The following data were taken from the annual reports of Big Bang Inc., a manufacturer of fireworks, and Orange Inc., a manufacturer of computers. \[\begin{array} { | l | r | r | } \hline & \text { Big Bang Inc. } & { \text { Orange Inc. } } \\ \hline \text { Cost of merchandise sold } & \$ 830,000 & \$ 11,540,000 \\ \hline \text { Inventory, end of year } & 190,000 & 320,000 \\ \hline \text { Inventory, beginning of year } & 240,000 & 290,000 \\ \hline \end{array}\] (a) Determine the (1) inventory turnover and (2) days' sales in inventory for Big Bang and Orange.Round your answers to two decimal places. (b) How would you expect these measures to compare between the companies? Why?

The answer of The following data were taken from the...

Addison, Inc. uses a perpetual inventory system. The following is information about one inventory item for the month of September: $\begin{array} { r l l } \text { Sept. } 1 & \text { Inventory } & 20 \text { units at } \$ 20 \\ 4 & \text { Sale } & 10 \text { units } \\ 10 & \text { Purchase } & 30 \text { units at } \$ 25 \\ 17 & \text { Sale } & 20 \text { units } \\ 30 & \text { Purchase } & 10 \text { units at } \$ 30 \end{array}$ -When using a perpetual inventory system, the journal entry to record the cost of merchandise sold is

A) debit Cost of Merchandise Sold; credit Sales B) debit Cost of Merchandise Sold; credit Merchandise Inventory C) debit Merchandise Inventory; credit Cost of Merchandise Sold D) No journal entry is made to record the cost of merchandise sold. A) debit Cost of Merchandise Sold; credit Sales B) debit Cost of Merchandise Sold; credit Merchandise Inventory C) debit Merchandise Inventory; credit Cost of Merchandise Sold D) No journal entry is made to record the cost of merchandise sold.

Use the information below to answer the following questions. Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1. \[\begin{array} { | c | l | c | c | } \hline \text { Date } & { \text { Blankets } } & \text { Units } & \text { Cost } \\ \hline \text { May } 3 & \text { Purchase } & 5 & \$ 20 \\ \hline 10 & \text { Sale } & 3 & \\ \hline 17 & \text { Purchase } & 10 & 24 \\ \hline 20 & \text { Sale } & 6 & \\ \hline 23 & \text { Sale } & 3 & 30 \\ \hline 30 & \text { Purchase } & 10 & \\ \hline \end{array}\] ? -Assuming that the company uses the perpetual inventory system, determine the gross profit for the month of May using the LIFO cost method.?

A) $348 B) $452 C) $444 D) $356 A) $348 B) $452 C) $444 D) $356

Based on the following data, calculate the estimated cost of the merchandise inventory on March 31 using the retail method. $\begin{array}{llrr}&\text { Cost } & \text { Retail } \\ \text { March } 1 \text { Merchandise inventory } & \$ 225,000 & \$ 357,600 \\ \text { March 1-31 Purchases (net) } & 454,245 & 612,750 \\ \text { March 1-31 Sales } & & 835,000 \end{array}$

The answer of Based on the following data, calculate the...

Use the information below to answer the following questions. Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1. \[\begin{array} { | c | l | c | c | } \hline \text { Date } & { \text { Blankets } } & \text { Units } & \text { Cost } \\ \hline \text { May } 3 & \text { Purchase } & 5 & \$ 20 \\ \hline 10 & \text { Sale } & 3 & \\ \hline 17 & \text { Purchase } & 10 & 24 \\ \hline 20 & \text { Sale } & 6 & \\ \hline 23 & \text { Sale } & 3 & 30 \\ \hline 30 & \text { Purchase } & 10 & \\ \hline \end{array}\] ? -Assuming that the company uses the perpetual inventory system, determine the cost of merchandise sold for the sale of May 20 using the LIFO inventory cost method.

A) $136 B) $144 C) $180 D) $120 A) $136 B) $144 C) $180 D) $120

Addison, Inc. uses a perpetual inventory system. The following is information about one inventory item for the month of September: $\begin{array} { r l l } \text { Sept. } 1 & \text { Inventory } & 20 \text { units at } \$ 20 \\ 4 & \text { Sale } & 10 \text { units } \\ 10 & \text { Purchase } & 30 \text { units at } \$ 25 \\ 17 & \text { Sale } & 20 \text { units } \\ 30 & \text { Purchase } & 10 \text { units at } \$ 30 \end{array}$ -The inventory data for an item for November are: \[\begin{array} { r l l } \text { Nov. } 1 & \text { Inventory } & 20 \text { units at } \$ 19 \\ 4 & \text { Sale } & 10 \text { units } \\ 10 & \text { Purchase } & 30 \text { units at } \$ 20 \\ 17 & \text { Sale } & 20 \text { units } \\ 30 & \text { Purchase } & 10 \text { units at } \$ 21 \end{array}\] Using a perpetual system, what is the cost of merchandise sold for November if the company uses FIFO?

A) $610 B) $600 C) $590 D) $580 A) $610 B) $600 C) $590 D) $580

Addison, Inc. uses a perpetual inventory system. The following is information about one inventory item for the month of September: $\begin{array} { r l l } \text { Sept. } 1 & \text { Inventory } & 20 \text { units at } \$ 20 \\ 4 & \text { Sale } & 10 \text { units } \\ 10 & \text { Purchase } & 30 \text { units at } \$ 25 \\ 17 & \text { Sale } & 20 \text { units } \\ 30 & \text { Purchase } & 10 \text { units at } \$ 30 \end{array}$ -If Addison uses FIFO, the cost of the ending merchandise inventory on September 30 is

A) $800 B) $650 C) $750 D) $700 A) $800 B) $650 C) $750 D) $700

The units of Product Green-2 available for sale during the year were as follows:? \[\begin{array} { l r l l l l } \text { Apr. } & 1 & \text { Inventory } & 15 \text { units } & @ & \$ 30 \\ \text { June } & 16 & \text { Purchase } & 29 \text { units } & @ & \$ 33 \\ \text { Sept. } & 28 & \text { Purchase } & 45 \text { units } & @ & \$ 35 \end{array}\] There are 17 units of the product in the physical inventory at September 30. The periodic inventory system is used. Determine the cost of merchandise sold by the (a) FIFO, (b) LIFO, and (c) average cost methods.

The answer of The units of Product Green-2 available for...

Exam 7: Inventories

The following data were taken from the annual reports of Big Bang Inc., a manufacturer of fireworks, and Orange Inc., a manufacturer of computers. Big Bang Inc. Orange Inc. Cost of merchandise sold \ 830,000 \ 11,540,000 Inventory, end of year 190,000 320,000 Inventory, beginning of year 240,000 290,000 (a) Determine the (1) inventory turnover and (2) days' sales in inventory for Big Bang and Orange.Round your answers to two decimal places. (b) How would you expect these measures to compare between the companies? Why?

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Question 101

A perpetual inventory system is an effective means of control over inventory.

(True/False)

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Question 102

List three different security measures taken to safeguard inventory.

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Question 103

Addison, Inc. uses a perpetual inventory system. The following is information about one inventory item for the month of September: Sept. 1 Inventory 20 units at \ 20 4 Sale 10 units 10 Purchase 30 units at \ 25 17 Sale 20 units 30 Purchase 10 units at \ 30 -When using a perpetual inventory system, the journal entry to record the cost of merchandise sold is

(Multiple Choice)

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Question 104

Match each situation to its impact (a-c) on the current year's net income. -Merchandise held on consignment was included in the count of ending inventory.

(Multiple Choice)

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Question 105

Using a LIFO perpetual cost flow, calculate the value of the ending inventory and the cost of merchandise sold for the month of November of Beamer Company using the data below.?? Nov. 1 Purchase 600 units \ 80 each 4 Sale 200 units 11 Purchase 350 units \ 82 each 12 Sale 275 units 22 Purchase 175 units \ 84 each 23 Sale 155 units Calculate the following: (a) Inventory valuation at the end of November (b) Cost of merchandise sold for November

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Question 106

The two most widely used methods for determining the cost of inventory are

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Question 107

Use the information below to answer the following questions. Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1. Date Blankets Units Cost May 3 Purchase 5 \ 20 10 Sale 3 17 Purchase 10 24 20 Sale 6 23 Sale 3 30 30 Purchase 10 ? -Assuming that the company uses the perpetual inventory system, determine the gross profit for the month of May using the LIFO cost method.?

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Question 108

During a period of consistently rising prices, the method of inventory that will result in reporting the greatest cost of merchandise sold is

(Multiple Choice)

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Question 109

If merchandise inventory is being valued at cost and the price level is steadily rising, the method of costing that will yield the highest net income is

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Question 110

Match each description to the appropriate cost flow assumption (a-c). -Does not follow the physical flow of goods in most cases

(Multiple Choice)

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Question 111

Based on the following data, calculate the estimated cost of the merchandise inventory on March 31 using the retail method. Cost Retail March 1 Merchandise inventory \ 225,000 \ 357,600 March 1-31 Purchases (net) 454,245 612,750 March 1-31 Sales 835,000

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Question 112

If a company mistakenly counts less items during a physical inventory than actually exist, how will the error affect the cost of merchandise sold?

(Multiple Choice)

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Question 113

Use the information below to answer the following questions. Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1. Date Blankets Units Cost May 3 Purchase 5 \ 20 10 Sale 3 17 Purchase 10 24 20 Sale 6 23 Sale 3 30 30 Purchase 10 ? -Assuming that the company uses the perpetual inventory system, determine the cost of merchandise sold for the sale of May 20 using the LIFO inventory cost method.

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Question 114

The lower-of-cost-or-market method of determining the value of ending inventory can be applied on an item-by-item basis, by major classification of inventory, or by the total inventory.

(True/False)

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Question 115

Addison, Inc. uses a perpetual inventory system. The following is information about one inventory item for the month of September: Sept. 1 Inventory 20 units at \ 20 4 Sale 10 units 10 Purchase 30 units at \ 25 17 Sale 20 units 30 Purchase 10 units at \ 30 -The inventory data for an item for November are: Nov. 1 Inventory 20 units at \ 19 4 Sale 10 units 10 Purchase 30 units at \ 20 17 Sale 20 units 30 Purchase 10 units at \ 21 Using a perpetual system, what is the cost of merchandise sold for November if the company uses FIFO?

(Multiple Choice)

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Question 116

Garrison Company uses the retail method of inventory costing. It started the year with an inventory that had a retail cost of $45,000. During the year, Garrison purchased an inventory with a retail sales value of $300,000. After performing a physical inventory, Garrison calculated the inventory at retail to be $80,000. The markup is 100% of cost. Determine the ending inventory at its estimated cost.

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Question 117

A subsidiary inventory ledger can be an aid in maintaining inventory levels at their proper levels.

(True/False)

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Question 118

Addison, Inc. uses a perpetual inventory system. The following is information about one inventory item for the month of September: Sept. 1 Inventory 20 units at \ 20 4 Sale 10 units 10 Purchase 30 units at \ 25 17 Sale 20 units 30 Purchase 10 units at \ 30 -If Addison uses FIFO, the cost of the ending merchandise inventory on September 30 is

(Multiple Choice)

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Question 119

The units of Product Green-2 available for sale during the year were as follows:? Apr. 1 Inventory 15 units @ \ 30 June 16 Purchase 29 units @ \ 33 Sept. 28 Purchase 45 units @ \ 35 There are 17 units of the product in the physical inventory at September 30. The periodic inventory system is used. Determine the cost of merchandise sold by the (a) FIFO, (b) LIFO, and (c) average cost methods.

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Question 120

A perpetual inventory system is an effective means of control over inventory.

List three different security measures taken to safeguard inventory.

Match each situation to its impact (a-c) on the current year's net income. -Merchandise held on consignment was included in the count of ending inventory.

The two most widely used methods for determining the cost of inventory are

During a period of consistently rising prices, the method of inventory that will result in reporting the greatest cost of merchandise sold is

If merchandise inventory is being valued at cost and the price level is steadily rising, the method of costing that will yield the highest net income is

Match each description to the appropriate cost flow assumption (a-c). -Does not follow the physical flow of goods in most cases

Based on the following data, calculate the estimated cost of the merchandise inventory on March 31 using the retail method. Cost Retail March 1 Merchandise inventory \ 225,000 \ 357,600 March 1-31 Purchases (net) 454,245 612,750 March 1-31 Sales 835,000

If a company mistakenly counts less items during a physical inventory than actually exist, how will the error affect the cost of merchandise sold?

The lower-of-cost-or-market method of determining the value of ending inventory can be applied on an item-by-item basis, by major classification of inventory, or by the total inventory.

A subsidiary inventory ledger can be an aid in maintaining inventory levels at their proper levels.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Cost-Volume-Profit Analysis

Evaluating Variances From Standard Costs

Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

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