Exam 6: Inventories

Rudolf Diesel Company's inventory records show the following data: A physical inventory on December 31 shows 8,000 units on hand. Under the FIFO method, the December 31 inventory is

For each of the independent events listed below, analyze the impact on the indicated items at the end of the current year by placing the appropriate code letter in the box under each item. Code: O = item is overstated U = item is understated NA = item is not affected

A company just starting business made the following four inventory purchases in June: A physical count of merchandise inventory on June 30 reveals that there are 100 units on hand. Using the average-cost method, the amount allocated to the ending inventory on June 30 is

Which of the following should be included in the physical inventory of a company?

If beginning inventory is understated by $10,000, the effect of this error in the current period is

An error that overstates the ending inventory will also cause net income for the period to be overstated.

The inventory reported on Lazzard Company's statement of financial position is understated by £1,250,000. The company's reported net income for the period will be

A problem with the specific identification method is that

The following information is available for Massey Company: Assume that Massey uses a periodic inventory system and that there are 700 units left at the end of the month. Instructions Compute each of the following under the average-cost method: (a) Cost of ending inventory. (b) Cost of goods sold.

Tatsoi Company's purchase and sales transactions for the month of May were as follows: Assuming that the company keeps perpetual inventory records, Tatsoi's cost of goods sold for the month of May on a LIFO basis is

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?

Items not yet placed into production are considered to be

In a period of rising prices, the costs allocated to ending inventory may be understated in the

Breguet Company uses the FIFO inventory method. The company reported inventory of CHF2,270,000 on its December 31, 2014 statement of financial position. Had average-cost been used, the company would have reported inventory of CHF1,860,000. The company's tax rate is 30%. What is the impact of the inventory cost flow assumption on Breguet's 2014 financial statements?

Neiderhoff Inc. uses the retail inventory method to value its merchandise inventory. The following information is available for 2014: What is Neiderhoff's estimated ending inventory at cost?

The retail inventory method requires a company to value its inventory on the statement of financial position at retail prices.

At December 31, 2014, Murchi Company reported total assets of Rs22,320,000, including inventory of Rs5,580,000 and net income of Rs7,365,600 for 2014. The reported inventory was overstated by Rs1,020,000. Which of the following is true with regard to Murchi's 2014 financial statements (ignore income taxes)?

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. Assuming that the specific identification method is used and that ending inventory consists of 30 units from each of the three purchases and 10 units from the November 1 inventory, cost of goods sold is

GAAP requires the following

In a period of rising prices, the statement of financial position will report a higher inventory amount if FIFO, rather than average-costing, is the cost flow assumption used.