Use the following information to calculate cost of goods sold under each of three methods: (a)FIFO,(b)LIFO,and (c)average-cost.Assume the periodic inventory system is used.(Show your work.) $\begin{array}{lrll} \text { Apr. } & 1 & \text { Beginning inventory }& \text { 90 units@\$40} \\ & 8 & \text { Sales } &\text { 70 units}\\ & 17 & \text { Purchases }& \text { 150 units \$ 4}\\ & 24 & \text { Sales }&\text { 110 units}\\ & 30 & \text { Purchases }&\text { 60 units\$ 44 } \end{array}$

a.FIFO: $7,380[(90 @#LAT-DLM& $40)+ (90

Freyman's Shoe Store had net retail sales of $200,000 during the current year.The following additional information was obtained from the accounting records. $\begin{array}{lrr} &\text {At Cost}&\text {At Retail}\\ \text { Beginning inventory } & \$ 30,000 & \$63,000 \\ \text { Net purchases for the period } & 89,000 & 193,000 \\ \text { Freight-in } & 9,000 & \end{array}$ Estimate the company's ending inventory at cost using the retail method.(Show your work.)

The answer of Freyman's Shoe Store had net retail sales...

Use this information to answer the following question. $\begin{array}{ll} \text { Beginning inventory } & 100 \text { units @\$8.00 } \\ \text { Purchase-Oct. } & 200 \text { units } @ \$ 6.00 \\ \text { Purchase-Dec. } & 100 \text { units } @ \$ 12.00 \end{array}$ A periodic inventory system is used; ending inventory is 150 units. What is ending inventory under the average-cost method?

A) $900 B) $1,050 C) $1,350 D) $1,200 A) $900 B) $1,050 C) $1,350 D) $1,200

Exam 6: Inventories

Assume that during the physical count of the inventory of a large corporation last year,$750,000 of merchandise was not counted.The error was not detected,and the financial statements for the current fiscal year were prepared.Identify the individual statements that would be affected and explain the effect the error would have on each of these statements.

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Question 1

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By understating last year's ending inventory,the company would have started the current year with an understated inventory balance.As a result,total assets would be understated by the same $750,000.The error would also cause cost of goods sold and gross margin on the statement of earnings to be understated and overstated,respectively.Earnings before income taxes would be overstated by $750,000.This year's overstatement of earnings before income taxes,retained earnings,and inventory would exactly offset the understatement of each item on the prior year's statements.

When the average-cost method is applied to a perpetual inventory system,the sale and purchase of goods will change the unit cost of the goods that remain in inventory.

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Question 2

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True

Assuming that ending inventory for 2009 was understated,indicate whether each of the following will be understated (U),overstated (O),or not affected (N). ___ 1.Beginning inventory for 2010 _ 2.Cost of goods sold for 2009 _ 3.Stockholders' equity at the end of 2010 _ 4.Income before income taxes for 2010 _ 5.Stockholders' equity at the end of 2009 _ 6.Cost of goods sold for 2010 ___ 7.Income before income taxes for 2009

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Question 3

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What is the chief objective of supply-chain management? How is it accomplished?

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Question 4

Days' inventory on hand equals 365 divided by

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Question 5

Goods held on consignment are

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Question 6

In accounting for inventory,the assumed cost flow need not match the physical goods flow.

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Question 7

Cost of goods sold equals $500,000,and average inventory equals $200,000.Days' inventory on hand equals

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Question 8

A cost-to-retail percentage must be calculated when applying the retail method.

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Question 9

The LIFO method tends to smooth out the peaks and valleys of a business cycle.

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Question 10

The FIFO inventory method produces the most up-to-date figure for ending inventory.

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Question 11

Use the following figures (stated in millions of dollars)to compute the inventory turnover and the days' inventory on hand: (Round answers to one decimal place). Cost of goods sold: \ 6,584 Beginning inventory: \ 915 Ending inventory: \ 1,177 a. Inventory turnover = _ b. Days' inventory on hand = _

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Question 12

Use the following information to calculate cost of goods sold under each of three methods: (a)FIFO,(b)LIFO,and (c)average-cost.Assume the periodic inventory system is used.(Show your work.) Apr. 1 Beginning inventory 90 units@ \4 0 8 Sales 70 units 17 Purchases 150 units \ 4 24 Sales 110 units 30 Purchases 60 units\ 44

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Question 13

Goods in transit shipped FOB destination should be included in the buyer's ending inventory.

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Question 14

A retail store prices its goods to achieve a gross margin of 30 percent.Up to the date of a fire that destroyed the store's inventory,sales were $200,000 and cost of goods available for sale was $150,000.The estimated cost of the inventory destroyed is

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Question 15

Supply-chain management works well in a just-in-time operating environment.

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Question 16

Freyman's Shoe Store had net retail sales of $200,000 during the current year.The following additional information was obtained from the accounting records. At Cost At Retail Beginning inventory \ 30,000 \6 3,000 Net purchases for the period 89,000 193,000 Freight-in 9,000 Estimate the company's ending inventory at cost using the retail method.(Show your work.)

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Question 17

How is the matching rule applied when accounting for merchandise inventory?

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Question 18

Which inventory method generally best follows the matching principle?

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Question 19

Use this information to answer the following question. Beginning inventory 100 units @ \8 .00 Purchase-Oct. 200 units @\ 6.00 Purchase-Dec. 100 units @\ 12.00 A periodic inventory system is used; ending inventory is 150 units. What is ending inventory under the average-cost method?

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Question 20

Exam 6: Inventories

When the average-cost method is applied to a perpetual inventory system,the sale and purchase of goods will change the unit cost of the goods that remain in inventory.

What is the chief objective of supply-chain management? How is it accomplished?

Days' inventory on hand equals 365 divided by

Goods held on consignment are

In accounting for inventory,the assumed cost flow need not match the physical goods flow.

Cost of goods sold equals $500,000,and average inventory equals $200,000.Days' inventory on hand equals

A cost-to-retail percentage must be calculated when applying the retail method.

The LIFO method tends to smooth out the peaks and valleys of a business cycle.

The FIFO inventory method produces the most up-to-date figure for ending inventory.

Goods in transit shipped FOB destination should be included in the buyer's ending inventory.

A retail store prices its goods to achieve a gross margin of 30 percent.Up to the date of a fire that destroyed the store's inventory,sales were $200,000 and cost of goods available for sale was $150,000.The estimated cost of the inventory destroyed is

Supply-chain management works well in a just-in-time operating environment.

How is the matching rule applied when accounting for merchandise inventory?

Which inventory method generally best follows the matching principle?

Use this information to answer the following question. Beginning inventory 100 units @ \8 .00 Purchase-Oct. 200 units @\ 6.00 Purchase-Dec. 100 units @\ 12.00 A periodic inventory system is used; ending inventory is 150 units. What is ending inventory under the average-cost method?

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Contributed Capital

Investments

The Corporate Income Statement and the Statement of Stockholders Equity

The Statement of Cash Flows

The Changing Business Environment - a Managers Perspective

Cost Concepts and Cost Allocation

Costing Systems- Job Order Costing

Costing Systems- Process Costing

Value-Based Systems- Abm and Lean

Cost Behavior Analysis

The Budgeting Process

Performance Management and Evaluation

Standard Costing and Variance Analysis

Short Run Decision Analysis

Capital Investment Analysis

Pricing Decisions, incltarget Costing and Transfer Pricing

Quality Management and Measurement

Financial Analysis of Performance

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