The following units of an inventory item were available for sale during the year. Use this information to answer the following questions. \[\begin{array} { l l } \text { Beginning inventory } & 10 \text { units at } \$ 55 \\ \text { First purchase } & 25 \text { units at } \$ 60 \\ \text { Second purchase } & 30 \text { units at } \$ 65 \\ \text { Third purchase } & 15 \text { units at } \$ 70 \end{array}\] The firm uses the periodic inventory system. During the year, 60 units of the item were sold. -The ending inventory cost using LIFO is

A) $1,250 B) $1,350 C) $1,375 D) $1,150 A) $1,250 B) $1,350 C) $1,375 D) $1,150

Assume that three identical units of merchandise were purchased during October, as follows: \[\begin{array} { | l | c | l | c | c | } \hline & & & \text { Units } & \text { Cost } \\ \hline \text { October } & 5 & \text { Purchase } & 1 & \$ 5 \\ \hline & 12 & \text { Purchase } & 1 & 13 \\ \hline & 28 & \text { Purchase } & \underline { 1 } & \underline { 15 } \\ \hline \text { Total } & & & 3 & \$ 33 \\ \hline \end{array}\] -One unit is sold on October 31 for $28. Using the table provided, determine cost of goods sold under the average cost method.

A) $22 B) $17 C) $13 D) $11 A) $22 B) $17 C) $13 D) $11

Exam 6: Inventories

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, what is the inventory balance at the end of September?

(Multiple Choice)

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Question 41

Garrison Company uses the retail method of inventory costing. It started the year with an inventory that had a retail cost of $45,000. During the year, Garrison purchased an inventory with a retail sales value of $300,000. After performing a physical inventory, Garrison calculated the inventory at retail to be $80,000. The markup is 100% of cost. Determine the ending inventory at its estimated cost.

(Multiple Choice)

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Question 42

Which of the following is used to analyze the efficiency and effectiveness of inventory management?

(Multiple Choice)

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Question 43

Ending inventory is made up of the oldest purchases when a company uses

(Multiple Choice)

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Question 44

What is the amount of cost of goods sold for the year according to the FIFO method?

(Multiple Choice)

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Question 45

The following data regarding purchases and sales of a commodity were taken from the related perpetual inventory account:

(Essay)

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Question 46

During the taking of its physical inventory on December 31, Almond Supplies Company incorrectly counted its inventory as $545,000 instead of the correct amount of $554,000. Indicate the balance sheet effects of the error on inventory, current assets, total assets, and stockholders' equity. Also indicate the income statement effects of the error on cost of goods sold, gross profit, and net income.

(Essay)

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Question 47

The following units of an inventory item were available for sale during the year. Use this information to answer the following questions. Beginning inventory 10 units at \ 55 First purchase 25 units at \ 60 Second purchase 30 units at \ 65 Third purchase 15 units at \ 70 The firm uses the periodic inventory system. During the year, 60 units of the item were sold. -The ending inventory cost using LIFO is

(Multiple Choice)

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Question 48

Beginning inventory, purchases, and sales for an inventory item are as follows: Beginning inventory 150 units @\ 755 Sale 120 units First purchase 400 units @\ 785 Sale 200 units Second purchase 300 units (\ 805 Sale 290 units The firm uses the perpetual inventory system and there are 240 units of the item on hand at the end of the year. What is the total cost of ending inventory according to LIFO?

(Essay)

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Question 49

Assume that three identical units of merchandise were purchased during October, as follows: Units Cost October 5 Purchase 1 \ 5 12 Purchase 1 13 28 Purchase Total 3 \ 33 -One unit is sold on October 31 for $28. Using the table provided, determine cost of goods sold under the average cost method.

(Multiple Choice)

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Question 50

Inventory at the end of the year was understated. Which of the following statements correctly states the effect of the error?

(Multiple Choice)

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Question 51

Generally, the lower the number of days' sales in inventory, the better.

(True/False)

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Question 52

Beginning inventory, purchases, and sales for an inventory item are as follows: Assuming a perpetual inventory system and the last-in, first-out method, determine (a) the cost of the goods sold for the September 30 sale and (b) the inventory on September 30.

(Essay)

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Question 53

Complete the chart, indicating whether LIFO or FIFO would give the highest and lowest amounts for each item, assuming a period of increasing costs.

(Essay)

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Question 54

During the taking of its physical inventory on December 31, 2014, Barry's Bike Shop incorrectly counted its inventory as $350,000 instead of the correct amount of $280,000. The effect on the balance sheet and income statement would be

(Multiple Choice)

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Question 55

On the basis of the following data, determine the value of the inventory at the lower of cost or market. Apply lower of cost or market to each inventory item. Show your work.

(Essay)

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Question 56

Match each description to the appropriate cost flow assumption.

The cost of the units sold and in ending inventory is a weighted average of the purchase costs.

Weighted average

Cost flow is assumed to be in the reverse order of costs incurred.

First-in, first-out (FIFO)

Cost flow matches the unit sold to the unit purchased.

Last-in, first-out (LIFO)

Correct Answer:

Verified

The cost of the units sold and in ending inventory is a weighted average of the purchase costs.

Cost flow is assumed to be in the reverse order of costs incurred.

Cost flow matches the unit sold to the unit purchased.

Cost flow is in the order in which the costs were incurred.

(Matching)

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Question 57

Brutus Corporation, a newly formed corporation, has the following transactions during May, its first month of operations. -Using the table provided, calculate total sales, cost of goods sold, gross profit, and ending inventory using each of the average cost periodic inventory method. Round the average to the nearest cent.

(Multiple Choice)

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Question 58

Match each description to the appropriate document used for inventory control.

last document in the chain, use to compare all three for accuracy

Receiving report

authorizes the purchase of inventory from an approved vendor

Vendor’s invoice

establishes an initial record of the receipt of inventory

Purchase order

Correct Answer:

Verified

last document in the chain, use to compare all three for accuracy

authorizes the purchase of inventory from an approved vendor

establishes an initial record of the receipt of inventory

(Matching)

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Question 59

Under the periodic inventory system, a physical inventory is taken to determine the cost of the inventory on hand and the cost of the goods sold.

(True/False)

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Question 60

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, what is the inventory balance at the end of September?

Which of the following is used to analyze the efficiency and effectiveness of inventory management?

Ending inventory is made up of the oldest purchases when a company uses

What is the amount of cost of goods sold for the year according to the FIFO method?

The following data regarding purchases and sales of a commodity were taken from the related perpetual inventory account:

Assume that three identical units of merchandise were purchased during October, as follows: Units Cost October 5 Purchase 1 \ 5 12 Purchase 1 13 28 Purchase Total 3 \ 33 -One unit is sold on October 31 for $28. Using the table provided, determine cost of goods sold under the average cost method.

Inventory at the end of the year was understated. Which of the following statements correctly states the effect of the error?

Generally, the lower the number of days' sales in inventory, the better.

Beginning inventory, purchases, and sales for an inventory item are as follows: Assuming a perpetual inventory system and the last-in, first-out method, determine (a) the cost of the goods sold for the September 30 sale and (b) the inventory on September 30.

Complete the chart, indicating whether LIFO or FIFO would give the highest and lowest amounts for each item, assuming a period of increasing costs.

During the taking of its physical inventory on December 31, 2014, Barry's Bike Shop incorrectly counted its inventory as $350,000 instead of the correct amount of $280,000. The effect on the balance sheet and income statement would be

On the basis of the following data, determine the value of the inventory at the lower of cost or market. Apply lower of cost or market to each inventory item. Show your work.

Under the periodic inventory system, a physical inventory is taken to determine the cost of the inventory on hand and the cost of the goods sold.

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

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, what is the inventory balance at the end of September?

Which of the following is used to analyze the efficiency and effectiveness of inventory management?

Ending inventory is made up of the oldest purchases when a company uses

What is the amount of cost of goods sold for the year according to the FIFO method?

The following data regarding purchases and sales of a commodity were taken from the related perpetual inventory account: ​

Assume that three identical units of merchandise were purchased during October, as follows: Units Cost October 5 Purchase 1 \ 5 12 Purchase 1 13 28 Purchase Total 3 \ 33 -One unit is sold on October 31 for $28. Using the table provided, determine cost of goods sold under the average cost method.

Inventory at the end of the year was understated. Which of the following statements correctly states the effect of the error?

Generally, the lower the number of days' sales in inventory, the better.

Beginning inventory, purchases, and sales for an inventory item are as follows: ​ Assuming a perpetual inventory system and the last-in, first-out method, determine (a) the cost of the goods sold for the September 30 sale and (b) the inventory on September 30.

Complete the chart, indicating whether LIFO or FIFO would give the highest and lowest amounts for each item, assuming a period of increasing costs.

During the taking of its physical inventory on December 31, 2014, Barry's Bike Shop incorrectly counted its inventory as $350,000 instead of the correct amount of $280,000. The effect on the balance sheet and income statement would be

On the basis of the following data, determine the value of the inventory at the lower of cost or market. Apply lower of cost or market to each inventory item. Show your work.

Under the periodic inventory system, a physical inventory is taken to determine the cost of the inventory on hand and the cost of the goods sold.

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

The following data regarding purchases and sales of a commodity were taken from the related perpetual inventory account:

Beginning inventory, purchases, and sales for an inventory item are as follows: Assuming a perpetual inventory system and the last-in, first-out method, determine (a) the cost of the goods sold for the September 30 sale and (b) the inventory on September 30.