Redeker Company had the following records: $\begin{array}{lll}&2017&2016\\ \text { Ending inventory } & \$ 32,650 & \$ 30,490 \\ \text { Cost of goods sold } & 213,600 & 209,040 \end{array}$ What is Redeker's average days in inventory for 2017? (rounded)

A) 53.7 days B) 56.2 days C) 55.3 days D) 52.1 days A) 53.7 days B) 56.2 days C) 55.3 days D) 52.1 days

Use the following information regarding Black Company and Red Company to answer the question "Which of the following is Red Company's "cost of goods sold" for 2017 (to the closest dollar)?" $\begin{array}{l} \begin{array}{|l|c|c|c|} \hline & \text { Year } & \begin{array}{c} \text { Inventory } \\ \text { Turnover } \end{array} & \text { Ending Inventory } \\ \hline \text { Black Company } & 2015 & & \$ 26,340 \\ \hline & 2016 & 8.7 & \$ 29,890 \\ \hline & 2017 & 8.2 & \$ 30,100 \\ \hline \\ \hline \text { Red Company } & 2015 & & \$ 25,860 \\ \hline & 2016 & 7.0 & \$ 24,750 \\ \hline & 2017 & 7.5 & \$ 22,530 \\ \hline \end{array} \end{array}$

A) $260,043 B) $189,788 C) $168,975 D) $177,300 A) $260,043 B) $189,788 C) $168,975 D) $177,300

Delightful Discs has the following inventory data: $\begin{array}{rll} \text { Nov. } 1 & \text { Inventory } & 30 \text { units } @ \$ 6.00 \text { each } \\ 8 & \text { Purchase } & 120 \text { units } @ \$ 6.45 \text { each } \\ 17 & \text { Purchase } & 60 \text { units } @ \$ 6.30 \text { each } \\ 25 & \text { Purchase } & 90 \text { units } @ \$ 6.60 \text { each } \end{array}$ A physical count of merchandise inventory on November 30 reveals that there are 100 units on hand. Ending inventory under LIFO is

A) $657 B) $632 C) $1,269 D) $1,295 A) $657 B) $632 C) $1,269 D) $1,295

Hogan Industries had the following inventory transactions occur during 2017: $\begin{array}{rlll}&&\text { Units } & \text { Cost/unit } \\ \text { Feb. 1,2017 } & \text { Purchase } & 108 & \$ 45 \\ \text { Mar. 14,2017 } & \text { Purchase } & 186 & \$ 47 \\ \text { May } 1,2017 & \text { Purchase } & 132 & \$ 49 \end{array}$ The company sold 306 units at $63 each and has a tax rate of 30%. Assuming that a periodic inventory system is used and operating expenses of $1,800, what is the company's after-tax income using FIFO? (rounded to whole dollars)

A) $2,832 B) $3,288 C) $2,302 D) $1,982 A) $2,832 B) $3,288 C) $2,302 D) $1,982

Alpha First 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 LIFO inventory method, the value of the ending inventory on June 30 is

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

Automobile Audio has the following inventory data: $\begin{array}{rll} \text { Nov. } 1 & \text { Inventory } & 30 \text { units } @ \$ 6.00 \text { each } \\ 8 & \text { Purchase } & 120 \text { units } @ \$ 6.45 \text { each } \\ 17 & \text { Purchase } & 60 \text { units } @ \$ 6.30 \text { each } \\ 25 & \text { Purchase } & 90 \text { units } @ \$ 6.60 \text { each } \end{array}$ A physical count of merchandise inventory on November 30 reveals that there are 100 units on hand. Ending inventory under FIFO is

A) $657 B) $1,269 C) $632 D) $1,295 A) $657 B) $1,269 C) $632 D) $1,295

Exam 5: Reporting and Analyzing Inventory

The accountant at Landry Company is figuring out the difference in income taxes the company will pay depending on the choice of either FIFO or LIFO as an inventory costing method. The tax rate is 30% and the FIFO method will result in income before taxes of $17,480. The LIFO method will result in income before taxes of $16,200. What is the difference in tax that would be paid between the two methods?

(Multiple Choice)

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Question 61

The LIFO method is rarely used because most companies do not sell the last goods they purchase first.

(True/False)

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Question 62

The average cost inventory method relies on a simple average calculation.

(True/False)

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Question 63

The First-in, First-out (FIFO) inventory method results in an ending inventory valued at the most recent cost.

(True/False)

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Question 64

Redeker Company had the following records: 2017 2016 Ending inventory \ 32,650 \ 30,490 Cost of goods sold 213,600 209,040 What is Redeker's average days in inventory for 2017? (rounded)

(Multiple Choice)

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Question 65

Johnson Company has a high inventory turnover that has increased over the last year. All of the following statements are true regarding this situation except Johnson Company:

(Multiple Choice)

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Question 66

Which of the following is not a common cost flow assumption used in costing inventory?

(Multiple Choice)

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Question 67

Use the following information regarding Black Company and Red Company to answer the question "Which of the following is Red Company's "cost of goods sold" for 2017 (to the closest dollar)?" Year Inventory Turnover Ending Inventory Black Company 2015 \ 26,340 2016 8.7 \ 29,890 2017 8.2 \ 30,100 Red Company 2015 \ 25,860 2016 7.0 \ 24,750 2017 7.5 \ 22,530

(Multiple Choice)

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Question 68

Delightful Discs has the following inventory data: Nov. 1 Inventory 30 units @\ 6.00 each 8 Purchase 120 units @\ 6.45 each 17 Purchase 60 units @\ 6.30 each 25 Purchase 90 units @\ 6.60 each A physical count of merchandise inventory on November 30 reveals that there are 100 units on hand. Ending inventory under LIFO is

(Multiple Choice)

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Question 69

A major criticism of the FIFO inventory method is that it magnifies the effects of the business cycle on business income.

(True/False)

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Question 70

GAAP's provision for ownership of goods (goods-in-transit or consigned goods), as well as which costs to include in inventory, as compared to IFRS are:

(Short Answer)

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Question 71

The inventory turnover is calculated by dividing cost of goods sold by

(Multiple Choice)

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Question 72

The consistent application of an inventory costing method enhances

(Multiple Choice)

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Question 73

Inventory costing methods place primary reliance on assumptions about the flow of

(Multiple Choice)

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Question 74

Tidwell Company's goods in transit at December 31 include sales made (1) FOB destination (2) FOB shipping point And purchases made (3) FOB destination (4) FOB shipping point. Which items should be included in Tidwell's inventory at December 31?

(Multiple Choice)

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Question 75

Hogan Industries had the following inventory transactions occur during 2017: Units Cost/unit Feb. 1,2017 Purchase 108 \ 45 Mar. 14,2017 Purchase 186 \ 47 May 1,2017 Purchase 132 \ 49 The company sold 306 units at $63 each and has a tax rate of 30%. Assuming that a periodic inventory system is used and operating expenses of $1,800, what is the company's after-tax income using FIFO? (rounded to whole dollars)

(Multiple Choice)

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Question 76

The manager of Weiser is given a bonus based on net income before taxes. The net income after taxes is $59,500 for FIFO and $49,000 for LIFO. The tax rate is 30%. The bonus rate is 20%. How much higher is the manager's bonus if FIFO is adopted instead of LIFO?

(Multiple Choice)

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Question 77

Alpha First 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 LIFO inventory method, the value of the ending inventory on June 30 is

(Multiple Choice)

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Question 78

The specific identification method of inventory valuation is desirable when a company sells a large number of low-unit cost items.

(True/False)

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Question 79

Automobile Audio has the following inventory data: Nov. 1 Inventory 30 units @\ 6.00 each 8 Purchase 120 units @\ 6.45 each 17 Purchase 60 units @\ 6.30 each 25 Purchase 90 units @\ 6.60 each A physical count of merchandise inventory on November 30 reveals that there are 100 units on hand. Ending inventory under FIFO is

(Multiple Choice)

5.0/5

(41)

Question 80

The LIFO method is rarely used because most companies do not sell the last goods they purchase first.

The average cost inventory method relies on a simple average calculation.

The First-in, First-out (FIFO) inventory method results in an ending inventory valued at the most recent cost.

Redeker Company had the following records: 2017 2016 Ending inventory \ 32,650 \ 30,490 Cost of goods sold 213,600 209,040 What is Redeker's average days in inventory for 2017? (rounded)

Johnson Company has a high inventory turnover that has increased over the last year. All of the following statements are true regarding this situation except Johnson Company:

Which of the following is not a common cost flow assumption used in costing inventory?

A major criticism of the FIFO inventory method is that it magnifies the effects of the business cycle on business income.

GAAP's provision for ownership of goods (goods-in-transit or consigned goods), as well as which costs to include in inventory, as compared to IFRS are:

The inventory turnover is calculated by dividing cost of goods sold by

The consistent application of an inventory costing method enhances

Inventory costing methods place primary reliance on assumptions about the flow of

Tidwell Company's goods in transit at December 31 include sales made (1) FOB destination (2) FOB shipping point And purchases made (3) FOB destination (4) FOB shipping point. Which items should be included in Tidwell's inventory at December 31?

The manager of Weiser is given a bonus based on net income before taxes. The net income after taxes is $59,500 for FIFO and $49,000 for LIFO. The tax rate is 30%. The bonus rate is 20%. How much higher is the manager's bonus if FIFO is adopted instead of LIFO?

The specific identification method of inventory valuation is desirable when a company sells a large number of low-unit cost items.

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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