Exam 7: Reporting and Interpreting Inventories and Cost of Goods Sold

Assume the periodic inventory method is used.When LIFO is used,costs are assigned to cost of goods sold using the most recent purchase at the time of the sale.

Use the following to answer questions 179 - 180: Charter Company, which uses the perpetual inventory method, purchases different letters for resale.Character had a beginning inventory comprised of seven units at $4 per unit.The company purchased five units at $6 per unit in February, sold seven units in October, and purchased two units at $7 per unit in December. -Use the information above to answer the following question.If Charter Company uses the LIFO method,what is the cost of its ending inventory?

The inventory turnover ratio is calculated as:

If the Ball Corp.writes down its inventory,its:

Eaton Electronics uses a periodic inventory system.On March 31, Eaton has two plasma TVs on hand at a cost of $1,500 each (serial numbers 11534892 and 11534894).In April, the company purchases four more identical TVs from Toshiba for $1,450 each (serial numbers 11542631 through 11542634).In May, the company purchases five more identical TVs for $1,600 each (serial numbers 11550964 through 11550968).In June, Eaton sells two of these TVs (serial numbers 11534894 and 11542631).There were no additional purchases or sales during the remainder of the year. -Use the information above to answer the following question.Eaton Electronics uses the FIFO method.What is the cost of its ending inventory?

Which of the following is not associated with a high inventory turnover ratio?

Goods placed in inventory are initially recorded at market value.

Greenies Inc.updates its inventory periodically.The company's cost of goods sold was $24,700 and purchases were $12,000 during the year.The company's ending inventory count was $3,500. Required: Determine the amount of beginning inventory.

Which of the following statements about inventory classifications is not correct?

For a merchandiser,inventory turnover refers to how many times:

If inventory is updated perpetually,which of the equations is correct?

Your company has 100 units in inventory,purchased at $16 per unit.These units have a current market value of $14.The entry to write-down the inventory will include a:

Evaluate each inventory error separately and determine whether it overstates or understates cost of goods sold and net income.

Fill in the blanks below with the words "higher" and "lower" to indicate which inventory costing method causes the value to be higher and which causes it to be lower.Assume that the cost of inventory is decreasing.