Exam 7: Inventories

Portocall Sailboats reports income before income taxes of $160,000 during 2014.If beginning inventory was overstated by $14,000 and ending inventory was understated by $16,000,calculate corrected income before income taxes for the year.(Show your work. )

Which of the following inventory methods when used for income tax purposes must also be used for reporting purposes?

Manufacturing overhead would not include which of the following costs?

Why are the amounts determined for ending inventory and cost of goods sold the same under both the periodic and perpetual inventory systems when FIFO is used but not when LIFO is used?

Use this inventory information for the month of May to answer the following questions. Assuming that a perpetual inventory system is used. -What is cost of goods sold (rounded)under the average-cost method?

Use this information to answer the following question. A periodic inventory system is used. -Using FIFO,the cost assigned to ending inventory is

If a company uses LIFO for tax purposes,it need not use LIFO for financial reporting purposes.

Goods in transit shipped FOB shipping point should be included in the seller's ending inventory.

Atwood Company uses a periodic inventory system.During the first quarter of 2014,it sold 12,000 cases of Product A for $120,000.Facts related to its beginning inventory and purchases are as follows: For the quarter ended March 31,2014,compute the ending inventory,cost of goods sold,and gross margin under three methods: (a)average-cost, (b)FIFO,and (c)LIFO.(Show your work. )

The costs of an automated perpetual inventory system are considerable because they include the costs of automating the system,maintaining the system,and taking a physical inventory.

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

Given the following information about purchases and sales during the year,compute the cost to be assigned to ending inventory under each of three methods: (a)average-cost, (b)FIFO,and (c)LIFO.(Show your work. ) Assuming that a periodic inventory system is used

Which of the following is a reason for not using the specific identification method?

The average-cost method produces an ending inventory figure that is somewhere between the figures produced by FIFO and LIFO.

Which of the following methods generally is used to determine the loss when inventory is destroyed or stolen?

Use this inventory information for the month of August to answer the following question. Assuming that a perpetual inventory system is used. -What is ending inventory on a FIFO basis?

To increase their levels of inventory,many merchandisers and manufacturers use supply-chain management in conjunction with a just-in-time operating environment.

Inventory is an example of a long-term asset.

Use this inventory information for the month of March to answer the following question. -Assume that a periodic inventory system is used. What is ending inventory under the LIFO method?

Graczyk Company uses a periodic inventory system.During October,it sold 360 units of Product Z.Its beginning inventory and purchases during the month were as follows: Compute the cost of goods sold under each of three methods: (a)average-cost, (b)LIFO,and (c)FIFO.(Show your work. )