Exam 6: Inventories

Selection of an inventory costing method by management does not usually depend on

Under a consignment arrangement the

In a perpetual inventory system the cost of goods sold under the FIFO method is based on the cost of the latest goods on hand during the period.

Tomas Company uses the perpetual inventory system and the moving-average method to value inventories. On August 1 there were 10000 units valued at $30000 in the beginning inventory. On August 10 20000 units were purchased for $4.95 per unit. On August 15 25000 units were sold for $12 per unit. The amount charged to cost of goods sold on August 15 was

The following information is available for Heller Company: Beginning inventory \ 60,000 Cost of goods sold 640,000 Ending inventory 100,000 Sales revenue 1,000,000 Instructions Compute each of the following: (a) Inventory turnover. (b) Days in inventory.

Finished goods are a classification of inventory for a manufacturer that are completed and ready for sale.

Pearl Company uses the periodic inventory system to account for inventories. Information related to Pearl Company's inventory at October 31 is given below: October 1 Beginning inventory 400 units @\ 9.60= \ 3,840 8 Purchase 800 units @\ 10.40= 8,320 16 Purchase 600 units @\ 10.80= 6,480 24 Purchase 200 units @\ 11.80= Total units and cost 2,000 units \ 21,000 Instructions 1. Show computations to value the ending inventory using the FIFO cost assumption if 600 units remain on hand at October 31. 2. Show computations to value the ending inventory using the weighted-average cost method if 600 units remain on hand at October 31. 3. Show computations to value the ending inventory using the LIFO cost assumption if 600 units remain on hand at October 31.

In a manufacturing business inventory that is ready for sale is called

Norris Company uses the perpetual inventory system and had the following purchases and sales during March. Instructions Using the inventory and sales data above calculate the value assigned to cost of goods sold in March and to the ending inventory at March 31 using (a) FIFO and (b) LIFO.

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. The inventory method which results in the highest gross profit for June is

Of the following companies which one would not likely employ the specific identification method for inventory costing?

Morton Watch Company reported the following income statement data for a 2-year period. Sales revenue Cost of goods sold Beginning inventory 32,000 44,000 Cost of goods purchased Cost of goods available for sale 225,000 269,000 Ending inventory Cost of goods sold Gross profit Mortan uses a periodic inventory system. The inventories at January 1 2016 and December 31 2017 are correct. However the ending inventory at December 31 2016 was overstated $5000. Instructions (a) Prepare correct income statement data for the 2 years. (b) What is the cumulative effect of the inventory error on total gross profit for the 2 years?

Shellhammer Company's inventory records show the following data for the month of September: Inventory, September 1 100 \ 3.34 Purchases: September 8 450 3.50 September 18 350 3.70 A physical inventory on September 30 shows 200 units on hand. Calculate the value of the ending inventory and cost of goods sold if the company uses weighted average inventory costing and a periodic inventory system. Round cost per unit to 2 decimal places and ending inventory and cost of goods sold to the nearest dollar.

The accountant at Peacock Company has determined that income before income taxes amounted to $6500 using the FIFO costing assumption. If the income tax rate is 30% and the amount of income taxes paid would be $318 greater if the LIFO assumption were used what would be the amount of income before taxes under the LIFO assumption?

Crosby Department Store estimates inventory by using the retail inventory method. The following information was developed: Beginning inventory \ 465,000 \7 50,000 Goods purchased 900,000 1,350,000 Net sales 1,500,000 The estimated cost of the ending inventory is

Match the items below by entering the appropriate code letter in the space provided.

The accountant at Elvira Company is figuring out the difference in income taxes the company will pay depending on the choice of either FIFO or LIFO as an inventory costing method. The tax rate is 25% and the FIFO method will result in income before taxes of $8290. The LIFO method will result in income before taxes of $7190. What is the difference in tax that would be paid between the two methods?

In a period of rising prices the inventory reported in Sinatra Company's balance sheet is close to the current cost of the inventory. Crosby Company's inventory is considerably below its current cost. Identify the inventory cost flow method being used by each company. Which company has probably been reporting the higher gross profit?

Britt Company uses the perpetual inventory system and the LIFO method. The following information is available for the month of May: May 1 Beginning inventory 20 units @\ 6 10 Purchase 20 units @\ 7 15 Sales 12 units 18 Purchase 10 units @\ 9 21 Sales 18 units 30 Purchase 10 units @\ 10 Instructions Prepare a schedule to show cost of goods sold and the value of the ending inventory for the month of May.

Laurie Company applied FIFO to its inventory and got the following results for its ending inventory. DVRs 140 units at a cost per unit of $60 DVD players 210 units at a cost per unit of $75 iPods 175 units at a cost per unit of $80 The cost of purchasing units at year-end was DVRs $68 DVD players $70 and iPods $76. Instructions Determine the amount of ending inventory at lower-of-cost-or-market.