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  • Problem 1

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    Zyrah Manalo
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    1. CSI Inc. had 150,000 units in inventory on July 31. It sold 297,000 units during July. The unit cost of inventory on July 31 was P0.45. The value of inventory on July 31 was P67,500. 2. Under the perpetual moving average method, AIG Inc. had a cost of goods sold of P1,250,000 and an ending inventory of P2,150,000 for January. 3. Using the average periodic inventory system, CITI Company had a cost of goods sold of P230,000 and an ending inventory of P105,000 for August.

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    1. CSI Inc. had 150,000 units in inventory on July 31. It sold 297,000 units during July. The unit cost of inventory on July 31 was P0.45. The value of inventory on July 31 was P67,500. 2. Under the perpetual moving average method, AIG Inc. had a cost of goods sold of P1,250,000 and an ending inventory of P2,150,000 for January. 3. Using the average periodic inventory system, CITI Company had a cost of goods sold of P230,000 and an ending inventory of P105,000 for August.

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    779 views3 pages

    Problem 1

    Uploaded by

    Zyrah Manalo
    1. CSI Inc. had 150,000 units in inventory on July 31. It sold 297,000 units during July. The unit cost of inventory on July 31 was P0.45. The value of inventory on July 31 was P67,500. 2. Under the perpetual moving average method, AIG Inc. had a cost of goods sold of P1,250,000 and an ending inventory of P2,150,000 for January. 3. Using the average periodic inventory system, CITI Company had a cost of goods sold of P230,000 and an ending inventory of P105,000 for August.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 3

    Problem 1. A recent fire severely damaged CSI Inc.

    ’s administration building and destroyed many of


    its financial records. You have been contracted by CSI’s management to reconstruct as much
    financial information as possible for the month of July. You learn that CSI makes a physical inventory
    count at the end of each month to determine monthly ending inventory values. You also find out
    that the company applies the average cost method.

    You are able to gather the following information by examining various documents:

    Inventory, July 31 150,000 units

    Total cost of goods available for sale in July P356,400

    Cost of goods sold during July 297,000

    Gross profit on sales for July 303,000

    Cost of Inventory, July 1 P0.35 per unit

    The following are CSI’s July purchases of merchandise:

    Date Quantity Unit Cost

    July 6 180,000 P0.40

    12 150,000 0.41

    16 120,000 0.42

    17 150,000 0.45

    Required: , determine the following:

    __________1. Number of units on hand, July 1

    __________2. Units sold during July

    __________3. Unit cost of Inventory at July 31

    __________4. Value of Inventory at July 31

    Problem 2: The following data are extracted from the records of AIG Inc. relating to an inventory
    item.

    Units Unit Cost Total Cost

    Jan. 1 Beginning balance 5,000 P200 P1,000,000

    10 Purchase 5,000 P250 P1,250,000


    15 Sale 7,000

    16 Sale return 1,000

    30 Purchase 16,000 P150 P2,400,000

    31 Purchase return 2,000 P150 P 300,000

    Under perpetual system-moving average method, what is the cost of goods sold & Ending Inventory
    for January?

    Problem 3: Company is a wholesaler of office supplies. The activity for inventory of calculators
    during August is shown below:

    Units Cost

    August 1 Inventory 20,000 10.00

    7 Purchase 30,000 12.00

    12 Sale 10,000

    21 Purchase 20,000 15.00

    23 Purchase return 10,000 12.00

    24 Sale 20,000

    26 Sales return 5,000

    29 Purchase 20,000 20.00

    If CITI Company uses a Average periodic inventory system, what is the cost of goods sold and Ending
    Inventory for August?

    Problem 4: SUITS Inc. incurred the following costs related to its inventories:

    List price P1,000,000

    Trade discount and rebates 200,000

    Purchase discount 100,000

    Foreign exchange differences arising from acquisition 100,000

    Finance cost on inventory loan 200,000


    Irrecoverable import duties 300,000

    Creditable value added taxes 200,000

    Freight and handling costs 400,000

    After-sales warranty cost 200,000

    Sales commission paid to sales agents 100,000

    Salary of inventory accountant 300,000

    What is the total capitalizable cost of inventories of SUITS Inc.?

    Problem 5: ARROW Inc. provided the following data concerning its inventories:

    Finished goods of Arrow out on consignment to its customers P1,000,000

    Raw materials held on consignment by Arrow from its suppliers 2,000,000

    Goods in process in Arrow’s manufacturing plant 3,000,000

    Raw materials in transit from a supplier with FOB Destination 1,000,000

    Finished goods in transit to a customer with FOB Shipping point 3,000,000

    Finished goods in retail store of Arrow 4,000,000

    Finished good in shipping department of Arrow 2,000,000

    Raw materials in receiving department of Arrow 3,000,000

    Finished goods out to customer on approval 2,000,000

    Finished goods out to customer on sale or return arrangement 1,000,000

    Raw materials in transit from a supplier with FOB Shipping point 2,000,000

    Finished goods in transit to a customer with FOB Destination 3,000,000

    What is the total inventory to be presented in the Statement of Financial Position of ARROW Inc.?

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