Exam 6: Inventories

Lee Industries had the following inventory transactions occur during 2011: The company sold 153 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)

Reinhoff Inc.reported total assets of €2,600,000, including €435,000 for inventory, and equity of €1,490,0000 on the December 31, 2011 statement of financial position.Reinhoff subsequently determined that the ending inventory was understated by €63,000.What is the corrected amount of equity for the year?

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

The pool of inventory costs consists of the beginning inventory plus the cost of goods purchased.

At December 31, 2011, Bosan Corporation has 3,500 units of model 63 and 2,500 units of model 64 in its ending inventory.Specific data with respect to each product follows: What amount will be reported for inventory on Boson's statement of financial position after the company applies LCNRV?

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.

The moving-average cost flow assumption for a perpetual inventory system and the average-cost cost flow assumption for a periodic inventory system will allocate the same amounts to ending inventory and cost of goods sold.

An error that overstates the ending inventory will also cause net income for the period to be overstated.

A physical count of merchandise inventory on July 31 reveals that there are 45 units on hand.Using the average-cost method, the value of ending inventory is

In a period of rising prices, the statement of financial position will report a higher inventory amount if FIFO, rather than average-costing, is the cost flow assumption used.

Overstating ending inventory will overstate all of the following except

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

In a period of falling prices, which inventory method would result in the lowest tax burden?

At May 1, 2011, Deitrich Company had beginning inventory consisting of 100 units with a unit cost of €3.50.During May, the company purchased inventory as follows: The company sold 500 units during the month for €6 per unit.Deitrich uses the average cost method.The value of Deitrich's inventory at May 31, 2011 is

Which of the following statements is correct with respect to inventories?

The following information is available for Park Company at December 31, 2011: beginning inventory $80,000; ending inventory $120,000; cost of goods sold $900,000; and sales $1,200,000.Park's inventory turnover in 2011 is

Inventory turnover is calculated as cost of goods sold divided by ending inventory.

The average cost method costs units using a weighted-average unit cost.

If an error understates the beginning inventory, net income will also be understated.

The retail inventory method requires a company to value its inventory on the statement of financial position at retail prices.