MOCK BOARD EXAM – FINANCIAL
REPORTING
Answer each of the following problems. Solutions are provided after each question.
1. Inventory (Periodic FIFO Method)
Antonio Co. uses a periodic inventory system and the FIFO method. Below are its its
inventory activities for May 2025:
- May 1: Beginning Inventory, 100 units @ ₱40
- May 10: Purchase, 200 units @ ₱42
- May 20: Sale, 250 units
- May 25: Purchase, 100 units @ ₱45
Required: Compute the ending inventory and COGS for May.
Solution:
COGS = 100×₱40 + 150×₱42 = ₱13,250
Ending Inventory = 50×₱42 + 100×₱45 = ₱6,600
✅ Answer: COGS = ₱13,250; Ending Inventory = ₱6,600
2. Revenue Recognition (Installment Method)
On January 1, 2025, Mercado Co. sold equipment for ₱500,000 (cost ₱300,000). ₱100,000
was collected upfront; balance payable in 4 annual installments.
Required: Gross profit recognized in 2025.
Solution:
GP = ₱200,000; GP rate = 40%; GP recognized = ₱100,000 × 40% = ₱40,000
✅ Answer: ₱40,000
3. PPE (Revaluation Model)
Machine cost ₱1,000,000, 10-yr life, no salvage. Revalued to ₱850,000 on Jan 1, 2025.
Required: Revaluation surplus.
Solution:
Depreciation (3 years) = ₱300,000; BV = ₱700,000; Surplus = ₱150,000
✅ Answer: ₱150,000
