Henri Company's inventory records show the following data: \[\begin{array} { l r r } & \underline { \text { Units } } & \underline { \text { Unit Cost } } \\ \text { Inventory, January 1 } & 10,000 & \$ 9.20 \\ \text { Purchases: June 18 } & 9,000 & 8.00 \\ \text { November 8 } & 6,000 & 7.25 \end{array}\] A physical inventory on December 31 shows 3000 units on hand. Henri sells the units for $12 each. The company has an effective tax rate of 20%. Henri uses the periodic inventory method. The weighted-average cost per unit is

A) $8.00. B) $8.60. C) $8.30. D) $8.15. A) $8.00. B) $8.60. C) $8.30. D) $8.15.

Oscar Industries has the following inventory information. $\begin{array}{rll} \text { July } 1 & \text { Beginning Inventory } & 40 \text { units at } \$ 110 \\ 5 & \text { Purchases } & 240 \text { units at } \$ 112 \\ 14 & \text { Sale } & 160 \text { units } \\ 21 & \text { Purchases } & 120 \text { units at } \$ 115 \\ 30 & \text { Sale } & 150 \text { units } \end{array}$ Assuming that a periodic inventory system is used what is the amount allocated to ending inventory on a FIFO basis?

A) $10350 B) $10000 C) $35080 D) $34730 A) $10350 B) $10000 C) $35080 D) $34730

Under IFRS companies can choose which inventory system? $\begin{array} { l l l } & \underline{ \text { LIFO }} & \underline{ \text { FIFO }} \\\end{array}$ A)$\begin{array} { l l l } &\text { Yes } & &\text { No } \\\end{array}$ B)$\begin{array} { l l l } &\text { Yes } && \text { Yes } \\\end{array}$ C)$\begin{array} { l l l }& \text { No } && \text { Yes } \\\end{array}$ D)$\begin{array} { l l l } &\text { No } && \text { No } \end{array}$

The answer of Under IFRS companies can choose which inventory...

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 FIFO inventory method the amount allocated to cost of goods sold for July is

A) $1380. B) $1414 C) $1470. D) $1440. A) $1380. B) $1414 C) $1470. D) $1440.

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 gross profit using LIFO? (rounded to whole dollars)

A) $2388 B) $2678 C) $6472 D) $6712 A) $2388 B) $2678 C) $6472 D) $6712

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. Cost of goods sold (rounded to the nearest dollar) under the average-cost method is

A) $1758. B) $1870. C) $1859. D) $1812. A) $1758. B) $1870. C) $1859. D) $1812.

Henri Company's inventory records show the following data: \[\begin{array} { l r r } & \underline { \text { Units } } & \underline { \text { Unit Cost } } \\ \text { Inventory, January 1 } & 10,000 & \$ 9.20 \\ \text { Purchases: June 18 } & 9,000 & 8.00 \\ \text { November 8 } & 6,000 & 7.25 \end{array}\] A physical inventory on December 31 shows 3000 units on hand. Henri sells the units for $12 each. The company has an effective tax rate of 20%. Henri uses the periodic inventory method. If the company uses FIFO what is the gross profit for the period?

A) $78250 B) $84100 C) $81400 D) $84700 A) $78250 B) $84100 C) $81400 D) $84700

Exam 6: Inventories

Henri Company's inventory records show the following data: Inventory, January 1 10,000 \ 9.20 Purchases: June 18 9,000 8.00 November 8 6,000 7.25 A physical inventory on December 31 shows 3000 units on hand. Henri sells the units for $12 each. The company has an effective tax rate of 20%. Henri uses the periodic inventory method. The weighted-average cost per unit is

(Multiple Choice)

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Question 41

Oscar Industries has the following inventory information. July 1 Beginning Inventory 40 units at \ 110 5 Purchases 240 units at \ 112 14 Sale 160 units 21 Purchases 120 units at \ 115 30 Sale 150 units Assuming that a periodic inventory system is used what is the amount allocated to ending inventory on a FIFO basis?

(Multiple Choice)

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Question 42

In periods of inflation phantom or paper profits may be reported as a result of using the

(Multiple Choice)

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Question 43

A company may use more than one inventory costing method concurrently.

(True/False)

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Question 44

In a period of inflation the cost flow method that results in the lowest income taxes is the

(Multiple Choice)

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Question 45

Under IFRS companies can choose which inventory system? A) Yes No B) Yes Yes C) No Yes D) No No

(Short Answer)

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Question 46

Which of the following statements is true regarding inventory cost flow assumptions?

(Multiple Choice)

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Question 47

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 FIFO inventory method the amount allocated to cost of goods sold for July is

(Multiple Choice)

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Question 48

Jill Tango is studying for the next accounting mid-term examination. What should Jill know about (a) departing from the cost basis of accounting for inventories and (b) the meaning of "market" in the lower-of-cost-or-market method?

(Essay)

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Question 49

Which one of the following inventory methods is often impractical to use?

(Multiple Choice)

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Question 50

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 gross profit using LIFO? (rounded to whole dollars)

(Multiple Choice)

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Question 51

Shannon's Department Store prepares monthly financial statements but only takes a physical count of merchandise inventory at the end of the year. The following information has been developed for the month of July: At Cost At Retail Beginning inventory \ 36,000 \ 50,000 Merchandise purchases 99,000 150,000 The net sales for July amounted to $150000. Instructions Use the retail inventory method to estimate the ending inventory at cost for July. Show all computations to support your answer.

(Essay)

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Question 52

In the first month of operations Mordica Company made three purchases of merchandise in the following sequence: (1) 200 units at $6 (2) 300 units at $7 and (3) 400 units at $9. Assuming there are 300 units on hand compute the cost of the ending inventory under (1) the FIFO method and (2) the LIFO method. Mordica uses a periodic inventory system.

(Essay)

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Question 53

Which costing method cannot be used to determine the cost of inventory items before lower-of-cost-or-market is applied?

(Multiple Choice)

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Question 54

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. Cost of goods sold (rounded to the nearest dollar) under the average-cost method is

(Multiple Choice)

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Question 55

The gross profit method is based on the assumption that the rate of gross profit remains constant from one year to the next.

(True/False)

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Question 56

The lower-of-cost-or-market basis of accounting for inventories should be applied when the ______________ cost of the goods is lower than its cost.

(Short Answer)

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Question 57

The accounting principle that requires that the cost flow assumption be consistent with the physical movement of goods is

(Multiple Choice)

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Question 58

Inventory items on an assembly line in various stages of production are classified as

(Multiple Choice)

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Question 59

Henri Company's inventory records show the following data: Inventory, January 1 10,000 \ 9.20 Purchases: June 18 9,000 8.00 November 8 6,000 7.25 A physical inventory on December 31 shows 3000 units on hand. Henri sells the units for $12 each. The company has an effective tax rate of 20%. Henri uses the periodic inventory method. If the company uses FIFO what is the gross profit for the period?

(Multiple Choice)

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Question 60

In periods of inflation phantom or paper profits may be reported as a result of using the

A company may use more than one inventory costing method concurrently.

In a period of inflation the cost flow method that results in the lowest income taxes is the

Under IFRS companies can choose which inventory system? A) Yes No B) Yes Yes C) No Yes D) No No

Which of the following statements is true regarding inventory cost flow assumptions?

Jill Tango is studying for the next accounting mid-term examination. What should Jill know about (a) departing from the cost basis of accounting for inventories and (b) the meaning of "market" in the lower-of-cost-or-market method?

Which one of the following inventory methods is often impractical to use?

Which costing method cannot be used to determine the cost of inventory items before lower-of-cost-or-market is applied?

The gross profit method is based on the assumption that the rate of gross profit remains constant from one year to the next.

The lower-of-cost-or-market basis of accounting for inventories should be applied when the ______________ cost of the goods is lower than its cost.

The accounting principle that requires that the cost flow assumption be consistent with the physical movement of goods is

Inventory items on an assembly line in various stages of production are classified as

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