Exam 8: Reporting and Interpreting Property, Plant, and Equipment; Intangibles; and Natural Resources

Yoakum Company reported the following information related to inventory and sales: Sold 700 units at $20 each. Calculate the revenue, cost of goods sold, gross margin and inventory balances assuming i) the weighted average inventory cost method ii) FIFO cost method

An inventory write down from cost to net realizable value should not be made in the period in which the price decline occurs.

A company purchased inventory as follows: On March 5, it sold 400 units for $17 each. The weighted- average unit cost to be used for the cost of goods sold on March 5, in a perpetual inventory system, is

The lower of cost and net realizable value should be applied to the total inventory, rather than to individual inventory items.

A $15,000 overstatement of the 20B ending inventory was discovered after the financial statements for 20B were prepared. What was the effect of the inventory error on the 20B financial statements?

Which of the following costs would be included in the costs of inventory of a manufacturer?

In the average cost formula used in a periodic inventory system, the same weighted average cost per unit is used to calculate all of the goods sold during the period.

Upaway Company hired some students to help count inventory during their semester break. Unfortunately, the students added incorrectly and ending inventory was overstated by $12,000. What would be the effect of this error in ending inventory?

When goods are sold on credit, revenue usually should be recognized at the date of which of the following?

The following information is available from recent financial statements of Competitor A and Competitor B: Requirement: (a) Calculate the inventory turnover and days in inventory for both companies. (b) What conclusion concerning the management of inventory can be drawn from these data?

The selection of a method of inventory costing is important because it will affect reported profit, income tax expense (and, hence, cash flow), and the inventory valuation reported on the statement of financial position.

An automobile dealer would most likely have a

Selection of an inventory cost formula by management should be influenced most by the

Days in inventory is calculated by dividing 365 days by

An error that understates the ending inventory will cause assets to be understated.

Which of the following costs would not be part of product inventory costs for a manufacturer such as Harley Davidson?

Which of the following types of inventory usually is not held by a manufacturing business?

A low inventory turnover ratio could mean a company is at risk of experiencing inventory shortages.

Retail Company reported the following amounts on its 20B income statement: Purchases, $45,000; Beginning 20B inventory, $15,000; and Cost of goods sold, $50,000. What was the 20B ending inventory?

In periods of falling prices, FIFO will result in a higher cost of goods sold than the average cost formula.