Atlis Company sells on product which it purchases from various suppliers. The trial balance on December 31, 2020 included the following accounts: Sales (100,000 units at P150) P15,000,000 Sales discount 1,000,000 Purchases 9,300,000 Purchase discount 400,000 The inventory purchases during 2020 were as follows: Units Unit cost Total cost January 1 20,000 60 1,200,000 1st quarter 30,000 65 1,950,000 2nd quarter 40,000 70 2,800,000 3rd quarter 50,000 75 3,750,000 4th quarter 10,000 80 800,000 150,000 10,500,000 Altis’ accounting policy is to report inventory in its financial statements at the lower of cost or net realizable value. Cost is determined under the first-in, first-out method. Altis has determined that, on December 31, 2020, the replacement cost of its inventory was P70 per unit and the net realizable value was P72 per unit. The normal profit margin is P10 per unit. Compute for the following: 1. Ending inventory at cost. 2. Net realizable value 3. Cost of goods sold
Atlis Company sells on product which it purchases from various suppliers. The
31, 2020 included the following accounts: Sales (100,000 units at P150) P15,000,000
Sales discount 1,000,000
Purchases 9,300,000
Purchase discount 400,000
The inventory purchases during 2020 were as follows:
Units Unit cost Total cost
January 1 20,000 60 1,200,000
1st quarter 30,000 65 1,950,000
2nd quarter 40,000 70 2,800,000
3rd quarter 50,000 75 3,750,000
4th quarter 10,000 80 800,000
150,000 10,500,000
Altis’ accounting policy is to report inventory in its financial statements at the lower of cost or net realizable
value. Cost is determined under the first-in, first-out method.
Altis has determined that, on December 31, 2020, the replacement cost of its inventory was P70 per unit
and the net realizable value was P72 per unit. The normal profit margin is P10 per unit.
Compute for the following:
1. Ending inventory at cost.
2. Net realizable value
3. Cost of goods sold
4. Gross profit.
5. Assuming the entity used weighted average method, compute for the ending inventory at cost.
6. Assuming the entity used weighted average method, compute for the cost of goods sold.
7. Assuming the entity used weighted average method, compute for the gross profit.
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