Reference no: EM133151691
Questions -
Q1. Presented below is a list of items that may or may not be reported as inventory in a company's December 31 balance sheet.
1. Goods out on consignment at another company's store- P800,000
2. Goods sold on installment basis- P100,000
3. Goods purchased F.O.B. shipping point that are in transit on December 31- P120,000
4. Goods purchased F.O.B. destination that are in transit on December 31- P200,000
5. Goods sold to another company, for which our company has signed an agreement to repurchase at a set price that covers all costs related to the inventory- P300,000
How much of these items would typically be reported as inventory in the financial statements?
a. P1,520,000
b. P1,100,000
c. P800,000
d. P1,220,000
Q2. The notes receivable account of Caimito, Inc. consisted of the following:
1. 60-day note of P10,000 dated May 15 with a 9% interest rate, discounted at the bank on June 8 at 12%.
2. 120-day note of P100,000 (face amount) dated October 1 with no stated interest rate and a market rate of 9% interest, discounted at the bank on November 30 at 12%. This note was received from the sale of equipment.
The proceeds from discounting of the 60-day note amount to
a. P10,150
b. P10,059
c. P10,000
d. P10,028
Q3. Rainbow Company has the following information pertaining to its biological assets for the year 2021.
A herd of 100, 2-year old animals was held at January 2, 2021. Ten animals aged 2.5 years were purchased on July 1, 2021 for P5,400, and ten animals were born on July 1, 2021. No animals were sold or disposed of during the period. Per unit fair values less estimated cost to sell were as follows:
2.0-year old animal at January 1, 2021- P5,000
Newborn animal at July 1, 2021- P3,500
2.5-year old animal at July 1, 2021- P5,400
Newborn animal at December 31, 2021- P3,600
0.5-year old animal at December 31, 2021- P4,000
2.0-year old animal at December 31, 2021- P5,250
2.5-year old animal at December 31, 2021- P5,550
3.0-year old animal at December 31, 2021- P6,000
What is the fair value of the biological assets as of December 31, 2021?
a. P581,500
b. P700,000
c. P735,000
d. P554,000