Exam 6: Inventories

A company just starting business made the following four inventory purchases in June: June 1 150 units \ 390 June 10 200 units 598 June 15 200 units 630 June 28 150 units A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand. Using the average-cost method the amount allocated to the ending inventory on June 30 is

The LIFO inventory method assumes that the cost of the latest units purchased are

Manufacturers usually classify inventory into all the following general categories except

The specific identification method of costing inventories tracks the actual physical flow of the goods available for sale.

Quayle Bookstore had 500 units on hand at January 1 costing $9 each. Purchases and sales during the month of January were as follows: Jan. 14 380@\ 15 17 250@\ 10 25 250@\ 12 29 260@\ 17 Quayle does not maintain perpetual inventory records. According to a physical count 360 units were on hand at January 31. The cost of the inventory at January 31 under the LIFO method is:

A company purchased inventory as follows: 150 units at $6 350 units at $7 The average unit cost for inventory is

During July the following purchases and sales were made by Phast Company. There was no beginning inventory. Phast Company uses a perpetual inventory system. Purchases Sales July 3 40 units @\ 14 July 13 50 units 11 40 units @\ 15 22 20 units 20 20 units @\ 16 Under the FIFO method the cost of goods sold for each sale is: July 13 July 22 A) \ 700 \ 280 B) 710 300 C) 750 300 D) 800 320

If inventories are valued using the LIFO cost assumption they should not be classified as a current asset on the balance sheet.

If a company has no beginning inventory and the unit price of inventory is increasing during a period the cost of goods available for sale during the period will be the same under the LIFO and FIFO inventory methods.

Days in inventory is calculated by dividing

Under the LCM approach the market value is defined as

Roseanne Company's inventory records show the following data: Units Unit Cost Inventory, January 1 10,000 \ 9.00 Purchases: June 18 9,000 8.20 November 8 6,000 7.25 A physical inventory on December 31 shows 5000 units on hand. Under the FIFO method the December 31 inventory is

The major IFRS requirements related to accounting for and reporting inventories are

The specific identification method

Dulzura Company had beginning inventory of $60000 ending inventory of $90000 cost of goods sold of $600000 and sales of $960000. Dulzura's days in inventory is:

The following information is available for Miguel Company at December 31 2016: beginning inventory $160000; ending inventory $240000; cost of goods sold $1050000; and sales $1800000. Everett's inventory turnover in 2016 is

During July the following purchases and sales were made by Phast Company. There was no beginning inventory. Phast Company uses a perpetual inventory system. Purchases Sales July 3 40 units @ \ 14 July 13 50 units 11 40 units @\ 15 22 20 units 20 20 units @\ 16 Under the LIFO method the cost of goods sold for each sale is: July 13 July 22 A) \ 700 \ 280 B) 710 300 C) 750 300 D) 800 320

James Supply Company reports net income of $120000 in 2016. The ending inventory did not include goods valued at $9000 that James had consigned to Eli's Gift Shop. (1) What is the correct net income for 2016? (2) What impact will this error have on the balance sheet at 12/31/16?

The following information is available for Clancy Company: Beginning inventory 600 units at \ 4 First purchase 900 units at \ 6.50 Second purchase 500 units at \ 7.20 Assume that Clancy uses a periodic inventory system and that there are 760 units left at the end of the month. Instructions Compute the cost of ending inventory under the (a) FIFO method. (b) LIFO method.

Tyler Company reported the following summarized annual data at the end of 2016: Sales revenue \ 1,000,000 Cost of goods sold Gross margin 400,000 Operating expenses Income before income taxes \ 120,000 "Based on an ending FIFO inventory of $\$ 240,000$ . The income tax rate is 30%. The controller of the company is considering a switch from FIFO to LIFO. He has determined that on a LIFO basis the ending inventory would have been $150000. Instructions (a) Restate the summary information on a LIFO basis. (b) What effect if any would the proposed change have on Tyler's income tax expense net income and cash flows? (c) If you were an owner of this business what would your reaction be to this proposed change?