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You are auditing the valuation assertions over the inventories of your client, Atom Corporation, a manufacturer of textile products. The company has 4 major products. An analysis of the client records revealed the following: FINISHED GOODS Product Cost Estimated Selling Estimated Cost to Sell Price as a % of Selling price Alpha 560,000 906,000 20% Beta 920,000 1,200,000 25% Charlie 890,000 1,500,000 20% Delta 960,000 1,250,000 30% WORK IN PROGRESS Product Accumulated Estimated Selling Estimated Production Cost Price Upon Cost to Completion Complete Alpha 600,000 850,000 90,000 Beta 290,000 480,000 60,000 Charlie 980,000 1,620,000 100,000 Delta 610,000 1,050,000 89,000 RAW MATERIALS Item Cost Current Purchas Price Alpha-1 200,000 220,000 Alpha-2 185,000 175,000 Alpha-3 320,000 300,000 Beta-1 589,000 575,000 Beta-2 210,000 210,000 Charlie-1 560,000 550,000 Charlie-2 112,000 110,000 Charlie-3 222,000 200,000 Delta-1 60,000 80,000 Delta-2 256,000 240,000 Delata-3 145,000 130,000

You are auditing the valuation assertions over the inventories of your client, Atom Corporation, a manufacturer of textile products. The company has 4 major products. An analysis of the client records revealed the following: FINISHED GOODS Product Cost Estimated Selling Estimated Cost to Sell Price as a % of Selling price Alpha 560,000 906,000 20% Beta 920,000 1,200,000 25% Charlie 890,000 1,500,000 20% Delta 960,000 1,250,000 30% WORK IN PROGRESS Product Accumulated Estimated Selling Estimated Production Cost Price Upon Cost to Completion Complete Alpha 600,000 850,000 90,000 Beta 290,000 480,000 60,000 Charlie 980,000 1,620,000 100,000 Delta 610,000 1,050,000 89,000 RAW MATERIALS Item Cost Current Purchas Price Alpha-1 200,000 220,000 Alpha-2 185,000 175,000 Alpha-3 320,000 300,000 Beta-1 589,000 575,000 Beta-2 210,000 210,000 Charlie-1 560,000 550,000 Charlie-2 112,000 110,000 Charlie-3 222,000 200,000 Delta-1 60,000 80,000 Delta-2 256,000 240,000 Delata-3 145,000 130,000

FINANCIAL ACCOUNTING
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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A. Assuming that the company had the following beginning balances in its allowance for inventory write down accounts: FG – P60,000; WIP – P0; RM – P60,000, what is the total loss on inventory write-down to be recognized for the year?

B. 

You are auditing the valuation assertions over the inventories of your client, Atom Corporation, a manufacturer of textile products. The company has 4 major products. An analysis of the client records revealed the following: FINISHED GOODS Product Cost Estimated Selling Estimated Cost to Sell Price as a % of Selling price Alpha 560,000 906,000 20% Beta 920,000 1,200,000 25% Charlie 890,000 1,500,000 20% Delta 960,000 1,250,000 30% WORK IN PROGRESS Product Accumulated Estimated Selling Estimated Production Cost Price Upon Cost to Completion Complete Alpha 600,000 850,000 90,000 Beta 290,000 480,000 60,000 Charlie 980,000 1,620,000 100,000 Delta 610,000 1,050,000 89,000 RAW MATERIALS Item Cost Current Purchas Price Alpha-1 200,000 220,000 Alpha-2 185,000 175,000 Alpha-3 320,000 300,000 Beta-1 589,000 575,000 Beta-2 210,000 210,000 Charlie-1 560,000 550,000 Charlie-2 112,000 110,000 Charlie-3 222,000 200,000 Delta-1 60,000 80,000 Delta-2 256,000 240,000 Delata-3 145,000 130,000
Transcribed Image Text:You are auditing the valuation assertions over the inventories of your client, Atom Corporation, a manufacturer of textile products. The company has 4 major products. An analysis of the client records revealed the following: FINISHED GOODS Product Cost Estimated Selling Estimated Cost to Sell Price as a % of Selling price Alpha 560,000 906,000 20% Beta 920,000 1,200,000 25% Charlie 890,000 1,500,000 20% Delta 960,000 1,250,000 30% WORK IN PROGRESS Product Accumulated Estimated Selling Estimated Production Cost Price Upon Cost to Completion Complete Alpha 600,000 850,000 90,000 Beta 290,000 480,000 60,000 Charlie 980,000 1,620,000 100,000 Delta 610,000 1,050,000 89,000 RAW MATERIALS Item Cost Current Purchas Price Alpha-1 200,000 220,000 Alpha-2 185,000 175,000 Alpha-3 320,000 300,000 Beta-1 589,000 575,000 Beta-2 210,000 210,000 Charlie-1 560,000 550,000 Charlie-2 112,000 110,000 Charlie-3 222,000 200,000 Delta-1 60,000 80,000 Delta-2 256,000 240,000 Delata-3 145,000 130,000
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