Scribd
Upload
279 views2 pages

Quiz Chapter 8 Inventory Estimation Ia 1 2020 Edition

The document provides information and questions about inventory estimation. It includes details about inventory amounts, purchases, sales, and other accounting details for multiple companies. It then provides multiple choice questions to calculate inventory amounts and losses based on the information given.

Uploaded by

Jennifer Reloso
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
279 views2 pages

Quiz Chapter 8 Inventory Estimation Ia 1 2020 Edition

The document provides information and questions about inventory estimation. It includes details about inventory amounts, purchases, sales, and other accounting details for multiple companies. It then provides multiple choice questions to calculate inventory amounts and losses based on the information given.

Uploaded by

Jennifer Reloso
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
You are on page 1/ 2

Page |1

Chapter 8
Inventory Estimation

NAME: Date:
Professor: Section: Score:

QUIZ:
1. On October 1, 20x1, the warehouse of ABC Co. and all the inventories contained therein were
damaged by flood. Off-site back up of data base shows the following information:
Inventory, Jan. 1 10,000
Accounts payable, Jan. 1 3,000
Accounts payable, Sept. 30 2,000
Payments to suppliers 50,000
Freight-in 500
Purchase returns 500
Sales from Jan. to Sept. 80,000
Sales returns 5,000
Sales discounts 2,000
Gross profit rate based on sales 30%

Additional information:
Goods in transit as of October 1, 20x1, purchased FOB shipping point, amounted to ₱1,000, cost of
goods out on consignment is ₱1,200, and materials damaged by flood can be sold at a salvage value of
₱1,800. How much is the inventory loss due to the flood?
a. 3,000 b. 2,500 c. 4,400 d. 4,900

2. On October 1, 20x1, the warehouse of ABC Co. and all the inventories contained therein were razed
by fire. Off-site back up of data base shows the following information:
Inventory, Jan. 1 20,000
Net purchases 190,000
Net sales from Jan. to Sept. 240,000
Gross profit rate based on cost 25%

Twenty percent of the inventory contained in the warehouse has been salvaged from the fire, while half
is partially damaged and can be sold as scrap at thirty percent of its cost. How much is the inventory
loss due to the fire?
a. 18,000 b. 5,400 c. 9,000 d. 11,700

3. The work in process inventories of ABC Manufacturing, Inc. were completely destroyed by fire on
June 1, 20x1. Amounts for the following accounts have been established.
January 1, 20x1 June 1, 20x1
Accounts payable 117,000 135,000
Raw materials 15,000 18,000
Work in process 60,000 ?
Finished goods 69,000 87,000

The following additional information was determined:


Page |2

 Payments to suppliers for purchases on account, ₱60,000.


 Freight on purchases, ₱3,000.
 Purchase returns, ₱7,500.
 Direct labor, ₱48,000.
 Production overhead, ₱18,000.
 Sales from January 1 to May 31, ₱225,000.
 Sales returns, ₱45,000.
 Sales discounts, ₱15,000.
 Gross profit rate based on sales, 25%.

How much is the work in process destroyed by fire?


a. 48,000 b. 49,500 c. 58,500 d. 51,000

Use the following information for the next two questions:


Presented below is information pertaining to ABC Co.:
Cost Retail
Inventory, January 1 21,750 35,000
Purchases 138,250 200,750
Freight-In 5,000 -
Purchase discounts 1,250 -
Purchase returns 13,000 21,500
Departmental Transfers-In (Debit) 2,500 3,750
Departmental Transfers-Out (Credit) 2,000 3,000
Markups 15,000
Markup cancellations 5,000
Markdowns 30,000
Markdown cancellations 7,500
Abnormal spoilage (theft and casualty loss) 12,500 17,500
Sales 109,500
Sales returns 6,250
Sales discounts 2,500
Employee discounts 1,250
Normal spoilage (shrinkage and breakages) 500

4. How much is the ending inventory under the Average cost method?
a. 60,750 b. 60,000 c. 61,050 d. 62,400

5. How much is the ending inventory using the FIFO cost method?
a. 60,750 b. 60,000 c. 61,050 d. 62,400

“Blessed is the one who perseveres under trial because, having stood the test, that
person will receive the crown of life that the Lord has promised to those who love
him.” (James 1:12)
- END -

You might also like