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Intermediate Accounting Inventories Problems and Solution

Pink Company's inventory using the moving-average method on February 28 should be P1,150,000. White Company should report P245,000 as inventory on its balance sheet as of December 31, 2018. Big Company will recognize a P800,000 gain on its purchase commitment on February 14, 2022 when it takes delivery of raw material A. Green Manufacturing needs to reconstruct its inventory records using available information after a warehouse fire destroyed inventories and records on September 11, 2021.

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479 views1 page

Intermediate Accounting Inventories Problems and Solution

Pink Company's inventory using the moving-average method on February 28 should be P1,150,000. White Company should report P245,000 as inventory on its balance sheet as of December 31, 2018. Big Company will recognize a P800,000 gain on its purchase commitment on February 14, 2022 when it takes delivery of raw material A. Green Manufacturing needs to reconstruct its inventory records using available information after a warehouse fire destroyed inventories and records on September 11, 2021.

Uploaded by

KrizahMarieCaballero
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Intermediate Accounting Inventories - Show Complete Solution and Explain:

Question 36
Pink Company's inventory records for the month of February revealed the following
information:

Assuming Pink Company maintains perpetual inventory records, what should the inventory
be on February 28 rounded to the nearest peso, using the moving-average inventory
method?

Question 37
On December 31, 2018, White Company has P245,000 amount in inventory, which
consisted of the following:

Image transcription text

Direct materials P85,000 Direct


materials purchases in transit, FOB
destination 15,000 Direct... Show more
What is the cost of inventory to be reported on White Company's Balance Sheet as of
December 31, 2018?

Question 38
Big Company engaged into a commitment on October 15, 2021 to purchase 200,000 units
of raw material A for P8,000,000 on Feb. 14, 2022. Big Co. engaged into this purchase to
safeguard itself against the volatility of raw material A's pricing. The purchase price of
material A had dropped to P36 per unit as of Dec. 31, 2021. However, by the time Big Co.
took delivery of the 200,000 units on Feb. 14, 2022, the price of the material had increased
to P41 per unit.
On Feb. 14, 2022, how much will be recognized as gain on purchase commitment?

Question 39
Green Manufacturing started the business 5 yrs ago. A fire broke out at the warehouse on
September 11, 2021, destroying all inventories as well as numerous accounting records
pertaining to the inventory. The information that is currently available is shown below. All
sales and purchases are on account.

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