Exam 6: Inventories

A retail store has goods available for sale of $2 million at retail and $1,100,000 at cost,and ending inventory of $160,000 at retail.What is the estimated cost of ending inventory?

Use this inventory information for the month of March to answer the following questions. Mar. 1 Beginning inventory 20 units @ \ 76 7 Purchase 70 units @ \ 80 18 Sale 25 units 22 Purchase 10 units @ \ 88 29 Sale 40 units Assuming that a perpetual inventory system is used,what is ending inventory on a LIFO basis?

Braxton Company uses the retail method to estimate the cost of ending inventory.Use the following information to estimate the cost of Braxton's ending inventory on December 31,2010,using the retail method.Show your answer in good form.

In general,in times of rising prices,using FIFO has a favorable effect on cash flows.

An overstatement of ending inventory in one period results in

An overstatement of beginning inventory in a period will result in an overstatement of gross margin in the next period.

Use this information to answer the following question. Feb. 1 Inventory 200 units @ \ 6.00 6 Purchase 300 units @ \ 6.60 13 Purchase 100 units @ \ 7.20 20 Purchase 200 units @ \ 7.80 25 Purchase 40 units @ \ 8.40 Total sales 620 units A periodic inventory system is used. Using the specific identification method and assuming that 50 of the items left are from the February 13 purchase and the rest are from the February 20 purchase,the cost assigned to ending inventory is

An understatement of ending inventory in a period will result in an understatement of gross margin in the next period.

Use the following information to calculate ending inventory on (a)a LIFO basis,(b)a FIFO basis,and (c)an average-cost basis.Assume a perpetual inventory system. Round answers to nearest dollar. Dec. 1 Beginning inventory 70 units @ \1 4 9 Purchases 30 units @ \1 6 17 Sales 25 units 22 Purchases 15 units @ \1 8 27 Sales 40 units

Assuming that ending inventory for 2009 was overstated,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

Supply-chain management helps companies maintain higher levels of inventory.

In a period of rising prices,which inventory method is best to use for tax purposes?

Specific identification is a very popular inventory method because it is very easy to apply.

Which of the following costs would not be included in the inventory cost?

Why is the LIFO cost flow assumption an acceptable valuation method for merchandise inventory when it rarely matches the physical movement of the product?

An overstatement of beginning inventory results in

Use this information to answer the following question. Jan. 1 Inventory 8 Purchase 17 Purchase 25 Purchase Total sales 15 units@ \4 .00 60 units @\ 4.40 30 units @\ 4.20 45 units @\ 4.80 100 units Assuming that the specific identification method is used and that ending inventory consists of 15 units from each of the three purchases and five units from the January 1 inventory,cost of goods sold is

Which of the following is an inventory processing system?

Use this information to answer the following question. Jan. 1 Inventory 8 Purchase 17 Purchase 25 Purchase Total sales 15 units@ \4 .00 60 units @\ 4.40 30 units @\ 4.20 45 units @\ 4.80 100 units A periodic inventory system is used. Ending inventory under LIFO is

Costs incurred in storing inventory usually are included in inventory costs.