Reference no: EM132702451

Problem 1: Monami Company uses the weighted average method to determine the cost of its inventory. Monami recorded the following information pertaining to its inventory:

Units Units cost Total cost

Balance 1/1 160,000 60 P9,600,000

Sold on 1/15 140,000

Purchased on 1/31 80,000 90 7,200,000

1. What amount of inventory should Monami report in its January 31, 2021 statement of financial position using the perpetual inventory system?

A. P 8,400,000

B. P 7,000,000

C. P 8,400,000

D. P 7,000,000

2. What amount of inventory should Monami report in its January 31, 2021 statement of financial position using the periodic inventory system?

A. P 7,000,000

B. P 8,400,000

C. P 7,500,000

D. P 7,500,000

Problem 2: Riptide Company included the following items in its inventory on December 31, 2020:

Merchandise out on consignment, at sales price, including 25% markup on cost P 4,000,000

Goods purchased in transit, FOB destination 2,000,000

Goods held on consignment by Riptide Company 1,000,000

By what amount should the inventory at December 31, 2020 be reduced?

a. P3,800,000

b. P2,000,000

c. P1,800,000

d. P1,000,000

Problem 3: Gumamela Company installs replacement siding, windows, and louvered glass doors for family homes. At December 31, 2020, the balance of inventory account was P502,000, and the allowance for inventory write down was P33,000. The inventory cost and market data at December 31, 2020, are as follows:

Cost Replacement Cost Sales Price NRV Normal Profit

Aluminum siding P 89,000 P 86,000 P 91,500 P 87,000 P 5,000

Mahogany siding 94,000 92,000 93,000 85,000 7,000

Louvered glass door 125,000 135,000 129,000 111,000 10,000

Glass windows 194,000 114,000 205,000 197,000 20,000

Total P 502,000 P 427,000 P 518,500 P 480,000 P 32,000

1. The correct balance of the inventory after any allowance for write down is

a. P427,000

b. P486,500

c. P480,000

d. P477,000