Ayo Company started 2022 with P94,000 of merchandise inventory on hand. During 2022, P400,000 in merchandise was purchased on account with credit terms 1/15, n/45. All discounts were taken. Purchases were all made FOB Origin. Ayo paid freight charges of P7,500. Merchandise with an invoice amount of P5,000 was returned for credit. Cost of goods sold for the year was P380,000. Ayo uses the perpetual inventory system. What is the ending inventory assuming Ayo uses the gross method to record purchases?
Ayo Company started 2022 with P94,000 of merchandise inventory on hand. During 2022, P400,000 in merchandise was purchased on account with credit terms 1/15, n/45. All discounts were taken. Purchases were all made FOB Origin. Ayo paid freight charges of P7,500. Merchandise with an invoice amount of P5,000 was returned for credit. Cost of goods sold for the year was P380,000. Ayo uses the perpetual inventory system. What is the ending inventory assuming Ayo uses the gross method to record purchases?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter5: The Income Statement And The Statement Of Cash Flows
Section: Chapter Questions
Problem 3RE: Shaquille Corporation began the current year with inventory of 50,000. During the year, its...
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![Ayo Company started 2022 with P94,000 of merchandise inventory on
hand. During 2022, P400,000 in merchandise was purchased on account
with credit terms 1/15, n/45. All discounts were taken. Purchases were all
made FOB Origin. Ayo paid freight charges of P7,500. Merchandise with
an invoice amount of P5,000 was returned for credit. Cost of goods sold
for the year was P380,000. Ayo uses the perpetual inventory system.
What is the ending inventory assuming Ayo uses the gross method to
record purchases?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0c870c96-5bcf-4eb4-89b6-883259326491%2Ff2ad4b46-317d-4777-b3b8-7c688d15e7c2%2Fbz58kt2_processed.png&w=3840&q=75)
Transcribed Image Text:Ayo Company started 2022 with P94,000 of merchandise inventory on
hand. During 2022, P400,000 in merchandise was purchased on account
with credit terms 1/15, n/45. All discounts were taken. Purchases were all
made FOB Origin. Ayo paid freight charges of P7,500. Merchandise with
an invoice amount of P5,000 was returned for credit. Cost of goods sold
for the year was P380,000. Ayo uses the perpetual inventory system.
What is the ending inventory assuming Ayo uses the gross method to
record purchases?
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