Exam 11: Inventory

Henri Company's inventory and purchases accounts show the following data: Units Unit Cost Inventory, January 1 10,000 \ 9.20 Purchases: June 18 9,000 8.00 Novermber 8 6,000 7.25 A physical inventory on December 31 shows 3,000 units on hand. Henri sells the units for $12 each. Henri uses the periodic inventory method. Under the LIFO method, cost of goods sold is

Flite Company had beginning inventory on May 1 of $12,000. During the month, the company made purchases of $38,000 but returned $2,000 of goods because they were defective. At the end of the month, the inventory on hand was valued at $16,500. Calculate cost of goods available for sale and cost of goods sold for the month.

Cost of goods available for sale includes all of the following except the

James Supply Company reports gross profit of $120,000 in 2022. The ending inventory did not include goods valued at $9,000 that James had consigned to Eli's Gift Shop. (1) What is the correct gross profit for 2022? (2) What impact will this error have on the balance sheet at 12/31/22?

Which one of the following inventory cost flow methods is often impractical to use?

Elly Company uses a periodic inventory system. Details for the inventory and purchases accounts for the month of January, 2022 are as follows: Units Per unit price Total Balance, 1/1/22 200 \ 5.00 \ 1,000 Purchase, 1/15/22 100 5.30 530 Purchase, 1/28/22 100 5.50 550 An end of the month (1/31/22) inventory showed that 150 units were on hand. If the company uses FIFO, what is the cost of the ending inventory?

The specific identification method of inventory valuation is desirable when a company sells a large number of low-unit cost items.

The expense recognition principle requires that the cost of goods sold be matched against the ending merchandise inventory in order to determine income.

Nicholas Industries had the following inventory transactions occur during 2022: Units Cost/unit 2/1/22 Purchase 54 \ 45 3/14/22 Purchase 93 \ 47 5/1/22 Purchase 66 \ 49 The company sold 140 units at $65 each. Assume that a periodic inventory system is used, what is the company's gross profit using FIFO?

In a manufacturing company, inventory that is ready for sale is called

A company just starting business made the following four inventory purchases in June: June 1 150 units \3 90 June 10 200 units 598 June 15 200 units 630 June 28 150 units 510 \2 ,128 A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand. Using a periodic inventory system and the LIFO inventory method, the cost of the ending inventory, to the nearest doolar, on June 30 is

Pasquale has the following inventory information. July 1 Beginning Inventory 20 units at \ 19 \3 80 7 Purchases 70 units at \ 20 1,400 22 Purchases 10 units at \ 24 240 \2 ,020 A physical count of merchandise inventory on July 31 reveals that there are 30 units on hand. Using periodic inventory system and the FIFO inventory method, the amount allocated to cost of goods sold for July is

Macarty Company's records indicate the following information for the year: Merchandise inventory,1/1 \5 50,000 purchases 2,250,000 net sales 3,100,000 On December 31, a physical inventory determined that ending inventory of $600,000 was in the warehouse. Macarty's gross profit on sales has remained constant at 30%. Macarty suspects that some of the inventory may have been taken by a new employee. At December 31, what is the estimated cost of missing inventory?

Quayle Bookstore had 500 units on hand at January 1, costing $9 each. Purchases and sales during the month of January were as follows: Quayle maintains a periodic inventory system. According to a physical count, 360 units were on hand at January 31. The cost of the inventory at January 31, under the LIFO method is:

The managers of Venice Company receive performance bonuses based on the gross profit of the firm. Which inventory costing method are they likely to favor in periods of declining prices?

In periods of inflation, phantom or paper profits may be reported as a result of using the

The LCNRV basis may be used with all of the following methods except

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

Lester Company sells many products. Hackenberry is one of its popular items. Below is an analysis of the inventory purchases and sales of Hackenberry for the month of March. Lester Company uses the periodic inventory system. Instructions (a) Using the FIFO method, calculate the amount charged to cost of goods sold for March. (Show computations) (b) Using the weighted average method, calculate the amount assigned to the inventory on hand on March 31. (Show computations) (c) Using the LIFO method, calculate the amount assigned to the inventory on hand on March 31. (Show computations)

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.