Inventory Systems

A. On January 1, 2018, Entity A had an inventory balance of P9,000. The following transactions
affected. Entity A’s inventory during the year:

1. Purchased goods worth P130,000 on account.

2. Paid freight of P5,000 on the purchase above.
3. Returned damaged goods worth P3,000 to the supplier.
4. Sold goods costing P128,000 for P320,000 , on credit.
5. A customer returned goods with sale price of P2,500 and cost of P1,000.

Requirements:

1. Prepare journal entries under (a) perpetual inventory system and (b) periodic inventory
system.
2. Compute for the cost of goods sold under (a) perpetual inventory system and (b) periodic
inventory system. The ending inventory per physical count is P14,000
3. Prepare a statement of cost of goods sold and gross profit.

B. Entity B had the following transactions during the period:

1. Purchased goods worth P90,000 on account.

2. Paid transportation costs of P7,000 on the purchase above.
3. Returned damaged goods worth P2,000 to the supplier.
4. Sold goods costing P80,000 for P132,000 on account.
5. A customer returned goods with sale price of P9,000 and cost of P6,000.

Requirements:

4. Prepare journal entries under (a) perpetual inventory system and (b) periodic inventory
system.
5. Compute for the cost of goods sold under (a) perpetual inventory system and (b) periodic
inventory system. The ending inventory per physical count is P21,000
6. Prepare a statement of cost of goods sold and gross profit.
C. Entity C’s records show the following information on December 31, 2018.

Sales 230,000
Sales discounts 7,000
Sales returns 15,000
Inventory, beginning 22,000
Inventory, ending 28,000
Purchases 120,000
Freight-in 5,000
Purchase discounts 3,000
Purchase returns 2,000

Requirement: Prepare the statement of cost of goods sold and gross profit for the period.

D. The records of a business show the following information: Sales, P724,200; Sales discounts,
P10,000; Sales returns, P3,600; and Freight-in, P5,300. How much is the net sales?
E. Inventory, beg. P20,000; Net purchases, P210,000; Cost of goods sold, P190,000. How much is
the ending inventory?
F. Net purchases, P170,000; Cost of goods sold, P140,000; Inventory, end, P60,000. How much is
the beginning inventory?
G. Total goods available for sale, P170,000; Net purchases, P150,000; Inventory, end., P50,000.
How much is the change in inventory during the year? Increase (decrease)
H. Net purchases, P170,000; Increase in inventory during the year, P40,000. How much is the cost
of goods sold?
I. Inventory, end., P62,000; Net purchases, P216,000; Cost of goods sold, P244,000. How much is
the Inventory, beg.?
J. The records of a business show the following information:
Sales, P364,000; Purchases, P252,000; Freight-in, P11,000; Purchase discounts, P4,900; Sales
returns, P12,600; Purchase returns, P3,000; Inventory, beg., P22,400; and Inventory, end.,
P15,000. How much is the total goods available for sale?
Format:
 Perpetual System Periodic System

1. Purchased goods worth P10,000 on account

Inventory 10,000 Purchases 10,000
Accounts Payable 10,000 Accounts Payable 10,000

2. Paid shipping costs of P1,000 for purchase order.

Inventory 1,000 Freight-in 1,000
Cash 1,000 Cash 1,000

3. Returned damaged goods worth P2,000 to the supplier.

Accounts Payable 2,000 Accounts Payable 2,000
Inventory 2,000 Purchase returns 2,000

4. Sold goods costing P5,000 for P20,000 on account.

Accounts Receivable 20,000 Accounts Receivable 20,000
Sales 20,000 Sales 20,000

Perpetual System Periodic System

1. Purchased goods worth P10,000 on account

Inventory 10,000 Purchases 10,000
Accounts Payable 10,000 Accounts Payable 10,000

2. Paid shipping costs of P1,000 for purchase order.

Inventory 1,000 Freight-in 1,000
Cash 1,000 Cash 1,000

3. Returned damaged goods worth P2,000 to the supplier.

Accounts Payable 2,000 Accounts Payable 2,000
Inventory 2,000 Purchase returns 2,000

4. Sold goods costing P5,000 for P20,000 on account.

Accounts Receivable 20,000 Accounts Receivable 20,000
Sales 20,000 Sales 20,000

Cost of Goods Sold 5,000

No entry
Inventory 5,000