Reference no: EM133069978

Questions -

Q1. Nadia Company's pricing structure has been established to yield a gross margin of 30%. The following data pertain to the year ended December 31, 2021

Sales 1,000,000

Inventory, January 1 500,000

Purchases 400,000

Inventory, per actual count on December 31 80,000

Nadia is satisfied that all sales and purchases have been fully and properly recorded. How much might Nadia reasonably estimate as a shortage in inventory at December 31?

a. 100,000

b. 120,000

c. 276,000

d. 200,000

Q2. On June 20, 2019, a fire destroyed the entire uninsured merchandise inventory of the Allen Merchandising Company. The following data are available:

Inventory, January 1 P350,000

Purchases, January 1 through June 20 670,000

Sales, January 1 through June 20 1,200,000

Markup percentage on cost 25%

What is the approximate inventory loss as a result of the fire?

a. 120,000

b. 60,000

c. 40,000

d. 180,000

Q3. On October 15, 2021, Patty Company purchased goods costing P4,500,000. The freight term is FOB Destination. Some of the costs incurred with the sale and delivery of the goods were:

Packaging for shipment 200,000

Shipping 200,000

Special handling charges 100,000

These goods were received on October 17, 2021. What amount of cost for these goods should be included in Patty's inventory?

a. 5,000,000

b. 4,700,000

c. 4,900,000

d. 4,500,000

Q4. Lerma Company started its operations in 2021. The following data are abstracted from the company's production and sales records:

	2021	2022	2023
Number of units produced	160,000	155,000	135,000
Number of units sold	100,000	145,000	130,000
Unit production cost	4.50	5.20	5.80
Sales revenue	800,000	1,200,000	1,300,000

Assuming that the inventory value is calculated in terms of FIFO, how much will be the gross profit calculated for the year 2023?

a. 546,000

b. 683,500

c. 435,000

d. 588,000