1. Anderson Co. records purchases at net amounts.

On June 7, Anderson purchased merchandise on

account. P45,000, terms 3/10, n/30. Anderson returned P4,000 of the June 7 purchase and received credit
on account. At June 30, the balance had not been paid. By how much should the account payable be
adjusted on June 30?

2. On January 1, 2021, Vivian Corp. embarked on a real estate development project

involving single family dwellings. Vivian purchased a track of land for
P85,000,000. Vivian incurred additional cost of P15,000,000 in preparing the land
for sale. Details of the project are as follows:
Subdivision Phase No. of Lots Sales Price per lot
A 200 P 400, 000
B 300 P 400, 00
C 400 P 500,000

What amount of cost should be allocated to Phase C lots?

3. Thalia Co. provided the following information at the end of current year:
1. Finished goods in storeroom, at cost, including
overhead of P450,000 or 30% P1,500,000
2. Materials 1,200,000
3. Materials in transit, FOB destination 40,000
4. Defective materials returned to suppliers 80,000
5. Shipping supplies 10,000
6. Gasoline and old for testing finished goods 120,000
7. Machine lubricants 50,000
8. Finished goods in transit, including
freight charges of P30,000, FOB shipping point 300,000

9. Finished goods held by salesmen, at selling price, cost, P130,000 180,000

10. Goods in process, at cost of materials and direct labor 700,000

What is the correct amount of inventory?

For items 29 to 30

Malia Co.’s transactions for the month of November were:

Date Purchases Data Sales
Nov. 1 700 @ P8.50 Nov. 2 450 @ P10.00

5 950 @ P9.00 8 600 @ P10.00

9 750 @ P8.75 11 500 @ P11.00

16 1,000 @ P9.00 12 250 @ P12.00

25 300 @ P8.40 20 800 @ P12.00

28 200 @ P11.50

29. Assuming that perpetual inventory records are kept in pesos, the ending
inventory on a FIFO basis is?

30. Assuming that perpetual inventory records are kept in units only, the ending
inventory on an average-cost basis is?

31. Presented below is a list of items that may or may not be reported as inventory in
Mason Co.’s December 31, 2021 statement of financial position (SFP):
1. Goods out on consignment at another company’s store P950,000
2. Goods sold on installment basis 75,000

3. Goods purchased FOB shipping point that are in transit at Dec.

31 150,000

4. Goods purchased FOB destination that are in transit at Dec. 31 180,000

5. Goods sold to another company for which our company has

signed an agreement to repurchase at a set price that covers all costs related to the inventory 480,000

6. Interest cost incurred for inventories that are routinely

manufactured
50,000

7. Costs incurred to advertise goods held for resale

50,000

8. Materials on hand not yet placed into production

500,000

9. Office supplies
250,000

10. Raw materials on which the company has started production,

but which are not completely processed
400,000

11. Factory supplies

Goods held on consignment from another company
 40,000

12. Goods held on consignment from another company

500,000

13. Costs identified with units completed but not yet sold
270,000

14. Goods sold FOB destination that are in transit at Dec. 31

30,000

15. Temporary investment in stocks and bonds that will be resold

in the near future
400,000

16. Goods sold where large returns are predictable

300,000

17. Goods sold FOB shipping point that are in transit on Dec. 31
150,000

18. Freight charges on goods purchased

100,000

19. Factory labor costs incurred on goods still unsold

80,000

How much of these items would typically be reported as inventory in the SFP?
32. A physical inventory was taken on December 31, 2021. Such resulted to an
ending inventory of P25,294,511. Jelly Corp. suspects some inventory may have
been taken by employees. To estimate the cost of missing inventory, the
following were gathered:
Inventory. 12.31.20
P11,278,010

Purchases during 2021

24,786,501

Cash sales during 2021

13,500,000

Shipment received on 12.26.21, included in physical inventory,

but not recorded as purchases
180,000

Deposits made with suppliers, entered as purchases.

Goods were not received in 2021
250,000

Collections on accounts receivable, 2021

4,050,382

Accounts receivable, 1.1.21

5,795,875

Accounts receivable, 12.31.21

2,745,493
Gross profit percentage on sales
40%

On Dec. 31,2021, what is the estimated cost of missing inventories?

Answer: P2,000,000

For items 33 to 34

Mill Corp. is a wholesaler of school supplies. The activity for a product during the
month of April is shown below:
Date Balance/Transaction Units Cost
April 1 Inventory 1,500 P25.00
6 Purchase 5,500 P28.50
14 Sales 4,000
19 Purchase 3,200 P30.00
23 Sales 4,000
28 Purchase 1,800 P31.50

33. If Mill Corp. uses a FIFO perpetual inventory system, the ending inventory of the
product at April 30 is reported as?

34. If Mill Corp. uses a Weighted Average periodic inventory system, the ending
inventory of the product at April 30 is reported as?

35. On Dec. 1, 2021, Tully Corp. purchased goods costing P250,000. The terms
were FOB shipping point. Costs incurred in connection with the purchase and
delivery of the goods were as follows:
Normal freight charges P7,500
Handling costs 5,000
Insurance on shipment 1,000
Abnormal freight charges for express shipping 1,500

What is the total amount to be charged to inventory?

36. On December 31, 2021, Tatia Co. has inventory in the amount of P245,000,
which consists of the following:
Direct materials P85,000
Direct materials purchases in transit, FOB destination 15,000
Direct materials purchases in transit, FOB shipping point 25,000
Prepaid insurance on inventory 3,000
Work-in-process 42,000
Finished goods 50,000
Goods shipped on consignment, at selling price with 20% profit on
sales 25,000

What is the cost of inventory to be shown in the statement of financial position of

Tatia Co. as of December 31, 2021?

For items 37 to 38

Zanila Corp. uses the FIFO method in calculating cost of goods sold for the three products that the
company sells. At March 1, the balance of the inventory account was P14,852,500, and the allowance for
inventory writedown was P2,900. Inventories and purchase information concerning the three products are
given for the month of March.

P A S
Units
 Unit Cost/
SP
Units
Unit Cost/
SP
Units
Unit Cost/
SP

Inventory
235,000
P11.50
180,000
P15.00
210,000
P45.00

Purchases
105,000
10.00
150,000
14.00
120,000
43.00

Purchases
80,000
14.00

Sales
 250,000
15.00
200,000
17.00
200,000
46.00

Inventory
170,000
130,000
130,000

On March 31, the company’s suppliers reduced their selling prices from the most recent purchase prices
by the following percentages: Product P, 20%; Product A, 10%; Product S, 8%. Accordingly, Zanila
decided to reduce its sales prices on all items by 10% effective August 1. Zanila’s selling cost is 10% of
sales price. Product P and A have a normal profit (after selling costs) of 30% on sales price, while the
normal profit on Product S (after selling cost) is 15% of sales price

37. The amount of inventory to be reported on the company’s statement of financial

position at March 31 is?

38. The loss on inventory write down for the month of March is?

39. Joseph Co. reported inventory on December 31, 2021 at P4,500,000 based on a physical count of
goods priced at cost and before any necessary year-end adjustment relating to the following:
• Included in the physical count were goods billed to a customer FOB
shipping point of December 29, 2021. These goods had a cost of
P500,000 and were picked up by the carrier on January 5, 2022.
• Goods shipped FOB shipping point on December 27, 2021, from a vendor
to Joseph Co. were received and recorded on January 3, 2022. The
invoice cost was P250,000.
What amount should be reported as inventory on December 31, 2021?