Exam 8: Reporting and Interpreting Property, plant, and Equipment; Intangibles; and Natural Resources

Ownership of goods passes from the seller to the buyer after the buyer has paid for the goods.

Which of the following may be used to calculate ending inventory (EI)under the periodic inventory system?

In a period of declining prices,which of the following inventory cost formula generally results in the lowest statement of financial position figure for inventory?

The higher the inventory turnover ratio,the higher the average days it takes to sell inventory.

Goofy Company reported profit for 20A of $30,000,and in 20B $40,000 (both after income taxes at a 20% rate).It was discovered in 20C that the ending inventory for 20A was overstated by 8,000 (before any income tax effect).The correct profit (after income tax of 20%)should be: 20A $_______________________ 20B $_______________________

The selection of a method of inventory costing is important because it will affect reported profit,income tax expense (and,hence,cash flow),and the inventory valuation reported on the statement of financial position.

On February 20,20A,Ross Sound Company purchased $10,000 of stereo equipment for resale on credit,subject to the terms 3/15,n/30.The company records all purchases using the gross method.The periodic inventory system is used.If the company paid for these goods on March 20,the entry made to record the payment should include which of the following?

The lower of cost and net realizable value basis of valuing inventories ensures that inventories are

Upaway Company hired some students to help count inventory during their semester break.Unfortunately,the students added incorrectly and ending inventory was overstated by $12,000.What would be the effect of this error in ending inventory?

Inventory turnover measures the liquidity (nearness to cash)of inventory.

Which of the following inventory costing methods is subject to manipulation with regard to the resulting inventory cost?

If prices never changed,there would be no need for alternative inventory cost formulas.

"Toys 4 U" had cost of goods sold in 2012 of $8,191 million and $7,710 million in 2011.Their merchandise inventory in 2012 was $1,902 million and $2,464 million in 2011.What was their inventory turnover in 2012?

When ending inventory is smaller than beginning inventory,gross margin is less than if ending inventory were larger than beginning inventory (assuming purchases remain constant).

In 20B,Landings Inc.provided the following items in their footnotes.Its cost of goods available for sale was $6.2 billion under FIFO costing and its ending inventory value under FIFO costing was $2.1 billion.Its opening inventory was $2.5 billion.What was itspurchases?

Purchases,returns and allowances should be added to the cost of purchases on the income statement,assuming the periodic inventory system is used.

The records of Tea Time Company show 20B purchases of $9,000.An actual count revealed a 20B ending inventory of $4,000.The 20B beginning inventory was $5,000.What was the cost of goods sold for 20B? $_______________________

The ending inventory of one accounting period becomes the beginning inventory amount of the next accounting period.

Which of the following costs would be included in the costs of inventory of a manufacturer?

Maxell Company uses the periodic FIFO method to value inventory and had the following transactions in the period.What are the cost of goods sold and ending inventory balances in dollars for the period?