Exercise 5-1

1. H
2. C
3. D
4. F
5. I
6. E
7. K
8. G
9. B
10. A

Exercise 5-2
1. Inventory
2. Consignment
3. COGS
4. Freight Out
5. Absorption/ full costing
6. Moving Average
7. Variable Costing
8. Freigt In
9. Net Realizable value
10. Finished Goods

Exercise 5-3
1. D
2. B
3. C
4. D
5. D
6. D
7. D
8. B
9. D
10. A
11. A
12. D
13. D
14. D
15. B

Exercise 5-4
1. Inventory Cost
Goods counted in the warehouse
Goods in the receiving department, returned by customer
Goods ordered and in the receiving department
Goods shipped today, invoice mailed, FOB destination
Goods currently being used for window
Goods in the counter for sale
Goods in the shipping department

Correct amount of inventory

2. Gross and Net Method

Cost of inventory (P150,000 x 85%)

3. Shipping Terms and Inventoriable Cost

Unadjusted Balance
Goods purchased FOB destination
Goods held on consignment

Correct amount of inventory

4. Cost Flow (FIFO and Moving Average)

a.
Total pairs sold = 150 pairs

Cost of goods sold - FIFO

10-Oct 50 pairs @ P120
20-Oct 50 pairs @ P120
40 pairs @ P125
10 pairs @ P130

Total

b.
Purchase COGS
Beginning
6-Oct 40 @ P125 = 5,000
10-Oct 50 @ 121.429= P6,071.45
15-Oct 70 @ P130 = 9,100
20-Oct 100@125.178=P12,517.80
25-Oct 40 @ P130 = 5,200
Ending Inventory

5. Cost Flow (FIFO)

a.
90 units @ P60 5,400
60 units @ P54 3,240

Total 8,640

b.
Total units sold 340 units

Cost of goods sold

100 units @ P50 5,000
240 units @P54 12,960

Total 17,960

6. Gross and Net Method

Purchases of machines 3,400,000
Purchase return and allowances 100,000
Net amount payable 3,300,000
Discount rate x .02

Discount available 66,000

Purchase discounts taken 34,000
Purchase discounts lost 32,000

7.Cost Flow (Single Transaction)

Moving Average Method
Purchase Cost of Goods Sold
1-Aug
15-Aug 17,500 @ P10 = P175,000
22-Aug 10,000 @ P16 = P160,000

Ending Inventory – Moving Average

8. Inventory Cost and NRV: Estimation

Selling Price 2,400
Selling Expenses -440
Net Realizable Value 1,960
Cost 1,500

Lower of Cost or NRV 1,500

 1,000,000
12,500
100,000
38,000
50,000
200,000
67,500

1,468,000

127,500

36,400
-3,700
-4,800

27,900

6,000
6,000
5,000
1,300

18,300

Balance
100 @120 = P 12,000.00
140 @ 121.429 = 17,000.00
90 @ 121.429 = 10,928.55
160 @ 125.178 = 20,028.55
60 @ 125.179 = 7,510.75
100 @ 127.107 = 12,710.75
 12,710.75

Balance
20,000 @ P10 = P 200,000
2,500 @P10 = 25,000
12,500 @P14.80 =185,000

185,000