f.g.PROBLEMSh.1.On April 1, 2015,ICompany issued 30,000 shares for a parcel of land. Par value and marketvalue of ordinary shares 40 and 55 respectively. The fair market value of the building is1,600,000.
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2.LCompany is engaged in raising dairy livestock. The entity provided the following informationduring the year:j.k.Carrying amount on January 13,000,000l.Gain arising from change in fair value due to price change500,000m.Gain arising from change in fair value due to phyical change400,000n.Decrease due to sales900,000o.p.What amount should be reported as biological asset on December 31?a.3,000,000b.3,500,000c.4,800,000d.3,900,000q.
3.On December 31, 2015, a storm surge damaged the warehouse ofOCompany. The entireinventory and many accounting records wre completely destroyed4.5.Jan 1Dec 316.Purchases6,500,0007.Inventory2,000,0008.Cash Sales800,0009.Collections of accounts receivable7,500,00010.Accounts receivable600,0001,200,00011.Gross profit rate30%12.13.What is the inventory loss from the storm surge?
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INVENTORY ESTIMATION
1.Inventory estimates will be required for the following, except
a.As proof of reasonable accuracy of the physical inventory
b.When inventory is destroyed by typhoon or lahar flow
c.When interim financial statements are prepared
d.In the determination of the ending inventory to be shown on the balance
sheet at year end
2.Noel Corp. has annual sales totaling P650,000 and an average gross profit of
20% of cost. What is the peso amount of the gross profit?
a.130,000
b.162,500
c.108,333
d.97,500
SOLUTION:
P650,000 - (P650,000 ÷ 1.20) = P108,333
3.The following information is available for October for Joseph Company
Beginning inventoryP 50,000
Net purchases150,000
Net sales300,000
Percentage markup on cost66.67%
A fire destroyed Joseph’s October 31 inventory, leaving undamaged inventory
with a cost of P3,000. Using the gross profit method, the estimated ending
inventory destroyed by fire is
a. P17,000
b.P77,000
c.P80,000
d.P100,000
SOLUTION:
(P50,000 + P150,000) – (P300,000 ÷ 5/3) – P3,000 = P17,000
4.April Company uses the retail inventory method to value its merchandise
inventory. The following information is available for the current year:
CostRetail
Beginning inventoryP 30,000P 50,000
Purchases145,000200,000
Freight-in2,500-
Net markups-8,500