Exam 6: Inventories

As a result of a thorough physical inventory, Horace Company determined that it had inventory worth $320,000 at December 31, 2015. This count did not take into consideration the following facts: Herschel Consignment currently has goods worth $47,000 on its sales floor that belong to Horace but are being sold on consignment by Herschel. The selling price of these goods is $75,000. Horace purchased $22,000 of goods that were shipped on December 27, FOB destination, that will be received by Horace on January 3. Determine the correct amount of inventory that Horace should report.

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.

Netta Shutters has the following inventory information. 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 LIFO is

Goods in transit should be included in the inventory of the buyer when the

Priscilla has the following inventory information. A physical count of merchandise inventory on July 31 reveals that there are 35 units on hand. Using the FIFO inventory method, the amount allocated to cost of goods sold for July is

The factor which determines whether or not goods should be included in a physical count of inventory is

A new average cost is computed each time a purchase is made in the

TB Nelson Company prepares monthly financial statements and uses the gross profit method to estimate ending inventories. Historically, the company has had a 40% gross profit rate. During June, net sales amounted to $180,000; the beginning inventory on June 1 was $54,000; and the cost of goods purchased during June amounted to $90,000. The estimated cost of TB Nelson Company's inventory on June 30 is

Turturro Department Store utilizes the retail inventory method to estimate its inventories. It calculated its cost to retail ratio during the period at 75%. Goods available for sale at retail amounted to $600,000 and goods were sold during the period for $420,000. The estimated cost of the ending inventory is

Partridge Bookstore had 500 units on hand at January 1, costing $9 each. Purchases and sales during the month of January were as follows: 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:

Inventory turnover is calculated as cost of goods sold divided by ending inventory.

Finished goods are a classification of inventory for a manufacturer that are completed and ready for sale.

Clooney Department Store estimates inventory by using the retail inventory method. The following information was developed: The estimated cost of the ending inventory is

Goodman Company's inventory records show the following data: A physical inventory on December 31 shows 6,000 units on hand. Under the FIFO method, the December 31 inventory is

Inventory is

The manager of Brick Company is given a bonus based on income before income taxes. Net income, after taxes, is $11,200 for FIFO and $9,800 for LIFO. The tax rate is 30%. The bonus rate is 20%. How much higher is the manager's bonus if FIFO is adopted instead of LIFO?

Indrisano's Used Cars uses the specific identification method of costing inventory. During March, Indrisano purchased three cars for $12,000, $14,400, and $19,200, respectively. During March, two cars are sold for a total of $34,600. Indrisano determines that at March 31, the $14,400 car is still on hand. What is Indrisano's gross profit for March?

Fetherston Company's goods in transit at December 31 include: Which items should be included in Fetherston's inventory at December 31?

Effie Company uses a periodic inventory system. Details for the inventory account for the month of January, 2015 are as follows: An end of the month (1/31/15) inventory showed that 160 units were on hand. If the company uses LIFO, what is the value of the ending inventory?

Goods out on consignment should be included in the inventory of the consignor.