I.

COMPUTATIONAL AND ANALYTICAL SKILLS

Supply the answer.

Problem 1: Vision Company occurred the following transactions during the month of May of the current year:

May 6 Sold merchandise on account, list price P 500,000. Terms: 10; 5/15, n/30, FOB Destination,
freight collect, P 25,000.

May 8 Sold goods for cash, P 300,000. Transportation cost is P 3,000, FOB Shipping point, freight
collect.

May 10 Sold P 600,000. Terms: 20, 10; 5/10, n/30. FOB Destination, freight prepaid, P 60,000.
May 12 Sold P 400,000. Terms: 3/10, n/30; FOB Shipping point, freight prepaid, P 4,000.
May 21 Collected sales for May 6.

Disregard VAT.
Give the correct amount of the following items:
1. Total net sales.
2. Total accounts receivable.
3. Total freight out.
4. Total sales discount.
5. Cash collected from May 6 sale.

Problem 2: STM Co., a VAT registered company, engaged in the following transactions during September 2013: (The
Co. is using the perpetual inventory system)

9 /3 Purchased merchandise on account, terms: FOB Shipping point, 5 / 10; 4 /15; 3/20 n/60. The
related invoice is priced at P31,320 (including a freight charge of P5,000).

9/11 Sold merchandise on account, terms: FOB Destination, 3 / 10 n/25. Goods costing P20,300
were sold at P28,000. Freight paid amounted to P900.

9/15 Received the payment for goods sold on 9/11.

9/17 Paid the goods purchased on 9/3.

Assuming no other transactions relevant to inventories

Required: Compute for the

6. Peso amount of inventory on hand as of Sept. 30.
7. Amount of VAT payable.
8. Purchase discount availed.
9. Amount of cash paid on September 17.
10. Gross profit.
11. Net income.

Problem 3: Bri Co. sold merchandise to An Co. on account, P95,760, terms 2/15, n/30 FOB Destination. Bri prepaid the
freight in the amount of P3,000. The cost of the merchandise sold is P57,900. Bri Co. issued a credit memorandum for
P25,984 for merchandise returned and later received the amount due within the discount period. The cost of the
defective merchandise is P21,220.

Required: Compute for the

12. Amount received from the customer.
13. Net sales.
14. Gross profit.
15. Net profit.

Problem 4: X-Con Company regularly buys merchandise from Y-Con Company and is allowed trade discounts of 15%
and 10% from the list price. Ex-Con made a purchase on May 20, 2013 and received an invoice with a list price of
150,000, a freight charge of P2,500, and payment terms of net 45 days.

Ignore VAT.
Required: Compute for the
16. Total trade discounts to be recorded in the books of Y-Con.
17. Purchases.

Problem 5: Xem Co. purchased an item of merchandise quoted and listed at P210,000 under the following terms:
trade discounts of 15%, 10%, 5%, 3/12 n/30.
Required: Compute for the
18. Purchases under net method.
19. Cash payment, if settlement is made within the discount period.
20. Purchase discounts lost under net method, if settlement is made outside the discount period.

Problem 6: Psych Distributors, a computer store, specializes in the sale of IBM compatibles and software packages
and had the following transactions with one of its suppliers:

Purchases of IBM compatibles P3,280,000

Purchases of commercial software package 900,000
Returns and allowances 80,000
Purchase discounts taken 27,000

Purchases (VAT-exclusive) were made throughout the year on terms 3/11 n/30. All returns and allowances took place
within 5 days of purchase and prior to any payment of account.

Required: Compute for the

21. Input tax.
22. Purchase Discounts not taken.

Problem 7: Mort Inc. asks you to review its December 31, 2013, inventory values. The following information is given
to you:

Account balances prior to adjustments below:

Merchandise Inventory P704,670
Accounts Receivable P606,512
Accounts Payable P1,163,705.60
Input Tax P521,825.60
Sales P2,195,100
Output Tax P713,412

A. Mort uses the periodic inventory system. A physical count reveals P704,670 of inventory on hand at December
31, 2013.

B. Not included in the physical count of inventory is P31,260 cost of merchandise purchased on December 15
from Shendelzare suppliers. This merchandise was shipped FOB Shipping point on December 29 and arrived in
January. The invoice arrived and was recorded on December 31.

C. Included in inventory is merchandise sold to Arach on December 30, FOB Destination. The merchandise was
shipped after it was counted. The invoice was prepared and recorded as a sale on account for P38,400 (VAT
exclusive) on December 31. The merchandise cost P22,050, and Arach received it on January 3.

D. Included in inventory was merchandise received from Brood on December 31 with an invoice price of
P52,516.80. the merchandise was shipped FOB Destination. The invoice, which has not yet arrived, has not
been recorded.

E. Not included in inventory is P25,620 cost of merchandise purchased from Lich Co. this merchandise was
received on December 31 after the inventory had been counted. The invoice was received and recorded on
December 30.

F. Included in inventory was P31,314 worth of inventory held by Mort on consignment from Jakiro Corp.

G. Included in inventory is merchandise sold to Rylai FOB Shipping point. This merchandise was shipped after it
was counted. The invoice was prepared and recorded as a sale for P63,504 on December 31. The cost of this
merchandise was P34,560, and Rylai received the merchandise on January 5.

H. Excluded from inventory was a carton labeled Please accept for credit. This carton contains merchandise
costing P4,500 which had been sold to a customer for P8,736. No entry had been made to the books to reflect
the return, but none of the returned merchandise seemed damaged.

Required: Compute for the correct balance of

23. Merchandise inventory, December 31.
24. Accounts receivable, December 31
25. Accounts payable, December 31
26. Sales
27. VAT payable
Problem 8: In testing the sales cut-off for the Insulto Corporation in connection with an audit for the year ended
October 31, 2013, you find the following information:

A physical inventory was taken as of the close of business on October 31, 2013. All customers are within a 3 day
delivery area of the companys plant. The unadjusted balances of Sales, Output tax, and Inventories are P7,500,000,
P900,000 and P330,000 respectively. Sales and costs are VAT exclusive.

Invoice # FOB terms: Date Date Sales: Cost:

Shipped: recorded:
24601 Destination Oct. 20 Oct. 31 P 3,000 P 2,700
33702 Shipping pt. Oct. 31 Nov. 2 7,500 6,000
33706 Shipping pt. Oct. 25 Oct. 31 5,400 3,600
41706 Destination Oct. 31 Oct. 29 12,600 9,300
42666 Destination Oct. 31 Nov. 2 27,600 24,000
45112 Shipping pt. Nov. 2 Oct. 23 19,500 15,300
45988 Shipping pt. Nov. 5 Nov. 6 22,500 17,400
57609 Destination Oct. 25 Nov. 3 11,700 6,000
73422 Shipping pt. Nov. 4 Oct. 31 25,800 24,600
92433 Destination Nov. 5 Nov. 2 15,000 12,000

Required: based on the following information, compute the October 31, 2013, adjusted balances of the
following accounts:
28. Sales
29. Output Tax
30. Inventories

Problem 9: KP Company prepares monthly income statements. A physical inventory is taken only at year-end. All
sales are made on account. The rate of markup on cost is 50%. The following information relates to the month of June:

Accounts Receivable, June 1 P102,000

Accounts receivable, June 30 153,000
Collection of accounts receivable during June 255,000
Inventory, June 1 183,600
Purchases of inventory during June 163,200

Disregard the effect of VAT.

Required: compute for
31. Cost of sales
32. Gross margin
33. Inventory, June 30

Problem 10:On the eve of June 15, 2013, a fire destroyed the entire merchandise inventory of Epic Merchandising.
The merchandise was not insured with any insurance company. The following information was gathered:

Inventory, January 1 P250,000

Purchases, January 1 June 15 1,500,000
Sales, January 1 June 15 2,000,000
Markup % on cost 25%

Disregard the effect of VAT.

Required: compute for
34. Cost of sales
35. Gross profit
36. Inventory loss

Problem 11:The balances of selected accounts taken from the December 31, 2012 statement of financial position of
Javert, Inc. are as follows:

Accounts Receivable P 337,000

Allowance for doubtful accounts 12,000

The following transactions affecting accounts receivable occurred during the year ended December 31, 2013:
(Disregard the effect of VAT)

Sales (all on account, terms 2/10, 1/15, n/45) P 1,500,000

Cash received from customers 1,600,000
From customers paying within the 10-day discount period 882,000
From customers paying within the 15-day discount period 495,000
From recovery of accounts written off 3,000
From customers paying beyond the discount period ?
Accounts receivable written off as worthless 11,000
Credit memoranda for sales returns 6,000

Based on assessment of collectability of the accounts, impairment loss recognized on accounts receivable is P15,000.

Required: Compute for the

37. Total net sales.
38. Amortized cost of Accounts receivable.

Problem 12: Vojee Co. purchased goods from Jozax on credit for P772,800 terms: FOB Destination 4/10 n/30. Freight
cost is P15,000 and Vojee advanced the payment of freight to the shipping company. After 3 days, Vojee received
credit memo from Jozax for goods returned for P101,360. Vojee paid the balance within the discount period.

Required: Compute for

39. The amount of cash paid byVojee.

Problem 13: Repaa sold goods to Zigko for cash with a catalogue price of P302,000 and with trade discount of 5%,
8%, 12%. Repaa Co. is a VAT-registered business. Sales is VAT exclusive.

Required: Compute for the

40. Amount due from Zigko.
41. Sales

Problem 14: The following information is available for Sazzu Company relating to 2013 operations: (Disregard the
effect of VAT)

Accounts Receivable, January 1 4,000,000

Accounts Receivable Collected 8,400,000
Cash Sales 2,000,000
Inventory, January 1 4,800,000
Inventory, December 31 4,400,000
Purchases 8,000,000
Gross Margin on Sales 4,200,000

Required:
42. What is the balance of accounts receivable on December 31, 2013?
43. Total sales?
44. Cost of goods sold?

Problem 15: Thrust Company reports operating expenses in two categories: distribution and general &
administrative. The adjusted trial balance on December 31, 2013 included the following expense and loss accounts:

Accounting and Legal fees 1,200,000

Advertising 1,500,000
Freight out 800,000
Interest 700,000
Loss on sale of Equipment 300,000
Officers salaries 2,250,000
Rent for office space 2,200,000
Sales salaries and commissions 1,400,000

of the rented premises is occupied by the sales department.

Required:
45. What amount should be reported as total distribution costs?

Problem 16: The following costs were incurred by Cohag Company during the current year:

Accounting and Legal fees 250,000

Freight in 1,750,000
Freight out 1,600,000
Officers salaries 1,500,000
Insurance 850,000
Sales representative salaries 2,150,000
Required:
46. What amount should be reported as general and administrative expenses?

Problem 17: The following information is available from Vast Cold Companys accounting records for the current year:

Purchases 5,300,000
Purchase discounts 100,000
Beginning inventory 1,600,000
Ending inventory 2,150,000
Freight Out 400,000

Required:
47. What is the cost of sales for the current year?

Problem 18: The following information is available for Fohossi Company for the current year:

Disbursements for purchases 5,800,000

Increase in trade accounts payable 500,000
Decrease in inventory 200,000

Required:
48. What is the cost of sales for the current year?

Problem 19: The following information is available from the records of Bajux Company for the current year:

Beginning Inventory 400,000

Freight in 300,000
Purchase Returns 900,000
Ending Inventory 500,000
Selling expenses 1,250,000
Sales discounts 250,000

The cost of goods sold is six times the selling expenses.

Required:
49. What is the amount of Gross Purchases?
50. What is the amount of Cost of Goods Purchased?

Problem 20: Bliss Company is using the periodic inventory system. For the year, its total purchases amounted to P
250,000. Its unsold merchandise at the end of the year has a cost of P 5,000 which is 80% of its beginning inventory.

51. Bliss cost of sales for the year is?

Problem 21: The following data pertain to the two-year operation of Faith Business

Year 1 Year 2
Sales P 200,000 P 250,000
Purchases 250,000 150,000
Ending inventory 90,000 40,000

52. What is the business gross profit on year 1?

53. What is the business gross profit on year 2?

Problem 22: The cost of sale is P 250,000. Total purchases amounted to P 300,000 which increased the total goods
available for sale to P 310,000.

54. How much is the ending inventory?

Problem 23: The gross profit is P 100,000; goods available for sale, P 1,100,000; beginning inventory, P 100,000;
purchases, P 1,000,000 and sales, P 1,000,000.

55. How much is the ending inventory?

Believe in yourself! Have faith in your abilities! Without a humble but reasonable confidence in
your own powers you cannot be successful or happy.
~Norman Vincent Peale