Reference no: EM133054432
PROBLEM 1 - The Pub Company purchased a tract of land for P12,000,000 and incurred an additional cost of P3,000,000 during the remainder of the year in preparing the land for sale. The tract was subdivided into residential lots as follows:
|
Lot class
|
Number of lots
|
Sales price per lot
|
|
A
|
100
|
240,000
|
|
B
|
100
|
160,000
|
|
C
|
200
|
100,000
|
Using the relative sales value method, what amount of cost should be allocated to Class C lots?
PROBLEM 2 - Big Bang is a wholesaler of printing equipment.
The entity used the periodic average cost method to account for inventory. The activity for the inventory of printers during July is
|
|
|
Unit
|
Unit Cost
|
|
July 1
|
Inventory
|
20,000
|
36.00
|
|
July 7
|
Purchase
|
30,000
|
37.00
|
|
July 12
|
Sale
|
36,000
|
|
|
July 21
|
Purchase
|
50,000
|
37.88
|
|
July 22
|
Sale
|
38,000
|
|
|
July 29
|
Purchase
|
16,000
|
38.11
|
What is the unit cost of ending inventory on July 31?
PROBLEM 3 - Wesley Company reported that a flood recently destroyed many of the financial records. The entity used an average cost inventory valuation system. The entity måde a physical count at the end of each month in order to determine monthly ending inventory value. By examining various documents, the following data are gathered:
Ending inventory at July 31 60,000 units
Total cost of units available for sale in July 1,452,100
Cost of goods sold during July 1,164,100
Cost of beginning inventory, July 1 4.00 per unit
Gross profit on sales for July 935,900
|
|
Units
|
Unit Cost
|
Total Cost
|
|
July 5
|
55,000
|
5.10
|
280,500
|
|
July 11
|
53,000
|
5.00
|
265,000
|
|
July 5
|
45,000
|
5.50
|
247,500
|
|
July 5
|
47,000
|
5.30
|
249,100
|
|
Total Purchases
|
200,000
|
|
1,042,100
|
What is the number of units on July 01?
How many units were sold during the month?
What is the cost of the inventory on July 31?
PROBLEM 4 - Mythic Company provided the following data for the current year:
Inventory - January 1:
Cost 3,000,000
Net realizable value 2,800,000
Net purchases 8,000,000
Inventory - December 31:
Cost 4,000,000
Net realizable value 3,700,000
What amount should be reported as the cost of goods sold?
How much is the balance of Allowance for Inventory write-down as at December 31?
PROBLEM 5 - Cardo Company used the lower cost or NRV method to value the inventory. Data regarding the items in WIP Inventory are presented below.
|
|
T-shirts
|
Bags
|
Shoes
|
|
Historical Cost
|
240,000
|
188,000
|
300,000
|
|
Selling Price
|
360,000
|
250,000
|
360,000
|
|
Estimated cost to complete
|
48,000
|
50,000
|
68,000
|
|
Replacement Cost
|
208,000
|
168,000
|
318,000
|
|
Normal Profit Margin as % of Selling Price
|
25%
|
25%
|
10%
|
What is the measurement of WIP Inventory?