Exam 6: Inventories

Eneri Company's inventory records show the following data: Units Unit Cost Inventory, January 1 10,000 \ 9.20 Purchases: June 18 9,000 8.00 November 8 6,000 7.00 A physical inventory on December 31 shows 4,000 units on hand. Eneri sells the units for $13 each. The company has an effective tax rate of 20%. Eneri uses the periodic inventory method. The weighted-average cost per unit is

Use of the LIFO inventory valuation method enables a company to report paper or phantom profits.

Eneri Company's inventory records show the following data: Units Unit Cost Inventory, January 1 10,000 \ 9.20 Purchases: June 18 9,000 8.00 November 8 6,000 7.00 A physical inventory on December 31 shows 4,000 units on hand. Eneri sells the units for $13 each. The company has an effective tax rate of 20%. Eneri uses the periodic inventory method. What is the difference in taxes if LIFO rather than FIFO is used?

Which costing method cannot be used to determine the cost of inventory items before lower-of-cost-or-market is applied?

If a company has no beginning inventory and the unit cost of inventory items does not change during the year, the value assigned to the ending inventory will be the same under LIFO and average cost flow assumptions.

Switzer, Inc. has 8 computers which have been part of the inventory for over two years. Each computer cost $600 and originally retailed for $900. At the statement date, each computer has a current replacement cost of $400. How much loss should Switzer, Inc., record for the year?

When valuing ending inventory under a perpetual inventory system, the

Inventory accounting under IFRS differs from GAAP in regard to

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

Delmar Company had beginning inventory of $90,000, ending inventory of $110,000, cost of goods sold of $600,000, and sales of $960,000. Delmar's days in inventory is:

Priscilla has the following inventory information. July 1 Beginning Inventory 20 units at \ 19 \ 380 7 Purchases 70 units at \ 20 1,400 22 Purchases 10 units at \ 23 230 \ 2,010 A physical count of merchandise inventory on July 31 reveals that there are 35 units on hand. Using the average-cost method, the value of ending inventory is

A company just starting in business purchased three merchandise inventory items at the following prices. First purchase $64; Second purchase $76; Third purchase $68. If the company sold two units for a total of $200 and used FIFO costing, the gross profit for the period would be

Under a consignment arrangement, the

Accountants believe that the write down from cost to market should not be made in the period in which the price decline occurs.

Under GAAP, companies can choose which inventory system? LIFO $\quad$$\quad$ FIFO a. Yes $\quad$$\quad$ No b. Yes $\quad$$\quad$ Yes c. No $\quad$$\quad$ Yes d. No $\quad$$\quad$ No

Items waiting to be used in production are considered to be

A company purchased inventory as follows: 150 units at \ 5 350 units at \ 6 The average unit cost for inventory is

The retail inventory method requires a company to value its inventory on the balance sheet at retail prices.

Netta Shutters has the following inventory information. Nov. 1 Inventory 30 units @ \ 8.00 8 Purchase 120 units @ \ 8.30 17 Purchase 60 units @ \8 .40 25 Purchase 90 units @ \ 8.80 A physical count of merchandise inventory on November 30 reveals that there are 90 units on hand. Assume a periodic inventory system is used. Ending inventory under FIFO is

If goods in transit are shipped FOB destination