Exam 5: Inventories and Cost of Sales

Given the following information,determine the cost of goods sold at December 31 using the weighted-average periodic inventory method: December 2: 5 units were purchased at $7 per unit. December 9: 10 units were purchased at $9.40 per unit. December 11: 12 units were sold at $35 per unit. December 15: 20 units were purchased at $10.15 per unit. December 22: 18 units were sold at $35 per unit.

The Inventory account is a controlling account for the inventory subsidiary ledger that contains a separate record for each individual product.

The inventory valuation method that identifies the invoice cost of each item in ending inventory to determine the cost assigned to that inventory is the:

A company uses the periodic inventory system and the following information is available.All purchases and sales are on credit. Unit Unit Total Sales Units Cost Cost Price 10/01 Inventory balance 30 \ 3 \ 90 10/06 Purchase 70 4 280 10/11 Purchase 45 5 225 10/16 Purchase 50 6 300 Goods available 195 \ 895 10/12 Sale 100 10 10/20 Sale 60 11 Goods sold 160 10/31 Inventory balance 1.Prepare the general journal entries to record: The October 6 purchase. The October 12 sale. 2.Assuming the periodic inventory system is used,determine both the cost of the ending inventory and the cost of goods sold using the LIFO method for October.

The ____________________ ratio reflects how much inventory is available in terms of days' sales.

Given the following information,determine the cost of goods sold at December 31 using the LIFO periodic inventory method: December 2: 5 units were purchased at $7 per unit. December 9: 10 units were purchased at $9.40 per unit. December 11: 12 units were sold at $35 per unit. December 15: 20 units were purchased at $10.15 per unit. December 22: 18 units were sold at $35 per unit.

Acme-Jones Corporation uses a LIFO perpetual inventory system. August 2,25 units were purchased at $12 per unit. August 5,10 units were purchased at $13 per unit. August 15,12 units were sold at $25 per unit. August 18,15 units were purchased at $14 per unit. What was the amount of the cost of goods sold?

Days' sales in inventory is calculated as:

Errors in the period-end inventory balances only have an impact on the current period's records and financial statements.

A company's warehouse was destroyed by a tornado on March 15.The following information was salvaged from the ruins: Inventory,beginning: $28,000 Purchases for the period: $17,000 Sales for the period: $55,000 Sales returns for the period: $700 The company's average gross profit ratio is 35%.What is the estimated cost of the lost inventory?

Given the following information,determine the cost of ending inventory at December 31 using the FIFO perpetual inventory method. December 2: 5 units were purchased at $7 per unit. December 9: 10 units were purchased at $9.40 per unit. December 11: 12 units were sold at $35 per unit. December 15: 20 units were purchased at $10.15 per unit. December 22: 18 units were sold at $35 per unit.

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 weighted-average periodic method,what would be the cost of the ending inventory?

A company had the following ending inventory costs: Product Units Available Cost Market A 10 \ 5 \ 6 B 50 8 7 C 35 10 11 Instructions: (a) Calculate the lower of cost or market (LCM)value for the inventory as a whole. (b) Calculate the lower of cost or market (LCM)value for each individual item.

Goods in transit are automatically included in a company's inventory account.

The consistency concept requires a company to use the same accounting methods period after period,so that financial statements are comparable across periods.

A company had inventory on November 1 of 5 units at a cost of $20 each.On November 2,they purchased 10 units at $22 each.On November 6 they purchased 6 units at $25 each.On November 5,8 units were sold for $55 each.Using the weighted-average perpetual inventory method,what was the value of the inventory on November 30?

The ______________________ method of assigning costs to inventory and cost of goods sold is usually only practical for companies with expensive,custom-made inventory.

The inventory valuation method that tends to smooth out erratic changes in costs is:

The days' sales in inventory ratio is computed by dividing ending inventory by cost of goods sold and multiplying the result by 365.

The dollar value assigned to goods purchased will differ under the different inventory valuation methods of specific identification,FIFO,LIFO,and weighted average.