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 Perpetual LIFO inventory valuation method, what is the cost of the ending inventory? (Assume all sales were made on the last day of the month.)

A) $3,200. B) $3,405. C) $5,400. D) $3,364. E) $3,270. A) $3,200. B) $3,405. C) $5,400. D) $3,364. E) $3,270.

Eastview Company uses a perpetual LIFO inventory system, and has the following purchases and sales: \[\begin{array} { | l | l | } \hline \text { January 1 } & 150 \text { units were purchased at } \$ 9 \text { per unit. } \\ \hline \text { January } 17 & 120 \text { units were sold. } \\ \hline \text { January 20 } & 160 \text { units were purchased at } \$ 11 \text { per unit. } \\ \hline \text { January 29 } & 150 \text { units were sold. } \\ \hline \end{array}\] What is the value of cost of goods sold?

A) $2,670. B) $2,750. C) $2,730. D) $380. E) $440. A) $2,670. B) $2,750. C) $2,730. D) $380. E) $440.

Eastview Company uses a periodic LIFO inventory system, and has the following purchases and sales: \[\begin{array} { | l | l | } \hline \text { January 1 } & 150 \text { units were purchased at } \$ 9 \text { per unit. } \\ \hline \text { January } 17 & 120 \text { units were sold. } \\ \hline \text { January 20 } & 160 \text { units were purchased at } \$ 11 \text { per unit. } \\ \hline \text { January 29 } & 150 \text { units were sold. } \\ \hline \end{array}\] What is the value of cost of goods sold?

A) $440. B) $2,750. C) $2,730. D) $2,670. E) $380. A) $440. B) $2,750. C) $2,730. D) $2,670. E) $380.

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

A) $2,460 B) $2,590 C) $2,850 D) $2,860 E) $2,580 A) $2,460 B) $2,590 C) $2,850 D) $2,860 E) $2,580

Exam 6: Inventories and Cost of Sales

A company had beginning inventory of 10 units at a cost of $20 each on March 1. On March 2, it purchased 10 units at $22 each. On March 6 it purchased 6 units at $25 each. On March 8, it sold 22 units for $54 each. Using the FIFO perpetual inventory method, what was the cost of the 22 units sold?

(Multiple Choice)

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Question 161

On September 1 of the current year, Scots Company experienced a flood that destroyed the company's entire inventory. Because the company had not completed its month end reporting for August, it must estimate the amount of inventory lost using the gross profit method. At the beginning of August, the company reported beginning inventory of $215,450. Inventory purchased during August was $192,530. Sales for the month of August were $542,500. Assuming the company's typical gross profit ratio is 40%, estimate the amount of inventory destroyed in the flood.

(Multiple Choice)

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Question 162

The lower of cost or market rule for inventory valuation is always applied to individual units separately rather than to major categories of inventory or to the entire inventory.

(True/False)

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Question 163

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 Perpetual LIFO 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)

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Question 164

All of the following statements related to goods on consignment are true except:

(Multiple Choice)

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Question 165

The consistency concept allows a company to use different accounting methods from period to period in order to maximize profits.

(True/False)

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Question 166

The consistency concept:

(Multiple Choice)

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Question 167

Eastview Company uses a perpetual LIFO inventory system, and has the following purchases and sales: January 1 150 units were purchased at \ 9 per unit. January 17 120 units were sold. January 20 160 units were purchased at \ 11 per unit. January 29 150 units were sold. What is the value of cost of goods sold?

(Multiple Choice)

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Question 168

Damaged and obsolete goods that can be sold:

(Multiple Choice)

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Question 169

The full disclosure principle requires that the notes to the financial statements report any change in the method of accounting for inventory.

(True/False)

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Question 170

Underwood had cost of goods sold of $8 million and its ending inventory was $2 million. Therefore, its days' sales in inventory equals 25 days.

(True/False)

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Question 171

A company's cost of inventory was $219,500. Due to phenomenal demand the market value of its inventory increased to $221,700. This company should record the inventory at its market value.

(True/False)

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Question 172

An inventory error is sometimes said to be self-correcting because it yields an offsetting error in the next period.

(True/False)

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Question 173

Sarbanes Oxley (SOX)demands that companies safeguard inventory and properly report it. List methods that companies should use to safeguard inventory and accounting procedures that should be used to properly report inventory.

(Essay)

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Question 174

Avanti purchases inventory from overseas and incurs the following costs: the merchandise cost is $50,000, credit terms 2/10, n/30 that apply only to the $50,000; FOB shipping point freight charges are $1,500; insurance during transit is $500; and import duties are $1,000. Avanti paid within the discount period and incurred additional costs of $1,200 for advertising and $5,000 for sales commissions. Compute the cost that should be assigned to the inventory.

(Multiple Choice)

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Question 175

Eastview Company uses a periodic LIFO inventory system, and has the following purchases and sales: January 1 150 units were purchased at \ 9 per unit. January 17 120 units were sold. January 20 160 units were purchased at \ 11 per unit. January 29 150 units were sold. What is the value of cost of goods sold?

(Multiple Choice)

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Question 176

McCarthy Company has inventory of 8 units at a cost of $200 each on October 1. On October 2, it purchased 20 units at $205 each. 11 units are sold on October 4. Using the FIFO perpetual inventory method, what amount will be reported as cost of goods sold for the 11 units that were sold?

(Multiple Choice)

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Question 177

A company has the following per unit original costs and replacement costs for its inventory. LCM is applied to individual items. Part A: 50 units with a cost of $5, and replacement cost of $4.50 Part B: 75 units with a cost of $6, and replacement cost of $6.50 Part C: 160 units with a cost of $3, and replacement cost of $2.50 Under the lower of cost or market method, the total value of this company's ending inventory is:

(Multiple Choice)

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Question 178

An advantage of the weighted average inventory method is that it tends to smooth out erratic changes in costs.

(True/False)

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Question 179

Salmone Company reported the following purchases and sales for its only product. Salmone uses a periodic inventory system. Determine the cost assigned to cost of goods sold using LIFO. \multicolumn 1 |c| 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)

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Question 180

Showing 161 - 180 of 189

A company had beginning inventory of 10 units at a cost of $20 each on March 1. On March 2, it purchased 10 units at $22 each. On March 6 it purchased 6 units at $25 each. On March 8, it sold 22 units for $54 each. Using the FIFO perpetual inventory method, what was the cost of the 22 units sold?

The lower of cost or market rule for inventory valuation is always applied to individual units separately rather than to major categories of inventory or to the entire inventory.

All of the following statements related to goods on consignment are true except:

The consistency concept allows a company to use different accounting methods from period to period in order to maximize profits.

The consistency concept:

Damaged and obsolete goods that can be sold:

The full disclosure principle requires that the notes to the financial statements report any change in the method of accounting for inventory.

Underwood had cost of goods sold of $8 million and its ending inventory was $2 million. Therefore, its days' sales in inventory equals 25 days.

A company's cost of inventory was $219,500. Due to phenomenal demand the market value of its inventory increased to $221,700. This company should record the inventory at its market value.

An inventory error is sometimes said to be self-correcting because it yields an offsetting error in the next period.

Sarbanes Oxley (SOX)demands that companies safeguard inventory and properly report it. List methods that companies should use to safeguard inventory and accounting procedures that should be used to properly report inventory.

McCarthy Company has inventory of 8 units at a cost of $200 each on October 1. On October 2, it purchased 20 units at $205 each. 11 units are sold on October 4. Using the FIFO perpetual inventory method, what amount will be reported as cost of goods sold for the 11 units that were sold?

An advantage of the weighted average inventory method is that it tends to smooth out erratic changes in costs.

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

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