Reference no: EM133122617
Questions -
Q1. Love Yourself Association engages in the business of cow farming. Throughout the year 2020, they have managed 100, 2-year-old cows and 50, 3-year old cows. No other calves are born during the year. Here are the important information about their fair value less cost of disposal:
Fair value of a 2-year-old cow, 1/1/2020- P3,000
Fair value of a 3-year-old cow, 1/1/2020- P4,000
Fair value of a 4-year-old cow, 1/1/2020- P5,300
Fair value of a 2-year-old cow, 12/31/2020- P3,300
Fair value of a 3-year-old cow, 12/31/2020- P4,500
Fair value of a 4-year-old cow, 12/31/2020- P5,800.
How much shall be recorded as change in fair value due to 1) physical change and 2) price change, respectively?
a. P185,000 ; P55,000
b. P150,000 ; P90,000
c. P165,000 ; P75,000
d. P240,000 ; P0
Q2. Boy With Luv, Inc. sells grocery items and utilizes of the retail inventory method in valuing its inventory. The following information has been provided:
Inventory, 1/1- Cost: 320,000; Retail- P800,000
Sales- P5,800,000
Purchases- Cost: P2,100,000; Retail: P6,000,000
Freight-in- P70,000
Net markups- P400,000
Net markdowns- P200,000
Using the FIFO Retail Inventory Method, what is the ending inventory at December 31 (assuming Boy With Luv reports every calendar year)?
a. P460,000
b. P414,996
c. P420,000
d. P426,852