FAR 100 Merchandising Quiz Answer Key

Holy Name University
College of Business and Accountancy

Accountancy Department
FAR 100 – Fundamentals of Accounting

Chapter Quiz in Merchandising Business (Inventory Systems and VAT)
Name: Date: Score: / 80

Program & Yr. Level: Instructor: Ross Catherine P. Lero, CPA
True or False: Write TRUE if the statement is correct. Otherwise, underline the word/s that makes the statement wrong and
write the correct word/s that will make the statement correct. (20 pts)
________________1. A merchandising-concern business purchases raw materials that will be processed and converted into
finished products to be sold to customers.
________________2. Freight-out is used in computing cost of goods sold.
________________3. Merchandise in transit may or may not be owned by the buyer depending upon the shipment term.
________________4. Gross profit is the excess of cost goods sold over net sales.
________________5. Goods sold under FOB destination, freight collect will increase the buyer’s liability to the seller.
________________6. Value added tax is a tax imposed on the sale, barter, exchange, lease, and export of goods, properties
and services.
________________7. The weighted average method can be used in computing the value of ending inventory of a business that
has experienced inventory losses due to flooding.
________________8. A non-VAT registered business must file its March 2550M and remit the VAT payable to the BIR
before April 25.
________________9. Under perpetual method, the entry to record sales discounts includes a debit to Inventory.
________________10. Freight-out is to distribution cost as office supplies expense is to administrative cost.
Periodic and Perpetual Inventory System: JT Builders is involved in the buying and selling of construction materials. VAT on
Sales are separately billed. Cash sales are given 5% trade discount and credit sales are given 3% discount if paid within 10 days.
JT Builders’ gross profit rate is 30%. Inventory transactions are as follows:
Oct 1 The opening entry for the month of October included a debit entry to Inventory, P50,000.
2 Purchased on account P224,000 VAT-inclusive goods from Diosa Samaniego, 3/15 n/30.
4 Purchased in cash P75,000 worth of goods from Yeti Altre. VAT is billed separately.
5 Sold P78,000 worth of goods on account to SRC Inc. under shipping terms FOB Shipping Point, freight
collect. Freight charge is at P350.
7 Returned inventory worth P53,760 to Diosa Samaniego. Only half of these items were replaced.
8 Gosia Co. purchased goods worth P300,000 from JT Builders paying cash upfront.
10 Purchased on account P 98,560 worth of goods from Nova Suarez, n/45. Freight is to be shouldered by JT
Builders, P2,240. Prices and shipping fee are VAT-inclusive.
13 Remitted payment to Diosa Samaniego.
16 SRC Inc. settled their account with JT Builders.
18 A parcel was received containing P33,250 invoice price of goods with a note, “RTS-wrong order”. The
package was addressed from Gosia Co. No replacement was made.
21 Purchased on account VAT-exclusive goods worth P50,000 from Pipoy Inc, FOB Shipping Point, freight
prepaid. The shipping charge is P3,500.
25 Sold on account, FOB Destination P105,000 goods to Ennaira Parks. JT Builders prepaid freight of P1,500.
28 Sold in cash P56,000 goods to Olimpia Montez who picked up their order at the store.
31 P35,200 worth of inventory was listed per physical inventory count. Inventory shipments from Pipoy Inc. and
to Ennaira Parks were not included in the count.
Requirement:
(1) Journalize the preceding transactions under:
a. Periodic inventory system; and
b. Perpetual inventory system (32 pts)
(2) Compute the ff: under periodic inventory system:
a. Cost of goods available for sale (3 pts)
b. Cost of goods sold (3 pts)
c. Gross profit (3 pts)
(3) Compute the ff: under perpetual inventory system:
a. Cost of goods sold (3 pts)
b. Gross profit (3 pts)
(4) How much is the input VAT of JT Builders for the month of October? (3 pts)
(5) How much is the output VAT of JT Builders for the month of October? (3 pts)
(6) Determine the VAT Payable/Prepaid VAT of JT Builders for October. (3 pts)
(7) What BIR form is JT Builders required to file for their VAT transactions? (2 pts)
(8) When is the deadline of filing for your answer in the previous item? (2 pts)
-End of Quiz-
Page | 1
Journal entries under Periodic Inventory Method:
Page | 2
Journal entries under the Perpetual Inventory Method
Page | 3
Page | 4

FAR 100 Merchandising Quiz Answer Key

Uploaded by

Copyright:

Available Formats

FAR 100 Merchandising Quiz Answer Key

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

FAR 100 Merchandising Quiz Answer Key

Uploaded by

Copyright:

Available Formats

Holy Name University

College of Business and Accountancy

FAR 100 – Fundamentals of Accounting

Name: Date: Score: / 80

You might also like