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

Nichols Company had 400 units of "Dink" in its inventory at a cost of $6 each.It purchased 600 more units of "Dink" at a cost of $9 each.Nichols then sold 700 units at a selling price of $15 each.The LIFO liquidation overstated normal gross profit by

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

Homes 4 You builds single-family homes throughout the United States and Europe.The International Accounting Standards Board (IASB) Requires Homes 4 You to use which of the following cost flow assumptions for its inventory?

Groh Co.recorded the following data pertaining to raw material X during January 2010: The moving-average unit cost of X inventory at January 31, 2010 is

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

Assuming no beginning inventory, what can be said about the trend of inventory prices if cost of goods sold computed when inventory is valued using the FIFO method exceeds cost of goods sold when inventory is valued using the average cost method?

June Corp.sells one product and uses a perpetual inventory system.The beginning inventory consisted of 10 units that cost $20 per unit.During the current month, the company purchased 60 units at $20 each.Sales during the month totaled 45 units for $43 each.What is the number of units in the ending inventory?

Oats Company offers a trade discount to its customers as a reward for large orders.According to the International Accounting Standards Board (IASB) how should the customers of Oats Company account for these trade discounts?

A manufacturing concern would report the cost of units only partially processed as inventory in the statement of financial position.

Which of the following is a period cost?

What is the cost of the ending inventory at December 31, 2012 under dollar-value LIFO?

In a period of rising prices, the inventory method which tends to give the highest reported net income is

How might a company obtain a price index in order to apply dollar-value LIFO?

Use the following information for questions. Transactions for the month of June were: -Assuming that perpetual inventory records are kept in units only, the ending inventory on an average-cost basis, rounded to the nearest dollar, is

Use the following information for questions. Winsor Co.records purchases at net amounts.On May 5 Winsor purchased merchandise on account, $16,000, terms 2\10, n\30.Winsor returned $1,200 of the May 5 purchase and received credit on account.At May 31 the balance had not been paid. -By how much should the account payable be adjusted on May 31?

Use the following information for questions. Gross Corporation adopted the dollar-value LIFO method of inventory valuation on December 31, 2009.Its inventory at that date was $220,000 and the relevant price index was 100.Information regarding inventory for subsequent years is as follows: -What is the cost of the ending inventory at December 31, 2011 under dollar-value LIFO?

Which of the following is true regarding the use of LIFO for inventory valuation?

In all cases when FIFO is used, the cost of goods sold would be the same whether a perpetual or periodic system is used.

Use the following information for questions. During 2010 Carne Corporation transferred inventory to Nolan Corporation and agreed to repurchase the merchandise early in 2011.Nolan then used the inventory as collateral to borrow from Norwalk Bank, remitting the proceeds to Carne.In 2011 when Carne repurchased the inventory, Nolan used the proceeds to repay its bank loan. -This transaction is known as a(n)

Interest costs incurred to manufacture large quantities of inventory that are produced routinely should be capitalized.