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    Intermediate Accounting 1 Inventories - Assignment

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    Gabriel Adrian Obungen
    This document provides an assignment with multiple inventory accounting problems. It includes missing amounts in an inventory table, calculations for purchase discounts and costs, adjustments to reported inventory amounts, and a question about lost discounts. The problems require applying concepts like freight costs, purchase discounts, inventory in transit, and consignment arrangements to calculate correct inventory or cost amounts.

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    Intermediate Accounting 1 Inventories - Assignment

    Uploaded by

    Gabriel Adrian Obungen
    399 views3 pages
    This document provides an assignment with multiple inventory accounting problems. It includes missing amounts in an inventory table, calculations for purchase discounts and costs, adjustments to reported inventory amounts, and a question about lost discounts. The problems require applying concepts like freight costs, purchase discounts, inventory in transit, and consignment arrangements to calculate correct inventory or cost amounts.

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    Inventories_Assignment

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    This document provides an assignment with multiple inventory accounting problems. It includes missing amounts in an inventory table, calculations for purchase discounts and costs, adjustments to reported inventory amounts, and a question about lost discounts. The problems require applying concepts like freight costs, purchase discounts, inventory in transit, and consignment arrangements to calculate correct inventory or cost amounts.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    399 views3 pages

    Intermediate Accounting 1 Inventories - Assignment

    Uploaded by

    Gabriel Adrian Obungen
    This document provides an assignment with multiple inventory accounting problems. It includes missing amounts in an inventory table, calculations for purchase discounts and costs, adjustments to reported inventory amounts, and a question about lost discounts. The problems require applying concepts like freight costs, purchase discounts, inventory in transit, and consignment arrangements to calculate correct inventory or cost amounts.

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    © All Rights Reserved
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    of 3

    INTERMEDIATE ACCOUNTING 1

    INVENTORIES - ASSIGNMENT
    A. Supply the missing amounts.

    A B C D E
    Purchase Returns & 12,750 2,480 1,750 14,000 2,200
    Allowances

    Sales Returns & Allowances 4,500 6,200 2,250 35,000 5,500


    Goods Available for Sale 69,000 77,500 90,000 41,500 85,500
    Freight In 2,000 5,000 2,250 1,250 1,110
    Freight Out 3,000 12,000 5,000 3,800 1,500

    Merchandise Inventory, 35,000 19,000 17,500 13,000 15,090


    beginning

    Merchandise Inventory, ending 19,000 23, 500 47,000 18,500 17,000


    Purchases 47,500 58, 155 72,000 85,000 73,000
    Sales Discount 3,200 4,600 5,500 1,950 2,000
    Purchase Discount 2,750 2,175 0 1,250 1,500
    Cost of Goods Sold 50,000 54,000 43,000 60,000 68,000

    B. Crossings Company regularly buys merchandise from Best Company and is


    allowed a trade discount of 20% from the list price. Crossings made a purchase
    on March 20, 2020, and received an invoice with a list price of P150,000, a
    freight charge of P2,500, and payment terms of net 30 days. What is the
    total cost of merchandise purchases?

    (Crossings Company)
    Invoice price (150,000 x 0.80 x 0.90) P 108,000
    Freight charge 2,500
    Total cost of merchandising purchases P 110,500
    C. The inventory of Orient Trading at the end of 2020 is P9,500,000. Included in
    the amount are the following items:
    • Merchandise in transit, purchased FOB Shipping Point, P680,000.
    • Goods held on consignment, P500,000.
    • Goods out on consignment, at cost plus 50% mark-up on cost plus P10,000
    delivery charge, P610,000.
    What is the correct amount of inventory?
    (Orient Trading)
    Reported Inventory P 9,500,000
    Merchandise in transit purchased FOB destination (420,0000)
    Goods held on consignment (500,000)
    Mark up on goods out on consignment
    Sales 600,000
    Cost (600,000/1.5) 400,000 (200,000)
    Merchandise in transit to customers FOB destination
    400,000 x ( 100% - 40%) 240,000
    Correct Inventory P 8, 620,000
    D. The physical inventory on December 31, 2020 of Tintin Company showed
    merchandise at P172,000. You discovered that the following items were excluded
    from this amount:
    • Merchandise costing P31,500 shipped by a vendor FOB Shipping Point on
    December 31,2020 and received by Tintin on January 5, 2021.
    • Merchandise costing P40,000 shipped by a vendor FOB Destination on
    December 30,2020 and received by Tintin on January 4, 2021.
    • Merchandise costing P12,500 which was shipped FOB Destination to a
    customer on December 29, 2020. The customer expected to receive the
    merchandise on January 6, 2021.
    • Merchandise costing P28,500 which was shipped FOB Shipping Point to a
    customer on December 29, 2020. The goods are scheduled to arrive at the
    destination point on January 2, 2021.
    What is the correct amount of inventory?

    (Tintin Company)
    Physical inventory at December 31, 2013 P 172,000
    Merchandise in transit shipped FOB shipping point 31,500
    Merchandise sold FOB destination still in transit 12,500
    Correct inventory P 216,000
    E. Rock Distributors, a computer store, specializes in the sale of IBM compatibles and
    software packages, and had the following transactions with one of its suppliers:

    Purchases of IBM compatibles P3,280,000


    Purchases of commercial software package 900,000
    Returns and allowances 80,000
    Purchase discounts taken 27,000

    Purchases were made throughout the year on terms 3/10, n/30. All returns and allowances
    took place within 5 days of purchase and prior to any payment of account.
    How much were the discounts lost?

    3,280,000 + 900,000 – 80,000 = 4,100,000 x 3% =123,000


    ; 123,000 – 27,000= 96,000

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