Problem 1: (Gross profit method) PP Company reported the following information for the current year: Beginning inventory P 5,000,000 Purchases 26,000,000 Freight in 2,000,000 Purchase returns and allowances 3,500,000 Purchase discounts 1,500,000 Sales 40,000,000 Sales returns 3,000,000 Sales allowances 500,000 Sales discounts 1,000,000 A physical inventory taken at year-end resulted in an ending inventory of P4,000,000. At year-end, unsold goods out on consignment with selling price of P1,000,000 are in the hands of a consignee. The gross profit was 40% of sales. 1. What is the cost of good available for sale? a. 28m b.31m c.33m d.29.5m 2. What is the cost of good sold? a.21,900,000 b.22,200,000 c.21,300,000 d.24m 3. what is the estimated cost of inventory shortage? a. 1.8m b.2.7m c.1.2m d.2.1m
Problem 1: (Gross profit method)
PP Company reported the following information for the current year: Beginning inventory P 5,000,000
Purchases 26,000,000
Freight in 2,000,000
Purchase returns and allowances 3,500,000
Purchase discounts 1,500,000
Sales 40,000,000
Sales returns 3,000,000
Sales allowances 500,000
Sales discounts 1,000,000
A physical inventory taken at year-end resulted in an ending inventory of P4,000,000.
At year-end, unsold goods out on consignment with selling price of P1,000,000 are in the hands of a consignee.
The gross profit was 40% of sales.
1. What is the cost of good available for sale?
a. 28m
b.31m
c.33m
d.29.5m
2. What is the cost of good sold?
a.21,900,000
b.22,200,000
c.21,300,000
d.24m
3. what is the estimated cost of inventory shortage?
a. 1.8m
b.2.7m
c.1.2m
d.2.1m
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