ABC sells one product which it purchases from various suppliers. ABC trial balance at December 20X1 included the following items: Sales (33,000 units) P528,000 Sales discounts 7,500 Purchases 368,900 Purchase discounts 18,000 Freight in 4,800 Freight out 11,000 ABC’s inventory purchases during 20X1 were as follows: Units sold Cost per unit Total cost Beginning inventory, Jan 1 8,000 P8.20 P65,600 Purchases, quarter ended, Mar 31 12,000 8.25 99,000 Purchases, quarter ended, June 30 15,000 7.90 118,500 Purchases, quarter ended, Sep 30 13,000 7.50 97,500 Purchases, quarter ended, Dec 31 7,000 7.70 53,900 Additional information: ABC’s accounting policy is to report inventory in its financial statements at a lower of cost or net realizable value, applied to total inventory. Cost is determined under the weighted average method. ABC had determined that at December 31, 20X1, the replacement cost of its inventory was P8.20 per unit and the net realizable value was P8 per unit. ABC’s normal profit margin is P1.05 per unit. The company uses the direct method of reporting losses from market decline of inventory, what is the total cost of sales for the year 20X1?
ABC sells one product which it purchases from various suppliers. ABC
Sales (33,000 units) P528,000
Sales discounts 7,500
Purchases 368,900
Purchase discounts 18,000
Freight in 4,800
Freight out 11,000
ABC’s inventory purchases during 20X1 were as follows:
Units sold Cost per unit Total cost
Beginning inventory, Jan 1 8,000 P8.20 P65,600
Purchases, quarter ended, Mar 31 12,000 8.25 99,000
Purchases, quarter ended, June 30 15,000 7.90 118,500
Purchases, quarter ended, Sep 30 13,000 7.50 97,500
Purchases, quarter ended, Dec 31 7,000 7.70 53,900
Additional information: ABC’s accounting policy is to report inventory in its financial statements at a lower of cost or net realizable value, applied to total inventory. Cost is determined under the weighted average method.
ABC had determined that at December 31, 20X1, the replacement cost of its inventory was P8.20 per unit and the net realizable value was P8 per unit. ABC’s normal profit margin is P1.05 per unit. The company uses the direct method of reporting losses from market decline of inventory, what is the total cost of sales for the year 20X1?
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