1,096,360
Finished Goods Inventory, May 31,2018 (276,760)
Cost of goods sold before Inventory Write-Down 819,600
Less: Recovery on Inventory Write-Down 10,720
Cost of Goods sold after Recovery from P808,880
Inventory Write-Down

15. The Big Balls Company has decided to value its materials inventory at the
lower of cost or net realizable value. The materials account has an ending
balance of P110,492. The estimated selling price and selling expense are
P134,315 and P26,855 respectively.

What is the journal entry to value the inventory at the lower of cost of NRV?
a. Loss on Inventory Write- Down 3,032
Allowance for Inventory Write-Down 3,032
b. Loss on Inventory Write- Down 23,823
Inventory 23,823
c. Allowance for Inventory Write-Down 3,032
Gain on Inventory Write-Down 3,032
d. Loss on Inventory Write-Down 3,032
Inventory 3,032

16. On December 31,2018, the Materials account for the Mars Manufacturing
Company has a balance of P296,369. The company has been using the
lower of cost or net realizable value method for several years. The
Allowance for Inventory write-down account has a balance of P8,930. The
net realizable value of the materials on December 31,2018 is P291,250.

On December 31,2018, what is the entry to adjust the value of the materials at
the lower of cost or net realizable value?
a. Allowance for Inventory Write- Down 3,811
Recovery Inventory Write-Down 3,811
b. Loss on Inventory Write- Down 5,119
 Allowance for Inventory Write- Down 5,119
c. Allowance for Inventory Write-Down 3,821
Inventory 3,821
d. Allowance for Inventory Write-Down 5,119
Recovery from Inventory Write- Down 5,119

LINDSAY ANNEMARIE N. FERRER PCBET-01-301P COST ACCOUNTING