WRITE-DOWN OF INVENTORY

The raw materials inventory account of Western Company at December 31, 2020 consists of 160,000
units of Xylosma each costing P25. As of December 31, 2020, the market price of the Xylosma was only
P20 each. The additional cost per unit to complete and dispose the product is P13. The finished product
has an estimated selling price of P42.

The amount of inventory write-down to be reported as part of expenses in 2020 is? NIL

RETAIL METHOD
The records of Dandan and Soy Company show the following for the current year:
COST RETAIL
Beginning inventory 126,000 280,000
Purchases 456,950 765,000
Freight-in 50,000
Purchase returns 28,350 45,000
Purchase discounts and allowances 5000
Department transfers in 56,700 90,000
Department transfers out 34,650 55,000
Additional mark-up 105,000
Additional mark-up cancellation 70,000
Markdowns 60,000
Markdown cancellation 45,000
Sales 580,000
Sales discounts 95,000
Sales returns 40,000
Employee discounts 60,000
Shrinkage, Spoilage 25,000
Shoplifting losses 10,000

Ending inventory – cost under the average retail method is? 247,482

Cost of sales under the FIFO retail method? 353,040

CATEGORIZATION
Paw Patrol Company reported an ending inventory of P1,950,000 based on the physical count on
December 29, 2020. The following information were provided in determining the amount to be
reported.
 Cost of goods sold FOB destination, shipped on December 27, 2020, P250,000, expected to be
received by buyer on January 2, 2021.
 Cost of goods sold FOB shipping point, shipped on December 28, 2020, P300,000, expected to
be received by the buyer on January 3, 2021.
 Cost of goods sold FOB shipping point, shipped on December 30, 2020, P120,000, received by
the buyer on December 31, 2020,
 Cost of goods sold FOB destination, shipped on December 30, 2020, P80,000, received by the
buyer on December 31, 2020.
The inventory balance to be reported at December 31, 2020 is? 2,000,000