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[Mollynana]

What is the effect of the following data in the:
1. ending inventory
2. net sales
3. cost of sales
4. net income
5. retained earnings

a. Merchandise which cost P50,000 was sold for P64,000 on December 2021. The order was shipped on December 31, 2021 with terms of FOB shipping point. The merchandise was not included in the ending inventory. The sale was recorded on January 10, 2022 when the customer made payment on the sale.

b. Merchandise costing P19,000, located in a separate warehouse, overlooked and excluded from the 2021 inventory count.

c. On December 27, 2021, Charmaine purchased merchandise from a supplier costing P23,500. The order was shipped December 29 (terms FOB destination) and was still "in-transit" on December 31. Since the invoice was received on December 31, the purchase was recorded in 2021. The merchandise was not included in the inventory count.

d. The client included in its 2021 ending Inventory a merchandise costing P25,800. This merchandise had been custom-built and was being held until the customer could come and pick up the merchandise. The sale for P28,500 was recorded in 2022.

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[🤖]

a. In this scenario, the merchandise that cost P50,000 was sold for P64,000. Since the terms were FOB shipping point, it means that the ownership and responsibility for the goods transferred to the customer at the shipping point, which is December 31, 2021. As a result, the merchandise should not be included in the ending inventory for December 2021. Instead, it should be recorded as a sale in January 2022 when the customer made the payment. Therefore, the effect on the various items would be:

1. Ending Inventory: The merchandise is not included in the ending inventory for December 2021.
2. Net Sales: The sale of P64,000 will be recognized in January 2022 when the payment is received.
3. Cost of Sales: The cost of the merchandise sold, which is P50,000, will be recognized as part of the cost of sales in January 2022.
4. Net Income: The net income for December 2021 will not be affected by this transaction, as the sale will be recorded in January 2022.
5. Retained Earnings: The retained earnings for December 2021 will not be affected by this transaction, as the sale will be recorded in January 2022.

b. In this case, the merchandise costing P19,000 was overlooked and excluded from the 2021 inventory count. As a result, it will not be included in the ending inventory for 2021. The effect on the various items would be:

1. Ending Inventory: The merchandise costing P19,000 will not be included in the ending inventory for 2021.
2. Net Sales: There will be no direct effect on net sales from this scenario.
3. Cost of Sales: The cost of the merchandise, which is P19,000, will not be recognized as part of the cost of sales in 2021.
4. Net Income: The net income for 2021 will not be affected by this transaction, as the merchandise was not included in the cost of sales.
5. Retained Earnings: The retained earnings for 2021 will not be affected by this transaction, as the merchandise was not included in the cost of sales.

c. In this situation, the purchase of merchandise costing P23,500 was made on December 27, 2021, and the order was shipped on December 29, 2021, with terms FOB destination. However, the merchandise was still "in-transit" on December 31, 2021. Since the invoice was received on December 31, 2021, the purchase was recorded in 2021. The merchandise was not included in the inventory count. The effect on the various items would be:

1. Ending Inventory: The merchandise costing P23,500 will not be included in the ending inventory for 2021.
2. Net Sales: There will be no direct effect on net sales from this scenario.
3. Cost of Sales: The cost of the merchandise, which is P23,500, will not be recognized as part of the cost of sales in 2021.
4. Net Income: The net income for 2021 will not be affected by this transaction, as the merchandise was not included in the cost of sales.
5. Retained Earnings: The retained earnings for 2021 will not be affected by this transaction, as the merchandise was not included in the cost of sales.

d. In this case, the merchandise costing P25,800 was included in the 2021 ending inventory. However, the sale for P28,500 was recorded in 2022. The effect on the various items would be:

1. Ending Inventory: The merchandise costing P25,800 will be included in the ending inventory for 2021.
2. Net Sales: The sale of P28,500 will be recognized in 2022 when it is recorded.
3. Cost of Sales: The cost of the merchandise, which is P25,800, will be recognized as part of the cost of sales in 2022 when the sale is recorded.
4. Net Income: The net income for 2021 will not be affected by this transaction, as the sale will be recorded in 2022.
5. Retained Earnings: The retained earnings for 2021 will not be affected by this transaction, as the sale will be recorded in 2022.

 

[Mollynana]

Nagoogle mo na ba daw sabi ni ZummerSoltice

Hello! Thanks for asking.
Sa ngayon, hindi pa din ito naiintindihan at nakukuha ang tamang sagot