Answer key
Activity on Accounting for Inventories
The following information has been extracted from the records of Praktis Corporation about one of its products.
Date No. of Units Unit Cost
Total Cost
January 1
Beginning balance
1,600 P14.00 P22,400
January 6 Purchased 600 14.10 8,460
February 5
Sold @ P24.00 per unit 2,000
March 19 Purchased 2,200 14.70 32,340
March 24
Purchase returns
160 14.70 2,352
April 10 Sold @ P24.20 per unit 1,400
June 22 Purchased 16,800 15.00 252,000
July 31 Sold @ P26.50 per unit 3,600
August 4 Sales returns @ P26.50 per unit 40
September 4
Sold @ P27.00 per unit 7,000
November 15
Purchased 1,000 16.00 16,000
December 28
Sold @ P30.00 per unit 6,200
REQUIRED:
Compute for the closing inventory under each of the following pricing methods. (Round unit costs to two decimal places.)
1.
FIFO โ Periodic 3. Weighted average - Periodic
2.
FIFO โ Perpetual 4. Weighted average โ Perpetual (Moving average)
SOLUTION:
FIFO โ Periodic
From November 15 purchases (1,000 units x P16.00)
- P16,000
From June 22 purchases (880 units x P15.00)
Total
- 13,200
P29,200
FIFO โ Perpetual
Purchases
Sales
Balance
Unit Unit Unit
Jan. 1
Units
Cost Total Cost
Units
Cost Total Cost
Units
1,600
Cost
14.00
Total Cost
22,400
Jan. 6 600 14.10 8,460 1,600 14.00 22,400
600
14.10
8,460
2,200 30,860
Feb. 5 1,600 14.00 22,400
400 14.10 5,640 200 14.10 2,820
Mar. 19 2,200 14.70 32,340 200 14.10 2,820
2,200
14.70
32,340
2,400 35,160
Mar. 24 (160) 14.70 (2,352) 200 14.10 2,820
2,040
14.70
29,988
2,240 32,808
Apr. 10 200 14.10 2,820
1,200 14.70 17,640 840 14.70 12,348
Jun. 22 16,800 15.00 252,000 840 14.70 12,348
16,800 15.00
252,000
17,640 264,348
Jul. 31 840 14.70 12,348
2,760 15.00 41,400 14,040 15.00 210,600
Aug. 4 (40) 15.00 (600) 14,080 15.00 211,200
Sep. 4 7,000 15.00 105,000 7,080 15.00 106,200
Nov. 15 1,000 16.00 16,000 7,080 15.00 106,200
1,000
16.00
16,000
8,080 122,200
Dec. 28 6,200 15.00 93,000 880 15.00 13,200
1,000
16.00
16,000
1,880
29,200
Average โ Periodic
Total cost (1,880 units x P14.92) - P28,050
Weighted average unit cost (P328,848/22,040 units)
- P14.92
