Problem 1. A recent fire severely damaged CSI Inc.
’s administration building and destroyed many of
its financial records. You have been contracted by CSI’s management to reconstruct as much
financial information as possible for the month of July. You learn that CSI makes a physical inventory
count at the end of each month to determine monthly ending inventory values. You also find out
that the company applies the average cost method.
You are able to gather the following information by examining various documents:
Inventory, July 31 150,000 units
Total cost of goods available for sale in July P356,400
Cost of goods sold during July 297,000
Gross profit on sales for July 303,000
Cost of Inventory, July 1 P0.35 per unit
The following are CSI’s July purchases of merchandise:
Date Quantity Unit Cost
July 6 180,000 P0.40
12 150,000 0.41
16 120,000 0.42
17 150,000 0.45
Required: , determine the following:
__________1. Number of units on hand, July 1
__________2. Units sold during July
__________3. Unit cost of Inventory at July 31
__________4. Value of Inventory at July 31
Problem 2: The following data are extracted from the records of AIG Inc. relating to an inventory
item.
Units Unit Cost Total Cost
Jan. 1 Beginning balance 5,000 P200 P1,000,000
10 Purchase 5,000 P250 P1,250,000
15 Sale 7,000
16 Sale return 1,000
30 Purchase 16,000 P150 P2,400,000
31 Purchase return 2,000 P150 P 300,000
Under perpetual system-moving average method, what is the cost of goods sold & Ending Inventory
for January?
Problem 3: Company is a wholesaler of office supplies. The activity for inventory of calculators
during August is shown below:
Units Cost
August 1 Inventory 20,000 10.00
7 Purchase 30,000 12.00
12 Sale 10,000
21 Purchase 20,000 15.00
23 Purchase return 10,000 12.00
24 Sale 20,000
26 Sales return 5,000
29 Purchase 20,000 20.00
If CITI Company uses a Average periodic inventory system, what is the cost of goods sold and Ending
Inventory for August?
Problem 4: SUITS Inc. incurred the following costs related to its inventories:
List price P1,000,000
Trade discount and rebates 200,000
Purchase discount 100,000
Foreign exchange differences arising from acquisition 100,000
Finance cost on inventory loan 200,000
Irrecoverable import duties 300,000
Creditable value added taxes 200,000
Freight and handling costs 400,000
After-sales warranty cost 200,000
Sales commission paid to sales agents 100,000
Salary of inventory accountant 300,000
What is the total capitalizable cost of inventories of SUITS Inc.?
Problem 5: ARROW Inc. provided the following data concerning its inventories:
Finished goods of Arrow out on consignment to its customers P1,000,000
Raw materials held on consignment by Arrow from its suppliers 2,000,000
Goods in process in Arrow’s manufacturing plant 3,000,000
Raw materials in transit from a supplier with FOB Destination 1,000,000
Finished goods in transit to a customer with FOB Shipping point 3,000,000
Finished goods in retail store of Arrow 4,000,000
Finished good in shipping department of Arrow 2,000,000
Raw materials in receiving department of Arrow 3,000,000
Finished goods out to customer on approval 2,000,000
Finished goods out to customer on sale or return arrangement 1,000,000
Raw materials in transit from a supplier with FOB Shipping point 2,000,000
Finished goods in transit to a customer with FOB Destination 3,000,000
What is the total inventory to be presented in the Statement of Financial Position of ARROW Inc.?
