Paa2 Ia

1.
585,000
2. 286,650
3. 4.60
4. @101.96 –407,840
@102------408,000
5. 335,000
6. 365,000
7. 230
8. 7,625,000
9. 3,850,000
10. If this is the first year of operations, what is the loss in inventory writedown? 150,000
11. If this is the subsequent year and the beginning balance of Allowance for inventory writedown is 210,000,
how much is the gain on reversal of inventory writedown? 60,000
12. Based on a physical inventory taken on December 31, 2021, Comoros Company determined its
chocolate inventory on a FIFO basis at P5,200,000 with a replacement cost of P5,000,000.
Comoros Company estimated that, after further processing costs of P2,400,000, the chocolate
could be sold as finished candy bars for P8,000,000. The normal profit margin is 10% of sales.
Under the lower of cost and net realizable value, what amount should Comoros Company report
as chocolate inventory in the December 31, 2021 statement of financial position? 5,200,000
13. 3,200,000
14. If this is the subsequent year, and the Allowance for inventory writedown has a beginning balance of
P75,000, what is the loss on inventory writedown in the current year? 25,000
15. In relation to number 14, what should be presented as Allowance for Inventory Writedown in the
Statement of Financial Position as of the end of the current year? 100,000
16. 30,000
17. 8,000
18. 4,400,000
19. 1,665,000
20. On October 1, 2021, Eswatini Company entered into a 6-month, P10,400,000 purchase commitment for a
supply of a special product on March 31, 2022. On December 31, 2021, the market value of this material had
fallen to P10,000,000. On March 31, 2022, the market value of the purchase commitment is P9,800,000. What
is the loss on purchase commitment that should be recognized on March 31, 2022? 400,000
21. 6,000,000
22. What account is debited in the amount of P800,000? (Use ALL CAPITAL LETTERS) LOSS ON PURCHASE
COMMITMENT
23. What amount is credited to Accounts Payable? 6,200,000
24. What amount is credited to Gain on purchase commitment? 600,000
25. On November 15, 2021, what amount is credited to Estimated Liability on Purchase Commitment? (Amount in
Figure) 800,000
26. Which of the following is INCORRECT ?

a. IFRS prohibits LIFO cost flow assumptions.
b. FIFO is the inventory pricing procedure in which the oldest costs rarely have an effect on the ending inventory.
c. In a period of falling prices, weighted average method provides the lowest amount of net income.
d. In a period of falling prices, FIFO generally provides the lowest amount of ending inventory.
27. Which of the following is CORRECT?

a. The credit balance that arises when a loss on purchase commitment is recognized should be subtracted from ending
inventory.
b. When the cost of goods sold method is used to record the inventory at net realizable value, the NRV for ending
inventory is substituted for cost and the loss is buried in cost of goods sold.
c. LCNRV should always be equal to net realizable value which is the estimated selling price less estimated cost to
complete and estimated cost of disposal. d. Reversal of inventory writedown is prohibited
28. 1,772,000
29. Under the moving average, what is the cost of sales? 3,527,800
30. Under FIFO-perpetual, what is the cost of goods sold? 3,500,000
31. Under weighted average-periodic, what is the cost of sales? 3,710,000
32. 7,508,000
33. 102,500
34. How many units were sold in August? 242,500
35. What is the cost of inventory on August 31? 576,000
36. 2,240,000
37. If 70% of the lots of EACH lot class is sold during the year, what is the cost of the ending inventory? 3,528,000
38. Assuming that the following lots were sold during the year : 8 Jupiter lots, 14 Saturn lots, 24 Venus lots and 25
Mercury lots, what is the cost of the ending inventory? 4,620,000
39. 7,800,000
40. What is the cost of goods sold? 12,400,000
41. What is the balance of Allowance for inventory writedown at the the end of the year? 600,000
42. What is the Gain on reversal of inventory writedown? 200,000
43. If the company used the direct method, what is the cost of goods available for sale? 20,400,000
44. 38,400,000
45. Under the allowance method, what is the cost of goods sold after inventory writedown? 38,400,000
46. Under the allowance method, what is the Loss on Inventory writedown, if any? 400,000
47. Under the allowance method, what is the cost of sales before inventory writedown? 38,000,000
48. In the Statement of Financial Position as of December 31, 2021, what amount should be shown as
Allowance for inventory writedown? 1,400,000
49. 5,000,000
50. Under assumption 1, what is the gain (loss) on purchase commitment on the date of purchase? 500,000
51. Under assumption 2, at what amount should Raw Materials Inventory be recorded? 4,800,000
52. Under assumption 2, what is the gain (loss) on purchase commitment on the date of purchase? 300,000
53. Lower of cost or net realizable value as it applies to inventory is best described as the
a. reporting of a loss when there is a decrease in the future utility below the original cost
b. method of determining the cost of goods sold
c. assumption to determine inventory flow
d. change in inventory value to net realizable value.
54.
a. Only Statement 1 is true.

b. Only Statement 2 is true.
c. Both statements are true
d. Both statements are false.
55. When agricultural crops have been harvested or mineral ores have been extracted and a sale is assured
under a forward contract or government guarantee, such inventories are measured at
a. Net realizable value
b. Cost
c. Standard cost
d. Relative sales price
56. The costing of inventory must be deferred until the end of the reporting period under which of the
following method of inventory valuation?
a. Moving average
b. Weighted average periodic
c. FIFO perpetual
d. either FIFO perpetual or moving average
57. The credit balance that arises when a loss on purchase commitment is recognized should be
a. Presented as a current liability

b. Subtracted from ending inventory
c. Presented as either current or contingent liability
d. Presented in the income statement
58.
a. Weighted average – perpetual

b. Weighted average – periodic
c. FIFO – perpetual
d. Weighted average, whether perpetual or periodic
59.
a. Weighted average – perpetual

b. Weighted average – periodic
c. FIFO – whether perpetual or periodic
d. Moving average
e. Specific identification
60.
2,550,000;3,450,000

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1.

23. What amount is credited to Accounts Payable? 6,200,000

24. What amount is credited to Gain on purchase commitment? 600,000

26. Which of the following is INCORRECT ?

27. Which of the following is CORRECT?

30. Under FIFO-perpetual, what is the cost of goods sold? 3,500,000

31. Under weighted average-periodic, what is the cost of sales? 3,710,000

35. What is the cost of inventory on August 31? 576,000

a. Only Statement 1 is true.

a. Presented as a current liability

a. Weighted average – perpetual

a. Weighted average – perpetual

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