1).

During the year, Victoria Home and Garden purchased potteries, plants, dried
flowers, candles and other home and garden decors at a total cost of P300,000. In each of the
following cases, calculate the cost of goods available for  sale and the cost of sales:

Case Case 1 Case 2 Case 3 Case 4 Case 5

Beginning Inventory P          0 P120,000 P 50,000 P10,000 P       0
Freight In 25,000 0 40,000 15,000 25,000
Returns and Allowance 5,000 55,000 0 21,000 11,000
Discounts 0 15,000 0 0 18,550
Ending Inventory 0 0 75,000 75,500 85,000

Case 1

Merchandise Inventory Beginning of the period P0

Add: Net Cost of Purchases during the period

Purchase P 300000

Freight In P25000

Purchase discounts P0

Purchase returns and allowances P5000

Cost of Goods available for sale P320000

Less: Merchandise Inventory, end of the period P0

Cost of Goods Sold P 320000

Case 2

Merchandise Inventory Beginning of the period P120000

Add: Net Cost of Purchases during the period

Purchase P 300000

Freight In P0

Purchase discounts P15000

Purchase returns and allowances P55000

Cost of Goods available for sale P350000

Less: Merchandise Inventory, end of the period P0

Cost of Goods Sold P350000

Case 3

Merchandise Inventory Beginning of the period P50000

Add: Net Cost of Purchases during the period

Purchase P 300000

Freight In P40000

Purchase discounts P0

Purchase returns and allowances P0

Cost of Goods available for sale P390000

Less: Merchandise Inventory, end of the period P75000

Cost of Goods Sold P 315000

Case 4

Merchandise Inventory Beginning of the period P10000

Add: Net Cost of Purchases during the period

Purchase P 300000

Freight In P15000

Purchase discounts P0

Purchase returns and allowances P21000

Cost of Goods available for sale P304000

Less: Merchandise Inventory, end of the period P75500

Cost of Goods Sold P 228500

Case 5

Merchandise Inventory Beginning of the period P0

Add: Net Cost of Purchases during the period

Purchase P 300000

Freight In P25000

Purchase discounts P18550

Purchase returns and allowances P11000

Cost of Goods available for sale P295450

Less: Merchandise Inventory, end of the period P85000

Cost of Goods Sold P 210450

2) In each of the following cases, supply the missing item(s):

  Case Cost of Sales Operating Expenses Net Profit

Sales Gross Profit (Net Loss)
A P   440,000 P  ? P215,000 P     ? P75,000
B ? 185,000 75,000 105,000 ?
C 870,000 640,000 ? ? (90,000)
D 1,250,000 ? ? 275,000 150,000
E 1,300,500 ? 579,250 ? (95,750)

A. Cost of Sales: 225000

Operating Expenses: 140000

Revenue Earned:

Net Sales P440,000

Cost of Goods Sold P225,000

Gross Profit P215,000

Operating Expense Incurred P140,000

Net Operating Income P140,000

Non-Operating Income / (Expense) P75,000

B. Sales:

Net Profit:

Revenue Earned:

Net Sales P260,000

Cost of Goods Sold P185,000

Gross Profit P75,000

Operating Expense Incurred P105,000

Net Operating Income P105,000

Non-Operating Income / (Expense) (30,000)

C. Gross Profit:

Operating Expense:

Revenue Earned:

Net Sales P870,000

Cost of Goods Sold P640,000

Gross Profit P230,000

Operating Expense Incurred P320,000

Net Operating Income P320,000

Non-Operating Income / (Expense) (90,000)

D. Cost of Sales:

Gross Profit:

Revenue Earned:

Net Sales P1,250,000

Cost of Goods Sold P825,000

Gross Profit P425,000

Operating Expense Incurred P275,000

Net Operating Income P275,000

Non-Operating Income / (Expense) P150,000

E. Cost of Sales:

Operating Expenses:

Revenue Earned:

Net Sales P1,300,500

Cost of Goods Sold P721,250

Gross Profit P579,250

Operating Expense Incurred P675,000

Net Operating Income P675,000

Non-Operating Income / (Expense) (95,750)

3). The following information were taken from the books of Aqua-Land Sport Store
which sells all kinds of swimming gears:
Sales Returns & Allowances 4,000 Purchase Discount 6,000
Freight In 8,000 Communication 45,000
Expense
Commission Expense 30,000 Sales 368,000
Purchase Returns & Allowances 7,500 Purchases 112,000
Merchandise Inventory, Dec 31 95,000 Sales Discount 25,000
 Transportation Out 11,000 Rent Expense 120,000
Merchandise Inventory, Jan 1 78,500 Sales Salaries Expense 91,300
Pag-ibig Premium Expense 1,826 Taxes & Licenses 10,170
SS & EC Premium Expense 3,088 Depreciation Expense 16,500
Phil Health Premium Expense 1,200 Loss from Sale of 43,000
Land
Required: Prepare an Income Statement using the multi-step form. Rent and Communications 
                       Expenses are 25% allocated to General and Administrative Expenses.
        

Aqua-Land Sport Store

Income Statement
For the period ended January 1

Sales P368,000
less: Sales Return & Allowance P4,000
Sales Discount 25,000 29,000
Net Sales 339,000
Merchandise Entry. Jan 1 78,500
Purchase P112,000
0
Add: Transportation In 8,000
120,000
Less: Purchase Return & Allowance P7,500
Purchase Discount 6,000
Net Purchase P106,500
Total Goods Available for Sale 185,000
Less Merchandise Entry. Jan 31 95,000
Cost of Sales 90,000
Gross Profit P249,000
Less: Distribution Costs
Commission Expense P30,000
Salaries Expense P91,300
Rent Expense P90,000
Communication Expense P33,750
Depreciation Expense P16,500
Transportation Expense P11,000
Pag-ibig Premium Expense P1,826
SS & EC Premium Expense P3,088
Phil Health Premium Expense P1,200 (278,664)
Administrative Expenses
Taxes & License P10,170
Communication Expense P11,250
Rent Expense P30,000 (53,420)

Total Operating Expenses 81,084

Less: Loss from Sales of Land 43,000
Net Loss P124,084