At the end of the year, Katerinos Company is applying the lower-of-cost-or-market rule to inventory. The company uses the perpetual inventory system. The company has the following data before year-end adjustments: \[\begin{array} { | l | l| } \hline \text { Cost of Goods Sold } & \$ 500,000 \\ \hline \text { Ending Inventory (FIFO cost) } & \$ 120,000 \\ \hline \text { Ending Inventory (Current Replacement Cost) } & \$ 105,000 \\ \hline \text { Ending Inventory (Net Realizable Value) } & \$ 115,000 \\ \hline \text { Ending Inventory (Net Realizable Value - Normal Profit) } & \$ 100,000 \\ \hline \end{array}\] Required: 1. Following U.S. GAAP, prepare the required journal entry at year-end. The company uses the direct method when applying the lower-of-cost-or-market rule.

\[\begin{array} { l l l l } \text { Acc

Bombard Company has the following data available: \[\begin{array} { | l | c | c | c | } \hline \text { Transaction } & \text { Units Purchased } & \text { Unit Cost } & \text { Units Sold } \\ \hline \text { Beginning Inventory } & 500 & \$ 10 & \\ \hline \text { March 1 Purchase } & 200 & \$ 12 & \\ \hline \text { April 25 Sale } & & & 350 \\ \hline \text { June 10 Purchase } & 300 & \$ 14 & \\ \hline \text { July 20 Sale } & & & 250 \\ \hline \text { October 30 Purchase } & 350 & \$ 15 & \\ \hline \text { December 15 Sale } & & & 400 \\ \hline \end{array}\] If Bombard Company uses a perpetual LIFO inventory system, the cost of goods sold for the year is ________.

A) $3,500 B) $5,520 C) $16,850 D) $13,350 A) $3,500 B) $5,520 C) $16,850 D) $13,350

Jones Company has the following data available: \[\begin{array} { l c c c } \text { Transaction } & \text { Units Purchased } & \text { Unit Cost } & \text { Units Sold } \\ \text { Beginning Inventory } & 850 & \$ 30 & \\ \text { Oct. 1 Purchase } & 325 & 32 & \\ \text { Oct. 10 Sale } & & & 425 \\ \text { Oct. 14 Purchase } & 450 & 36 & \\ \text { Oct. 20 Sale } & & & 600 \\ \text { Oct. 22 Purchase } & 400 & 37 & \\ \text { Oct. 29 Sale } & & & 500 \end{array}\] If Jones Company uses a perpetual LIFO inventory system, the cost of ending inventory on October 31 is ________.

A) $14,800 B) $18,500 C) $15,000 D) $66,900 A) $14,800 B) $18,500 C) $15,000 D) $66,900

The ABC Enterprise Company uses the perpetual inventory system. The company has the following data available for the month of April: \[\begin{array} { | l | l | l | l | } \hline \text { Date } & \text { Transaction } & \text { Units } & \text { Unit Cost } \\ \hline \text { April 1 } & \text { Beginning inventory } & 200 & \$ 1.00 \\ \hline \text { April 9 } & \text { Purchase } & 300 & \$ 1.10 \\ \hline \text { April 10 } & \text { Sale } & 400 & \\ \hline \text { April 15 } & \text { Purchase } & 400 & \$ 1.16 \\ \hline \text { April 18 } & \text { Sale } & 300 & \\ \hline \text { April 24 } & \text { Purchase } & 100 & \$ 1.26 \\ \hline \end{array}\] What is the cost of ending inventory on April 30 using moving average?

A) $354 B) $336 C) $342 D) $310 A) $354 B) $336 C) $342 D) $310

Vaclav Company has the following data available: \[\begin{array} { l c c c } \text { Transaction } & \text { Units Purchased } & \text { Unit Cost } & \text { Units Sold } \\ \text { Beginning Inventory } & 850 & \$ 30 & \\ \text { Oct. 1 Purchase } & 325 & 32 & \\ \text { Oct. 10 Sale } & & & 425 \\ \text { Oct. 14 Purchase } & 450 & 36 & \\ \text { Oct. 20 Sale } & & & 600 \\ \text { Oct. 22 Purchase } & 400 & 37 & \\ \text { Oct. 29 Sale } & & & 525 \end{array}\] If Vaclav Company uses a perpetual moving-average inventory system, the cost of ending inventory on October 31 is ________. (Round average cost per unit to four decimal places and all other numbers to two decimal places.)

A) $34,357.48 B) $16,319.81 C) $50,580.19 D) $66,900.00 A) $34,357.48 B) $16,319.81 C) $50,580.19 D) $66,900.00

The Siempre Store has the following data for inventory: \[\begin{array} { | l | r | r | } \hline & \text { Cost } & \text { Retail } \\ \hline \text { Inventory, March 1 } & \$ 220,000 & \$ 340,000 \\ \hline \text { Purchases for March } & 370,000 & 1,000,000 \\ \hline \text { Sales for March } & & 500,000 \\ \hline \end{array}\] The store uses the LIFO retail method. Round all ratios to four decimal places. What is the cost of the ending inventory at March 31? (Round your final answer to the nearest dollar.)

A) $500,000 B) $840,000 C) $185,000 D) $405,000 A) $500,000 B) $840,000 C) $185,000 D) $405,000

Exam 10: Short-Term Operating Assets: Inventory

At the end of the year, Katerinos Company is applying the lower-of-cost-or-market rule to inventory. The company uses the perpetual inventory system. The company has the following data before year-end adjustments: Cost of Goods Sold \ 500,000 Ending Inventory (FIFO cost) \ 120,000 Ending Inventory (Current Replacement Cost) \ 105,000 Ending Inventory (Net Realizable Value) \ 115,000 Ending Inventory (Net Realizable Value - Normal Profit) \ 100,000 Required: 1. Following U.S. GAAP, prepare the required journal entry at year-end. The company uses the direct method when applying the lower-of-cost-or-market rule.

(Essay)

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Question 81

The Peggy Ahlers Company uses the perpetual inventory system and the FIFO method. At the end of the fiscal year, December 31, 2015, the company conducted a physical count of the inventory on hand at all warehouses and stores. The FIFO cost of the physical count is $1,005,400. According to the records, ending inventory using FIFO is $1,122,000. Which journal entry is required at December 31, 2015?

(Multiple Choice)

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Question 82

On June 1, Johnson Company purchased $8,000 of inventory on account from Schmid Company on June 1. Schmid Company offers a 4% discount if payment is received within 15 days. Johnson Company records the purchase using the net method and the perpetual inventory system. Johnson Company paid for the inventory on June 30. The journal entry on June 30 by Johnson Company includes ________.

(Multiple Choice)

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Question 83

Bombard Company has the following data available: Transaction Units Purchased Unit Cost Units Sold Beginning Inventory 500 \ 10 March 1 Purchase 200 \ 12 April 25 Sale 350 June 10 Purchase 300 \ 14 July 20 Sale 250 October 30 Purchase 350 \ 15 December 15 Sale 400 If Bombard Company uses a perpetual LIFO inventory system, the cost of goods sold for the year is ________.

(Multiple Choice)

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Question 84

Jones Company has the following data available: Transaction Units Purchased Unit Cost Units Sold Beginning Inventory 850 \ 30 Oct. 1 Purchase 325 32 Oct. 10 Sale 425 Oct. 14 Purchase 450 36 Oct. 20 Sale 600 Oct. 22 Purchase 400 37 Oct. 29 Sale 500 If Jones Company uses a perpetual LIFO inventory system, the cost of ending inventory on October 31 is ________.

(Multiple Choice)

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Question 85

The inventory allocation method used for companies that maintain base stocks of inventory items is the ________.

(Multiple Choice)

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Question 86

The ABC Enterprise Company uses the perpetual inventory system. The company has the following data available for the month of April: Date Transaction Units Unit Cost April 1 Beginning inventory 200 \ 1.00 April 9 Purchase 300 \ 1.10 April 10 Sale 400 April 15 Purchase 400 \ 1.16 April 18 Sale 300 April 24 Purchase 100 \ 1.26 What is the cost of ending inventory on April 30 using moving average?

(Multiple Choice)

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Question 87

A perpetual inventory system always provides current information about inventory levels.

(True/False)

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Question 88

Vaclav Company has the following data available: Transaction Units Purchased Unit Cost Units Sold Beginning Inventory 850 \ 30 Oct. 1 Purchase 325 32 Oct. 10 Sale 425 Oct. 14 Purchase 450 36 Oct. 20 Sale 600 Oct. 22 Purchase 400 37 Oct. 29 Sale 525 If Vaclav Company uses a perpetual moving-average inventory system, the cost of ending inventory on October 31 is ________. (Round average cost per unit to four decimal places and all other numbers to two decimal places.)

(Multiple Choice)

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Question 89

Purchase returns and purchase discounts are added to purchases to calculate net purchases.

(True/False)

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Question 90

Sweet Treats is considering a change in its inventory valuation method. Sweet Treats currently uses the FIFO method and is considering a change to the LIFO method. Sweet Treats started the year on January 1 with inventory at a FIFO cost of $35,000 and a LIFO cost of $26,750. The ending inventory on December 31 is $29,980 at FIFO cost and $25,810 at LIFO cost. Cost of goods sold under the LIFO basis is $74,600 for the current year. The LIFO effect is ________.

(Multiple Choice)

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Question 91

If the LIFO Reserve increases during the year, Cost of Goods Sold will higher under LIFO than FIFO.

(True/False)

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Question 92

Following IFRS, reversal of an inventory write-down ________.

(Multiple Choice)

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Question 93

How do inventory disclosures following IFRS differ from those following U.S. GAAP?

(Multiple Choice)

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Question 94

Explain the difference between the basic retail method and the conventional retail method.

(Essay)

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Question 95

The Siempre Store has the following data for inventory: Cost Retail Inventory, March 1 \ 220,000 \ 340,000 Purchases for March 370,000 1,000,000 Sales for March 500,000 The store uses the LIFO retail method. Round all ratios to four decimal places. What is the cost of the ending inventory at March 31? (Round your final answer to the nearest dollar.)

(Multiple Choice)

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Question 96

The work-in-process inventory is found on the books of a merchandising concern.

(True/False)

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Question 97

Ferret Company uses the LIFO retail inventory method for inventory costing. Ferret Company has beginning inventory with a cost of $10,000 and a retail value of $40,000. During the year, the company purchases goods with a cost basis of $80,000 and a retail basis of $100,000. It has net markups of $5,000 and net markdowns of $5,000. Sales are $50,000 at retail. Required: What is the cost of the ending inventory using the LIFO retail inventory method? Round all ratios to four decimal places. Round all numbers to two decimal places.

(Essay)

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Question 98

Freight-in costs are treated as a selling expense.

(True/False)

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Question 99

Under the conventional retail inventory method net markups and net markdowns are both used to determine the cost to retail percentage.

(True/False)

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Question 100

The inventory allocation method used for companies that maintain base stocks of inventory items is the ________.

A perpetual inventory system always provides current information about inventory levels.

Purchase returns and purchase discounts are added to purchases to calculate net purchases.

If the LIFO Reserve increases during the year, Cost of Goods Sold will higher under LIFO than FIFO.

Following IFRS, reversal of an inventory write-down ________.

How do inventory disclosures following IFRS differ from those following U.S. GAAP?

Explain the difference between the basic retail method and the conventional retail method.

The work-in-process inventory is found on the books of a merchandising concern.

Freight-in costs are treated as a selling expense.

Under the conventional retail inventory method net markups and net markdowns are both used to determine the cost to retail percentage.

The Financial Reporting Environment

Financial Reporting Theory

Judgment and Applied Financial Accounting Research

Review of the Accounting Cycle

Statements of Net Income and Comprehensive Net Income

Statements of Financial Position and Cash Flows and the Annual Report

Accounting and the Time Value of Money

Revenue Recognition

Extenssion: Ol Revenue Recognition Previous Standard

Short-Term Operating Assets: Cash and Receivables

Long-Term Operating Assets: Acquisition, Cost Allocation

Long-Term Operating Assets: Departures From Historical Cost

Operating Liabilities and Contingencies

Financing Liabilities

Accounting for Stockholders Equity

Investing Assets

Accounting for Income Taxes

Accounting for Leases

Extension: Ol Accounting for Leases Current Standard

Accounting for Employee Compensation and Benefits

Earnings Per Share

Accounting Corrections and Error Analysis

The Statement of Cash Flows

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