Exam 6: Inventories

During July, the following purchases and sales were made by James Company. There was no beginning inventory. James Company uses a perpetual inventory system. Under the FIFO method, the cost of goods sold for each sale is: July 13 July 22

The average cost method costs units using a weighted-average unit cost.

The Entertainment Center accumulates the following cost and market data (in 000) at December 31. What is the lower-of-cost-or-net realizable value of the inventory?

Understating beginning inventory will understate

Finished goods are a classification of inventory for a manufacturer that are completed and ready for sale.

One difference between IFRS and GAAP in valuing inventories is that

In a period of rising prices which inventory method generally provides the greatest amount of net income?

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

Major Grey Company uses the retail inventory method to value its merchandise inventory. The following information is available for the current year: What cost to retail ratio should be used to estimate ending inventory?

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

Stark Department Store estimates inventory by using the retail inventory method. The following information was developed: The estimated cost of the ending inventory is

Hoyt Company's inventory records show the following data for the month of September: A physical inventory on September 30 shows 200 units on hand. Calculate the value of ending inventory and cost of goods sold if the company uses FIFO inventory costing and a periodic inventory system.

Under the retail inventory method, the estimated cost of ending inventory is computed by multiplying the cost-to-retail ratio by

Henri Company uses the average-cost inventory method. Its 2014 ending inventory was €40,000, but it would have been €60,000 if FIFO had been used. Thus, if FIFO had been used, Henri's income before income taxes would have been

As a result of a thorough physical inventory, Hastings Company determined that it had inventory worth $570,000 at December 31, 2014. This count did not take into consideration the following facts: Carlin Consignment store currently has goods worth $104,000 on its sales floor that belong to Hastings but are being sold on consignment by Carlin. The selling price of these goods is $150,000. Hastings purchased $40,000 of goods that were shipped on December 27 FOB destination, that will be received by Hastings on January 3. Determine the correct amount of inventory that Hastings should report.

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. The value of Deitrich's inventory at May 31, 2014 is

East Asia Inc., Hong Kong subsidiary of a US company, uses the periodic inventory system. At April 1, the inventory consisted of 600 units that cost HK$650 each. During the month, the company made two purchases: 900 units at HK$680 each and 450 units at HK$700 each. East Asia also sold 1,500 units during the month. Using the LIFO cost flow assumption, what is the amount of cost of goods sold for the month?

The specific identification method of inventory costing

The following information is available for Park Company at December 31, 2014: beginning inventory $80,000; ending inventory $120,000; cost of goods sold $1,200,000; and sales $1,600,000. Park's inventory turnover in 2014 is

Goods that have been purchased FOB destination but are in transit, should be excluded from a physical count of goods.