Exam 6: Inventories

The accountant at Reber Company has determined that income before income taxes amounted to $6,750 using the FIFO costing assumption. If the income tax rate is 30% and the amount of income taxes paid would be $315 greater if the average-cost assumption were used, what would be the amount of income before taxes under the average-cost assumption?

Which method of inventory costing is prohibited under IFRS?

Kershaw Bookstore had 1,000 units on hand at January 1, costing €18 each. Purchases and sales during the month of January were as follows: Kershaw does not maintain perpetual inventory records. According to a physical count, 750 units were on hand at January 31. The cost of the inventory at January 31, under the FIFO method is:

The cost flow method that often parallels the actual physical flow of merchandise is the

A major difference between IFRS and GAAP is that GAAP specifically prohibits use of the FIFO cost flow assumption.

The lower-of-cost-or-net realizable value basis of accounting for inventories should be applied when the ______________ cost of the goods is lower than its cost.

Inventory turnover is calculated as cost of goods sold divided by ending inventory.

Taj Mahal Inc. uses the periodic inventory system and FIFO costing. For the year ending December 31, 2014, the company's cost of goods sold was Rs20,670,000. Had the LIFO cost flow assumption been used, cost of goods sold would have been Rs21,244,000. Assuming a 25% tax rate, what would be the tax savings if Taj Mahal were allowed to use LIFO?

Shandy Shutters has the following inventory information. A physical count of merchandise inventory on November 30 reveals that there are 100 units on hand. Assume a periodic inventory system is used. Ending inventory under LIFO is

Reinhoff Inc. reported total assets of €2,600,000, including €435,000 for inventory, and equity of €1,690,0000 on the December 31, 2014 statement of financial position. Reinhoff subsequently determined that the ending inventory was understated by €63,000. What is the corrected amount of equity for the year?

The cost of goods purchased during a period plus the beginning inventory is the amount of goods ________________ during the period.

At May 1, 2014, Deitrich Company had beginning inventory consisting of 200 units with a unit cost of €3.50. During May, the company purchased inventory as follows: 400 units at €3.50 600 units at €4.00 The company sold 1,000 units during the month for €6 per unit. Deitrich uses the average cost method. Deitrich's gross profit for the month of May is

Inventories are reported in the current assets section of the statement of financial position immediately before receivables.

The following accounts are included in the ledger of Dean Company: Advertising expense Freight-in Inventory Purchases Purchase returns and allowances Sales revenue Sales returns and allowances Which of the accounts would be included in calculating cost of goods sold?

If the unit cost of inventory has continuously increased, the ______________, first-out inventory valuation method will result in a higher valued ending inventory than if the ______________, first-out method had been used.

The cost of goods available for sale is allocated between

Under the gross profit method, each of the following items are estimated except for the

Sauder Company reports goods available for sale at cost, $90,000. Beginning inventory at retail is $40,000 and goods purchased during the period at retail were $80,000. Sales for the period amounted to $96,000. Instructions Determine the estimated cost of the ending inventory using the retail inventory method.