Question 1

FIFO inventory costing yields more accurate reporting of the inventory balance on the balance sheet than the LIFO method.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A)  $373.33 
B)  $372.00 
C)  $550.00 
D)  $380.00 
E)  None of the above 
A)  $373.33 
B)  $372.00 
C)  $550.00 
D)  $380.00 
E)  None of the above

Question 3

Which of the following is not an inventory account for manufacturing companies?

Accepted Answer

A)  Work-in-process 
B)  Finished goods 
C)  Cost of goods sold 
D)  Raw materials 
A)  Work-in-process 
B)  Finished goods 
C)  Cost of goods sold 
D)  Raw materials

Question 4

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 LIFO method, what amount would be reported for Ending Inventory on May 31?

Accepted Answer

A)  $1,040 
B)  $1,050 
C)  $1,055 
D)  $1,065 
A)  $1,040 
B)  $1,050 
C)  $1,055 
D)  $1,065

Question 5

Nature Inc.'s inventories are determined using FIFO. Nature Inc. provided the following information for the first quarter of 2019:
   
Required:
a. Compute the company's cost of goods sold for the first quarter.
b. Computer the ending inventory to be reported on Nature's balance sheet at March 31, 2019.

Accepted Answer

a. Units sold = 60 + 40 + 95 + 30 - 45 =

Question 6

The lower-of-cost-or-net realizable value method provides for the recognition of inventory losses from price declines in the period the inventory is sold.

Accepted Answer

A) True 
 B)False

Question 7

Use the following inventory related information for Questions below
  
-Assuming a periodic inventory system is used, what is ending inventory under LIFO?

Accepted Answer

A)  $2,400 
B)  $3,300 
C)  $1,600 
D)  $2,100 
A)  $2,400 
B)  $3,300 
C)  $1,600 
D)  $2,100

Question 8

Bono Company reported sales of $900,000, cost of goods sold of $600,000, and a gross profit of $300,000 for the year. Bono's beginning inventory was $120,000; the ending inventory at December 31, was $100,000.
Bono's inventory turnover for the year is:

Accepted Answer

A)  7.20 
B)  4.27 
C)  5.45 
D)  2.08 
E)  None of the above 
A)  7.20 
B)  4.27 
C)  5.45 
D)  2.08 
E)  None of the above

Question 9

Lee Company reported the following net income amounts: Year 1, $70,000; Year 2, $58,000; and Year 3, $53,000. In Year 4, the company discovered errors that had been made in computing the ending inventories for Year 1 and Year 2, as follows: 
  
Compute the correct net incomes for Year 1, Year 2, and Year 3.

Accepted Answer

The answer of Lee Company reported the following net income...

Question 10

Wang Company's average inventory for 2019 was $75,000 and its inventory turnover for 2019 was 6.0; Wang's 2019 days' sales in inventory (computed to one decimal place) is:

Accepted Answer

A)  12.7 days 
B)  60.8 days 
C)  68.5 days 
D)  53.8 days 
E)  None of the above 
A)  12.7 days 
B)  60.8 days 
C)  68.5 days 
D)  53.8 days 
E)  None of the above

Question 11

A firm's operating figures for three successive periods are shown below:
Assuming the following errors were made, compute the correct amount of gross profit for each period.

Accepted Answer

Period 1: $21,000 ($22,000 - $

Question 12

Cork Company imports and sells a product produced in Canada. In the summer of 2019, a natural disaster disrupted production, affecting its supply of product. Cork uses the LIFO inventory method. On January 1, 2019, Cork's inventory records were as follows:
 
 Through mid-December of 2019, purchases were limited to 8,000 units, because the cost had increased to $80 per unit. Cork sold 14,200 units during 2019 at a price of $102 per unit, which significantly depleted its inventory.
Assume that Cork makes no further purchases during 2019. Compute Cork's gross profit for 2019.

Accepted Answer

A)  $ 440,600 
B)  $1,036,600 
C)  $1,247,000 
D)  $ 485,400 
A)  $ 440,600 
B)  $1,036,600 
C)  $1,247,000 
D)  $ 485,400

Question 13

Use the following inventory related information for Questions below:
Matt's Sporting Goods had the following inventory records for the month of January.
  
-Assuming the Weighted-Average method is used, what is the total cost of Matt's ending inventory on January 31?

Accepted Answer

A)  $2,100 
B)  $2,090 
C)  $2,000 
D)  $2,050 
A)  $2,100 
B)  $2,090 
C)  $2,000 
D)  $2,050

Question 14

During its first and second years of operations, Rogers Company, a corporation using a periodic inventory system, made undiscovered errors in taking its year-end inventories that overstated year 1 ending inventory by $80,000 and overstated year 2 ending inventory by $60,000.
The combined effect of these errors on reported income is:

Accepted Answer

The answer of During its first and second years of...

Question 15

What is Brill Company's Ending Inventory for the year?

Accepted Answer

A)  $ 7,650 
B)  $ 4,950 
C)  $10,350 
D)  $ 2,700 
A)  $ 7,650 
B)  $ 4,950 
C)  $10,350 
D)  $ 2,700

Question 16

Hanover Shoes' sales totaled $8,000,000 for the year. Information concerning Hanover's gross profit under three inventory costing methods follows: 
   
Compute the gross profit percentage for each costing method. Which method shows the highest gross profit?

Accepted Answer

@#IMG-DLM& 
Last-in, first-out

Question 17

Best Buy Clothing had the following inventory at December 31, 2019:
   
Required:
a. Determine ending inventory by applying the lower of cost or net realizable value rule to:
1. Each item of inventory
2. Each major category of inventory
3. Total inventory
b. Which of the LCNRV procedures from requirement A results in the lowest net income for 2019? Explain.

Accepted Answer

a. 1. (350 × $18) + (375 × $21) + (600 ×

Question 18

Use the following information to answer Questions below
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 LIFO perpetual inventory procedures, the ending inventory cost is:

Accepted Answer

A)  $1,056 
B)  $1,080 
C)  $1,488 
D)  $1,128 
E)  None of the above 
A)  $1,056 
B)  $1,080 
C)  $1,488 
D)  $1,128 
E)  None of the above

Question 19

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 LIFO perpetual inventory procedures, sale no. 1 is recorded as an entry to Cost of Goods Sold for:

Accepted Answer

A)  $ 910 
B)  $ 900 
C)  $ 890 
D)  $1,080 
E)  None of the above 
A)  $ 910 
B)  $ 900 
C)  $ 890 
D)  $1,080 
E)  None of the above

Question 20

Tiger Company had the following inventory at December 31. 
   Determine the ending inventory amount by applying the lower-of-cost-or-net realizable value rule to:
a. Each item of inventory
b. Each major category of inventory
c. The total inventory

Accepted Answer

a.
 @#IMG-DLM& @#IMG-DLM& 
Lower of cost or NRV by

FIFO inventory costing yields more accurate reporting of the inventory balance on the balance sheet than the LIFO method.

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

Which of the following is not an inventory account for manufacturing companies?

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 LIFO method, what amount would be reported for Ending Inventory on May 31?

Nature Inc.'s inventories are determined using FIFO. Nature Inc. provided the following information for the first quarter of 2019: Required: a. Compute the company's cost of goods sold for the first quarter. b. Computer the ending inventory to be reported on Nature's balance sheet at March 31, 2019.

The lower-of-cost-or-net realizable value method provides for the recognition of inventory losses from price declines in the period the inventory is sold.

Use the following inventory related information for Questions below -Assuming a periodic inventory system is used, what is ending inventory under LIFO?

Bono Company reported sales of $900,000, cost of goods sold of $600,000, and a gross profit of $300,000 for the year. Bono's beginning inventory was $120,000; the ending inventory at December 31, was $100,000. Bono's inventory turnover for the year is:

Wang Company's average inventory for 2019 was $75,000 and its inventory turnover for 2019 was 6.0; Wang's 2019 days' sales in inventory (computed to one decimal place) is:

A firm's operating figures for three successive periods are shown below: Assuming the following errors were made, compute the correct amount of gross profit for each period.

Use the following inventory related information for Questions below: Matt's Sporting Goods had the following inventory records for the month of January. -Assuming the Weighted-Average method is used, what is the total cost of Matt's ending inventory on January 31?

What is Brill Company's Ending Inventory for the year?

Hanover Shoes' sales totaled $8,000,000 for the year. Information concerning Hanover's gross profit under three inventory costing methods follows: Compute the gross profit percentage for each costing method. Which method shows the highest gross profit?

Use the following information to answer Questions below 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 LIFO perpetual inventory procedures, the ending inventory cost is:

Tiger Company had the following inventory at December 31. Determine the ending inventory amount by applying the lower-of-cost-or-net realizable value rule to: a. Each item of inventory b. Each major category of inventory c. The total inventory

Financial Accounting and Business Decisions

Processing Accounting Information

Accrual Basis of Accounting

Understanding Accounting Information

Internal Control and Cash

Receivables

Property, Plant and Equipment and Intangible Assets

Liabilities

Stockholders Equity

Statement of Cash Flows

Analysis and Interpretation of Financial Statements

Appendix A: The Language of Accountants: Debits and Credits

Appendix B: Accounting for Investments and Consolidated Financial Statements

Appendix C: Accounting and the Time Value of Money

Filters

Exam 7: Inventory

FIFO inventory costing yields more accurate reporting of the inventory balance on the balance sheet than the LIFO method.

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

Which of the following is not an inventory account for manufacturing companies?

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 LIFO method, what amount would be reported for Ending Inventory on May 31?

The lower-of-cost-or-net realizable value method provides for the recognition of inventory losses from price declines in the period the inventory is sold.

Use the following inventory related information for Questions below -Assuming a periodic inventory system is used, what is ending inventory under LIFO?

Bono Company reported sales of $900,000, cost of goods sold of $600,000, and a gross profit of $300,000 for the year. Bono's beginning inventory was $120,000; the ending inventory at December 31, was $100,000. Bono's inventory turnover for the year is:

Wang Company's average inventory for 2019 was $75,000 and its inventory turnover for 2019 was 6.0; Wang's 2019 days' sales in inventory (computed to one decimal place) is:

A firm's operating figures for three successive periods are shown below: Assuming the following errors were made, compute the correct amount of gross profit for each period.

Use the following inventory related information for Questions below: Matt's Sporting Goods had the following inventory records for the month of January. -Assuming the Weighted-Average method is used, what is the total cost of Matt's ending inventory on January 31?

What is Brill Company's Ending Inventory for the year?

Hanover Shoes' sales totaled $8,000,000 for the year. Information concerning Hanover's gross profit under three inventory costing methods follows: Compute the gross profit percentage for each costing method. Which method shows the highest gross profit?

Use the following information to answer Questions below 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 LIFO perpetual inventory procedures, the ending inventory cost is:

Tiger Company had the following inventory at December 31. Determine the ending inventory amount by applying the lower-of-cost-or-net realizable value rule to: a. Each item of inventory b. Each major category of inventory c. The total inventory

Financial Accounting and Business Decisions

Processing Accounting Information

Accrual Basis of Accounting

Understanding Accounting Information

Internal Control and Cash

Receivables

Property, Plant and Equipment and Intangible Assets

Liabilities

Stockholders Equity

Statement of Cash Flows

Analysis and Interpretation of Financial Statements

Appendix A: The Language of Accountants: Debits and Credits

Appendix B: Accounting for Investments and Consolidated Financial Statements

Appendix C: Accounting and the Time Value of Money

Filters