Exam 7: Inventory

During its first year of operations, Williams Company, using a periodic inventory system, made undiscovered errors in taking its year-end inventory that overstated Year 1 ending inventory by $50,000. The effect of these errors on reported income is:

A decline in gross profit percentage can be caused by selling fewer units to customers.

Inventory costs are all costs necessary to acquire and sell the merchandise.

Felix Company reported the following year-end amounts: What is Felix Company's Ending Inventory and Cost of Goods Sold for the year?

An uncorrected error in an ending inventory amount will affect income determination for two accounting periods.

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 last in first out (LIFO) method is used, what is Matt's Cost of Goods Sold for the month of January?

The following data are excerpted from Williams Co.'s 2019 financial statements: Compute the inventory turnover ratios for 2019 and 2018 (ending inventory in 2017 is $6,791). What does this say about the company?

Use the following information for Questions below The following data represent the beginning inventory and, in order of occurrence, the purchases and sales of Newtown, Inc. for an operating period -Assuming Newtown, Inc., uses weighted-average (perpetual) inventory procedures, sale no. 2 is recorded as an entry to Cost of Goods sold for:

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 Blunt, Inc., for an operating period. -Assuming Blunt, Inc., uses FIFO perpetual inventory procedures, it records sale no. 2 as an entry to Cost of Goods Sold for:

The following are 2019 inventory data for Thames Company, which uses a perpetual inventory system. Ending inventory at December 31 is 125 units. Compute the cost of the ending inventory using the following methods: a. FIFO b. Weighted-average c. LIFO

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 weighted-average (perpetual) inventory procedures, sale no. 2 is recorded as an entry to Cost of Goods Sold for:

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 weighted-average (periodic) inventory procedures, the ending inventory cost is:

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

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 Blunt, Inc., for an operating period. -Assuming Blunt, Inc., uses weighted-average (perpetual) inventory procedures, sale no. 2 is recorded as an entry to Cost of Goods Sold for:

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 LIFO periodic inventory procedures, the ending inventory cost is:

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 periodic inventory procedures, the ending inventory cost is:

Basic inventory data for Save Mart Company as of June 30 are presented below: Assume Save Mart Company applies the Lower of Cost or Net Realizable Value rule for the inventory by major category, determine the amount of inventory adjustment at the end of the year.

A company discovered in 2019 that it had overstated the inventory balance for December 31, 2017 by $10,000. The company had (incorrectly) reported Net Income to be $300,000 for 2017, and $400,000 for 2018. What are the corrected Net Incomes for 2017 and 2018?

In general, in a period of rising prices, FIFO produces higher gross profits than LIFO.

LaGrange Company, which uses the periodic inventory system, has the following records for the year: Ending inventory at December 31 is 108 units. Compute the cost of the ending inventory and the cost of goods sold using the following methods: a. FIFO b. Weighted-average c. LIFO