ACTIVITY 6-ELE02

1. Entity A has a beginning inventory of ₱280,000. During the period Entity A

purchased inventories costing ₱890,000. Freight paid on the purchase totaled
₱30,000. If the ending inventory is ₱220,000, how much is the cost of goods sold?
Solution:
280,000 + 890,000 + 30,000 – 220,000 = 980,000

2. Entity A has a beginning inventory of ₱140,000. During the period Entity A

purchased inventories costing ₱790,000. Freight paid on the purchase totaled
₱10,000. The ending inventory was ₱60,000. Gross sales were ₱1,800,000 while
sales returns and discounts totaled ₱220,000. How much is the gross profit?
Solution:
140,000 + 790,000 + 10,000 – 60,000 = 880,000 Cost of goods sold
1,800,000 – 220,000 = 1,580,000 Net sales – 880,000 = 700,000 Gross profit

3. Entity A has gross purchases of ₱360,000. Freight paid on the purchases

amounted to ₱50,000. Purchase discounts totaled ₱20,000 while purchase returns
totaled ₱15,000. How much is the net purchases?
Solution:
360,000 + 50,000 – 20,000 – 15,000 = 375,000

4. Inventory, beg. ₱50,000; Net purchases, ₱120,000; Cost of goods sold, ₱80,000.
How much is the Inventory, end.?
Solution:
50,000 + 120,000 – 80,000 = 90,000

5. Entity A has a beginning inventory of ₱340,000. During the period Entity A

purchased inventories costing ₱990,000. Freight paid on the purchase totaled
₱40,000. The ending inventory was ₱360,000. If the net sales were ₱1,200,000,
how much is the gross profit?
Solution:
340,000 + 990,000 + 40,000 – 360,000 = 1,010,000 Cost of goods sold
1,200,000 – 1,010,000 = 190,000 gross profit