Exam 6: Reporting and Analyzing Inventory

Average Corp.purchased inventory as follows: March 3 300 units at $9 March 4 200 units at $10 March 7 100 units at $11 On March 5, Average sold 400 units for $17 each.The average unit cost to be used for the cost of goods sold on March 5, in a perpetual inventory system, is

Use the following information for the month of June for questions XYZ Inc.uses the average cost formula in a perpetual inventory system. (Use unrounded numbers in your calculations but round to the nearest cent for presentation purposes in your answer.) -The cost of goods sold for the June 8 sale is

Inventory that originally cost $10,000 was written down to its net realizable value of $8,500 at the end of 2014.At the end of 2015, the net realizable value is determined to be $10,500.At what amount should the inventory be reported on the December 31, 2015 statement of financial position?

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

The specific identification method of costing inventories is used when the

A change in the method of cost determination for inventory must be disclosed in the financial statements.

Once goods leave the premises of the seller, they should never be added to the seller's physical inventory count.

The cost of goods available for sale is allocated between

Goods in transit shipped FOB shipping point should be included in the buyer's ending inventory.

In periods of falling prices, FIFO will result in a higher cost of goods sold than the average cost formula.

Demonstrate the presentation and analysis of inventory.

When the value of inventory is lower than its cost, the inventory is written down to its net realizable value.

Apply the methods of cost determination using specific identification, FIFO, and average cost under a perpetual inventory system.

During a period of inflation, using ___ will approximate a company's current cost of ending inventory.

Use the following information for the month of June for questions XYZ Inc.uses the average cost formula in a perpetual inventory system. (Use unrounded numbers in your calculations but round to the nearest cent for presentation purposes in your answer.) -The cost of goods sold for the June 10 sale is

When using the perpetual system, the average cost method relies on a simple average calculation.

In a period of declining prices, which of the following inventory cost formulas generally results in the lowest inventory figure on the statement of financial position?

For 2015, Nervous Energy Inc.reported $24,000 beginning inventory and $26,000 ending inventory.Net sales were $160,000 and gross profit was $55,000 for the same period.Based on these figures, inventory turnover for 2015 was

Use the following information for questions A company just starting business made the following four inventory purchases in June: On June 25, the company made its first sale when a local customer purchased 500 units for $3,500.The company uses a perpetual inventory system. -Using the FIFO cost method, the cost of the ending inventory on June 30 is

The lower of cost and net realizable value basis of valuing inventories ensures that inventories are