COLLEGE OF ACCOUNTANCY AND BUSINESS ADMINISTRATION

QUIZ: INTERMEDIATE ACCOUNTING 1

Start: 12:00 PM
End: 2:00 PM

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1. Presented below is a list of items that may or may Raw Materials on hand not yet placed 350,000
not be reported as inventory in Geometry Valley into production
Company’s December 31 statement of financial Work-in-process inventory, ending 330,000
position located in Tagaytay: Costs identified with units completed 260,000
but not yet sold
Goods sold under a bill and hold sale, 450,000 Goods out on consignment at another 400,000
at the time of sale, the buyer accepts company’s store
the billing, goods are on hand, Goods purchased still in transit on 120,000
identified and ready for delivery to December 31 on terms CIF (cost,
the buyer, the buyer specifically insurance, and freight)
acknowledges the deferred delivery, Goods purchased still in transit on 450,000
and is under special terms agreed. December 31 on terms of FAS (free
Goods sold on installment basis 100,000 alongside)
Goods sold under Lay-away sale; final 300,000 Goods purchased still in transit on 200,000
installment payment is due on December 31 on terms of ex-ship
January 15 next year Freight charges on goods purchased 80,000
Goods sold where large returns are 280,000
predictable How much of these items would be reported as
Goods sold FOB Tagaytay that are in 80,000 inventory in the financial statements?
transit as of December 31; the buyer A. 2,370,000
is in Cebu B. 2,250,000
Goods sold FOB Davao that are in 80,000 C. 2,700,000
transit as of December 31; the buyer D. 2,820,000
is in Davao E. ____________
Interest cost incurred for inventories 40,000
that are routinely manufactured 2. Maria Company included the following items in
Costs incurred to advertise goods 20,000 its inventory on December 31, 2021:
held for resale

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 Merchandise out on consignment 6,000,000 Product A Product B Product C
to Felipe Company, at sales price Historical cost 24,000 18,880 30,000
Goods purchased in transit, FOB 4,000,000 Selling price 36,000 21,800 38,000
Shipping point Estimated cost 3,000 2,620 6,200
Goods held on consignment from 2,000,000 to complete
Jose Company Cost to sell 5% 10% 10%
Goods sold in transit, FOB 9,000,000 based on
Shipping point, at sales price selling price
Freight paid by Maria on 200,000
consigned goods to Felipe 4. What is the correct carrying value of inventories
Freight paid by Jose Company 100,000 as of December 31?
Freight paid by Maria on goods 20,000 A. 72,880
purchased B. 76,200
Freight paid by Maria on goods 40,000 C. 69,000
sold to customer D. 67,200
Mark-up on cost consigned goods 25% E. __________
still unsold at December 31, 2021
5. What is the loss on inventory write-down?
How much should be included in Maria’s correct cost A. 0
of inventory on December 31, 2021? B. 1,320
A. 10,020,000 C. 1,880
B. 9,020,000 D. 3,620
C. 8,820,000 E. _______
D. 10,000,000
E. ____________ 6. Carl Company provided the following
information during the current year:
3. Ayo Company started 2022 with P94,000 of
merchandise inventory on hand. During 2022, Product 1 Product 2
P400,000 in merchandise was purchased on Materials and 3,000,000 3,600,000
account with credit terms of 1/15, n/45. All conversion cost
discounts were taken. Purchases were all made Estimated selling 4,000,000 6,000,000
FOB Shipping point. Ayo paid freight charges of price
P7,500. Merchandise with an invoice amount of Estimated selling 1,200,000 1,400,000
P5,000 was returned for credit. Cost of goods cost
sold for the year was P380,000. Ayo uses a General 600,000 1,600,000
perpetual inventory system. administration cost
Normal profit 1,000,000 1,500,000
What is the ending inventory assuming Ayo uses margin on sales
the gross method to record purchases?
A. 112,490 What amount should be reported as ending inventory
B. 112,550 using the LCNRV individual approach?
C. 116,500 A. 6,400,000
D. 120,300 B. 6,600,000
E. __________ C. 4,900,000
D. 5,800,000
Numbers 4-5 E. __________
On December 31, 2022, the cost of Ricky Corporation
ending inventory account was P72,880, and the Numbers 7-9
allowance for inventory write-down account before Vice provided the following records connected to its
any adjustment was P2,000. Data regarding the items inventory transactions:
in work-in-process inventory are presented below:

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 Date Transaction Units Unit Total cost Using the gross profit method and gross profit rate of
cost 40%, what is the estimated ending inventory of Marie
Jan 1 Beginning 40,000 20 800,000 Margaret Company on September 30, 2022?
balance A. 920,000
Feb 1 Sale (30,000) B. 795,000
Apr 1 Purchase 60,000 25 1,500,000 C. 1,016,000
Sept 1 Sale (59,000) D. 895,000
Nov 1 Purchase 40,000 30 1,200,000 E. ___________
Dec 31 Balance 51,000
Numbers 11-12
(Round to two decimal places). Maricris Company used retail inventory method to
approximate the ending inventory. The following
7. What is the cost of the inventory at December 31 information is available for the current year:
under FIFO inventory cost flow?
A. 1, 475,000 Cost Retail
B. 1,275,000 Beginning inventory 650,000 1,200,000
C. 1,075,000 Purchases 9,000,000 14,700,000
D. 1,125,000 Freight in 200,000
E. __________ Purchase returns 300,000 500,000
Purchase allowances 150,000
8. What is the cost of the inventory at December 31 Departmental 200,000 300,000
under Weighted Average cost flow? transfer in
A. 1,475,000 Net mark ups 300,000
B. 1,275,000 Net markdowns 1,000,000
C. 1,530,000 Sales 9,500,000
D. 1,020,000 Sales discounts 100,000
E. __________ Employee discounts 500,000
Estimated normal 600,000
9. What is the cost of the inventory at December 31
shoplifting losses
under moving average cost flow?
Estimated normal 400,000
A. 1,466,890
shrinkage
B. 1,475,000
C. 1,433,890
11. What is the estimated cost of ending inventory
D. 1,450,110
using the conservative approach?
E. __________
A. 2,400,000
B. 2,460,000
10. The following data were taken from the records
C. 3,060,000
of Marie Margaret Company:
D. 2,700,000
E. _________
Sales 5,300,000
Sales discount 160,000
12. What is the estimated cost of ending inventory
Sales return 300,000 using the average cost approach?
Beginning inventory 1,980,000 A. 2,560,000
Purchases 2,400,000 B. 2,624,000
Freight-in 200,000 C. 3,264,000
Purchase discounts 300,000 D. 2,880,000
Purchase returns 260,000 E. ___________
Purchase allowances 100,000
Ending inventory ? Numbers 13-15
Elephant Company has herd of 15, one-year old
animals on January 1, 2021. Three animals were born

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 on July 1, 2021. Fair values per unit less costs to sell • P300,000 in goods were purchased by
are summarized below: Water’s and shipped on December 30 and
were in transit on December 31; the goods
One-year old animal at January 1, 2021 4,500 were received by Water on January 2. Terms
Newborn animal at July 1, 2021 3,000 were FOB Shipping point.
One-year old animal at December 31, 2021 4,600
Newborn animal at December 31, 2021 3,300 What is the correct amount of the company’s
Two-year old animal at December 31, 2021 5,500 inventory on December 31?
0.5-year-old animal at December 31, 2021 3,400 A. 2,700,000
B. 2,500,000
13. What is the gain or loss due to price change? C. 2,550,000
A. 2,400 D. 1,950,000
B. 1,500 E. ___________
C. 900
D. 3,000 17. Oreo Company started operations in 2021. The
E. _______ following data are abstracted from the purchase
and sales records:
14. What is the gain or loss due to physical change?
A. 13,800 2021 2022 2023
B. 13,500 Number of 320,000 310,000 340,000
C. 22,800 units
D. 22,500 purchased
E. _______ Number of 200,000 290,000 260,000
units sold
15. To record the new born biological asset on July 1, Unit cost 40 50 60
2021, the necessary journal entry is:
A. Debit to Gain due to Physical change The entity used FIFO method. What amount should
amounting to 13,800 be reported as cost of goods sold for 2023?
B. Credit to Gain due to Physical change A. 13,200,000
amounting to 13,800 B. 15,600,000
C. Debit to Gain on initial recognition C. 15,200,000
amounting to 9,000 D. 16,600,000
D. Credit to Gain on initial recognition E. ______________
amounting to 9,000
E. None of the above Numbers 18-20
Black Company carried four items in inventory. The
16. Water Company’s reported in the amount of following per-unit data relate to these items at the
P2,500,000 and excluded the following: end of first year of operations:
• P400,000 in goods were sold by Water’s and
shipped on December 30 and were in transit Units Cost Sales Selling Normal
on December 31; the goods were received by Price cost Profit
the customer on January 2. Terms were FOB Category 1
Shipping point. A 25,000 105 130 15 20
• P150,000 in goods located in Water’s B 20,000 85 90 10 10
warehouse that are on consignment from Category 2
another company. C 40,000 50 45 5 5
• P200,000 in goods that were sold by Water’s D 30,000 65 75 15 10
and shipped on December 30 and were in
transit on December 31; the goods were 18. What is the measurement of inventory under
received by customer on January 2. Terms LCNRV applied to individual item?
were FOB Shipping point. A. 8,275,000
B. 7,525,000

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 C. 7,725,000
D. 7,875,000
E. _____________

19. What is the measurement of inventory under

LCNRV applied to inventory category?
A. 7,875,000
B. 7,525,000
C. 8,275,000
D. 7,925,000
E. _____________

20. What is the measurement of inventory under

LCNRV applied to inventory as a whole?
A. 8,275,000
B. 7,525,000
C. 7,625,000
D. 7,925,000
E. _____________

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