Reference no: EM132806394

At the beginning of January 1, Karen Company has 2,000 inventories costing Php 20/unit. The following transactions occurred during the year:

1. Purchased on account 3,000 units of inventory at Php 20/unit
2. Sold on account 2,500 units of inventory for Php 50/unit 
3. Purchased on account 4,000 units of inventory at Php 50/unit 
4. Sold on account 3,000 units of inventory for Php 50/unit 
5. On December 31, physical count revealed that 3,500 units were on hand.

Required: Answer the following:

Question 1: Journal entries of the above transaction using (a) Perpetual and (b) Periodic inventory system

Question 2: Under each inventory system above, compute the (a) cost of inventory end and (b) cost of sale.

Question 3: Assume that result of the inventory count revealed that there are only 3,000 units on hand and the shortage is considered as normal, compute for the (a) cost of inventory end and (b) cost of sale under the (a) Perpetual and (b) Periodic inventory system

Question 4: Assume that result of the inventory count revealed that there are only 3,000 units on hand and the shortage is considered as abnormal, compute for the (a) cost of inventory end and (b) cost of sale under the (a) Perpetual and (b) Periodic inventory system