REQUIREMENT A

PERIODIC SYSTEM
ACCOUNT TITLES DEBIT CREDIT
1. Purchases 800, 000
Accounts Payable 800,000
2. Accounts Payable 50,000
Purchase Returns 50,000
3. Accounts Payable 600,000
Cash 600, 000
4. Accounts Receivable 1, 580, 000
Sales 1, 580, 000
5. Sales Return 40, 000
Accounts Receivable 40, 000
6. Cash 1, 360, 000
Accounts Receivable 1, 360, 000
7. Inventory 60, 0000
Income Summary 60, 000
Answer: Problem 10-4

PERPETUAL SYSTEM
ACCOUNT TITLES DEBIT CREDIT
1. Merchandise Inventory 800, 000
Accounts Payable 800,000
2. Accounts Payable 50,000
Merchandise Inventory 50,000
3. Accounts Payable 600,000
 Cash 600, 000
4. Accounts Receivable 1, 580, 000
Sales 1, 580, 000
Cost of Goods Sold 790, 000
Merchandise Inventory 790, 000
5. Sales Return 40, 000
Accounts Receivable 40, 000
Merchandise Inventory 20, 000
Cost of Goods Sold 20, 000
6. Cash 1, 360, 000
Accounts Receivable 1, 360, 000
7. Inventory Shortage 60, 0000
Merchandise Inventory 60, 000

REQUIREMENT B
70, 000
Merchandise Inventory per book
(60, 000)
Physical count
10, 000
SHORTAGE

PERIODIC SYSTEM

800,000 90, 000

Inventory- January
(50,000)
Add: Purchases
750,000
Less: Purchase returns
840,000
 Goods Available for Sale (60, 000)

Less: Inventory- December 31 P780, 000

COST OF SALES

PERPETUAL SYSTEM
Cost of Sales Recorded
770, 000
(790, 000- 20, 000)
10, 000
Inventory Shortage
780, 000
ADJUSTED COST OF SALES

Answer: Problem 10-9

Physical count of Goods 6,000,000

Goods shipped FOB shipping point on December 28, 2019

from a vendor to Hero Company were received on January 4, 300, 000

2020 6, 300, 000

INVENTORY, DECEMBER 31, 2019

D. 6, 300, 000

The goods costing P125,000 are properly included in the December 31, 2019

physical count because the goods are shipped FOB shipping point only on January

10,2020 (picked up by common carrier).

Answer: Problem 10-14
D. 2, 670, 000

Accounts Payable at December 31, 2019 2, 200, 000

Goods shipped FOB shipping point on December 22, 2019

and lost in transit 40, 000

Purchase Return (70, 000)

Advance payment erroneously debited to Accounts Payable 500, 000

ADJUSTED ACCOUNTS PAYABLE 2, 670, 000

Kew Company shall suffer the loss of the goods in transit because the goods are

shipped FOB shipping point.

Appropriately, Kew Company must file a claim against the common carrier.
Answer: Problem 10-17
A. 2, 500, 000

Ending inventory 2,000,000

Goods sold by the entity and shipped FOB destination 200,000

Goods purchased by the entity and FOB shipping point 300,000

CORRECT AMOUNT OF INVENTORY 2,500,000

Answer: Problem 10-24
A. 1, 300, 000
D. 860, 000
C. 9, 040, 000

INVENTORY ACCOUNTS PAYABLE NET SALES

UNADJUSTED 1, 250, 000 1, 000, 000 9,000 ,000

A (165, 000) (165, 000) -

B (20, 000) - -

C - - 40, 000

D 210, 000 - -

E 25, 000 25, 000 -

ADJUSTED 1, 300, 000 860, 000 9, 040, 000

Answer: Problem 10-8
ACCOUNT TITLES DEBIT CREDIT
1. Inventory 50,000
Income summary 50,000
2. Accounts Payable 75,000
Purchase 75,000
3. Purchases 30, 000

Accounts Payable 30, 000

4. Income Summary 90, 000

Inventory 90, 000

5. Purchases 140, 000

Accounts Payable 140, 000

Answer: Problem 10-10
D. 3, 000, 000

2, 500, 000
Inventory on 12-31-2019
100, 000
Merchandise
400, 000
Goods Billed to the customer 3, 000, 000

TOTAL

Answer: Problem 11-1

 REQUIREMENT 1 (FIFO)
Units Unit Cost Total Cost Sales (in units)
Jan. 1 Balance on hand 6,000 150 900,000 -
5 Purchase 2,000 200 400,000 -
10 Sale - - - 4,000
15 Sale 1,000
20 Purchase 2,500 300 750,000 -
25 Purchase 2,000 400 800,000 -
31 Sale - - - 3,000
12,500 2,850,000 8,000
Ending Inventory
Units 12, 500
Sales (8, 000)
TOTAL 4, 500
Units Unit Cost Total Cost
January 20 2,500 300 750,000
January 25 2,000 400 800,000
4,500 1,550,000

REQUIREMENT 2 (WEIGHTED AVERAGE METHOD – PERIODIC)

Units Unit Cost Total Cost
January 1 Balance on hand 6,000 150 900,000
5 Purchases 2,000 200 400,000
20 Purchases 2,500 300 750,000
25 Purchases 2,000 400 800,000
Total goods available for sale 12, 500 2,850,000

Weighted Average unit cost (2, 850,000/12,500) 228

Inventory Cost (4,500 x 228) ₱1,026,000

Answer: Problem 11-2

REQUIREMENT 1
 Units Unit Cost Total Cost Sales (in units)
Beginning Inventory 10,000 80 800,000 -
1 Purchases 2,000 100 200,000 -
2 Purchases 8,000 110 880,000 -
3 Purchases 6,000 120 20,000 -
4 Purchases 9,500 100 950,000 -
5 Purchases 14,500 90 1,305,000 -
Sales - - - 15,000
50,000 4,855,000 15,000
Ending Inventory
Units 50, 000
Sales (15, 000)
TOTAL 35, 000

FIFO - Periodic
Units Unit Cost Total Cost
4 Purchases 20,500 100 2,050,000
5 Purchases 14,500 90 1,305,000
35,000 3,355,000
Cost of Goods Sold
Beginning Inventory 800,000
Add: Purchases 4,055,000
Total Goods Available for sale 4,855,000
Less: Ending Inventory (3,355,000)
COST OF GOODS SOLD 1,500,000

REQUIREMENT 2 (WEIGHTED AVERAGE – PERIODIC)

Units Unit Cost Total Cost

Beginning Inventory 10,000 80 800,000
1 Purchases 2,000 100 200,000
2 Purchases 8,000 110 880,000
3 Purchases 6,000 120 20,000
4 Purchases 9,500 100 950,000
5 Purchases 14,500 90 1,305,000
50,000 4,855,000

Weighted Average unit cost (4, 855,000/50,000) 97.1

Inventory Cost (35,000 x 97.1) ₱3,398,000

REQUIREMENT 3

Lot 3, 6,000 x 120 = 720,000

Lot 4, 9,000 x 100 = 900,000
₱1,620,000

Answer: Problem 11-4

REQUIREMENT 1 (FIFO - PERPETUAL)
Purchases Sales Balance
Date Units Unit Cost Total Cost Units Unit Cost Total Cost Units Unit Cost Total Cost

Mar.1 1,000 270 270,000

6 3,000 250 750,000 1,000 270 270,000

3,000 250 750,000

9 1,000 270 270,000

1,000 250 250,000 2,000 250 500,000

14 6,000 280 1,680,000 2,000 250 500,000

25 4,000 210 840,000 6,000 280 1,680,000

4,000 210 840,000

31 2,000 250 500,000

6,000 280 1,680,000 4,000 210 840,000

13,000 3,270,000 4,000 840,000

REQUIREMENT 2 (MOVING AVERAGE)

Date Units Unit Cost Total Cost

Mar. 1 Beg. Balance 1,000 270 270,000

6 Purchase 3,000 250 750,000

Balance 4,000 255 1,020,000

9 Sale (2,000) 260 (520,000)

Balance 2,000 250 500,000

14 Purchase 6,000 280 1,680,000

Balance 8,000 272.5 2,180,000

25 Purchase 4,000 210 840,000

Balance 12,000 251.67 3,020,000

31 Sale (8,000) 272. 5 (2,180,000)

BALANCE 4,000 210 840,000

Answer: Problem 11-12

2019 2020 2021
Cost of Sales – Average 1,500,000 2,000,000 2,400,000
Understatement of
Ending Inventory:
2019 (150,000) 150,000 -
2020 (200,000) 200,000 -
2021 (270,000)
1,350,000 1,950,000 2,330,000

Sales 3,000,000 4,000,000 4,800,000

Cost of Sales – FIFO 1,350,000 1,950,000 2,330,000
Gross Income 17,650,000 2,050,000 2,470,000
Operating Expenses (800,000) (900,000) (1,000,000)
OPERATING INCOME 850,000 1,150,000 1,470,000

Proof
Net Income – Average 7,000,000 1,100,000 1,400,000
Understanding of Ending
Inventory:
2019 150,000 (150,000) -
2020 - 200,000 (200,000)
2021 - - 270,000
NET INCOME – FIFO 850,000 1,150,000 1,470,000

Answer: Problem 11-13

Units Unit Cost Total Cost Sales (in units)
January 1 Balance 500 500 250,000
9 Purchase 1,500 540 810,000
29 Purchase 500 600 300,000
31 Sales 750
 2,500 1,360,000 750
Ending Inventory
(2,500 – 750 = 1, 750)

FIFO – Periodic
Units Unit Cost Total Cost
January 9 1,250 540 675,000
January 29 500 600 300,000
1,750 975,000

Weighted Average unit cost (1,360,000/2,500) 544

Inventory Cost (1,750 x 544) ₱952,000

Cost of Goods sold under Average Method

Beginning Inventory ₱250,000
Add: Purchases 1,110,000
Total Goods Available for sale 1,360,000
Less: Ending Inventory (952,000)
COST OF GOODS SOLD ₱408,000

Answer: Problem 11-14

Group Sales Price Fraction Cost

1 20 x 3,000,000 60,000,000 60/105 40,200,000
2 10 x 2,500,000 25,000,000 25/105 16,750,000
3 10 x 2,000,000 20,000,000 20/105 13,400,000
105,000,000 70,350,000
Group Cost per lot Unsold Cost
1 40,200,000/2 2,010,000 5 10,050,000
2 16,750,000/10 1,675,000 4 6,700,000
3 13,400,000/10 1,340,000 3 4,020,000
20,770,000

Answer: Problem 11-16

D. 365, 000
Units Unit cost Total cost Sales (in units)
January 1 Inventory on hand 200 1,500 300,000 -
April 3 Purchase 300 1,750 525,000 -
October 3 Purchase 500 2,000 1,000,000 -
June 25 Sale 400
Dec. 31 Sale 400
 1,000 1,825,000 800

Ending Inventory
(1,000 – 800 = 200)

Weighted Average unit cost (1, 825,000/1,000) 1,825

Inventory Cost (200 x 1,825) ₱365,000

Answer: Problem 11-17

A. 7, 625, 000
Date Units Unit Cost Total Cost

Jan. 1 Beg. Balance 16,000 140 2,240,000

5 Purchase 4,000 150 600,000

Balance 20,000 142 2,840,000

10 Sale (15,000) 142 (2,130,000)

 Balance 5,000 142 710,000

15 Purchase 20,000 160 3,200,000

Balance 25,000 156.4 3,910,000

16 Purchase Return (1,000) 160 (160,000)

Balance 24,000 156.25 3,750,000

20 Sale (8,000) 156.25 1,250,000

Balance 16,000 156.25 2,500,000
26 Sales Return 4,000 156.25 625,000
Balance 20,000 156.25 3,125,000
31 Purchase 30,000 150 4,500,000
Balance 50,000 152.5 7,625,000