Jenks Company developed the following information about its inventories in applying the lower of cost or market (LCM) basis in valuing inventories: $\begin{array}{lrr}\text { Product } & \text { Cost } & \text { Market } \\ \mathrm{A} & \$ 114,000 & \$ 120,000 \\ \mathrm{~B} & 80,000 & 76,000 \\ \mathrm{C} & 160,000 & 162,000 \end{array}$ If Jenks applies the LCM basis, the value of the inventory reported on the balance sheet would be

A) $354,000. B) $358,000. C) $350,000. D) $362,000. A) $354,000. B) $358,000. C) $350,000. D) $362,000. C

Dole Industries had the following inventory transactions occur during 2017: $\begin{array}{lllll}&&\text { Units } & \text { Cost/unit } \\ \text { Feb. 1.2017 } & \text { Purchase } & 90 & \$ 90 \\ \text { Mar. 14.2017 } & \text { Purchase } & 155 & \$ 94 \\ \text { Mav 1.2017 } & \text { Purchase } & 110 & \$ 98 \end{array}$ The company sold 255 units at $126 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, what is the company's gross profit using FIFO? (rounded to whole dollars)

A) $24,410 B) $23,650 C) $8,480 D) $7,720 A) $24,410 B) $23,650 C) $8,480 D) $7,720 C

Dole Industries had the following inventory transactions occur during 2017: $\begin{array}{lllll}&&\text { Units } & \text { Cost/unit } \\ \text { Feb. 1.2017 } & \text { Purchase } & 90 & \$ 90 \\ \text { Mar. 14.2017 } & \text { Purchase } & 155 & \$ 94 \\ \text { Mav 1.2017 } & \text { Purchase } & 110 & \$ 98 \end{array}$ The company sold 255 units at $126 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, and operating expenses of $2,500, what is the company's after-tax income using LIFO? (rounded to whole dollars)

A) $5,220 B) $5,404 C) $4,186 D) $3,654 A) $5,220 B) $5,404 C) $4,186 D) $3,654

Trumpeting Trumpets has the following inventory data: \[\begin{array} { r l l } \text { July } 1 & \text { Beginning inventory } & 50 \text { units at } \$ 120 \\ 5 & \text { Purchases } & 300 \text { units at } \$ 112 \\ 14 & \text { Sale } & 200 \text { units } \\ 21 & \text { Purchases } & 150 \text { units at } \$ 115 \\ 30 & \text { Sale } & 140 \text { units } \end{array}\] Assuming that a periodic inventory system is used, what is the cost of goods sold on a FIFO basis?

A) $18,320 B) $18,370 C) $38,480 D) $38,530 A) $18,320 B) $18,370 C) $38,480 D) $38,530

Dobler Company uses a periodic inventory system. Details for the inventory account for the month of January 2017 are as follows: $\begin{array}{llrr}&\text { Units }&\text { Per unit price }&\text { Total }\\ \text { Balance, } 1 / 1 / 2017 & 300 & \$ 5.00 & \$ 1.500 \\ \text { Purchase, } 1 / 15 / 2017 & 150 & 5.30 & 795 \\ \text { Purchase, } 1 / 28 / 2017 & 150 & 5.50 & 825 \end{array}$ An end of the month (1/31/2017) inventory showed that 240 units were on hand. If the company uses FIFO, what is the value of the ending inventory?

A) $1,320 B) $1,200 C) $1,302 D) $1,818 A) $1,320 B) $1,200 C) $1,302 D) $1,818

Olympus Climbers Company has the following inventory data: \[\begin{array} { r l l r } \text { July } 1 & \text { Beginning inventory } & 30 \text { units at } \$ 19 & \$ 570 \\ 7 & \text { Purchases } & 105 \text { units at } \$ 20 & 2,100 \\ 22 & \text { Purchases } & 15 \text { units at } \$ 22 & { 330 }\\&&&{ \$ 3,000 } \end{array}\] A physical count of merchandise inventory on July 30 reveals that there are 48 units on hand. Using the FIFO inventory method, the amount allocated to cost of goods sold for July is

A) $930. B) $990. C) $2,010. D) $2,070. A) $930. B) $990. C) $2,010. D) $2,070.

Grape Gratuities Company has the following inventory data: \[\begin{array} { r l r r } \text { July } 1 & \text { Beginning inventory } & 40 \text { units at } \$ 20 & \$ 800 \\ 7 & \text { Purchases } & 140 \text { units at } \$ 21 & 2,940 \\ 22 & \text { Purchases } & 20 \text { units at } \$ 22 & { 440 }\\&&& { \$ 4,180 } \end{array}\] A physical count of merchandise inventory on July 30 reveals that there are 50 units on hand. Using the FIFO inventory method, the amount allocated to ending inventory for July is

A) $1,170. B) $1,010. C) $1,070. D) $1,100. A) $1,170. B) $1,010. C) $1,070. D) $1,100.

Exam 5: Reporting and Analyzing Inventory

Jenks Company developed the following information about its inventories in applying the lower of cost or market (LCM) basis in valuing inventories: Product Cost Market \ 114,000 \ 120,000 80,000 76,000 160,000 162,000 If Jenks applies the LCM basis, the value of the inventory reported on the balance sheet would be

Free

(Multiple Choice)

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Question 1

Correct Answer:

Verified

C

Dole Industries had the following inventory transactions occur during 2017: Units Cost/unit Feb. 1.2017 Purchase 90 \ 90 Mar. 14.2017 Purchase 155 \ 94 Mav 1.2017 Purchase 110 \ 98 The company sold 255 units at $126 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, what is the company's gross profit using FIFO? (rounded to whole dollars)

Free

(Multiple Choice)

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Question 2

Correct Answer:

Verified

C

In periods of rising prices, the inventory method which results in the inventory value on the balance sheet that is closest to current cost is the

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Question 3

Correct Answer:

Verified

A

The following information was available for Camara Company at December 31, 2017: beginning inventory $80,000; ending inventory $120,000; cost of goods sold $630,000; and sales $900,000. Camara's inventory turnover in 2017 was

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Question 4

If a company has no beginning inventory and the unit cost of inventory items does not change during the year, the value assigned to the ending inventory will be the same under LIFO and average cost flow assumptions.

(True/False)

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Question 5

Dole Industries had the following inventory transactions occur during 2017: Units Cost/unit Feb. 1.2017 Purchase 90 \ 90 Mar. 14.2017 Purchase 155 \ 94 Mav 1.2017 Purchase 110 \ 98 The company sold 255 units at $126 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, and operating expenses of $2,500, what is the company's after-tax income using LIFO? (rounded to whole dollars)

(Multiple Choice)

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Question 6

Which of these would cause the inventory turnover ratio to increase the most?

(Multiple Choice)

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Question 7

Trumpeting Trumpets has the following inventory data: July 1 Beginning inventory 50 units at \ 120 5 Purchases 300 units at \ 112 14 Sale 200 units 21 Purchases 150 units at \ 115 30 Sale 140 units Assuming that a periodic inventory system is used, what is the cost of goods sold on a FIFO basis?

(Multiple Choice)

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Question 8

The specific identification method of costing inventories tracks the actual physical flow of the goods available for sale.

(True/False)

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Question 9

For companies that use a perpetual inventory system, all of the following are purposes for taking a physical inventory except to:

(Multiple Choice)

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Question 10

Dobler Company uses a periodic inventory system. Details for the inventory account for the month of January 2017 are as follows: Units Per unit price Total Balance, 1/1/2017 300 \ 5.00 \ 1.500 Purchase, 1/15/2017 150 5.30 795 Purchase, 1/28/2017 150 5.50 825 An end of the month (1/31/2017) inventory showed that 240 units were on hand. If the company uses FIFO, what is the value of the ending inventory?

(Multiple Choice)

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Question 11

In periods of rising prices, which is an advantage of using the LIFO inventory costing method?

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Question 12

If prices never changed there would be no need for alternative inventory methods.

(True/False)

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Question 13

Olympus Climbers Company has the following inventory data: July 1 Beginning inventory 30 units at \ 19 \ 570 7 Purchases 105 units at \ 20 2,100 22 Purchases 15 units at \ 22 330 \ 3,000 A physical count of merchandise inventory on July 30 reveals that there are 48 units on hand. Using the FIFO inventory method, the amount allocated to cost of goods sold for July is

(Multiple Choice)

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(36)

Question 14

Grape Gratuities Company has the following inventory data: July 1 Beginning inventory 40 units at \ 20 \ 800 7 Purchases 140 units at \ 21 2,940 22 Purchases 20 units at \ 22 440 \ 4,180 A physical count of merchandise inventory on July 30 reveals that there are 50 units on hand. Using the FIFO inventory method, the amount allocated to ending inventory for July is

(Multiple Choice)

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Question 15

Two companies report the same cost of goods available for sale but each employs a different inventory costing method. If the price of goods has increased during the period, then the company using

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Question 16

At May 1, 2017, Heineken Company had beginning inventory consisting of 300 units with a unit cost of $7. During May, the company purchased inventory as follows: 600 units at $7 900 units at $8 The company sold 1,500 units during the month for $12 per unit. Heineken uses the average cost method. The average cost per unit for May is

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Question 17

If goods in transit are shipped FOB destination

(Multiple Choice)

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Question 18

Which statement concerning lower of cost or market (LCM) is incorrect?

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Question 19

Goods held on consignment should be included in the consignor's ending inventory.

(True/False)

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Question 20

In periods of rising prices, the inventory method which results in the inventory value on the balance sheet that is closest to current cost is the

The following information was available for Camara Company at December 31, 2017: beginning inventory $80,000; ending inventory $120,000; cost of goods sold $630,000; and sales $900,000. Camara's inventory turnover in 2017 was

If a company has no beginning inventory and the unit cost of inventory items does not change during the year, the value assigned to the ending inventory will be the same under LIFO and average cost flow assumptions.

Which of these would cause the inventory turnover ratio to increase the most?

Trumpeting Trumpets has the following inventory data: July 1 Beginning inventory 50 units at \ 120 5 Purchases 300 units at \ 112 14 Sale 200 units 21 Purchases 150 units at \ 115 30 Sale 140 units Assuming that a periodic inventory system is used, what is the cost of goods sold on a FIFO basis?

The specific identification method of costing inventories tracks the actual physical flow of the goods available for sale.

For companies that use a perpetual inventory system, all of the following are purposes for taking a physical inventory except to:

In periods of rising prices, which is an advantage of using the LIFO inventory costing method?

If prices never changed there would be no need for alternative inventory methods.

Two companies report the same cost of goods available for sale but each employs a different inventory costing method. If the price of goods has increased during the period, then the company using

If goods in transit are shipped FOB destination

Which statement concerning lower of cost or market (LCM) is incorrect?

Goods held on consignment should be included in the consignor's ending inventory.

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Merchandising Operations and the Multiple-Step Income Statement

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

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