Exam 7: Inventory

Using the FIFO cost flow assumption, what would be the value of inventory at July 31, 2013?

In 2009 Superior Ltd had sales of $25,650,000, cost of goods sold of $15,250,000, beginning inventory of $2,450,000 and ending inventory of $2,700,000.Superior's nearest competitor had a gross profit margin of 38% and, on average, turned over its inventory every 55 days. Required: A) Compare Superior's performance to its competitor. B) Which company do you think is performing better? C) What other information would you like to have?

Lion's is a furniture manufacturer.They sell to retail stores but also have a showroom at the plant where customers can buy directly from them.For each of the following items, indicate whether it would be classified as "supplies," "raw materials," "work-in-process," "finished goods" or "other." For any item you classified as "other," indicate how they would be accounted for. A) Bolts of upholstery on hand for covering the furniture. B) Upholstery fabric samples available for customers in the showroom.C) Desks displayed in the showroom for sale. D) Desks in the showroom that the sales staff use when making sales.E) Nails and screws on hand in the manufacturing facility. F) Stain on hand for staining the furniture G) Furniture that has been assembled and is waiting to be stained H) Furniture that has been shipped to a retail store customer.The customer arranged for and is paying for the shipping.

Which cost flow assumption assigns the actual cost of a unit to that unit of inventory?

Harvest Moon Produce has two hundred acres of apple and peach trees.Each year the company must adjust their inventory to fair value less costs to sell.The resulting gain or loss from this adjustment should be charged to:

Hopewell Ltd.had 1,000 units of inventory on hand at the beginning of the year worth $4,000.During the year, they purchased 15,000 units at $4.25 and 10,000 units at $4.40.They sold 24,500 units during the year.If Hopewell uses the average cost assumption for inventory valuation, what would their ending inventory value at year-end be closest to?

A company uses a periodic inventory system and has the following information at the end of the accounting period: beginning inventory $40,000, purchases $135,000, and ending inventory $27,500.What was their cost of sales for the period?

Fundy Corporation has the following information about their inventory at year-end: Item Cost NRV \#1 \ 12,000 \ 12,500 \#2 21,250 19,750 \#3 18,600 18,500 If Fundy values their inventory at the lower of cost and net realizable value on an item-by-item basis, what would be their year-end inventory balance on the balance sheet?

Using the FIFO cost flow assumption, what would be the inventory valuation at July 31, 2013?

The quarterly ending inventory numbers for Oakville Inc are as follows: April 30 July 31 October 31 January 31, 2014 \ 100,000 \ 175,000 \ 225,000 \ 125,000 Their cost of goods sold for the fiscal year ending January 31, 2014, was $812,500, ending inventory on January 31, 2013, was $115,000 Required: A) Calculate Oakville's inventory turnover and average number of days' inventory using opening and closing inventory figures. B) Calculate Oakville's inventory turnover and average number of days' inventory using an average of the quarterly ending inventory figures. C) Which one better represents Oakville's inventory management? Why? D) When is Oakville's peak sales period during the year?

Which of the following cost flow assumptions would most likely be used when inventory is expensive and unique?

Which of the following cost flow assumptions will result in the same ending inventory under both the perpetual and periodic inventory systems?

Which of the following best illustrates the accounting concept of conservatism?

Kane Limited's most popular inventory item was purchased at a cost of $22 and can currently be replaced at a cost of $15.The item sells for $25, and the company incurs $5 in selling cost on each item sold.If 4,000 units are on hand at year-end, what is the value of the ending inventory using the lower of cost and market, where the company defines market as net realizable value?

In most companies the flow of costs related to inventory does not match the physical flow of the goods.All of the following are reasons why the cost flow and physical flow may differ, except?

Jordan Precision Welding had sales of $134,000 for the month of June.The company's gross profit was $36,000.The company had beginning inventory of $70,000, and a physical inventory count indicated that ending inventory was $66,000.What was the company's average number of days in inventory for June closest to?

All of the following are directly affected by the cost flow assumption used for inventory except?

In a perpetual inventory system what kind of entry is used to record the cost of sales?

For which cost flow assumption would the cost of the units sold be the same as the cost of the units still on hand?

If a company is using a periodic inventory system, which of the following entries is the correct journal entry to record the purchase of $10,000 of merchandise on account? A. Dr. Inventory $\quad 10,000$ $\quad$ Cr. Accounts payable $\quad 10,000$ B. Dr. Inventory $\quad$ 10,000 $\quad$ Cr. Purchases $\quad$ 10,000 C. Dr. Purchases $\quad 10,000$ $\quad$ Cr. Inventory $\quad$ 10,000 D. Dr. Purchases $\quad 10,000$ $\quad$ Cr. Accounts payable $\quad$ 10,000