Exam 6: Inventories and Cost of Sales

McCarthy Company has inventory of 8 units at a cost of $200 each on October 1.On October 2,it purchased 20 units at $205 each.11 units are sold on October 4.Using the FIFO perpetual inventory method,what is the value of inventory after the October 4 sale?

During a period of steadily rising costs,the inventory valuation method that yields the highest reported net income is:

The inventory valuation method that has the advantages of assigning an amount to inventory on the balance sheet that approximates its current cost,and also mimics the actual flow of goods for most businesses is:

Jefferson Company has sales of $300,000 and cost of goods available for sale of $270,000.If the gross profit ratio is typically 30%,the estimated cost of the ending inventory under the gross profit method would be:

A company's current inventory consists of 5,000 units purchased at $6 per unit.Replacement cost has now fallen to $5 per unit.What is the entry the company must record to adjust inventory to market?

A company's warehouse contents were destroyed by a flood on September 12.The following information was the only information that was salvaged: 1.Inventory,beginning: $28,000 2)Purchases for the period: $17,000 3)Sales for the period: $55,000 4)Sales returns for the period: $700 The company's average gross profit ratio is 35%.What is the estimated cost of the lost inventory?

On April 24 of the current year,The Memphis Pecan Company experienced a tornado that destroyed the company's entire inventory.At the beginning of April,the company reported beginning inventory of $226,750.Inventory purchased during April (until the date of the tornado)was $197,800.Sales for the month of April through April 24 were $642,500.Assuming the company's typical gross profit ratio is 50%,estimate the amount of inventory destroyed in the tornado.

Avanti purchases inventory from overseas and incurs the following costs: the merchandise cost is $50,000,credit terms 2/10,n/30 that apply only to the $50,000;FOB shipping point freight charges are $1,500;insurance during transit is $500;and import duties are $1,000.Avanti paid within the discount period and incurred additional costs of $1,200 for advertising and $5,000 for sales commissions.Compute the cost that should be assigned to the inventory.

Apply the retail method to the following company information to calculate the cost of the ending inventory for the current period.

When costs to purchase inventory regularly decline,which method of inventory costing will yield the lowest cost of goods sold?

Acceptable methods of assigning specific costs to inventory and cost of goods sold include all of the following except:

Starlight Company has inventory of 8 units at a cost of $200 each on October 1.On October 2,it purchased 20 units at $205 each.11 units are sold on October 4.Using the LIFO perpetual inventory method,what is the value of inventory after the October 4 sale?

IFRS reporting currently does not allow which method of inventory costing?

The _________________ method is commonly used to estimate the value of inventory that has been destroyed,lost,or stolen.

Beckenworth had cost of goods sold of $9,421 million,ending inventory of $2,089 million,and average inventory of $1,965 million.Its days' sales in inventory equals:

Calculate the ending inventory using LIFO for a company that uses a perpetual inventory system,using the information given below.

Use the following information for Ephron Company to compute days' sales in inventory for 2015.

A company reported the current month purchase and sales data for its only product and uses the perpetual inventory system.Determine the cost assigned to ending inventory and cost of goods sold using FIFO.

Given the following information,determine the cost of the inventory at June 30 using the LIFO perpetual inventory method. The cost of the ending inventory is:

Internal controls that should be applied when a business takes a physical count of inventory should include all of the following except: