ZEBRA MUSIKAHAN CO. sells musical instruments. In your audit of the company'sfinancial statements for the year ended December 31, 2016, you have gathered thefollowing data concerning inventory.At December 31, 2015, the balance in Zebra's Inventory account was P502,000, and theAllowance for Inventory Writedown had a balance of P32,000. The relevant inventory costand market data at December 31, 2016, are summarized in the schedule below.CostReplacementCostSales PriceNetNormalRealizableProfitValueGuitarsXylophonesTrumpetsViolinsTotalP89,00094,000125,000194,000P502,000P86,00092,000135,000114,000P427,000P91,50093,000129,000205,000P518,500P87,00085,000111,000197,000P480,000P6,4007,44011,61020,500P45,95023. What is the proper balance in the Allowance for Inventory Writedown at December 31, 2016?a. P75,000b. P22,000c. P32,000d. P25,00024. The adjusting entry on December 31, 2016, to arrive at the proper allowance balance shouldbea. Allowance for inventory writedownGain on inventory recovery7,0007,000b. Loss on inventory writedown7,000Allowance for inventory writedown7,000c. Allowance for inventory writedownGain on inventory recovery3,0003,000d. Loss on inventory writedown43,000Allowance for inventory writedown43,000

Name: ZEBRA MUSIKAHAN CO. sells musical instruments. In your audit of the c
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Description: ZEBRA MUSIKAHAN CO. sells musical instruments. In your audit of the company'sfinancial statements for the year ended December 31, 2016, you have gathered thefollowing data concerning inventory.At December 31, 2015, the balance in Zebra's Inventory a

The allowance for inventory loss is created to overcome any reduction in value of inventory.

Business

Accounting

following data concerning inventory. At December 31, 2015, the balance in Zebra's Inventory account was P502,000, and the Allowance for Inventory Writedown had a balance of P32,000. The relevant inventory cost and market data at December 31, 2016, are summarized in the schedule below. Cost Sales Price Normal Replacement Cost Net Realizable Value P87,000 85,000 111,000 197,000 P480,000 Profit P89,000 94,000 125,000 194,000 P502,000 P86,000 92,000 135,000 114,000 P91,500 93,000 129,000 205,000 P518,500 Guitars Xylophones Trumpets Violins P6,400 7,440 11,610 20,500 P45,950 Total P427,000 23. What is the proper balance in the Allowance for Inventory Writedown at December 31, 2016? a. P75,000 b. P22,000 c. P32,000 d. P25,000 24. The adjusting entry on December 31, 2016, to arrive at the proper allowance balance should be a. Allowance for inventory writedown Gain on inventory recovery 7,000 7,000 b. Loss on inventory writedown 7,000 Allowance for inventory writedown 7,000 c. Allowance for inventory writedown Gain on inventory recovery 3,000 3,000 d. Loss on inventory writedown 43,000 Allowance for inventory writedown 43,000

following data concerning inventory. At December 31, 2015, the balance in Zebra's Inventory account was P502,000, and the Allowance for Inventory Writedown had a balance of P32,000. The relevant inventory cost and market data at December 31, 2016, are summarized in the schedule below. Cost Sales Price Normal Replacement Cost Net Realizable Value P87,000 85,000 111,000 197,000 P480,000 Profit P89,000 94,000 125,000 194,000 P502,000 P86,000 92,000 135,000 114,000 P91,500 93,000 129,000 205,000 P518,500 Guitars Xylophones Trumpets Violins P6,400 7,440 11,610 20,500 P45,950 Total P427,000 23. What is the proper balance in the Allowance for Inventory Writedown at December 31, 2016? a. P75,000 b. P22,000 c. P32,000 d. P25,000 24. The adjusting entry on December 31, 2016, to arrive at the proper allowance balance should be a. Allowance for inventory writedown Gain on inventory recovery 7,000 7,000 b. Loss on inventory writedown 7,000 Allowance for inventory writedown 7,000 c. Allowance for inventory writedown Gain on inventory recovery 3,000 3,000 d. Loss on inventory writedown 43,000 Allowance for inventory writedown 43,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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