Activity-NO-12

INTERMEDIATE ACCOUNTING 1
ACTIVITY NO. 12
SELF-TEST/REVIEW
1. An entity reported inventory on December 31, 2021 at P6,000,000 based on a physical count of
goods priced at cost and before any necessary year-end adjustments relating to the following:
• Excluded from the physical count were goods billed to a customer FOB shipping point on
December 30, 2021. These goods had a cost of P200,000 and were picked up by the carrier on
January 15, 2022.
• Goods shipped to a customer FOB shipping point on December 31, 2021 which are being held
for the customer to call at the customer’s convenience with a cost of P300,000 were included in
the count.
• Goods with invoice cost of P400,000 shipped FOB shipping point on December 31, 2021 from
a vendor were received on January 15, 2022.
What amount should be reported as inventory on December 31, 2021?
a. 6,100,000
b. 6,000,000
c. 6,300,000
d. 6,400,000
2. An entity reported the December 31, 2021 inventory at P2,500,000. The entity revealed the
following transactions:
• Goods shipped to the entity FOB destination on December 26, 2021 were received on January
2, 2022. The invoice cost of P300,000 is included in inventory balance.
• At the year-end, the entity held P250,000 of merchandise on consignment from another entity.
This merchandise is included in the inventory balance.
• On December 29,2021, merchandise costing P100,000 was shipped to a customer FOB
shipping point and arrived at the customer location on January 15, 2022. The merchandise is
not included in the inventory balance.
• At year-end, the entity had merchandise costing P150,000 out on consignment with the another
entity. The merchandise is not included in the inventory balance.
What amount should be reported as inventory on December 31,2021?
a. 2,100,000
b. 2,200,000
c. 2,400,000
d. 2,500,000
3. An entity counted and reported the ending inventory on December 31, 2021 at P2,000,000. None of
the following items were included in the ending inventory.
Goods sold and shipped FOB destination were in transit on December 31,
2021 and received by the customer on January 2, 2022
200,000
Goods purchased and shipped FOB seller were in transit on December 31,
2021 and received by the entity on January 2, 2022
300,000
Goods sold and shipped FOB shipping point were in transit on December
31, 2021 and received by the customer on January 2, 2022
400,000
What amount should be reported as inventory on December 31, 2021?
a. 2,500,000
b. 2,600,000
c. 2,900,000
d. 2,700,000
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4. An entity reported accounts payable of P4,000,000 on December 31, 2021 before considering the
following data:
* Goods shipped to the entity on December 31, 2021 FOB shipping point were lost in transit. The
invoice cost of P100,000 was not recorded. On January 15, 2022, the entity filed a P100,000
claim against the common carrier.
* On December 31, 2021, a vendor authorized the entity to return for full credit goods shipped
and billed at P150,000 on December 15, 2021. The returned goods were shipped by the entity
on December 31, 2021. A P150,000 credit memo was received and recorded by the entity on
January 15, 2022.
* On December 31, 2021, the entity had a P500,000 debit balance in accounts payable to a supplier
resulting from an advance payment for goods to be manufactured to the entity’s specifications.
What amount should be reported as accounts payable on December 31, 2021?
a. 4,350,000
b. 3,950,000
c. 4,500,000
d. 4,450,000
5. An entity reported accounts payable on December 31, 2021 at P4,500,000 before any necessary
year-end adjustments to the following transactions:
• On December 27, 2021, the entity wrote and recorded checks to creditors totaling P2,000,000
causing an overdraft of P500,000 in the entity’s bank account on December 31, 2021. The
checks were mailed on January 10, 2022.
• On December 28, 2021, the entity purchased and received goods for P750,000, terms 2/10,
n/30. The entity recorded purchases and accounts payable at net amount. The invoice was
recorded and paid January 31, 2022.
• Goods shipped FOB destination on December 30, 2021 from a vendor to the entity were
received January 15, 2022. The invoice cost was P325,000.
On December 31, 2021, what amount should be reported as accounts payable?
a. 7,575,000
b. 7,250,000
c. 7,235,000
d. 7,560,500
6. An entity had usual sales terms of net 60 days, FOB shipping point. Sales, net of returns and
allowances totaled P5,000,000 for 2021 before year-end adjustment.
* Goods with an invoice amount of P200,000 were billed to a customer on January 15, 2022. The
goods were shipped on December 31, 2021.
* On January 5, 2022, a customer notified the entity that goods billed and shipped on December
31, 2021 were lost in transit. The invoice amount was P50,000.
* On December 31, 2021, the entity authorized a customer to return, for full credit goods shipped
and billed at P300,000 on December 15, 2021. The returned goods were received by the entity
on January 15, 2022 and P300,000 credit memo was issued on the same date.
What amount should be reported as net sales for 2021?
a. 4,700,000
b. 4,900,000
c. 4,850,000
d. 5,200,000
END 6812

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INTERMEDIATE ACCOUNTING 1

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