Exam 6: Inventories

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 $240 and used FIFO costing, the gross profit for the period would be

One reason a company using a perpetual inventory system must make a physical count of goods is to determine the amount of inventory on hand as of the statement of financial position date.

Understating beginning inventory will understate

A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand.Using the average-cost method, the amount allocated to the ending inventory on June 30 is

A problem with the specific identification method is that

All inventories are reported as current assets on the statement of financial position.

Use the following information for questions . -What should be the inventory reported on Queen's July 31 statement of financial position using the average-cost inventory method (round per unit amounts to two decimal places)?

Which inventory costing method most closely approximates current cost for each of the following:

Blosser Company's goods in transit at December 31 include: Which items should be included in Blosser's inventory at December 31 ?

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.Deitrich's gross profit for the month of May is

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 ₤6 each.The company has an effective tax rate of 20%.Holliday uses the periodic inventory method.What is the cost of goods available for sale?

If a company uses the FIFO cost assumption, the cost of goods sold for the period will be the same under a perpetual or periodic inventory system.

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 average cost per unit for May is

The term "FOB" denotes

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 after-tax income using FIFO? (rounded to whole dollars)

A major difference between IFRS and GAAP is that GAAP specifically prohibits use of the FIFO cost flow assumption.