Purchase on account, P200,000, 2/10, n/30

GROSS METHOD NET METHOD

1. Purchases 200,000 1. Purchases

Accounts Payable 200,000 Accounts Payable

2. Assume payment is made within the discount period

Accounts Payable 200,000 Accounts Payable 196,000

Cash 196,000 Cash
Purchase Discount 4,000

3. Assume payment is made beyond the discount period

Accounts Payable 200,000 Accounts Payable

Cash 200,000 Purchase Discount lost
Cash

4. Assume it is the end of accounting period, no payment is made and the discount period has expired.

NO ENTRY Purchase Discount lost

Accounts Payable
196,000
196,000

196,000

196,000
4,000
200,000

4,000
4,000
The following data pertains to an inventory item:
Total Sales
Units Unit Cost Cost (in units)
Jan. 1 Beginning 800 200 160,000
Jan. 8 Sale 500
Jan. 18 Purchase 700 210 147,000
Jan. 22 Sale 800
Jan. 31 Purchase 500 220 110,000 FIFO - PERPETUAL
Total 2000 417,000 1300
ENDING INVENTORY IN UNITS 700 Date
FIFO - PERIODIC Jan. 1
ENDING INVENTORY - ? Jan. 8
COST OF GOODS SOLD - ? Jan. 18

Units unit cost total cost Jan. 22

From Jan.31 purchase 500 220 110,000
From Jan.18 purchase 200 210 42,000 Jan. 31
Ending Inventory 700 152,000

COST OF GOODS SOLD COST OF GOODS SOLD

Beginning 160,000 Beginning

Purchases 257,000 Purchases
GAS 417,000 GAS
less: Ending 152,000 Ending
COST OF GOODS SOLD 265,000 COST OF GOODS SOLD
FO - PERPETUAL
PURCHASES SALES BALANCE
Units unit cost total cost Units unit cost total cost Units unit cost total cost
800 200 160,000
500 200 100,000 300 200 60,000
700 210 147,000 300 200 60,000
700 210 147,000
300 200 60,000
500 210 105,000 200 210 42,000
500 220 110,000 200 210 42,000
500 220 110,000
ENDING 700 152,000

OST OF GOODS SOLD

160,000
257,000
417,000
152,000
OST OF GOODS SOLD 265,000
The following data pertains to an inventory item:
Total Sales
Units Unit Cost Cost (in units)
Jan. 1 Beginning 800 200 160,000
Jan. 8 Sale 500
Jan. 18 Purchase 700 210 147,000
Jan. 22 Sale 800
Jan. 31 Purchase 500 220 110,000
2000 417,000 1300
Ending Inventory in Units: 700
WEIGHTED - PERIODIC WEIGHTED - PERPETUAL (Mo
ENDING INVENTORY - ?
COST OF GOODS SOLD - ? Date
Jan. 1
Units unit cost total cost Jan. 8
Jan. 1 Beginning 800 200 160,000
Jan. 18 Purchase 700 210 147,000 Jan. 18
Jan. 31 Purchase 500 220 110,000
Total Goods available for sale 2000 417,000 Jan. 22

Weighted Average unit cost: 208.50 (Total cost available/Total unitJan. 31

Ending Inventory Cost: 145,950 (Aver. Unit cost * ending unit)

COST OF GOODS SOLD

COST OF GOODS SOLD
Beginning 160,000
Purchases 257,000 Beginning
GAS 417,000 Purchases
Ending 145,950 GAS
COST OF GOODS SOLD 271,050 less: Ending
COST OF GOODS SOLD
WEIGHTED - PERPETUAL (Moving Average)

Units unit cost total cost

BEGINNING 800 200 160000
SALE -500 200 -100000
BALANCE 300 200 60000
PURCHASE 700 210 147000
TOTAL 1000 207 207000
SALE -800 207 -165600
BALANCE 200 207 41400
PURCHASE 500 220 110000
ENDING INV. 700 216 151,400

OST OF GOODS SOLD

160000
257000
417000
151400
OST OF GOODS SOLD 265,600
The following data pertains to an inventory item:
Total Sales
Units Unit Cost Cost (in units)
Jan. 1 Beginning 800 200 160,000
Jan. 8 Sale 500
Jan. 18 Purchase 700 210 147,000
Jan. 22 Sale 800
Jan. 31 Purchase 500 220 110,000
2000 1300
EI=700 UNITS
LIFO - PERIODIC
ENDING INVENTORY - ?
COST OF GOODS SOLD - ?

Units unit cost total cost

From Jan. 1 Balance 700 200 140000

Ending Inventory 700 140000

COST OF GOODS SOLD

Beginning 160,000
Purchases 257,000
GAS 417,000
Ending 140000
COST OF GOODS SOLD 277,000
LIFO - PERPETUAL
PURCHASES SALES BALANCE
Date Units unit cost total cost Units unit cost total cost Units unit cost
Jan. 1 800 200
Jan. 8 500 200 100000 300 200
Jan. 18 700 210 147,000 300 200
700 210
Jan. 22 700 210 147000
100 200 20000 200 200
Jan. 31 500 220 110,000 200 200
500 220
ENDING 700

COST OF GOODS SOLD

Beginning 160,000
Purchases 257,000
GAS 417,000
Ending 150,000
COST OF GOODS SOLD 267,000
BALANCE
total cost
160,000
60000
60000
147,000

40000
40,000
110,000
150,000
The following data pertains to an inventory item:
Total Sales
Units Unit Cost Cost (in units)
Jan. 1 Beginning 800 200 160,000
Jan. 8 Sale 500
Jan. 18 Purchase 700 210 147,000
Jan. 22 Sale 800
Jan. 31 Purchase 500 220 110,000

UNITS UNIT COST TOTAL COST

Jan-01 100 200 20000 beg 160,000
Jan-18 200 210 42000 purchases 257,000
Jan-31 400 220 88000 GAS 417,000
ENDING INVENTORY 700 150000 EI 150000
CGS 267,000
 Product ACCOUNTING FOR INVEN
Category 1 Cost NRV LCNRV DIRECT METHOD
A 110,000 100,000 100,000 YEAR 2020
GIVEN: ENDING AT COST - 8,000,0000
Lower of cost or NET REALIZABLE VALUE - 7,850,

B 690,000 750,000 690,000

C 600,000 640,000 600,000 Inventory-Ending
SUBTOTAL 1,400,000 1,490,000 1,390,000 Income Summary

Category 2
D 2,000,000 1,900,000 1,900,000
E 1,500,000 1,560,000 1,500,000 YEAR 2021
SUBTOTAL 3,500,000 3,460,000 3,400,000 ASSUME: COST-8,500,000
NRV-8,400,000
Category 3
F 1,500,000 1,460,000 1,460,000 Inventory-Ending
G 1,600,000 1,690,000 1,600,000 Income Summary
SUBTOTAL 3,100,000 3,150,000 3,060,000

GRAND TOTAL 8,000,000 8,100,000 7,850,000

 ACCOUNTING FOR INVENTORY WRITEDOWN
INDIRECT METHOD
YEAR 2020

T REALIZABLE VALUE - 7,850,000

7,850,000 Inventory-Ending 8,000,000

7,850,000.00 Income Summary

Loss on Inventory writedown 150,000

Allowance for Inventory Writedown
YEAR 2021 (8,000,000 - 7,850,000)
Inventory-Ending 8,500,000
Income Summary

8,400,000 Allowance for Inventory Writedown 50,000

8,400,000 Gain on Reversal of Inventory writedown

Allowance for Iwdown

150 beginning
Reversal 50
100 ending
8,000,000

150,000

8,500,000

50,000