Atom Company just began business and made the following four inventory purchases in June: $\begin{array}{lrlr} \text { June } & 1 & 150 \text { units } & \$ 990 \\ \text { June } & 10 & 200 \text { units } & 1,344 \\ \text { June } & 15 & 200 \text { units } & 1,368 \\ \text { June } & 28 & 150 \text { units } & 1,062\\&&&\$4,764 \end{array}$ A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand. Using the LIFO inventory method, the value of the ending inventory on June 30 is

A) $1,326. B) $1,320. C) $1,404. D) $1,416. A) $1,326. B) $1,320. C) $1,404. D) $1,416.

Use the following information for Boxter, Inc., Clifford Company, Danforth Industries, and Evans Services to answer the question "Using the LIFO reserve adjustment, which company would have the strongest liquidity position for 2017 as expressed by the current ratio?" \(\begin{array}{|l|c|c|c|c|} \hline {\text { (amounts in \$ millions) }} & \text { Boxter } & \text { Clifford } & \text { Danforth } & \text { Evans } \\ \hline \text { Inventory Method for 2016 \& 2017 } & \text { LIFO } & \text { FIFO } & \text { LIFO } & \text { FIFO } \\ \hline 2016 \text { Ending inventory assuming LIFO } & \$ 324 & \text { N/A } & \$ 225 & \text { N/A } \\\hline 2016 \text { Ending inventory assuming FIFO } & \$ 427 & \$ 535 & \$ 310 & \$ 663 \\ \hline 2017 \text { Ending inventory assuming LIFO } & \$ 436 & \text { N/A } & \$ 167 & \text { N/A } \\ \hline 2017 \text { Ending inventory assuming FIFO } & \$ 578 & \$ 612 & \$ 209 & \$ 542 \\\hline \begin{array}{c} 2016 \text { Current assets } \\ \text { (reported on balance sheet) } \end{array} & \$ 1,677 & \$ 2,031 & \$ 1,308 & \$ 2,748 \\ \hline 2016 \text { Current liabilities } & \$ 987 & \$ 1,209 & \$ 545 & \$ 1,200 \\\hline \begin{array}{l} 2017 \text { Current assets } \\ \text { (reported on balance sheet) } \end{array} & \$ 2,225 & \$ 2,605 & \$ 1,100 & \$ 2,390 \\ \hline 2017 \text { Current liabilities } & \$ 1,306 & \$ 1,410 & \$ 465 & \$ 1,000 \\\hline 2017 \text { Cost of goods sold } & \$ 4,678 & \$ 1,410 & \$ 465 & \$ 1,000 \\ \hline \end{array}\)

A) Boxter B) Clifford C) Danforth D) Evans A) Boxter B) Clifford C) Danforth D) Evans

Clear Clarinets 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 amount allocated to ending inventory on a FIFO basis?

A) $18,220 B) $18,370 C) $38,480 D) $38,530 A) $18,220 B) $18,370 C) $38,480 D) $38,530

Baker Bakery Company just began business and made the following four inventory purchases in June: $\begin{array}{lrlr} \text { June } & 1 & 150 \text { units } & \$ 1,040 \\ \text { June } & 10 & 200 \text { units } & 1,560 \\ \text { June } & 15 & 200 \text { units } & 1,680 \\ \text { June } &28 & 150 \text { units } & 1,320 \\ &&&\$5,600 \end{array}$ A physical count of merchandise inventory on June 30 reveals that there are 210 units on hand. Using the FIFO inventory method, the amount allocated to ending inventory for June is

A) $1,456 B) $1,508 C) $1,824 D) $1,848 A) $1,456 B) $1,508 C) $1,824 D) $1,848

Orange-Aide 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 average cost method, the value of ending inventory is

A) $1,070 B) $1,045 c $1,050 D $1,100 A) $1,070 B) $1,045 c $1,050 D $1,100

Exam 5: Reporting and Analyzing Inventory

Butler Company reported ending inventory at December 31, 2017 of $1,200,000 under LIFO. It also reported a LIFO reserve of $210,000 at January 1, 2017, and $300,000 at December 31, 2017. Cost of goods sold for 2017 was $4,900,000. If Butler Company had used FIFO during 2017, its cost of goods sold for 2017 would have been

(Multiple Choice)

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Question 41

Which of the following should not be included in the physical inventory of a company?

(Multiple Choice)

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Question 42

Many companies use just-in-time inventory methods. Which of the following is not an advantage of this method?

(Multiple Choice)

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Question 43

A company purchased inventory as follows: 200 units at $6.00 300 units at $6.60 The average unit cost for inventory is

(Multiple Choice)

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Question 44

In periods of falling prices, FIFO will result in a larger net income than the LIFO method.

(True/False)

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Question 45

Atom Company just began business and made the following four inventory purchases in June: June 1 150 units \ 990 June 10 200 units 1,344 June 15 200 units 1,368 June 28 150 units 1,062 \4 ,764 A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand. Using the LIFO inventory method, the value of the ending inventory on June 30 is

(Multiple Choice)

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Question 46

Use the following information for Boxter, Inc., Clifford Company, Danforth Industries, and Evans Services to answer the question "Using the LIFO reserve adjustment, which company would have the strongest liquidity position for 2017 as expressed by the current ratio?" (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

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Question 47

The accounting principle that requires that the cost flow assumption be consistent with the physical movement of goods is

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Question 48

If companies have identical inventoriable costs but use different inventory flow assumptions when the price of goods have not been constant, then the

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Question 49

Clear Clarinets 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 amount allocated to ending inventory on a FIFO basis?

(Multiple Choice)

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Question 50

The following information was available for Bowyer Company at December 31, 2017: beginning inventory $90,000; ending inventory $70,000; cost of goods sold $800,000; and sales $1,100,000. Bowyer's inventory turnover in 2017 was

(Multiple Choice)

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Question 51

Which of the following items will increase inventoriable costs for the buyer of goods?

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Question 52

Under IFRS, companies can choose which inventory system?

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Question 53

After the physical inventory is completed,

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Question 54

When applying the lower of cost or market rule to inventory valuation, market generally means

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Question 55

Baker Bakery Company just began business and made the following four inventory purchases in June: June 1 150 units \ 1,040 June 10 200 units 1,560 June 15 200 units 1,680 June 28 150 units 1,320 \5 ,600 A physical count of merchandise inventory on June 30 reveals that there are 210 units on hand. Using the FIFO inventory method, the amount allocated to ending inventory for June is

(Multiple Choice)

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Question 56

An error in the ending inventory of the current period will have a similar effect on net income of the next accounting period.

(True/False)

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Question 57

Orange-Aide 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 average cost method, the value of ending inventory is

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Question 58

The LIFO reserve is the difference between ending inventory using LIFO and ending inventory if FIFO were used instead.

(True/False)

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Question 59

The requirements for accounting for and reporting of inventories under IFRS, compared to GAAP, tend to be more

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Question 60

Which of the following should not be included in the physical inventory of a company?

Many companies use just-in-time inventory methods. Which of the following is not an advantage of this method?

A company purchased inventory as follows: 200 units at $6.00 300 units at $6.60 The average unit cost for inventory is

In periods of falling prices, FIFO will result in a larger net income than the LIFO method.

The accounting principle that requires that the cost flow assumption be consistent with the physical movement of goods is

If companies have identical inventoriable costs but use different inventory flow assumptions when the price of goods have not been constant, then the

The following information was available for Bowyer Company at December 31, 2017: beginning inventory $90,000; ending inventory $70,000; cost of goods sold $800,000; and sales $1,100,000. Bowyer's inventory turnover in 2017 was

Which of the following items will increase inventoriable costs for the buyer of goods?

Under IFRS, companies can choose which inventory system?

After the physical inventory is completed,

When applying the lower of cost or market rule to inventory valuation, market generally means

An error in the ending inventory of the current period will have a similar effect on net income of the next accounting period.

The LIFO reserve is the difference between ending inventory using LIFO and ending inventory if FIFO were used instead.

The requirements for accounting for and reporting of inventories under IFRS, compared to GAAP, tend to be more

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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