Thursday Co. is estimating the cost of its inventory at month-end. The accountant determined the following: CostRetailInventory, Jan 1P 20,00028,000Purchases110,600160,600Freight-In 4,000 Purchase Discounts1,000 Purchase Returns10,40017,200Departmental Transfers-In2,0003,000Departmental Transfers-Out1,6002,400Markups 12,000Markup Cancellations 4,000Markdowns 24,000Markdown Cancellations 6,000 Add. Information:A loss of P 10,000 was recognized during the period for damaged goods. The goods have retail value of 14,000Gross sales for the period amounted to P 87,600. Sales returns and discounts amounted to P 5,000 and P 2,000, respectively. Employee discounts, treated as outright deduction to sale price, amounted to 1,000.Normal spoilage of P 400 was subsumed to cost of sales.8. How much are the ending inventory and cost of sales, respectively, under the average costmethod?a.46,412;67,188b. 48,981;64,619c. 49,126;64,474d.52,023;61,577 9.How much are the ending inventory and cost of sales, respectively, under the FIFO method?a.49,920;63,680b. 47,588;66,012c. 52,266;61,334d. 44,927; 68,673

Name: Thursday Co. is estimating the cost of its inventory at month-end. The
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Description: Thursday Co. is estimating the cost of its inventory at month-end. The accountant determined the following: CostRetailInventory, Jan 1P 20,00028,000Purchases110,600160,600Freight-In 4,000 Purchase Discounts1,000 Purchase Returns10,40017,200Departme

SOLUTION- COST OF GOOD SOLD REFERS TO THE DIRECT COSTS OF PRODUCING THE GOODS SOLD BY A COMPANY.

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SWFT Individual Income Taxes

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Publisher:YOUNG

Chapter18: Accounting Periods And Methods

Section: Chapter Questions

Problem 67P

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Thursday Co. is estimating the cost of its inventory at month-end. The accountant determined the following:

	Cost	Retail
Inventory, Jan 1	P 20,000	28,000
Purchases	110,600	160,600
Freight-In	4,000
Purchase Discounts	1,000
Purchase Returns	10,400	17,200
Departmental Transfers-In	2,000	3,000
Departmental Transfers-Out	1,600	2,400
Markups		12,000
Markup Cancellations		4,000
Markdowns		24,000
Markdown Cancellations		6,000

Add. Information:

A loss of P 10,000 was recognized during the period for damaged goods. The goods have retail value of 14,000
Gross sales for the period amounted to P 87,600. Sales returns and discounts amounted to P 5,000 and P 2,000, respectively. Employee discounts, treated as outright deduction to sale price, amounted to 1,000.
Normal spoilage of P 400 was subsumed to cost of sales.

8. How much are the ending inventory and cost of sales, respectively, under the average cost

method?

a.46,412;67,188

b. 48,981;64,619

c. 49,126;64,474

d.52,023;61,577

9.How much are the ending inventory and cost of sales, respectively, under the FIFO method?

a.49,920;63,680

b. 47,588;66,012

c. 52,266;61,334

d. 44,927; 68,673

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