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Quarantine Company, A Manufacturer of Small Tools, Provided The Following Information For The Year Ended December 31, 2019

The document provides inventory, accounts payable, and net sales figures for Quarantine Company for the year ended December 31, 2019. It also provides additional information on inventory items that were in transit, returned by customers, or received near year-end that require adjustments to the reported figures.

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Ann lou
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5K views9 pages

Quarantine Company, A Manufacturer of Small Tools, Provided The Following Information For The Year Ended December 31, 2019

The document provides inventory, accounts payable, and net sales figures for Quarantine Company for the year ended December 31, 2019. It also provides additional information on inventory items that were in transit, returned by customers, or received near year-end that require adjustments to the reported figures.

Uploaded by

Ann lou
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Quarantine Company, a manufacturer of small tools, provided the following information

for the year ended December 31, 2019.

Inventory at December 31 based on physical count 1,750,000

Accounts payable at December 31 1,200,000

Net sales 8,500,000

Additional information:

a. Included in the physical count were tools billed to a customer FOB shipping point
on December 31, 2019. These tools had a cost of P28,000 and were billed at P35,000.
The shipment was in loading dock waiting to be picked up by the common carrier.

b. Goods were in transit from a vendor to Quarantine Company on December 31,


2019. The invoice cost was P50,000, and the goods were shipped FOB shipping point
on December 29, 2019.

c. Work in process inventory costing P20,000 was sent to an outside processor for
plating on December 30, 2019.

d. Tools returned by customers and held pending inspection in the returned goods
area on December 31, 2019 were not included in the physical count. On January 5,
2020, the tools costing P26,000 were inspected and returned to inventory. Credit
memos total P40,000 were issued to the customers on the same date.
e. Tools shipped to a customer FOB destination on December 26, 2019, were in
transit on December 31, 2019, and had a cost of P25,000. Upon notification of receipt
by the customer on January 5, 2020, Quarantine Company issued a sales invoice for
P42,000.

f. Goods with an invoice cost of P30,000, received from a vendor at 5:00pm on


December 31, 2019, were recorded on a receiving report dated January 2, 2020. The
goods were not included in the physical count but the invoice was included in accounts
payable on December 31, 2019.

g. Goods received from a vendor on December 26, 2019 were included in the
physical count. However, the related P60,000 vendor invoice was not included in
accounts payable on December 31, 2019 because the accounts payable copy of the
receiving report was lost.

h.On January 10, 2020, a monthly freight bill in the amount of P20,000 was received.
The bill specifically related to merchandise purchased in December 2019, one-half of
which was still in the inventory on December 31, 2019. The freight charge was not
included in either the inventory or in accounts payable on December 31, 2019.

What is the correct amount of inventory?

1,911,000

1,925,000

1,885,000

1,883,000
Question 2

100 / 100 pts

What is the correct amount of accounts payable?

1,270,000

1,250,000

1,330,000

1,280,000

Question 3

100 / 100 pts

What is the correct amount of net sales?

8,460,000

8,425,000

8,500,000
8,465,000

Question 4

100 / 100 pts

Bravery Company had the following consignment transactions during the current year:

Inventory shipped on consignment to a consignee 600,000

Freight paid by Bravery Company 50,000

Inventory received on consignment from a consignor 800,000

Freight paid by consignor 50,000

No sales of consigned goods were made during the current year.

What amount should be reported as consigned inventory at year-end


700,000

600,000

850,000

650,000

Question 5

100 / 100 pts

Lakay Company reported that a flood recently destroyed many of the financial records.
The entity used an average cost inventory valuation. The entity made a physical count
at the end of each month in order to determine monthly ending inventory value. By
examining various documents, the following data are gathered:

Ending inventory at July 31 60,000 units

Total cost of units available for sale in July 1,452,100

Cost of goods sold during July 1,164,100

Cost of beginning inventory, July 1 4.00 per unit

Gross profit on sales for July 935,900


Units Unit cost Total cost

July 5 55,000 5.10 280,500

11 53,000 5.00 265,000

15 45,000 5.50 247,500

16 47,000 5.30 249,100

200,000 1,042,100

What is the number of units on July 1?

140,000

76,500

60,000

102,500
Question 6

100 / 100 pts

How many units were sold during the month of July?

242,500

140,000

302,500

260,000

Question 7

100 / 100 pts

What is the cost of the inventory on July 31?

288,000

240,000

410,000

312,600
Question 8

100 / 100 pts

Meg Company measured inventory at the lower of cost and net realizable value. Data
regarding the items in the inventory are:

Markers Pens Highlighter


s

Historical cost 240,000 188,000 300,000

Selling price 360,000 250,000 360,000

Estimated cost to complete 48,000 50,000 68,000

Replacement cost 208,000 168,000 318,000

Normal profit margin as a percentage of selling 25% 25% 10%


price

What is the measurement of the inventory?

728,000
720,000

676,000

694,000

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