Question 1

The method of estimating inventory that uses records of the selling prices of the merchandise is called

Accepted Answer

A)  retail method 
B)  gross profit method 
C)  inventory turnover method 
D)  average cost method 
A)  retail method 
B)  gross profit method 
C)  inventory turnover method 
D)  average cost method

Question 2

Match between columns
                        Premises: Merchandise shipped to a customer FOB destination was picked up by the freight company on December 28 but had not arrived at its destination as of December 31.

Hampton Co. sent merchandise on a consignment basis on December 31 just prior to the physical count.

Inventory on hand had been sold earlier in the year but had been returned by customers for various warranty repairs.

On December 27, Hampton Co. ordered merchandise on FOB shipping point terms. The merchandise was shipped on December 29 but had not been received by December 31.

Merchandise sold FOB shipping point on December 31 was picked up by the freight company just before closing on December 31.

On December 22, Hampton Co. ordered merchandise on FOB destination terms. The merchandise was shipped by the supplier on December 30 but had not been received by December 31.

Accepted Answer

The Answer of False and True is...

Question 3

Beginning inventory, purchases, and sales data for tennis rackets are as follows:   ​
Complete the inventory cost card assuming the business maintains a perpetual inventory system and determine the cost of goods sold and ending inventory using the weighted average cost method.
​   ​
​

Accepted Answer

The answer of Beginning inventory, purchases, and sales data for...

Question 4

For the year ended December 31, Depot Max's cost of goods sold was $56,900. Inventory at the beginning of the year was $6,540. Ending inventory was $7,250. Compute Depot Max's inventory turnover for the year.

Accepted Answer

A)  8.7 
B)  7.8 
C)  8.3 
D)  44.0 
A)  8.7 
B)  7.8 
C)  8.3 
D)  44.0

Question 5

Fill in the missing amounts from the chart below regarding the calculation of Bean Corporation's estimated inventory using the retail method of estimation.

Accepted Answer

The answer of Fill in the missing amounts from the...

Question 6

Match between columns
                        Premises:  Purchased merchandise was shipped FOB shipping point on the last day of the year.  The cost of the merchandise was not included in ending inventory.
 Merchandise was purchased FOB destination on the last day of the year.  The cost of the merchandise purchased was not included in ending inventory.
 Merchandise held on consignment was included in the count of ending inventory.
 A consignor included merchandise in the hands of the consignee in ending inventory.
 Beginning inventory was understated.
 Merchandise that was sold and shipped FOB destination on the last day of the year was not included in the seller’s ending inventory.
 Merchandise that was sold and shipped FOB shipping point on the last day of the year was not included in the seller’s ending inventory.
 The beginning inventory was recorded as $10,000, when actual inventory on hand was $12,000.

Accepted Answer

The Answer of Net income for the current year will is...

Question 7

In valuing merchandise for inventory purposes, net realizable value is the estimated selling price less any direct costs of disposal.

Accepted Answer

A) True 
 B)False

Question 8

The lower-of-cost-or-market method of determining the value of ending inventory can be applied on an item by item, by major classification of inventory, or by the total inventory.

Accepted Answer

A) True 
 B)False

Question 9

Assume that three identical units of merchandise were purchased during October, as follows:
​ $$\begin{array} { | l | c | c | c | c | } 
\hline & & & \text { Units } & \text { Cost } \
\hline \text { October } & 5 & \text { Purchase } & 1 & \$ 5 \
\hline & 12 & \text { Purchase } & 1 & 13 \
\hline & 28 & \text { Purchase } & 1 & 15 \
\hline \text { Total } & & & \underline { 3 } & \$ 33 \
\hline
\end{array}$$ ​
Assume one unit is sold on October 31 for $28. Determine cost of goods sold, gross profit, and ending inventory under the LIFO method.

Accepted Answer

The answer of Assume that three identical units of merchandise...

Question 10

Use the information below to answer the following questions.
The Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1.
   ​
​
-Assuming that the company uses the perpetual inventory system, determine the May 31 inventory balance using the LIFO inventory cost method.

Accepted Answer

A)  $324 
B)  $372 
C)  $320 
D)  $364 
A)  $324 
B)  $372 
C)  $320 
D)  $364

Question 11

The following lots of a Commodity P were available for sale during the year. Use this information to answer the questions that follow.
​
   ​
The firm uses the periodic system, and there are 20 units of the commodity on hand at the end of the year.
-What is the year-end inventory balance using the LIFO method? Use the information provided in the table to answer this question

Accepted Answer

A)  $1,380 
B)  $1,375 
C)  $1,510 
D)  $1,250 
A)  $1,380 
B)  $1,375 
C)  $1,510 
D)  $1,250

Question 12

Applying the lower of cost or market to each item of inventory, what should the total inventory value be for the following items
 $$\begin{array} { | c | c | c | c | c | c | } 
\hline \text { Item } & \begin{array} { c } 
\text { Inventory } \
\text { Quantity }
\end{array} & \begin{array} { c } 
\text { Cost per } \
\text { Unit }
\end{array} & \begin{array} { c } 
\text { Market value } \
\text { perUnit }
\end{array} & \begin{array} { c } 
\text { Total } \
\text { Cost }
\end{array} & \begin{array} { c } 
\text { Total } \
\text { Market }
\end{array} \
\hline \mathrm { A } & 300 & \$ 15.00 & \$ 14.50 & \$ 4,500 & \$ 4,350 \
\hline \mathrm { B } & 200 & \$ 14.00 & \$ 15.00 & \$ 2,800 & \$ 3,000 \
\hline \mathrm { C } & 100 & \$ 17.00 & \$ 17.50 & \$ 1,700 & \$ 1,750 \
\hline
\end{array}$$

Accepted Answer

A)  $8,850 
B)  $9,000 
C)  $9,100 
D)  $9,250 
A)  $8,850 
B)  $9,000 
C)  $9,100 
D)  $9,250

Question 13

Based on the following information, what is (1) inventory turnover; (2) average daily cost of goods sold using a 365 day year; and (3) number of days' sales in inventory.  
Cost of goods sold $195,640
Inventory:
Beginning of year 20,500
End of year 18,628

Accepted Answer

A)  (1) 9.9 times
(2) $543.44
(3) 36.3 days 
B)  (1) 10.5 times
(2) $536
(3) 34.8 day 
C)  (1) 9.5 times
(2) $543.44
(3) 37.7 days 
D)  (1) 10 times
(2) $536
(3) 36.5 days 
A)  (1) 9.9 times
(2) $543.44
(3) 36.3 days 
B)  (1) 10.5 times
(2) $536
(3) 34.8 day 
C)  (1) 9.5 times
(2) $543.44
(3) 37.7 days 
D)  (1) 10 times
(2) $536
(3) 36.5 days

Question 14

The beginning inventory and purchases of an item for the period were as follows: $$\begin{array} { l l } 
\text { Beginning inventory } & 6 \text { units at } \$ 70 \text { each } \
\text { First purchase } & 10 \text { units at } \$ 75 \text { each } \
\text { Second purchase } & 18 \text { units at } \$ 80 \text { each } \
\text { Third purchase } & 10 \text { units at } \$ 90 \text { each }
\end{array}$$ ​
The company uses the periodic system, and there were 15 units in the inventory at the end of the period. Determine the cost of the 15 units in the inventory by each of the following methods, presenting details of your computations: (a) first-in, first-out; (b) last-in, first-out; (c) average cost. Do not round your intermediate calculations. Round your final answer to two decimal places.

Accepted Answer

(a) @#IMG-DLM&_TB228

Question 15

Which of the following is not an example for safeguarding inventory?

Accepted Answer

A)  Storing inventory in restricted areas. 
B)  Physical devices such as two-way mirrors, cameras, and alarms. 
C)  Matching receiving documents, purchase orders, and vendor's invoice. 
D)  Returning inventory that is defective or broken. 
A)  Storing inventory in restricted areas. 
B)  Physical devices such as two-way mirrors, cameras, and alarms. 
C)  Matching receiving documents, purchase orders, and vendor's invoice. 
D)  Returning inventory that is defective or broken.

Question 16

Addison, Inc. uses a perpetual inventory system. Below is information about one inventory item for the month of September.
  
-Use the information in the table to answer this question. If Addison uses the weighted average cost method, calculate the inventory balance at the end of September?

Accepted Answer

The answer of Addison, Inc. uses a perpetual inventory system....

Question 17

Assuming a perpetual inventory system and the last-in, first-out method, determine (a) the inventory on November 30 and (b) the cost of the goods sold for November.
​
Nov. 1 Purchased 600 units $80 each
4 Sold 200 units
11 Purchased 350 units $82 each
12 Sold 275 units
22 Purchased 175 units $84 each
23 Sold 155 units
​

Accepted Answer

(a) Inventory valuation:
​
400

Question 18

When merchandise sold is assumed to be in the order in which the purchases were made, the company is using

Accepted Answer

A)  first-in, last-out 
B)  last-in, first-out 
C)  first-in, first-out 
D)  average cost 
A)  first-in, last-out 
B)  last-in, first-out 
C)  first-in, first-out 
D)  average cost

Question 19

On the basis of the following data for Sanford Industries as of December 31, what is the value of the inventory at the lower of cost or market? Apply lower of cost or market to each inventory item.

Accepted Answer

A)  $679 
B)  $729 
C)  $759 
D)  $799 
A)  $679 
B)  $729 
C)  $759 
D)  $799

Question 20

Three identical units of merchandise were purchased during March, as shown:
​ $\begin{array}{|c|l|c|r|}
\hline & {\text { Steele Plate }} & \text { Units } & {\text { Cost }} \
\hline \text { Mar. 3 } & \text { Purchase } & 1 & \$ 830 \
\hline 10 & \text { Purchase } & 1 & 840 \
\hline 19 & \text { Purchase } & 1 & 880 \
\hline \text { Total } & & \underline{3} & \$ 2,550 \
\hline
\end{array}$ ​
Assume that one unit is sold on March 23 for $1,125. Determine the gross profit for March and ending inventory on March 31 using (a) FIFO and (b) LIFO.

Accepted Answer

The answer of Three identical units of merchandise were purchased...

The method of estimating inventory that uses records of the selling prices of the merchandise is called

Beginning inventory, purchases, and sales data for tennis rackets are as follows: Complete the inventory cost card assuming the business maintains a perpetual inventory system and determine the cost of goods sold and ending inventory using the weighted average cost method.

For the year ended December 31, Depot Max's cost of goods sold was $56,900. Inventory at the beginning of the year was $6,540. Ending inventory was $7,250. Compute Depot Max's inventory turnover for the year.

Fill in the missing amounts from the chart below regarding the calculation of Bean Corporation's estimated inventory using the retail method of estimation.

In valuing merchandise for inventory purposes, net realizable value is the estimated selling price less any direct costs of disposal.

The lower-of-cost-or-market method of determining the value of ending inventory can be applied on an item by item, by major classification of inventory, or by the total inventory.

Based on the following information, what is (1) inventory turnover; (2) average daily cost of goods sold using a 365 day year; and (3) number of days' sales in inventory. Cost of goods sold $195,640 Inventory: Beginning of year 20,500 End of year 18,628

Which of the following is not an example for safeguarding inventory?

Addison, Inc. uses a perpetual inventory system. Below is information about one inventory item for the month of September. -Use the information in the table to answer this question. If Addison uses the weighted average cost method, calculate the inventory balance at the end of September?

When merchandise sold is assumed to be in the order in which the purchases were made, the company is using

On the basis of the following data for Sanford Industries as of December 31, what is the value of the inventory at the lower of cost or market? Apply lower of cost or market to each inventory item.

Accounting and Business

Double-Entry Accounting

Adjustments: Accruals and Deferrals

The Accounting Cycle

Accounting for Retail Businesses

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Liabilities: Current, Installment Notes, and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, Stock Transactions, and Dividends

Statement of Cash Flows

Financial Statement Analysis

Investments

Filters

Exam 6: Inventories

The method of estimating inventory that uses records of the selling prices of the merchandise is called

Beginning inventory, purchases, and sales data for tennis rackets are as follows: ​ Complete the inventory cost card assuming the business maintains a perpetual inventory system and determine the cost of goods sold and ending inventory using the weighted average cost method. ​ ​ ​

For the year ended December 31, Depot Max's cost of goods sold was $56,900. Inventory at the beginning of the year was $6,540. Ending inventory was $7,250. Compute Depot Max's inventory turnover for the year.

Fill in the missing amounts from the chart below regarding the calculation of Bean Corporation's estimated inventory using the retail method of estimation.

In valuing merchandise for inventory purposes, net realizable value is the estimated selling price less any direct costs of disposal.

The lower-of-cost-or-market method of determining the value of ending inventory can be applied on an item by item, by major classification of inventory, or by the total inventory.

Based on the following information, what is (1) inventory turnover; (2) average daily cost of goods sold using a 365 day year; and (3) number of days' sales in inventory. Cost of goods sold $195,640 Inventory: Beginning of year 20,500 End of year 18,628

Which of the following is not an example for safeguarding inventory?

Addison, Inc. uses a perpetual inventory system. Below is information about one inventory item for the month of September. -Use the information in the table to answer this question. If Addison uses the weighted average cost method, calculate the inventory balance at the end of September?

When merchandise sold is assumed to be in the order in which the purchases were made, the company is using

On the basis of the following data for Sanford Industries as of December 31, what is the value of the inventory at the lower of cost or market? Apply lower of cost or market to each inventory item.

Accounting and Business

Double-Entry Accounting

Adjustments: Accruals and Deferrals

The Accounting Cycle

Accounting for Retail Businesses

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Liabilities: Current, Installment Notes, and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, Stock Transactions, and Dividends

Statement of Cash Flows

Financial Statement Analysis

Investments

Filters

Beginning inventory, purchases, and sales data for tennis rackets are as follows: Complete the inventory cost card assuming the business maintains a perpetual inventory system and determine the cost of goods sold and ending inventory using the weighted average cost method.