Merchandise inventory 81x4 60000 Shipments 400000 x 25 40000 1000 00 Cost of

Merchandise inventory 81x4 60000 shipments 400000 x

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Merchandise inventory, 8/1/x4 60,000 Shipments (400,000 x 25%) 400,00 0 *100,,0 00 Cost of goods available for 160,000
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sale Less: MI, 8/31/x4 (160,000 x 25%) 160,00 0 40,000 Overvaluation of CGS/RPBSales 120,000 21. b (1) Sales P 40,000 Less: Cost of goods sold: Inventory, 1/1/2003 (P4,950 / 110%) P 4,500 Add: Shipments (P22,000 / 110%) 20,000 COGAS P 24,500 Less: Inventory, 12/31/2003 (P6,050 / 110%) 5,500 19,000 Gross profit P 21,000 Less: Expenses _ 13,100 Net income from own operations P 7,900 (2) Combined Cost of Goods Sold: Merchandise Inventory, 1/1/2003: of Home Office, cost……………………………………………..P 17,000 of Branch, cost: P4,950 / 110%…………………………………. 4,500 P 21,500 Add Purchases…………………………………………………………. 50,000 COGAS………………………………………………………………….. P 71,500 Less: Merchandise Inventory, 12/31/2003 of Home Office, cost……………………………………………… P 14,000 of Branch, cost: P6,050 /100%………………………………….. 5,500 19,500
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Cost of Goods Sold……………………………………………………. P 52,000 22. a - P48,000 / 120% = P40,000 23. a – P48,000 x 20/120 = P8,000 (note: adjusted allowance refers to the allowance related to the ending inventory, so, the allowance related to the CGS, which is P10,00 in this case is considered to be the adjustments in the books of Home Office to determine the adjusted branch net income) 120% 100% 20% Billed Price Cost Allowa nce Merchandise inventory, 1/1/x4 0 Shipments 108,000 Cost of goods available for sale 108,000 Less: MI, 12/31/x4 (P60,000 x 80%) 48,000 Overvaluation of CGS (60,000 x 20/120) 60,000 10,000 * 24. b Sales (P148,000 + P44,000) P192,000 Less: Cost of Sales Inventory, 1/1/20x4 P 0 Purchases 52,000 Shipments from home office 108,000 Cost of goods available for sale P 160,000 Less: Inventory, 12/31/20x4 60,000 100,000
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Gross profit P 92,000 Less: Expenses (P76,000 + P24,000) 100,000 Net income, unadjusted P( 8,000) Add: Overvaluation of CGS 10,000 Adjusted branch net income P 2,000 25. c 125% 100% 25% Billed Price Cost Allowa nce Merchandise inventory, 1/1/x4 40,000 Shipments 250,000 Cost of goods available for sale 290,000 Less: MI, 12/31/x4 (P60,000 x 80%) 60,000 Overvaluation of CGS(230,000x 25/125) 230,000 46,000 * 26. b – P326,000 Sales (P600,000 + P300,000) ………………………………………………….. P 900,000 Less: Cost of goods sold Merchandise inventory, beg. [P100,000 + (P40,000/1.25)] ………………………. … P 132,000 Add: Purchases…………………………………… 350,000 Cost of goods available for sale………………… P 482,000 Less: MI, ending [P30,000 + (P60,000/1.25)] ………………………… 78,000 404,000
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Gross profit……………………………………………………… P 496,000 Less: Expenses (P120,000 + P50,000)………………………. _ 170,000 Net Income …………………………………………………. P 326,000 27. b Sales (P537,500 + P300,000) ………………………………………………… P 837,500 Less: Cost of goods sold Merchandise inventory, beg. [P50,000 + (P60,000/1.20)]…………………………….. P 87,500 Add: Purchases ……………………………………. 500,000 Cost of goods available for sale………………… P587,500 Less: MI, ending [P70,000 + (P60,000/1.20)] ………………………….
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