Exam 6: Inventories

In a period of rising prices, the inventory reported in Leary Company's statement of financial position is close to the current cost of the inventory. Maris Company's inventory is below its current cost. Identify the inventory cost flow method being used by each company. Which company has probably been reporting the higher gross profit?

The major difference between IFRS and GAAP in accounting for inventories is that

Paulson, Inc. has 8 computers which have been part of the inventory for over two years. Each computer cost ₤600 and originally retailed for ₤825. At the statement date, each computer has a net realizable value of ₤350. How much loss should Paulson, Inc., record for the year?

Instructions (a) Compute the cost of the ending inventory and the cost of goods sold under (1) FIFO and (2) LIFO. (b) Compute the cost of the ending inventory and the cost of goods sold using the average-cost method.

Keiko Company took a physical inventory at December 31, 2013 and determined that ¥3,530,000 of goods were on hand. In addition, the company had goods consigned with Chang Company that had a cost of ¥700,000. On December 29, Keiko sold and shipped F.o.b. shipping point ¥600,000 worth of inventory. These goods arrived at the buyer's place of business on January 4, 2014. What amount should Keiko report as inventory on its December 31, 2013 statement of financial position?

Brocken Co. has the following data related to an item of inventory: The value assigned to cost of goods sold if Brocken uses average-cost is

Colletti Company recorded the following data: The weighted average unit cost of the inventory at January 31 is:

Compute the lower-of-cost-or-net realizable value valuation for Aber Company's total inventory based on the following:

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. Cost of goods sold under the average-cost method is

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

Bosio Corporation's computation of cost of goods sold is: The average days to sell inventory for Bosio is

Zimmer Company uses the perpetual inventory system and the LIFO method. The following information is available for the month of May: Instructions Prepare a schedule to show cost of goods sold and the value of the ending inventory for the month of May.

The specific identification method of inventory costing is appropriate for costly, easily distinguishable items such as cars, pianos, and antigues.

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

Vestle Company uses the periodic inventory system. For January 2014, the beginning inventory consisted of 24,000 units that cost CHF12 each. During the month, the company made two purchases: 10,000 units at CHF13 each and 40,000 units at CHF13.50 each. Vestle sold 43,000 units during the month for CHF19.50 per unit. Using the average-cost method, what is the amount of cost of goods sold for the month of January 2014 (round per unit amount to two decimal places)?

The controller of Scheller Company is applying the lower-of-cost-or-net realizable value basis of valuing its ending inventory. The following information is available: Instructions Compute the value of the ending inventory by applying the lower-of-cost-or-net realizable value basis.

IFRS requires that the cost flow assumption be consistent with the physical movement of the goods.

If goods in transit are shipped FOB destination

If the unit price of inventory is increasing during a period, a company using the average-cost inventory method will show less gross profit for the period, than if it had used the FIFO inventory method.

Disclosures about inventory should include each of the following except the