Reference no: EM132546459
Questions -
Q1. On June 1, 2020, a fire at Candy Company's factory cause severe damage to its entire inventory. Based on recent history, Candy had a gross profit of 35% of net sales. The following data were gathered for eight months ended June 1: Sales 4,000,000; Sales Discount 300,000; Purchases 3,250,000; Purchase Returns 230,000; Inventory January 1 , 320,000. A physical inventory disclosed usable damaged items which Candy estimates can be sold to a jobber for 120,000. The Company uses gross profit method. How much is the estimated cost of inventory loss on June 1, 2020?
a. 540,000
b. 580,000
c. 600,000
d. 620,000
Q2. Remkneack Variety Shop uses the FIFO retail method of inventory. The entity provided the following information for the current year: Beginning Inventory COST: 600,000, RETAIL: 1,500,000; Purchases COST: 3,000,000, RETAIL 5,500,000; Mark-up 500,000; Markdown 1,000,000; Net Sales 4,500,000. What is the estimated cost of ending inventory?
a. 1,200,000
b. 1,040,000
c. 1,000,000
d. 960,000
Q3. Royal Chateau Corp.'s physical inventory on December 31, 2016 showed merchandise with a cost of P364,000 was on hand at that date. Excluded from this amount are the following items: Merchandise costing P30,000 held by Royal Chateau on consignment. Merchandise costing P45,000 shipped FOB shipping point to a customer on December 29, 2016. The goods were expected to be received by the customer on January 4, 2017. Merchandise costing P62,000 shipped FOB destination to a customer on December 31, 2016. The goods were expected to be received by the customer on January 6, 2017. Merchandise costing P78,000 shipped by a vendor FOB destination on December 31, 2016 and received by Royal Chateau on January 5, 2017. Merchandise costing P54,000 shipped by a vendor FOB seller on December 31, 2016 and received by Royal Chateau on January 3, 2017.The correct amount of Royal Chateau's inventory at December 31, 2016 is
a. 480,000
b. 487,000
c. 504,000
d. 603,000
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