Clooney Department Store estimates inventory by using the retail inventory method. The following information was developed: $\begin{array}{lrr}&\text { At Cost }&\text { At Retail }\\ \text { Beginning inventory } & \$ 360,000 & \$ 750,000 \\ \text { Goods purchased } & 900,000 & 1,350,000 \\ \text { Net sales } & & 1,400,000 \end{array}$ The estimated cost of the ending inventory is

A) $280,000. B) $336,000. C) $420,000. D) $466,667. A) $280,000. B) $336,000. C) $420,000. D) $466,667.

A company just starting business made the following four inventory purchases in June: $\begin{array}{lrlr} \text { June } 1 & 150 \text { units } & \$ 390 \\ \text { June } 10 & 200 \text { units } & 585 \\ \text { June } 15 & 200 \text { units } & 630 \\ \text { June } 28 & 150 \text { units } & 510\\&&\$2,115 \end{array}$ A physical count of merchandise inventory on June 30 reveals that there are 250 units on hand. Using the LIFO inventory method, the value of the ending inventory on June 30 is

A) $683. B) $825. C) $1,290. D) $1,432. A) $683. B) $825. C) $1,290. D) $1,432.

Penny Company made an inventory count on December 31, 2015. During the count, one of the clerks made the error of counting an inventory item twice. For the balance sheet at December 31, 2015, the effects of this error are $\begin{array} { ccc} & \underline{\text { Assets }} &&&& \underline { \text { Liabilities } } & \underline{\text { Stockholder's Equity }} \\\end{array}$ A) $\begin{array} { ccc} & \text { overstated } & \text { understated } & \text { overstated } \\\end{array}$ B)$\begin{array} { ccc} &\text { understated } & \text { no effect } && \text { understated } \\\end{array}$ C)$\begin{array} { ccc} & \text { overstated } & \text { no effect } &&& \text { overstated } \\\end{array}$ D)$\begin{array} { ccc} & \text { overstated } & \text { overstated }& & \text { understated } \end{array}$

The answer of Penny Company made an inventory count on...

Langer Company has the following inventory information. \[\begin{array} { r l l } \text { July } 1 & \text { Beginning Inventory } & 10 \text { units at } \$ 90 \\ 5 & \text { Purchases } & 60 \text { units at } \$ 92 \\ 14 & \text { Sale } & 40 \text { units } \\ 21 & \text { Purchases } & 30 \text { units at } \$ 95 \\ 30 & \text { Sale } & 28 \text { units } \end{array}\] Assuming that a perpetual inventory system is used, what is the ending inventory (round all calculations to nearest dollar) under the moving-average cost method?

A) $2,930 B) $2,966 C) $2,986 D) $3,054 A) $2,930 B) $2,966 C) $2,986 D) $3,054

Partridge Bookstore had 500 units on hand at January 1, costing $9 each. Purchases and sales during the month of January were as follows: $\begin{array}{lll} \underline{\text { Date}}&\underline{\text { Purchases }}&\underline{\text { Sales}}\\ \text { Jan. } 14 & & 375 @ \$ 14 \\ \quad\quad17 & 250 @ \$ 10& \\ \quad\quad25 & 250 @ \$ 11& \\ \quad\quad29 & &260 @ \$ 16 \end{array}$ Partridge does not maintain perpetual inventory records. According to a physical count, 365 units were on hand at January 31. The cost of the inventory at January 31, under the LIFO method is:

A) $3,285. B) $3,650. C) $3,900. D) $4,015. A) $3,285. B) $3,650. C) $3,900. D) $4,015.

Nick's Place recorded the following data: $\begin{array}{llrrr}&&\text { Units }&&\text { Unit }\\ \text { Date }& \text { Received }& \text {Sold }& \text {On Hand }& \text {Cost }\\\hline 1 / 1 \text { Inventory } & & & 600 & \$ 2.50 \\ 1 / 8 \text { Purchased } & 1,000 & & 1,600 & 3.00 \\ 1 / 12 \text { Sold } & & 1,200 & 300 & \end{array}$ The weighted average unit cost of the inventory at January 31 is:

A) $2.50. B) $2.75. C) $2.81. D) $3.400. A) $2.50. B) $2.75. C) $2.81. D) $3.400.

Eneri Company's inventory records show the following data: $\begin{array}{lcrr}&\text { Units }&\text { Unit Cost }\\ \text { Inventory, January 1 } & 10,000 & \$ 9.20 \\ \text { Purchases: } \text { June 18 } & 9,000 & 8.00 \\ \text { November 8 } & 6,000 & 7.00 \end{array}$ 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. If the company uses FIFO, what is the gross profit for the period?

A) $95,000 B) $99,266 C) $99,960 D) $103,800 A) $95,000 B) $99,266 C) $99,960 D) $103,800

Exam 6: Inventories

Clooney Department Store estimates inventory by using the retail inventory method. The following information was developed: At Cost At Retail Beginning inventory \ 360,000 \ 750,000 Goods purchased 900,000 1,350,000 Net sales 1,400,000 The estimated cost of the ending inventory is

(Multiple Choice)

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Question 121

A company just starting business made the following four inventory purchases in June: June 1 150 units \ 390 June 10 200 units 585 June 15 200 units 630 June 28 150 units 510 \2 ,115 A physical count of merchandise inventory on June 30 reveals that there are 250 units on hand. Using the LIFO inventory method, the value of the ending inventory on June 30 is

(Multiple Choice)

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Question 122

Penny Company made an inventory count on December 31, 2015. During the count, one of the clerks made the error of counting an inventory item twice. For the balance sheet at December 31, 2015, the effects of this error are A) overstated understated overstated B) understated no effect understated C) overstated no effect overstated D) overstated overstated understated

(Short Answer)

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Question 123

The consistent application of an inventory costing method is essential for

(Multiple Choice)

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Question 124

Inventories are estimated

(Multiple Choice)

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Question 125

The requirements for accounting for and reporting of inventories under IFRS, compared to GAAP, tend to be more

(Multiple Choice)

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Question 126

Langer Company has the following inventory information. July 1 Beginning Inventory 10 units at \ 90 5 Purchases 60 units at \ 92 14 Sale 40 units 21 Purchases 30 units at \ 95 30 Sale 28 units Assuming that a perpetual inventory system is used, what is the ending inventory (round all calculations to nearest dollar) under the moving-average cost method?

(Multiple Choice)

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Question 127

Partridge Bookstore had 500 units on hand at January 1, costing $9 each. Purchases and sales during the month of January were as follows: Jan. 14 375@\ 14 17 250@\ 10 25 250@\ 11 29 260@\ 16 Partridge does not maintain perpetual inventory records. According to a physical count, 365 units were on hand at January 31. The cost of the inventory at January 31, under the LIFO method is:

(Multiple Choice)

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Question 128

Nick's Place recorded the following data: Units Unit Date Received Sold On Hand Cost 1/1 Inventory 600 \ 2.50 1/8 Purchased 1,000 1,600 3.00 1/12 Sold 1,200 300 The weighted average unit cost of the inventory at January 31 is:

(Multiple Choice)

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Question 129

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. If the company uses FIFO, what is the gross profit for the period?

(Multiple Choice)

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Question 130

In a perpetual inventory system, the cost of goods sold under the FIFO method is based on the cost of the latest goods on hand during the period.

(True/False)

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Question 131

The cost of goods available for sale is allocated to the cost of goods sold and the

(Multiple Choice)

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Question 132

Which one of the following inventory methods is often impractical to use?

(Multiple Choice)

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Question 133

Fetherston Company's goods in transit at December 31 include: sales made $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ purchases made (1) FOB destination $\quad$ $\quad$ $\quad$ (3) FOB destination (2) FOB shipping point $\quad$ $\quad$ (4) FOB shipping point Which items should be included in Fetherston's inventory at December 31?

(Multiple Choice)

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Question 134

The specific identification method

(Multiple Choice)

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Question 135

Which of the following statements is correct with respect to inventories?

(Multiple Choice)

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Question 136

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. Assuming that the specific identification method is used and that ending inventory consists of 20 units from each of the three purchases and 30 units from the November 1 inventory, cost of goods sold is

(Multiple Choice)

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Question 137

The inventory turnover is computed by dividing cost of goods sold by

(Multiple Choice)

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Question 138

The term "FOB" denotes

(Multiple Choice)

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Question 139

Overstating ending inventory will overstate all of the following except

(Multiple Choice)

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Question 140

Clooney Department Store estimates inventory by using the retail inventory method. The following information was developed: At Cost At Retail Beginning inventory \ 360,000 \ 750,000 Goods purchased 900,000 1,350,000 Net sales 1,400,000 The estimated cost of the ending inventory is

The consistent application of an inventory costing method is essential for

Inventories are estimated

The requirements for accounting for and reporting of inventories under IFRS, compared to GAAP, tend to be more

Nick's Place recorded the following data: Units Unit Date Received Sold On Hand Cost 1/1 Inventory 600 \ 2.50 1/8 Purchased 1,000 1,600 3.00 1/12 Sold 1,200 300 The weighted average unit cost of the inventory at January 31 is:

In a perpetual inventory system, the cost of goods sold under the FIFO method is based on the cost of the latest goods on hand during the period.

The cost of goods available for sale is allocated to the cost of goods sold and the

Which one of the following inventory methods is often impractical to use?

The specific identification method

Which of the following statements is correct with respect to inventories?

The inventory turnover is computed by dividing cost of goods sold by

The term "FOB" denotes

Overstating ending inventory will overstate all of the following except

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions, Dividends, and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting

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