Exam 7: Merchandise Inventory

Use the information that follows concerning Yarley's Gift Store to answer problems Grandma's Gift Store uses the periodic inventory method. nventory and purchase information for July is as follows: July 1 Beginning inventory 500@\ 4 July 10 Purchase 800@\ 5 July 31 Ending inventory 300 -Grandma's Gift Store uses the LIFO cost flow assumption. Calculate its cost of goods sold for July and its ending inventory at July 31.

Which of the following policies would increase a firm's current inventory turnover ratio?

If the market value of inventory is greater than its cost, then the application of the lower-of-cost-or-market rule would:

When prices remain the same, which cost flow assumption would generally measure the largest current ratio?

Explain the relationship between the valuation of inventory and income reporting.

During an extended period of constant prices, which cost flow assumption would generally measure the largest earnings per share?

Determine the amount of inventory to report on Bradley's balance sheet at January 31 under the FIFO cost flow assumption.

Grey Manufacturing had the following transaction: .Grey ordered $67,000 of inventory on December 30, 2017. The inventory was shipped on December 31, 2017, with the terms FOB destination. Grey received the inventory on January 3, 2018. If Grey included all these items in it ending inventory of 12/31/17, which of the following is the best statement regarding this treatment?

During a year of falling prices, which cost flow assumption would yield the greatest current ratio?

During a year of rising prices and increasing inventory, which cost flow assumption would measure the smallest net income?

Mamma's Cafe assigned the following costs to inventory on December 31: Cash purchase costs \6 ,000 Commissions paid to Mamma's sales staff 230 Transportation-in costs 310 Cell phone charges for Mamma's' CEO 400 Handling cost associated with unloading the inventory 150 Labor and overhead costs attributable to repackaging inventory Total cost Current net income Determine the correct December 31 inventory and recalculate current net income that is appropriate under generally accepted accounting principles. Justify your new valuation of inventory.

Yale Co. has valued its beginning and ending inventories at $4,000 and $7,000, respectively, during a period where cost of goods sold was $22,000. An auditor found an error in the valuation of the ending inventory and insisted that it be restated to $6,000. Calculate the adjusted cost of goods sold resulting from the inventory restatement.

Unusually high income resulted when Vincent Inc. cut back its inventory levels. This effect is:

What effect does management's perception of the 'capital market' have on selecting an inventory costing method?

Which one of the following should be included in Camden's inventory at December 31, 2017?

If the market value of inventory is less than its cost, then application of the lower-of-cost-or-market rule would:

Dole Produce Ltd. counted $700 of inventory twice in its December 31, 2016 inventory. On December 31, 2017, it mistakenly omitted $200 of merchandise from its inventory. As a result of these errors:

Vic's Produce purchased 50 boxes of tomatoes for a total of $400. It paid $20 for shipping tomatoes to a customer and $15 for repackaging them into smaller boxes. The cost of these tomatoes is:

After studying a financial accounting text, your roommate asserts that what is interesting about accountants is that they always measure what actually happens. Having studied inventory, you disagree with your roommate's assertion. Present an argument refuting your roommate's position that accountants measure what actually happens in context of knowledge acquired after reading the chapter entitled "Merchandise Inventory."

Toyz's Retail Store sold $900 of merchandise to Ebony Inc. on April 3, terms. On April 8, Ebony returned $200 of the merchandise that was defective. The original merchandise sold cost Toyz $600, but of this amount, $70 was returned. Toyz received payment from Ebony on April 10. What amount of sales and cost of goods sold should Toyz record for these transactions?