Exam 5: Reporting and Analyzing Inventory

A company uses the periodic inventory method and the beginning inventory is overstated by $4,000 because the ending inventory in the previous period was overstated by $4,000; the ending inventory for this period is correct. The amounts reflected in the current end of the period balance sheet are

Goods held on consignment are

The accountant at Patton Company has determined that income before income taxes amounted to $11,000 using the FIFO costing assumption. If the income tax rate is 30% and the amount of income taxes paid would be $900 greater if the LIFO assumption were used, what would be the amount of income before taxes under the LIFO assumption?

The lower of cost or market basis of valuing inventories is an example of

To adjust a company's LIFO cost of goods sold to FIFO cost of goods sold

Raw materials inventories are the goods that a manufacturing company has completed and are ready to be sold to customers.

LIFO can be used

Pop-up Party Favors Inc. 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 ending inventory for July is

An inventory turnover that is too high may indicate that the company is losing sales opportunities because of inventory shortages.

Manufactured inventory that has begun the production process but is not yet completed is

When the average cost method is applied to a perpetual inventory system, a moving average cost per unit is computed with each purchase.

Which of the following companies would most likely have the highest inventory turnover?

At December 31, 2017 Mohling Company's inventory records indicated a balance of $632,000. Upon further investigation it was determined that this amount included the following: -$112,000 in inventory purchases made by Mohling shipped from the seller 12/27/17 terms FOB destination, but not due to be received until January 2nd -$74,000 in goods sold by Mohling with terms FOB destination on December 27^th. The goods are not expected to reach their destination until January 6^th. -$6,000 of goods received on consignment from Dollywood Company What is Mohling's correct ending inventory balance at December 31, 2017?

Use the following information for Boxter, Inc., Clifford Company, Danforth Industries, and Evans Services to answer the question "Using the LIFO adjustment, which company shows the greatest improvement in its current ratio from 2016 to 2017?" (amounts in \ millions) Boxter Clifford Danforth Evans Inventory Method for 2016 \& 2017 LIFO FIFO LIFO FIFO 2016 Ending inventory assuming LIFO \ 324 N/A \ 225 N/A 2016 Ending inventory assuming FIFO \ 427 \ 535 \ 310 \ 663 2017 Ending inventory assuming LIFO \ 436 N/A \ 167 N/A 2017 Ending inventory assuming FIFO \ 578 \ 612 \ 209 \ 542 2016 Current assets (reported on balance sheet) \ 1,677 \ 2,031 \ 1,308 \ 2,748 2016 Current liabilities \ 987 \ 1,209 \ 545 \ 1,200 2017 Current assets (reported on balance sheet) \ 2,225 \ 2,605 \ 1,100 \ 2,390 2017 Current liabilities \ 1,306 \ 1,410 \ 465 \ 1,000 2017 Cost of goods sold \ 4,678 \ 1,410 \ 465 \ 1,000

Barnett Company had the following records: 2017 2016 Ending inventory \ 32,650 \ 30,490 Cost of goods sold 306,300 313,600 What is Barnett's average days in inventory for 2017? (rounded)

The term "FOB" denotes

In a period of rising prices, which of the following inventory methods generally results in the lowest net income figure?

When the terms of sale are FOB shipping point, legal title to the goods remains with the seller until the goods reach the buyer.

Which of the following statements is true regarding inventory cost flow assumptions?

The specific identification method of inventory costing