Reference no: EM133116947

Questions -

Q1) At December 31, 20x1, the accounting staff of ABC Company submitted an inventory list that showed a total of P235,000. The following information needs additional analysis to determine whether the items should be included or excluded in inventory:

Merchandise costing P4,000 were transferred to the delivery department on December 28 for shipment on January 3, 20x2. This inventory was excluded from the inventory total.

Seller's invoice for P1,800 worth of merchandise dated December 27, 20x1 was received through the mail on December 30, 20x1. Shipment term is FOB shipping point. Since the goods arrived only on January 4, 20x2, the goods were not included in the year-end inventory.

Goods valued at P20,000 were received from a supplier for approval and were included in the ending inventory. The company informed their supplier by facsimile message the acceptance (approval) of the goods on January 4, 20x2.

On December 27, 20x1, an order for P2,500 worth merchandise was placed. This was included in the year-end inventory although the goods were received only on January 5, 2022. Seller shipped the goods FOB destination.

1) What is the correct merchandise inventory should ABC Company report at December 31, 20x1?

a. P235,000

b. P216,500

c. P219,000

d. P218,300

2) On May 1, 20x0, LMN Company made two purchase of merchandise with a list price of P 370,000 and P 420.000, both subject to trade discount of 20% and 10 Credit terms were 215, 30 The payment due on the P 420,000 was remitted on May 14, 20x0 while the payment due on the P 370,000 was remitted on May 25, 20x0

Under the net method and the gross method, the net purchases to be included in the determination of cost of goods sold for the month of May should be:

a) P541,940 P 547,120, respectively

b) P 557,424 P 562,752, respectively

c) P 563,472 P 568,800, repectively

d) P 547,820 P 549,940, respectively