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

Axle Inc.purchases inventory from Nutria Company and then Axle sells it to Chang Company.Inventory is in transit on the last day of the year.Indicate who owns the inventory by placing an "X" in the proper column for each item that is described.

An adjustment to ending inventory under the lower of cost or market (LCM)rule would be least likely to be recorded by a company that sells:

A company had inventory on November 1 of 5 units at a cost of $20 each.On November 2,the company purchased 10 units at $22 each.On November 5,the company sold 8 units for $55 each.On November 6,the company purchased 6 units at $25 each.The company uses a perpetual inventory system.Using the weighted average method,what is the value of the ending inventory on November 30? (Round each per unit cost to two decimal places and then round your answer to the nearest whole dollar.)

Which of the following will occur when inventory costs are decreasing?

When a company sells goods,it removes their cost from the balance sheet and reports the cost on the income statement as:

Torrington Inc.updates its inventory records perpetually.The company's records showed a beginning inventory of $6,200,cost of goods sold of $81,600,and ending inventory of $12,000. Required: Determine the amount of inventory that was purchased during the year.

Lux Company uses a periodic inventory system.The company started the month with 20 lamps in its beginning inventory that cost $30 each.During the month,Lux purchased 80 additional lamps for $31 each.At the end of the month,Lux counted its inventory and found that 25 lamps remained unsold.If Lux uses the weighted average cost method,its cost of goods sold for the month is:

Assume a periodic inventory system is used.The LIFO inventory costing method assumes that the cost of the units most recently purchased is the:

Acme Company's balance sheet shows three inventory accounts-raw materials,work in process,and finished goods.Acme Company must be a:

The Xu Corporation uses a periodic inventory system.The company has a beginning inventory of 300 units at $5 each on January 1.Xu purchases 500 units at $4 each in February and 200 units at $6 each in March.There were no additional purchases or sales during the remainder of the year. -Use the information above to answer the following question.Xu sells 150 units during the quarter.If Xu uses the weighted average method,what is its cost of goods sold?

Nordic Industries uses a periodic inventory system.During its first month of operations, Nordic Industries purchased inventory as follows: There were 100 units in ending inventory on January 31. -Use the information above to answer the following question.Under the weighted average cost method,what is the cost of goods sold for January?

A one-time error in the application of the lower of cost or market (LCM)rule in the current period distorts financial results for the current accounting period:

Most companies report their lower of cost or market write-down expense as a ______ expense even if the goods haven't been sold,because it's a necessary cost of carrying and (eventually)selling the goods.

Bailey Company uses a periodic inventory system and its inventory records contain the following information: The company sold 1,000 units during June.There were no additional purchases or sales during the remainder of the year.The company had 500 units were in its ending inventory at the end of the year. -Use the information above to answer the following question.If Bailey Company uses the weighted average inventory costing method,what is the cost of its ending inventory? (Round the per unit cost to two decimal places and then round your answer to the nearest whole dollar.)

Consider the following information: What is the number of days to sell?

Delta Diamonds uses a periodic inventory system.The company had five one-carat diamonds available for sale this year: one was purchased on June 1 for $500,two were purchased on July 9 for $550 each,and two were purchased on September 23 for $600 each.On December 24,it sold one of the diamonds that was purchased on July 9.Using the FIFO method,its ending inventory (after the December 24 sale)equals:

Lock Security Company updates its inventory perpetually.The company reported a beginning inventory of $1,500.During the year,the company recorded inventory purchases of $4,500 and cost of goods sold of $5,000.What was the amount of its ending inventory?

King Costume uses a periodic inventory system.The company started the month with 8 masks in its beginning inventory that cost $10 each.During the month,King Costume purchased 40 additional masks for $12 each.At the end of the month,King counted its inventory and found that 5 masks remained unsold.Using the LIFO method,its cost of goods sold for the month is:

The LIFO Conformity Rule requires that LIFO be used:

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 weighted average method.What is the company's weighted average cost per unit? (Round the per unit cost to the nearest dollar.)