Name: __________________________________

QUIZ NO. 1 – FINALS (PAS 2: INVENTORIES)

Multiple Choice: Kindly write your final answer beside each question number. Strictly no erasures.

1. On December 10, 2020, WagMukmok Company purchase goods with an invoice price of
P200,000. The terms were FOB shipping point. Some of the costs incurred in connection with
the sale and delivery of the goods were as follows: Packaging for shipment, P2,000; Shipping,
P3,000 and special handling charges, P4,000. On December 15, 2020, WagMukmok Company
received a P5,000 rebate in relation to the above purchases. In the December 31, 2020
statement of financial position, what amount of these goods should be included in inventory?
a. P204,000
b. P207,000
c. P209,000
d. P214,000

WagSisi Company included the following items in its inventory on December 31, 2020:
 Merchandise out on consignment to GigilMoKo, at sales price 3,000,000
 Goods purchased in transit, FOB shipping point 2,000,000
 Goods held on consignment from SigeSubukanMo Company 1,000,000
 Goods sold in transit, FOB shipping point, at sales price 4,500,000
 Freight paid by WagSisi on cosigned goods to GigilMoKo 100,000
 Freight paid by SigeSubukanMo 50,000
 Freight paid by WagSisi on goods purchased 10,000
 Freight paid by Wagsisi on goods sold to customer 20,000
 Mark-up cost is 25%.
 Consigned goods were still unsold at December 31, 2020.

2. How much should be included in WagSisi’s correct cost of inventory on December 31, 2020?
a. 5,010,000
b. 4,510,000
c. 4,410,000
d. 5,000,000

3. WagIyak Company records purchases at net amounts. On May 5, WagIyak purchased

merchandise on account, P640,000, terms 2/10, n/30. WagIyak returned P48,000 of the May 5
purchase and received credit on account. At May 31, the balance had not been paid. By how
much should the accounts payable be adjusted at May 31?
a. 11,840
b. 12,800
c. 13,760
d. None
 WagSumbong Company’s balances are as follows:
Accounts payable:
January 1, 2020 286,924
December 31, 2020 737,824
Inventory balance:
January 1, 2020 815,386
December 31, 2020 488,874
Cost of goods sold - 2020 1,859,082

4. How much was paid by WagSumbong Company to its suppliers in 2020?

a. 2,636,494
b. 1,081,670
c. 1,734,694
d. 1,983,470

WagShift Company reported inventory on December 31, 2020 at P6,000,000 based on a physical
count of goods priced at cost, and before any necessary year-end adjustment relating to the
following:
 Included in the physical count were goods billed to a customer FOB shipping point on
December 26, 2020. These goods has a cost of P125,000 and were picked up by the
carrier on December 30, 2020.
 Included in the physical count were goods shipped FOB destination on December 28,
2020 from a vendor to WagShift Company were received on December 31, 2020. The
invoice cost was P300,000.

5. What amount should be reported as inventory on December 31, 2020?

a. 5,875,000
b. 6,000,000
c. 6,175,000
d. 6,300,000

WagLipat Company reported inventory on December 31, 2020 at P2,500,000 based on physical
count priced at cost and before any necessary adjustment for the following:
 Merchandise costing P100,000, shipped FOB shipping point from a vendor on December
30, 2020 was received and recorded on January 5, 2021.
 Goods in the shipping area were included in the inventory although shipment was not
made until January 5, 2021. The goods billed to the customer FOB shipping point on
December 30, 2020 had a cost of P400,000.
6. What amount should be reported as inventory on December 31, 2020?
a. 2,500,000
b. 2,600,000
c. 2,900,000
d. 3,000,000

A physical count on December 31, 2020 revealed that WagTransfer Company had inventory with
a cost of P4,410,000. The following items were excluded from this amount.
 Merchandise of P610,000 is held by WagTransfer on consignment.
 Merchandise costing P380,000 was shipped by WagTransfer FOB shipping point to a
customer on December 31, 2020. The customer was expected to receive the goods on
January 5, 2021.
 Merchandise costing P460,000 was shipped by WagTransfer FOB destination to a
customer on December 29, 2020. The customer was expected to receive the goods on
December 31, 2020.
 Merchandise costing P830,000 shipped by a vendor FOB destination on December 31,
2020 was received by WagTransfer on January 3, 2021.
 Merchandise costing P510,000 purchased FOB destination was shipped by the supplier
on December 27, 2020 and received by WagTransfer on December 31, 2020.

7. What amount should be reported as inventory on December 31, 2020?

a. 5,300,000
b. 4,690,000
c. 3,800,000
d. 4,920,000

WagSuko Company counted the ending inventory on December 31, 2020 and reported the
amount of P3,000,000 before any corrections.
 Goods located in the entity’s warehouse are on consignment
from another entity were included in the count . 150,000
 Goods sold by the entity and shipped FOB destination were in
transit on December 31, 2020 and received by the customer on
January 2, 2021. The goods were excluded from the count. 200,000
 Included in the count were goods purchased by the entity and
shipped FOB destination were in transit on December 31, 2020
and received by the entity on January 2, 2021. 300,000
 Goods sold by the entity and shipped FOB shipping point were
in transit on January 3, 2021, goods were billed to a customer
on December 31, 2020. The goods were included in the count. 400,000
8. What amount should be reported as inventory on December 31, 2020?
a. 3,500,000
b. 3,350,000
c. 2,900,000
d. 2,750,000

Questions 9-10.
KayaKoPa Company sells musical instruments. At December 31, 2020, the balance in KayaKoPa’s
Inventory account was P502,000, and the Allowance for Inventory Writedown had a balance of
P32,000. The relevant inventory cost and market data at December 31, 2020, are summarized in
the schedule below.

Net
Replacemen Normal
Cost Sales Price Realizable
t cost Profit
  Value

Guitars 89,000 86,000 91,500 87,000 6,400

Xylophones 94,000 92,000 93,000 85,000 7,440

Trumpets 1,250,000 135,000 129,000 111,000 11,610

Violins 194,000 114,000 205,000 197,000 20,500

Total 1,627,000 427,000 518,500 480,000 45,950

9. What is the proper balance in the Allowance for Writedown at December 31, 2020?
a. 22,000
b. 25,000
c. 32,000
d. 75,000

10. The adjusting entry on December 31, 2020, to arrive at the proper allowance balance should be
a. Dr. Allowance for Inventory Writedown and Cr. Gain on Inventory Recovery 7,000
b. Dr. Loss on Inventory Writedown and Cr. Allowance for Inventory Writedown 7,000
c. Dr. Allowance for Inventory Writedown and Cr. Gain on Inventory Recovery 3,000
d. Dr. Loss on Inventory Writedown and Cr. Allowance for Inventory Writedown 43,000
 Questions 11-12.
TekaWaitLang Company has two products with cost and selling price as follows:
Product X Product Y
Selling Price 2,000,000 3,000,000
Estimated selling cost 600,000 700,000
Materials and conversion cost 1,500,000 1,800,000
General administration cost 300,000 800,000

At year-end, the manufacture of inventory has been completed but no selling cost has yet been
incurred.

11. Under LCNRV by individual item, the inventory shall be measured at what amount?
a. 3,700,000
b. 3,200,000
c. 3,800,000
d. 3,300,000

12. Under LCNRV by total, the inventory shall be measured at what amount?
a. 3,300,000
b. 3,700,000
c. 3,800,000
d. 3,200,000

Question 13-14.
During January 2020, OoKayaPa Company recorded the following information pertaining to its
inventory.
Units Unit Cost
January 1 balance 20,000 P10
15 sales 15,000
18 purchases 20,000 11
20 purchases 15,000 12
25 sales 24,000
30 purchases 14,000 1
31 sales 10,000

13. Using the FIFO method, what amount of inventory should OoKayaPa report in its January 31,
2020 statement of financial position?
a. 240,000
b. 260,000
c. 280,000
d. 282,000
14. Using the moving average method, what amount of inventory should OoKayaPa report in its
January 31, 2020 statement of financial position?
a. 240,000
b. 260,000
c. 280,000
d. 282,000

Questions 15-18.
The following information was provided by the bookkeeper of KayaKoPaNgaSabiEh
Incorporation.
 Sales for the month of December totaled 286,000 units.
 The following purchases were made in December:
Date Quantity Unit Cost
December 4 50,000 13.00
December 8 62,500 12.50
December 11 75,000 12.00
December 24 70,000 12.40
 There were 108,500 units on hand on December 1 with a total cost of P1,450,000.
15. What is the FIFO cost of the company’s inventory on December 31?
a. 1,025,000
b. 1,016,230
c. 988,000
d. 1,069,124

16. What is the total cost of goods sold in December under FIFO?
a. 3,633,020
b. 3,617,900
c. 3,580,126
d. 3,661,250

17. What is the cost of ending inventory under weighted average?

a. 1,025,000
b. 1,016,230
c. 988,000
d. 1,069,124

18. What is the total cost of goods sold in December under weighted average?
a. 3,633,020
b. 3,617,900
c. 3,580,126
d. 3,661,250
 Questions 19-20.
On December 31, 2020, a typhoon damaged a warehouse of AyokoNaPagodNaAko Corporation.
The entire company and many accounting records stored in the warehouse were completely
destroyed. Through the use of microfilmed records, the following data were gathered:
Inventory, January 1 450,000
Purchases 2,100,000
Sales 2,336,000
Sales Returns 36,000
Sales Discounts 14,000
Sales Allowances 20,000
Purchase returns 60,000
Purchase discounts 12,000
Freight in 5,000

In addition, the salvage value of damaged inventory is P90,000 while an undamaged inventory
that were marked to sell at P150,000 were recovered. Gross profit percentage on sales, 30%.

19. How much is the estimated cost of ending inventory?

a. 885,000
b. 873,000
c. 633,000
d. 687,000

20. How much is the value of inventory loss?

a. 885,000
b. 873,000
c. 633,000
d. 678,000

Questions 21-23.
BatBaMapilitKa Corporation had the following amounts under retail inventory method:

Beginning Inventory – cost 3,600 Purchases – cost 120,000

Purchase returns – cost 6,000 Net Markups 18,000
Abnormal shortage – cost 4,000 Net Markdowns 2,800
Sales 72,000 Sales returns 1,500
Sales discounts 3,000 Abnormal shortage – retail 5,500
Purchase returns – retail 7,500 Purchases – retail 200,000
Purchase discount 1,290 Beginning inventory – retail 5,000
Departmental transfer-in – cost 8,000 Dept’al transfer-in – retail 10,000
Normal spoilage 2,000 Employee discount 2,500
21. How much is the estimated cost of inventory under FIFO?
a. 78,210
b. 75,460
c. 78,766
d. 77,764

22. How much is the estimated cost of inventory under conservative?

a. 78,766
b. 77,764
c. 78,210
d. 75,460

23. How much is the estimated cost of inventory under average?

a. 77,764
b. 78,210
c. 75,460
d. 78,766

Questions 24-25.
The following information was taken from the records of BahalaKaNa Company for the month of
December:
Sales 198,000 Purchases at cost 96,000
Sales returns 4,000 Purchases at retail 176,000
Additional markups 20,000 Purchase returns at cost 4,000
Markup cancellations 3,000 Purchase returns at retail 6,000
Markdowns 18,600 Beginning inventory at cost 60,000
Markdown cancellations 5,600 Beginning inventory at retail 93,000
Freight-in 4,800

24. What is the cost of BahalaKaNa’s ending inventory under the retail inventory (average cost)
method?
a. 40,880
b. 42,870
c. 51,296
d. 43,500

25. What is the cost of goods sold BahalaKaNa for the month of December?
a. 113,300
b. 105,504
c. 115,920
d. 113,930