Exam 5: Inventories and Cost of Sales

Sandoval needs to determine its year-end inventory.The warehouse contains 20,000 units,of which 3,000 were damaged by flood and are not sellable.Another 2,000 units were purchased from Markor Company,FOB shipping point,and are currently in transit.The company also consigns goods and has 4,000 units at a consignee's location.How many units should Sandoval include in its year-end inventory?

A company's normal selling price for its product is $20 per unit.However,due to market competition,the selling price has fallen to $15 per unit.This company's current inventory consists of 200 units purchased at $16 per unit.Replacement cost has fallen to $13 per unit.Calculate the value of this company's inventory at the lower of cost or market.

A company had the following purchases during its first year of operations: Purchases January: 10 units at \ 120 February: 20 units at \ 130 May: 15 units at \ 140 September: 12 units at \ 150 November: 10 units at \ 160 On December 31,there were 26 units remaining in ending inventory.These 26 units consisted of 2 from January,4 from February,6 from May,4 from September,and 10 from November.Using the specific identification method,what is the cost of the ending inventory?

During a period of steadily rising costs,the inventory valuation method that yields the highest reported net income is:

What specific costs and deductions are used to determine the final cost of merchandise inventory? Identify all costs including the incidental costs.

It can be expected that companies selling perishable goods have a higher inventory turnover than companies selling nonperishable goods.

Oxford Packing Company reported net sales in November of the current year of $1,000,000.At the beginning of November,the company reported beginning inventory of $368,000.Cost of goods purchased during November amounted to $217,500.The company reported ending inventory at the end of November of $226,750. The company's gross profit rate for November of the current year was:

On January 31,a company needed to estimate its ending inventory to prepare its monthly financial statements.The following information is currently available: Inventory as of January 1: $120,500 Net sales for January: $400,000 Net purchases for January: $270,500 This company typically achieves a gross profit ratio of 15%.Ending Inventory under the gross profit method would be:

Eastview Company uses a periodic LIFO inventory system,and has the following purchases and sales: January 1 150 units were purchased at \9 per unit. January 17 120 units were sold. January 20 160 units were purchased at \1 1 per unit. January 29 150 units were sold. - What is the value of ending inventory?

A company had the following purchases and sales during its first year of operations: Purchases Sales January: 10 units at \ 120 6 units February: 20 units at \ 125 5 units May: 15 units at \ 130 9 units September: 12 units at \ 135 8 units November: 10 units at \ 140 13 units On December 31,there were 26 units remaining in ending inventory. -Using the Perpetual FIFO inventory valuation method,what is the value of cost of goods sold? (Assume all sales were made on the last day of the month.)

The ________ method is commonly used to estimate the value of inventory that has been destroyed,lost,or stolen.

Physical counts of inventory:

Match each of the following terms with the appropriate definition. -An inventory pricing method that assumes the unit prices of the beginning inventory and of each purchase are weighted by the number of units of each in inventory; the calculation occurs at the time of each sale.

A company's current inventory consists of 5,000 units purchased at $6 per unit.Replacement cost has now fallen to $5 per unit.What is the entry the company must record to adjust inventory to market?

Sarbanes Oxley (SOX)demands that companies safeguard inventory and properly report it.List methods that companies should use to safeguard inventory and accounting procedures that should be used to properly report inventory.

Salmone Company reported the following purchases and sales of its only product.Salmone uses a periodic inventory system.Determine the cost assigned to the ending inventory using FIFO. Date Activities Units Acquired at Cost Units Sold at Retail May 1 Beginning Inventory 150 units @ \ 10.00 5 Purchase 220 units @ \ 12.00 10 Sales 140 units @ \2 0.00 15 Purchase 100 units @ \ 13.00 24 Sales 90 units @ \2 1.00

A company reported the current month purchase and sales data for its only product and uses the perpetual inventory system.Determine the cost assigned to ending inventory and cost of goods sold using FIFO. Date Activities Units Acquired at Cost Units Sold at Retail April 1 Beginning Inventory 175 units@ \1 5.00 4 Purchase 150units@ \1 6.00 7 Sales 160 units@ \ 30.00 10 Purchase E00units@ \1 7.00 16 Sales 250 units@ \ 30.00 25 Purchase 160 units@ \1 8.00 28 Sales 150units@ \3 2.00

A company made the following merchandise purchases and sales during the month of May: May 1 Purchased 380 units at \ 15 each May 5 Purchased 270 units at \ 17 each May 10 Sold 400 units at \ 50 each May 20 Purchased 300 units at \ 22 each May 25 Sold 400 units at \ 50 each There was no beginning inventory.If the company uses the FIFO periodic inventory method,what would be the cost of the ending inventory?

Goods in transit are included in a purchaser's inventory:

A company uses the retail inventory method and has the following information available concerning its most recent accounting period: At Cost At Retail Beginning-of-period inventory \ 148,600 \ 245,200 Net purchases 677,400 1,229,800 Sales 1,200,000 1.What is the cost-to-retail ratio using the retail method? 2.What is the estimated cost of the ending inventory?