Exam 8: Valuation of Inventories: a Cost-Basis Approach

Use the following information for questions 98 and 99. The following information was available from the inventory records of Rich Company for January: -Assuming that Rich maintains perpetual inventory records, what should be the inventory at January 31, using the moving-average inventory method, rounded to the nearest dollar?

On June 1, 2014, Penny Corp. sold merchandise with a list price of $50,000 to Linn on account. Penny allowed trade discounts of 30% and 20%. Credit terms were 2/15, n/40 and the sale was made F.o.b. shipping point. Penny prepaid $1,000 of delivery costs for Linn as an accommodation. On June 12, 2014, Penny received from Linn a remittance in full payment amounting to

Morgan Manufacturing Company has the following account balances at year end: What amount should Morgan report as inventories in its balance sheet?

June Corp. sells one product and uses a perpetual inventory system. The beginning inventory consisted of 40 units that cost $20 per unit. During the current month, the company purchased 240 units at $20 each. Sales during the month totaled 180 units for $43 each. What is the number of units in the ending inventory?

In a period of rising prices, the inventory method which tends to give the highest reported cost of goods sold is

Costs which are inventoriable include all of the following except

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

Elkins Corporation uses the perpetual inventory method. On March 1, it purchased $30,000 of inventory, terms 2/10, n/30. On March 3, Elkins returned goods that cost $3,000. On March 9, Elkins paid the supplier. On March 9, Elkins should credit

Use the following information for questions 103 through 106. Transactions for the month of June were: -Assuming that perpetual inventory records are kept in units only, the ending inventory on a LIFO basis is

Black Corporation uses the FIFO method for internal reporting purposes and LIFO for external reporting purposes. The balance in the LIFO Reserve account at the end of 2014 was $140,000. The balance in the same account at the end of 2015 is $210,000. Black's Cost of Goods Sold account has a balance of $1,050,000 from sales transactions recorded during the year. What amount should Black report as Cost of Goods Sold in the 2015 income statement?

Farr Co. adopted the dollar-value LIFO inventory method on December 31, 2014. Farr's entire inventory constitutes a single pool. On December 31, 2014, the inventory was $640,000 under the dollar-value LIFO method. Inventory data for 2015 are as follows: Using dollar value LIFO, Farr's inventory at December 31, 2015 is

Use the following information to answer questions 6-8. Barton Company uses a periodic inventory system. On January 1, 2014, Barton Company had 1,200 units of inventory on hand at a cost of $8 per unit. During 2014, Barton made the following inventory purchases. Assume Barton Company sold 2,300 units of inventory during 2014. -If you assume that Barton follows IFRS and uses the Average-cost method, what is the ending inventory and cost of goods sold, respectively?

Purchase Discounts Lost is a financial expense and is reported in the "other expenses and losses" section of the income statement.

Use the following information for 121 and 122 RF Company had January 1 inventory of $200,000 when it adopted dollar-value LIFO. During the year, purchases were $1,200,000 and sales were $2,000,000. December 31 inventory at year-end prices was $286,720, and the price index was 112. -What is RF Company's gross profit?

Opera Corp. uses dollar-value LIFO method of computing its inventory cost. Data for the past three years is as follows: What is the 2015 inventory balance using dollar-value LIFO?

When using the periodic inventory system, which of the following generally would not be separately accounted for in the computation of cost of goods sold?

Risers Inc. reported total assets of $3,200,000 and net income of $255,000 for the current year. Risers determined that inventory was understated by $69,000 at the beginning of the year and $30,000 at the end of the year. What is the corrected amount for total assets and net income for the year?

Use the following information for questions 103 through 106. Transactions for the month of June were: -Assuming that perpetual inventory records are kept in dollars, the ending inventory on a LIFO basis is

Use of LIFO provides a tax benefit in an industry where unit costs tend to decrease as production increases.

The use of a Purchase Discounts account implies that the recorded cost of a purchased inventory item is its