Exam 7: Inventory

Using the information below for a sporting goods store, calculate the amount of inventory adjustment using the Lower of Cost or Net Realizable value method applied to the inventory on a major category basis:

Under the FIFO method of inventory costing, the ending inventory amount reflects the most recent acquisition costs.

Use the following inventory related information for Questions below The following data regarding purchases and sales of a commodity were taken from the perpetual inventory account of Hailey Company: -Using the Weighted-Average method, what amount would be reported for cost of goods sold on Hailey Company's Income Statement for May (rounded to the nearest dollar)?

The following hammers were available for sale during the year for Wilkins Tools: Wilkins has 30 hammers on hand at the end of the year. What is the dollar amount of cost of goods sold for the year according to the last-in, first-out method?

Use the following information to answer Questions below The following data represent the beginning inventory and, in the order of occurrence, the purchases and sales of McKensie Company for an operating period. -Assuming McKensie Company uses FIFO perpetual inventory procedures, sale no. 2 is recorded as an entry to Cost of Goods Sold for:

At year-end, The Appliance Shop has a freezer on hand that has been used as a demonstration model. The freezer cost $390 and sells for $750 when new. In its present condition, the freezer will be sold for $380. Related selling costs are an estimated $20. At what amount should the freezer be carried in inventory?

A summary of inventory records for Tank Company reveals the following: During 2019, 35 units were sold at $900 per unit, generating total sales revenue of $31,500. Required: a. Determine cost of goods sold, gross profit, and the inventory balance under LIFO method. b. Determine the LIFO reserve for Tank Company.

The following are the income statement, the assets section of the balance sheet, and inventory disclosures from Imagine, Inc., a toy manufacturer, for 2019. Inventories: Inventories, net of an allowance for excess quantities and obsolescence, are stated at the lower of cost or net realizable value. Cost is determined by the first-in, first-out method. Required: a. Compute the inventory turnover for both 2019 and 2018. The 2017 ending inventories were $428,100,000. Interpret and explain the change in inventory turnover as a positive or a negative for the company. b. Compute the days' sales in inventory for both 2019 and 2018. Discuss what this measures and the importance of this measurement in analyzing company performance.

As a shareholder of Benson Industries, a manufacturer of DVD players, you are interested in comparing gross profits over a 3-year period. Calculate the gross profit percentage for years 2019, 2018, and 2017 using the income statement items below (in thousands). Interpret your results.

A company that uses LIFO must sell its oldest goods first.

Use the following inventory related information for Questions below The following data regarding purchases and sales of a commodity were taken from the perpetual inventory account of Hailey Company: -Using the perpetual FIFO method, what amount would be reported for Cost of Goods sold for the month of May?

The following data refer to Billings Company's ending inventory: How much is ending inventory if the lower of cost or net realizable value rule is applied to the total inventory?

The following data represent the beginning inventory and, in order of occurrence, the purchases and sales of Fiskie, Inc., for an operating period. -Assuming Fiskie, Inc., uses FIFO periodic inventory procedures, the ending inventory cost is:

The lower-of-cost-or-net realizable value method may be applied to each inventory item or to totals of each inventory category or to the entire inventory.

Which of the following inventory costing methods most closely matches the cost flow with the goods flow?

The weighted-average cost method is used by Mendez, Inc. Sales are $80,000, the number of units available for sale is 100, the number of units sold during the period is 75, and the weighted-average cost of the goods available for sale is $200 each. How much is gross profit for the company?

Farnsworth, Inc., reports the following information in its annual report: Sales for 2019 totaled $4,200,000. Cost of goods sold under LIFO totaled $1,850,000. Compute Farnsworth's cost of goods sold and gross profit assuming it uses the FIFO method.

Sawyer Company reported the following net income amounts: 2016, $82,000; 2017, $50,000; and 2018, $40,000. In 2019, the company discovered errors that had been made in computing the ending inventories for 2016 and 2017, as follows: Compute the correct net incomes for 2016, 2017, and 2018.

The following data refer to Issue Company's ending inventory: How much is the inventory if the lower of cost or net realizable value rule is applied to each item of inventory?

The specific identification inventory costing method: