Exam 13: Inventories

Millibrand Co uses a periodic inventory system with the specific identification method of cost assignment. Date Units Unit cost $ Beginning inventory July 1 1000 9 Purchase 12 2000 11 Purchase 26 1000 12 On 27 July 500 units from beginning inventory and 1000 units from the 12 July purchase were sold.What was the value of ending inventory at 31 July?

Which statement is untrue?

Riverbottom Liquidators was wiped out by a recent flood when all its inventory was observed floating down the river.On the day after the flood,management filed an insurance claim on the inventory that was totally destroyed.From records maintained elsewhere it was established: Sales revenue (to date this period)$700 000 Beginning inventory $ 90 000 Purchases (so far this period)$600 000 Historical gross profit percentage 60% Assuming the historical gross profit was maintained during the current period what was the cost of inventory lost in the flood?

Which of these is not a step in a properly conducted stocktake?

Which of these is not a possible source of error in calculating closing inventory?

At 31 December 2014,the end of their accounting year,the Zanzibar trading company understated ending inventory by $4,250.The profit for 2014 will be:

The formula,cost of sales/average inventory,measures the:

How many of these are advantages of the weighted average method of applying costs to inventory? -It is not subject to profit manipulation. -The profit and closing inventory values tend to be 'smoothed' compared to other methods. -It is simple to understand.

If inventory costs are declining,profit will be highest if the inventory method used is:

In performing a stocktake care must be taken with goods in transit.Which of these statements is true?

Under the FIFO method sales returns are costed back into inventory at:

A way that products can be unequivocally identified is by the use of:

Which of these is not included in the cost of inventory as defined by IAS 2/AASB 102?

For which of these would the specific identification method of costing inventory be unsuitable?

All the statements concerning the retail inventory method of estimating closing stock are correct except which of the following?

All of these statements about the presentation of inventory in financial reports are correct except which of the following?

Nugyen Co purchased goods for $3500.While on display,the goods were damaged and it is estimated that they can now only be sold for $2000.Additional marketing and distribution costs are $100.The net realisable value of the goods is:

Which statement concerning the perpetual inventory method is incorrect?

Montreal Furniture uses a periodic inventory system.During an accounting year many purchases and sales of goods occur.For Montreal,the balance in the general ledger inventory account:

Which statement is correct?