Exam 6: Reporting and Analyzing Inventory

The following information is available for Wallace Company for 2014. Wallace uses the LIFO inventory method. Instructions (a) Calculate the inventory turnover and days in inventory for Wallace Company based on LIFO. (b) Calculate the inventory turnover and days in inventory after adjusting for the LIFO reserve.

Johnson Company has a high inventory turnover that has increased over the last year. All of the following statements are true regarding this situation except Johnson County:

When a perpetual inventory system is used, which of the following is a purpose of taking a physical inventory?

Given equal circumstances, which inventory method would probably be the most time consuming?

The following information was available for Bowyer Company at December 31, 2014: beginning inventory $90,000; ending inventory $70,000; cost of goods sold $880,000; and sales $1,200,000. Bowyer's inventory turnover in 2014 was

A company just starting in business purchased three merchandise inventory items at the following prices. First purchase $80; Second purchase $95; Third purchase $85. If the company sold two units for a total of $290 and used FIFO costing, the gross profit for the period would be

The only acceptable cost flow assumptions under IFRS are

Faster Company uses the periodic inventory method and had the following inventory information available: A physical count of inventory on December 31 revealed that there were 55 units on hand. Instructions Answer the following independent questions and show computations supporting your answers. 1. Assume that the company uses the FIFO method. The value of the ending inventory at December 31 is $__________. 2. Assume that the company uses the Average Cost method. The value of the ending inventory on December 31 is $__________. 3. Assume that the company uses the LIFO method. The value of the ending inventory on December 31 is $__________. 4. Assume that the company uses the FIFO method. The value of the cost of goods sold at December 31 is $__________.

A problem with the specific identification method is that

A company may use more than one inventory cost flow method at the same time.