ventory and cost of good sold respectively, under net method? a. 19,600; 176,400 b. 20,000; 176,800 c. 20,000; 176,400
Neer Corp. purchased merchandise during 2004 on credit for P200,000; terms 2/10, n/30. All of the gross liability except P40,000 was paid within the discount period. The remainder was paid within the 30-day term. At the end of the annual accounting period, December 31, 2004, 90% of the merchandise had been sold and 10% remained in inventory. The company uses a periodic system. There was no beginning inventory.
7. How much are the ending inventory and cost of good sold respectively, under net method?
a. 19,600; 176,400
b. 20,000; 176,800
c. 20,000; 176,400
d. 19,600; 176,800
8. How much are the ending inventory (EI) and cost of goods sold (COGS), respectively, under the gross method, assuming (i) the discount is allocated only to the goods sold; and (ii) the discount is allocated to both the ending inventory and the goods sold?
|
Allocation to COGS only |
Allocation to both EI and COGS |
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|
EI |
COGS |
EI |
COGS |
|
a. 20,000; 177,120 |
19,000; 176,800 |
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|
b. 19,000; 176,400 |
20,00; 177,120 |
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|
c. 20,000; 176,800 |
19,680; 177,120 |
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|
d. 19,600; 176,800 |
20,000; 176,400 |
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