A company had the following purchases and sales during its first month of operations: $\begin{array}{|l|l|} \hline \text { January 1 } & \text { Purchased } 10 \text { units at } \$ 4.00 \text { per unit } \\ \hline \text { January } 9 & \text { Sold } 6 \text { units at } \$ 12.00 \text { per unit } \\ \hline \text { January 17 } & \text { Purchased } 8 \text { units at } \$ 5.50 \text { per unit } \\ \hline \text { January 27 } & \text { Sold } 7 \text { units at } \$ 12.00 \text { per unit } \\ \hline \end{array}$ Using the Perpetual weighted average method, what is the value of cost of goods sold? (Round weighted average costs per unit to 2 decimal places.)

A) $23.35. B) $24.00. C) $40.00. D) $59.00. E) $25.00. A) $23.35. B) $24.00. C) $40.00. D) $59.00. E) $25.00. D

Given the following information, determine the cost of the inventory at June 30 using the LIFO perpetual inventory method. \[\begin{array} { | l | l | l | } \hline \text { June 1 } & \text { Beginning inventory } & 15 \text { units at } \$ 20 \text { each } \\ \hline \text { June } 15 & \text { Sale of } 6 \text { units for } \$ 50 \text { each } & \\ \hline \text { June 29 } & \text { Purchase } & 8 \text { units at } \$ 25 \text { each } \\ \hline \end{array}\] The cost of the ending inventory is:

A) $220 B) $380 C) $275 D) $300 E) $200 A) $220 B) $380 C) $275 D) $300 E) $200 B

Monarch Company uses a weighted-average perpetual inventory system and has the following purchases and sales: $\begin{array}{|l|l|} \hline \text { January 1 } & 20 \text { units were purchased at } \$ 10 \text { per unit. } \\ \hline \text { January 12 } & 12 \text { units were sold. } \\ \hline \text { January 20 } & 18 \text { units were purchased at } \$ 11 \text { per unit. } \\ \hline \end{array}$ What is the value of cost of goods sold?

A) $272. B) $126. C) $120. D) $278. E) $398. A) $272. B) $126. C) $120. D) $278. E) $398.

Salmone Company reported the following purchases and sales of its only product. Salmone uses a perpetual inventory system. Determine the cost assigned to cost of goods sold using FIFO. \[\begin{array} { | r | l | l | l | } \hline \text { Date } & \text { Activities } & \text { Units Ac quired at Cost } & \text { Units Sold at Retail } \\ \hline \text { May 1 } & \text { Beginning Inventory } & 150 \text { units } @ \$ 10.00 & \\ \hline 5 & \text { Purchase } & 220 \text { units } @ \$ 12.00 & \\ \hline 10 & \text { Sales } & & 140 \text { units } @ \$ 20.00 \\ \hline 15 & \text { Purchase } & 100 \text { units } @ \$ 13.00 & \\ \hline 24 & \text { Sales } & & 90 \text { units } @ \$ 21.00 \\ \hline \end{array}\]

A) $5,440 B) $2,850 C) $2,980 D) $2,460 E) $2,590 A) $5,440 B) $2,850 C) $2,980 D) $2,460 E) $2,590

Use the following information for Ephron Company to compute days' sales in inventory for Year 2. \[\begin{array} { | l | r | r | } \hline & \text { Year } 2 & \text { Y ear 1 } \\ \hline \text { Net sales } & \$ 547,500 & \$ 572,000 \\ \hline \text { Cost of goods sold } & 348,500 & 370,840 \\ \hline \text { Ending inventory } & 75,700 & 81,400 \\ \hline \end{array}\]

A) 50.5 B) 76.8 C) 82.3 D) 79.3 E) 52.4 A) 50.5 B) 76.8 C) 82.3 D) 79.3 E) 52.4

Salmone Company reported the following purchases and sales of its only product. Salmone uses a periodic inventory system. Determine the cost assigned to ending inventory using LIFO. \[\begin{array} { | r | l | l | l | } \hline \text { Date } & \text { Activities } & \text { Units Acquir ed at Cost } & \text { Units Sold at Retail } \\ \hline \text { May 1 } & \text { Beginning Inventory } & 150 \text { units } @ \$ 10.00 & \\ \hline 5 & \text { Purchase } & 220 \text { units } @ \$ 12.00 & \\ \hline 10 & \text { Sales } & & 140 \text { units } @ \$ 20.00 \\ \hline 15 & \text { Purchase } & 100 \text { units } @ \$ 13.00 & \\ \hline 24 & \text { Sales } & & 90 \text { units } @ \$ 21.00 \\ \hline \end{array}\]

A) $2,100 B) $2,260 C) $2,580 D) $3,580 E) $3,180 A) $2,100 B) $2,260 C) $2,580 D) $3,580 E) $3,180

Monarch Company uses a weighted-average perpetual inventory system, and has the following purchases and sales: \[\begin{array} { | l | l | } \hline \text { January 1 } & 20 \text { units were purchased at } \$ 10 \text { per unit. } \\ \hline \text { January } 12 & 12 \text { units were sold. } \\ \hline \text { January 20 } & 18 \text { units were purchased at } \$ 11 \text { per unit. } \\ \hline \end{array}\] What is the value of ending inventory? (Round average cost per unit to 2 decimal places, and final answer to the nearest dollar.)

A) $272. B) $120. C) $278. D) $398. E) $126. A) $272. B) $120. C) $278. D) $398. E) $126.

A company had the following purchases and sales during its first year of operations: \[\begin{array} { | l | l | l | } \hline & \text { Purchases } & \text { Sales } \\ \hline \text { January: } & 10 \text { units at } \$ 120 & 6 \text { units } \\ \hline \text { February: } & 20 \text { units at } \$ 125 & 5 \text { units } \\ \hline \text { May: } & 15 \text { units at } \$ 130 & 9 \text { units } \\ \hline \text { September: } & 12 \text { units at } \$ 135 & 8 \text { units } \\ \hline \text { November: } & 10 \text { units at } \$ 140 & 13 \text { units } \\ \hline \end{array}\] On December 31, there were 26 units remaining in ending inventory. Using the Periodic FIFO inventory valuation method, what is the cost of the ending inventory? (Assume all sales were made on the last day of the month.)

A) $3,405. B) $3,270. C) $3,200. D) $3,445. E) $3,540. A) $3,405. B) $3,270. C) $3,200. D) $3,445. E) $3,540.

Exam 6: Inventories and Cost of Sales

A company had the following purchases and sales during its first month of operations: January 1 Purchased 10 units at \ 4.00 per unit January 9 Sold 6 units at \ 12.00 per unit January 17 Purchased 8 units at \ 5.50 per unit January 27 Sold 7 units at \ 12.00 per unit Using the Perpetual weighted average method, what is the value of cost of goods sold? (Round weighted average costs per unit to 2 decimal places.)

Free

(Multiple Choice)

4.9/5

(36)

Question 1

Correct Answer:

Verified

D

Given the following information, determine the cost of the inventory at June 30 using the LIFO perpetual inventory method. June 1 Beginning inventory 15 units at \ 20 each June 15 Sale of 6 units for \ 50 each June 29 Purchase 8 units at \ 25 each The cost of the ending inventory is:

Free

(Multiple Choice)

4.9/5

(34)

Question 2

Correct Answer:

Verified

B

Bedrock Company reported a December 31 ending inventory balance of $412,000. The following additional information is also available: -The ending inventory balance of $412,000 included $72,000 of consigned inventory for which Bedrock was the consignor. -The ending inventory balance of $412,000 included $22,000 of office supplies that were stored in the warehouse and were to be used by the company's supervisors and managers during the coming year. Based on this information, the correct balance for ending inventory on December 31 is:

Free

(Multiple Choice)

4.8/5

(35)

Question 3

Correct Answer:

Verified

D

The full disclosure principle:

(Multiple Choice)

4.9/5

(43)

Question 4

Merchandise inventory includes:

(Multiple Choice)

4.8/5

(35)

Question 5

Monarch Company uses a weighted-average perpetual inventory system and has the following purchases and sales: January 1 20 units were purchased at \ 10 per unit. January 12 12 units were sold. January 20 18 units were purchased at \ 11 per unit. What is the value of cost of goods sold?

(Multiple Choice)

4.8/5

(29)

Question 6

The inventory valuation method that tends to smooth out erratic changes in costs is:

(Multiple Choice)

4.9/5

(36)

Question 7

Salmone Company reported the following purchases and sales of its only product. Salmone uses a perpetual inventory system. Determine the cost assigned to cost of goods sold using FIFO. Date Activities Units Ac quired at Cost Units Sold at Retail May 1 Beginning Inventory 150 units @\ 10.00 5 Purchase 220 units @\ 12.00 10 Sales 140 units @\ 20.00 15 Purchase 100 units @\ 13.00 24 Sales 90 units @\ 21.00

(Multiple Choice)

4.9/5

(39)

Question 8

Use the following information for Ephron Company to compute days' sales in inventory for Year 2. Year 2 Y ear 1 Net sales \ 547,500 \ 572,000 Cost of goods sold 348,500 370,840 Ending inventory 75,700 81,400

(Multiple Choice)

4.9/5

(40)

Question 9

It can be expected that companies selling perishable goods have a higher inventory turnover than companies selling nonperishable goods.

(True/False)

4.8/5

(35)

Question 10

Overstating beginning inventory will understate cost of goods sold and net income.

(True/False)

4.9/5

(37)

Question 11

Salmone Company reported the following purchases and sales of its only product. Salmone uses a periodic inventory system. Determine the cost assigned to ending inventory using LIFO. Date Activities Units Acquir ed at Cost Units Sold at Retail May 1 Beginning Inventory 150 units @\ 10.00 5 Purchase 220 units @\ 12.00 10 Sales 140 units @\ 20.00 15 Purchase 100 units @\ 13.00 24 Sales 90 units @\ 21.00

(Multiple Choice)

4.8/5

(34)

Question 12

Monarch Company uses a weighted-average perpetual inventory system, and has the following purchases and sales: January 1 20 units were purchased at \ 10 per unit. January 12 12 units were sold. January 20 18 units were purchased at \ 11 per unit. What is the value of ending inventory? (Round average cost per unit to 2 decimal places, and final answer to the nearest dollar.)

(Multiple Choice)

4.8/5

(31)

Question 13

The cost of an inventory item includes its invoice cost minus any discount, plus any added or incidental costs necessary to put it in a place and condition for sale.

(True/False)

4.8/5

(29)

Question 14

Consignment goods are:

(Multiple Choice)

4.8/5

(37)

Question 15

In a period of rising purchase costs, LIFO usually gives a lower taxable income and therefore, yields a tax advantage.

(True/False)

4.9/5

(42)

Question 16

The assignment of costs to cost of goods sold and inventory using weighted average usually yields different results depending on whether a perpetual or periodic system is used.

(True/False)

4.9/5

(33)

Question 17

To avoid the time-consuming process of taking an inventory each year, most companies use the gross profit method to estimate ending inventory.

(True/False)

4.8/5

(35)

Question 18

A company had the following purchases and sales during its first year of operations: Purchases Sales January: 10 units at \ 120 6 units February: 20 units at \ 125 5 units May: 15 units at \ 130 9 units September: 12 units at \ 135 8 units November: 10 units at \ 140 13 units On December 31, there were 26 units remaining in ending inventory. Using the Periodic FIFO inventory valuation method, what is the cost of the ending inventory? (Assume all sales were made on the last day of the month.)

(Multiple Choice)

4.9/5

(33)

Question 19

Goods in transit are automatically included in inventory regardless of whether title has passed to the buyer.

(True/False)

4.9/5

(40)

Question 20

Given the following information, determine the cost of the inventory at June 30 using the LIFO perpetual inventory method. June 1 Beginning inventory 15 units at \ 20 each June 15 Sale of 6 units for \ 50 each June 29 Purchase 8 units at \ 25 each The cost of the ending inventory is:

The full disclosure principle:

Merchandise inventory includes:

Monarch Company uses a weighted-average perpetual inventory system and has the following purchases and sales: January 1 20 units were purchased at \ 10 per unit. January 12 12 units were sold. January 20 18 units were purchased at \ 11 per unit. What is the value of cost of goods sold?

The inventory valuation method that tends to smooth out erratic changes in costs is:

Use the following information for Ephron Company to compute days' sales in inventory for Year 2. Year 2 Y ear 1 Net sales \ 547,500 \ 572,000 Cost of goods sold 348,500 370,840 Ending inventory 75,700 81,400

It can be expected that companies selling perishable goods have a higher inventory turnover than companies selling nonperishable goods.

Overstating beginning inventory will understate cost of goods sold and net income.

The cost of an inventory item includes its invoice cost minus any discount, plus any added or incidental costs necessary to put it in a place and condition for sale.

Consignment goods are:

In a period of rising purchase costs, LIFO usually gives a lower taxable income and therefore, yields a tax advantage.

The assignment of costs to cost of goods sold and inventory using weighted average usually yields different results depending on whether a perpetual or periodic system is used.

To avoid the time-consuming process of taking an inventory each year, most companies use the gross profit method to estimate ending inventory.

Goods in transit are automatically included in inventory regardless of whether title has passed to the buyer.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resoures, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Filters