OOO Company uses the retail inventory method. At the end of the current year, OOO Company suffered a fire loss that destroyed most of its inventory. After the fire, onlygoods with a selling price of P125,000, a cost of P100,000 and a net realizable value of P75,000was salvaged. The following information is available prior to the fire: Cost Retail Beginning inventory P 1,100,000 P 2,200,000 Purchases 15,800,000 26,300,000 Freight in 540,000 Purchase returns 600,000 1,000,000 Purchase allowances 300,000 Departmental transfer in 400,000 800,000 Markups 300,000 Cancelation of markdown 100,000 Departmental transfer out 350,000 900,000 Markdowns 800,000 Cancelation of markup 50,000 Sales 24,700,000 Sales returns 350,000 Sales discounts 200,000 Sales allowances 100,000 Employee discounts 600,000 Normal wastage 5% of sales What is the estimated cost of goods sold if OOO Company applies the FIFOretail approach? What is the estimated ending inventory if OOO Company applies the average cost approach?
OOO Company uses the retail inventory method. At the end of the current year, OOO Company suffered a fire loss that destroyed most of its inventory. After the fire, onlygoods with a selling price of P125,000, a cost of P100,000 and a net realizable value of P75,000was salvaged. The following information is available prior to the fire: Cost Retail Beginning inventory P 1,100,000 P 2,200,000 Purchases 15,800,000 26,300,000 Freight in 540,000 Purchase returns 600,000 1,000,000 Purchase allowances 300,000 Departmental transfer in 400,000 800,000 Markups 300,000 Cancelation of markdown 100,000 Departmental transfer out 350,000 900,000 Markdowns 800,000 Cancelation of markup 50,000 Sales 24,700,000 Sales returns 350,000 Sales discounts 200,000 Sales allowances 100,000 Employee discounts 600,000 Normal wastage 5% of sales What is the estimated cost of goods sold if OOO Company applies the FIFOretail approach? What is the estimated ending inventory if OOO Company applies the average cost approach?
Chapter1: Financial Statements And Business Decisions
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PROBLEM 40: OOO Company uses the retail inventory method. At the end of the current year, OOO Company suffered a fire loss that destroyed most of its inventory. After the fire, onlygoods with a selling price of P125,000, a cost of P100,000 and a net realizable value of P75,000was salvaged. The following information is available prior to the fire: Cost Retail
Beginning inventory P 1,100,000 P 2,200,000
Purchases 15,800,000 26,300,000
Freight in 540,000
Purchase returns 600,000 1,000,000
Purchase allowances 300,000
Departmental transfer in 400,000 800,000
Markups 300,000
Cancelation of markdown 100,000
Departmental transfer out 350,000 900,000
Markdowns 800,000
Cancelation of markup 50,000
Sales 24,700,000
Sales returns 350,000
Sales discounts 200,000
Sales allowances 100,000
Employee discounts 600,000
Normal wastage 5% of sales
- What is the estimated cost of goods sold if OOO Company applies the FIFOretail approach?
- What is the estimated ending inventory if OOO Company applies the average cost approach?
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