Exam 6: Inventories

A company just starting business made the following four inventory purchases in June: A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand. Using the LIFO inventory method, the value of the ending inventory on June 30 is

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

Lee Industries had the following inventory transactions occur during 2010: The company sold 51 units at $63 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)

Raw materials inventories are the goods that a manufacturer has completed and are ready to be sold to customers.

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

Companies adopt different cost flow methods for each of the following reasons except

The factor which determines whether or not goods should be included in a physical count of inventory is

Overstating ending inventory will overstate all of the following except

At May 1, 2010, Deitrich Company had beginning inventory consisting of 100 units with a unit cost of $7. During May, the company purchased inventory as follows: 200 units at $7 300 units at $8 The company sold 500 units during the month for $12 per unit. Deitrich uses the average cost method. Deitrich's gross profit for the month of May is

Sauder Company reports goods available for sale at cost, $90,000. Beginning inventory at retail is $40,000 and goods purchased during the period at retail were $80,000. Sales for the period amounted to $88,000. Instructions Determine the estimated cost of the ending inventory using the retail inventory method.

The following information is available for Witten Company: Instructions Compute each of the following: (a) Inventory turnover. (b) Days in inventory.

Lee Industries had the following inventory transactions occur during 2010: The company sold 51 units at $63 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, what is the company's gross profit using FIFO? (rounded to whole dollars)

Under the lower-of-cost-or-market basis in valuing inventory, market is defined as

Kershaw Bookstore had 500 units on hand at January 1, costing $18 each. Purchases and sales during the month of January were as follows: Kershaw does not maintain perpetual inventory records. According to a physical count, 375 units were on hand at January 31. The cost of the inventory at January 31, under the LIFO method is:

In the first month of operations, Santos 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 $8. Assuming there are 300 units on hand, compute the cost of the ending inventory under (1) the FIFO method and (2) the LIFO method. Santos uses a periodic inventory system.

Holliday Company's inventory records show the following data: A physical inventory on December 31 shows 2,000 units on hand. Holliday sells the units for $12 each. The company has an effective tax rate of 20%. Holliday uses the periodic inventory method. Under the LIFO method, cost of goods sold is

Match the items below by entering the appropriate code letter in the space provided. A. Merchandise Inventory B. Work in process C. FOB shipping point D. FOB destination E. Specific identification method F. First-in, first-out (FIFO) method G. Last-in, first-out (LIFO) method H. Average-cost method I. Inventory turnover J. Current replacement cost 1. Measures the number of times the inventory sold during the period. 2. Tracks the actual physical flow for each inventory item available for sale. 3. Goods that are only partially completed in a manufacturing company. 4. Cost of goods sold consists of the most recent inventory purchases. 5. Goods ready for sale to customers by retailers and wholesalers. 6. Title to the goods transfers when the public carrier accepts the goods from the seller. 7. Ending inventory valuation consists of the most recent inventory purchases. 8. The same unit cost is used to value ending inventory and cost of goods sold. 9. Title to goods transfers when the goods are delivered to the buyer. 10. The amount that would be paid at the present time to acquire an identical item.

Colletti Company recorded the following data: The weighted average unit cost of the inventory at January 31 is:

Under the retail inventory method, the estimated cost of ending inventory is computed by multiplying the cost-to-retail ratio by

If a company has no beginning inventory and the unit cost of inventory items does not change during the year, the value assigned to the ending inventory will be the same under LIFO and average cost flow assumptions.