P. Didee has the following inventory information. \[\begin{array} { r l l } \text { July } 1 & \text { Beginning Inventory } & 20 \text { units at } \$ 90 \\ 5 & \text { Purchases } & 120 \text { units at } \$ 92 \\ 14 & \text { Sale } & 90 \text { units } \\ 21 & \text { Purchases } & 60 \text { units at } \$ 95 \\ 30 & \text { Sale } & 58 \text { units } \end{array}\] Assuming that a perpetual inventory system is used what is the ending inventory on a FIFO basis?

A) $4744 B) $5860 C) $4940 D) $6346 A) $4744 B) $5860 C) $4940 D) $6346

Quayle Bookstore had 500 units on hand at January 1 costing $9 each. Purchases and sales during the month of January were as follows: $\begin{array}{rlr} \underline{\text { Date }}&& \underline{\text { Purchases }}& \underline{ \text { Sales }} \\ \text { Jan. }&14 & & 380 @ \$ 15 \\ &17 & 250 @ \$ 10 & \\ &25 & 250@ \$ 12 & \\ &29 & & 260 @ \$ 17 \end{array}$ Quayle 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 FIFO method is:

A) $3240. B) $3650. C) $4100. D) $3820. A) $3240. B) $3650. C) $4100. D) $3820.

Ford Co. uses a periodic inventory system. Its records show the following for the month of May in which 75 units were sold. $\begin{array}{llccc} && \underline{\text { Units}}& \underline{\text { Unit Cost }}& \underline{\text { Total Cost }}\\ \text { May}& 1 \text { Inventory } & 35 & \$ 8&\$280 \\ &15 \text { Purchases } & 30 & 12&360 \\ &24 \text { Purchases } & \underline{40} & 13 & \underline{520}\\ &\text { Totals }& \underline{105}&& \underline{\$1.160} \end{array}$ Instructions Compute the ending inventory at May 31 and cost of goods sold using the FIFO and LIFO methods. Prove the amount allocated to cost of goods sold under each method.

The answer of Ford Co. uses a periodic inventory system....

Pasquale has the following inventory information. $\begin{array}{rllr} \text { July } 1 & \text { Beginning Inventory } & 20 \text { units at } \$ 19 & \$ 380 \\ 7 & \text { Purchases } & 70 \text { units at } \$ 20 & 1,400 \\ 22 & \text { Purchases } & 10 \text { units at } \$ 24 & 240\\ & & &\$2,020 \end{array}$ A physical count of merchandise inventory on July 31 reveals that there are 30 units on hand. Using the average-cost method the value of ending inventory is

A) $585. B) $606. C) $630. D) $660. A) $585. B) $606. C) $630. D) $660.

Storme Shutters has the following inventory information. \[\begin{array} { r l r } \text { Nov. } 1 & \text { Inventory } & 30 \text { units } @\$ 8.00 \\ 8 & \text { Purchase } & 120 \text { units }@\$ 8.30 \\ 17 & \text { Purchase } & 60 \text { units } @ \$ 8.70 \\ 25 & \text { Purchase } & 90 \text { units }@\$ 8.80 \end{array}\] A physical count of merchandise inventory on November 30 reveals that there are 80 units on hand. Assume a periodic inventory system is used. Ending inventory under LIFO is

A) $655. B) $704. C) $1756. D) $1812. A) $655. B) $704. C) $1756. D) $1812.

Elly Company uses a periodic inventory system. Details for the inventory account for the month of January 2016 are as follows: \[\begin{array} { l c c r } & \text { Units } & \text { Per unit price } & \text { Total } \\ \hline\text { Balance, } 1 / 1 / 16 & 200 & \$ 5.00 & \$ 1,000 \\ \text { Purchase, } 1 / 15 / 16 & 100 & 5.30 & 530 \\ \text { Purchase, } 1 / 28 / 16 & 100 & 5.50 & 550 \end{array}\] An end of the month (1/31/16) inventory showed that 150 units were on hand. If the company uses FIFO what is the value of the ending inventory?

A) $750 B) $805 C) $850 D) $815 A) $750 B) $805 C) $850 D) $815

GAAP's provision for ownership of goods (goods-in-transit or consigned goods) as well as which costs to include in inventory as compared to IFRS are: $\begin{array} { l c } \underline {\text { Ownership of goods} } & \underline { \text { Costs to include in inventory } } \\\end{array}$ A)$\begin{array} { l c } \text { essentially similar } & \text { essentially similar } \\\end{array}$ B)$\begin{array} { l c } \text { essentially different } & \text { essentially different } \\\end{array}$ C)$\begin{array} { l c } \text { essentially similar } && \text { essentially similar } \\\end{array}$ D)$\begin{array} { l c } \text { essentially different } &\text { essentially similar } \end{array}$

The answer of GAAP's provision for ownership of goods (goods-in-transit...

Nicholas Industries had the following inventory transactions occur during 2014: \[\begin{array} { l l c c } && \text { Units } & \text { Cost/unit } \\ 2 / 1 / 16 & \text { Purchase } & 54 & \$ 45 \\ 3 / 14 / 16 & \text { Purchase } & 93 & \$ 47 \\ 5 / 1 / 16 & \text { Purchase } & 66 & \$ 49 \end{array}\] The company sold 140 units at $65 each and has a tax rate of 30%. Assuming that a periodic inventory system is used what is the company's after-tax income using LIFO? (rounded to whole dollars)

A) $1672 B) $1840 C) $2388 D) $2628 A) $1672 B) $1840 C) $2388 D) $2628

Exam 6: Inventories

P. Didee has the following inventory information. July 1 Beginning Inventory 20 units at \ 90 5 Purchases 120 units at \ 92 14 Sale 90 units 21 Purchases 60 units at \ 95 30 Sale 58 units Assuming that a perpetual inventory system is used what is the ending inventory on a FIFO basis?

(Multiple Choice)

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Question 21

The term "FOB" denotes

(Multiple Choice)

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Question 22

Match the items below.

Measures the number of times the inventory sold during the period.

Merchandise Inventory

Tracks the actual physical flow for each inventory item available for sale.

Work in process

Goods that are only partially completed in a manufacturing company.

FOB shipping point

Correct Answer:

Verified

Measures the number of times the inventory sold during the period.

Tracks the actual physical flow for each inventory item available for sale.

Goods that are only partially completed in a manufacturing company.

Cost of goods sold consists of the most recent inventory purchases.

Goods ready for sale to customers by retailers and wholesalers.

Title to the goods transfers when the public carrier accepts the goods from the seller.

Ending inventory valuation consists of the most recent inventory purchases.

The same unit cost is used to value ending inventory and cost of goods sold.

Title to goods transfers when the goods are delivered to the buyer.

The amount that would be paid at the present time to acquire an identical item.

(Matching)

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Question 23

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 365 units were on hand at January 31. The cost of the inventory at January 31 under the FIFO method is:

(Multiple Choice)

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Question 24

At May 1 2016 Bibby Company had beginning inventory consisting of 200 units with a unit cost of $7. During May the company purchased inventory as follows: 800 units at $7 600 units at $8 The company sold 1000 units during the month for $12 per unit. Bibby uses the average cost method. The average cost per unit for May is

(Multiple Choice)

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Question 25

______________ is calculated as cost of goods sold divided by average inventory.

(Short Answer)

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Question 26

Under the FIFO method the costs of the earliest units purchased are the first charged to cost of goods sold.

(True/False)

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Question 27

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

(True/False)

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Question 28

Ford Co. uses a periodic inventory system. Its records show the following for the month of May in which 75 units were sold. May 1 Inventory 35 \ 8 \2 80 15 Purchases 30 12 360 24 Purchases 13 Totals Instructions Compute the ending inventory at May 31 and cost of goods sold using the FIFO and LIFO methods. Prove the amount allocated to cost of goods sold under each method.

(Essay)

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Question 29

The inventory turnover is computed by dividing cost of goods sold by

(Multiple Choice)

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Question 30

Pasquale has the following inventory information. July 1 Beginning Inventory 20 units at \ 19 \ 380 7 Purchases 70 units at \ 20 1,400 22 Purchases 10 units at \ 24 240 \2 ,020 A physical count of merchandise inventory on July 31 reveals that there are 30 units on hand. Using the average-cost method the value of ending inventory is

(Multiple Choice)

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Question 31

The inventory of Willamette Company was destroyed by fire on April 1. From an examination of the accounting records the following data for the first three months of the year are obtained: Sales Revenue \ 185,000 Sales Returns and Allowances 5,000 Purchases 110,000 Freight-In 4,000 Purchase Returns and Allowances 3,500 Instructions Determine the merchandise lost by fire assuming a beginning inventory of $50000 and a gross profit rate of 45% on net sales.

(Essay)

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Question 32

Storme Shutters has the following inventory information. Nov. 1 Inventory 30 units @\ 8.00 8 Purchase 120 units @\ 8.30 17 Purchase 60 units @\ 8.70 25 Purchase 90 units @\ 8.80 A physical count of merchandise inventory on November 30 reveals that there are 80 units on hand. Assume a periodic inventory system is used. Ending inventory under LIFO is

(Multiple Choice)

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Question 33

Elly Company uses a periodic inventory system. Details for the inventory account for the month of January 2016 are as follows: Units Per unit price Total Balance, 1/1/16 200 \ 5.00 \ 1,000 Purchase, 1/15/16 100 5.30 530 Purchase, 1/28/16 100 5.50 550 An end of the month (1/31/16) inventory showed that 150 units were on hand. If the company uses FIFO what is the value of the ending inventory?

(Multiple Choice)

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Question 34

GAAP's provision for ownership of goods (goods-in-transit or consigned goods) as well as which costs to include in inventory as compared to IFRS are: A) essentially similar essentially similar B) essentially different essentially different C) essentially similar essentially similar D) essentially different essentially similar

(Short Answer)

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Question 35

Two companies report the same cost of goods available for sale but each employs a different inventory costing method. If the price of goods has increased during the period then the company using

(Multiple Choice)

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Question 36

The controller of Greene Yard Company is applying the lower-of-cost-or-market basis of valuing its ending inventory. The following information is available: Lawnmowers: Self propelled \ 16,800 \ 17,000 Push type Total $\text { Snowblowers: }$ Manual 29,800 30,000 Self-start Total Total inventory Instructions Compute the value of the ending inventory by applying the lower-of-cost-or-market basis.

(Essay)

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Question 37

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

(True/False)

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Question 38

Nicholas Industries had the following inventory transactions occur during 2014: Units Cost/unit 2/1/16 Purchase 54 \ 45 3/14/16 Purchase 93 \ 47 5/1/16 Purchase 66 \ 49 The company sold 140 units at $65 each and has a tax rate of 30%. Assuming that a periodic inventory system is used what is the company's after-tax income using LIFO? (rounded to whole dollars)

(Multiple Choice)

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Question 39

A problem with the specific identification method is that

(Multiple Choice)

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Question 40

P. Didee has the following inventory information. July 1 Beginning Inventory 20 units at \ 90 5 Purchases 120 units at \ 92 14 Sale 90 units 21 Purchases 60 units at \ 95 30 Sale 58 units Assuming that a perpetual inventory system is used what is the ending inventory on a FIFO basis?

The term "FOB" denotes

______________ is calculated as cost of goods sold divided by average inventory.

Under the FIFO method the costs of the earliest units purchased are the first charged to cost of goods sold.

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

The inventory turnover is computed by dividing cost of goods sold by

Two companies report the same cost of goods available for sale but each employs a different inventory costing method. If the price of goods has increased during the period then the company using

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

A problem with the specific identification method is that

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Current Liabilities and Payroll Accounting

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Statement of Cash Flows

Financial Statement Analysis

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