Reference no: EM132767250

Questions -

Q1. Various Inventory Issues - The following independent issues relate to inventory accounting

a. J Co. purchased goods with a list price of P 150,000, subject to trade discounts of 20% to 10% with no cash discounts allowable . How much should J Co. record as cost of the goods?

b. F Company's inventory of P 1,100,000 at December 31, 2017 was based on physical count of goods prcied at cost and before year-end adjustment relating to the following items:

1. Goods shipped from a vendor FOB shipping point on December 24, 2017, at an invoice cost of P 69,000 to F Company were received January 4, 2018.

2. The physical count included P 29,000 of goods billed to Shy Corporation FOB shipping point on December 31, 2017. The carrier picked up these goods on January 3, 2018.

REQUIRED - What amount should be reported by F Company as inventory on its statement of financial position?

Q2. Review Recording of Purchase Transactions - Some of the transactions of Warren M Company during Auguist are listed below . Warren uses the periodic inventory method. Purchased of merchandise on account, P 9,000 , terms 2/10 n/30 Return part of the purchase of August 10, P 1,200 and received credit on account Purchased mechandise on account, P 12,000 terms; 1/10 n/60 Purchased mechandise on account P 15,000 terms ; 2/10 n/30 Paid invoice August 15 in full.

REQUIRED - A. Assuming that purchases are recorded at gross amounts and that discounts are to be recorded when taken:

1. Prepare journal entries to record the transactions

2. Describe how the various items would be shown in the financial statements

B. Assuming that purchases are recorded at net amounts and that discount lost are treated as financial expenses:

1. Prepare the journal entries to record the transactions

2. Prepare the adjusting entry necessary on August 31, 2017 financial statements

3. Describe how the various item would be shown in the financial statements

Q3. INVENTORY LOSS - Time Turner requires an estimate of the cost of goods sold lost by fire on March 9. Merchandise on hand on January 1 was P 38,000. Purchases since January 1 were P 72,000, freight in P 3,400; Purchase returns and allowances, P 2,400. Sales are priced at 33 1/3% above cost and totalled P 100,000 as at March 9. Goods costing P 10,900 were left undamaged by the fire; remaining goods were destroyed.

REQUIRED -  

A. Compute Cost of goods destroyed by the fire

B. Compute the cost of goods destroyed, assuming that the gross profit is 33 1/3% of sales?