Beruflich Dokumente
Kultur Dokumente
Canlubang Campus
Financial Management II
A physical inventory taken on December 31, 2013 resulted in an ending inventory of P4,000,000. On
December 31, 2013, unsold goods on consignment with selling price of P1,000,000 are in the hands of
a consignee. The gross profit was 25% on cost. On December 31, 2013, what is the estimated cost of
inventory shortage?
a. 2,400,000
b. 1,400,000
c. 1,600,000
d. 1,275,000
2. On the nights of December 31, 2013, a fire destroyed most of the merchandise inventory of Kristina
Company. All goods were completely destroyed except for partially damaged goods that normally sell
for P100,000 and that had an estimated net realizable value of P25,000 and undamaged goods that
normally sell for P60,000.
a. 700,000
b. 615,000
c. 630,000
d. 580,000
3. On December 31, 2013, a fire damaged the warehouse and factory of Pauline Company completely
destroying the work in process inventory. There was no damage to either the raw materials or finished
goods. The physical inventory revealed the following:
January 1 December 31
The gross profit margin historically approximated 30% of sales. The sales for the year amounted to
P20,000,000. Raw materials purchases totaled P4,000,000. Direct labor costs for the year amounted to
P5,000,000, and manufacturing overhead has been applied at 60% of direct labor. What was the
inventory fire loss on December 31, 2013?
a. 3,500,000
b. 3,800,000
c. 2,500,000
d. 1,500,000
4. Krizzadel Company used the retail inventory to approximate the ending inventory. The following
information is available for the current year:
Cost Retail
Beginning inventory 650,000 1,200,000
Purchases 9,000,000 14,700,000
Freight in 200,000
Purchase returns 300,000 500,000
Purchase allowances 150,000
Departmental transfer in 200,000 300,000
Net markups 300,000
Net markdowns 1,000,000
Sales 9,500,000
Sales discounts 100,000
Employee discounts 500,000
Estimated normal shoplifting losses 600,000
Estimated normal shrinkage 400,000
1. What is the estimated cost of ending inventory using the consecutive approach?
a. 2,400,000
b. 2,460,000
c. 3,060,000
d. 2,700,000
2. What is estimated cost of ending inventory using the average cost approach?
a. 2,560,000
b. 2,624,000
c. 3,264,000
d. 2,880,000
a. 2,300,000
b. 2,700,000
c. 2,800,000
d. 2,900,000
Cost Retail
Beginning inventory 1,400,000 2,000,000
Purchases 5,850,000 8,000,000
Net markup 1,500,000
Net markdown 500,000
Sales 7,500,000
What is the estimated cost of the ending inventory using the FIFO approach?
a. 2,275,000
b. 2,375,000
c. 2,310,000
d. 2,205,000
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