INTACC #1: Reviewer 5.

The retail inventory method includes which of the following

in the calculation of both cost and retail amounts of goods
available for sale?
[ Module #6 and #7 ]
1. When using the periodic inventory method, which of the - Purchase returns.
following generally would not be separately accounted for in 6. What amount should CHROLLO Corp. report as a cost of
the computation of cost of goods sold? goods sold for the year?
- Trade discounts applicable to purchases during the period.
2. The following items were included in NAMI SWAN’s
inventory account on December 31, 2004:
Merchandise out on consignment, at sales price, including
40% markup on selling price P40,000
Goods purchased, in transit, shipped FOB shipping point
P36,000 - P118,220

Goods held on consignment by NAMI SWAN P27,000 7. What amount of inventory was lost in the flood?

By what amount should Opal's inventory account at

December 31, 2004 be reduced?
- P43,000
The merchandise out on consignment is included in
inventory at selling price. But inventory must be measured at
cost. P40,000 = cost + .40(P40,000). Thus, cost = P24,000.
Therefore, inventory should be reduced by the P16,000 of - P55,000
markup on the merchandise out on consignment.
The goods held on consignment should be removed from
the inventory because these goods do not belong to NAMI
SWAN.
Hence, the total reduction from inventory is P43,000
(P16,000 + P27,000). The goods in transit are properly
included in inventory because they were shipped FOB
shipping point, which means the goods belong to NAMI
SWAN when the goods reach the common carrier at the
shipping point.
3. Under the moving-average method, what amount should
HISOKA Company report as inventory at January 31, 2021?

- ₱3,225
4. HxH Co.’s beginning inventory at January 1, 2021 was
understated by ₱26,000, and its ending inventory was
overstated by ₱52,000. As a result, HxH Co.’s cost of goods
sold for 2021 was?
- Understated by ₱26,000.