Exam 8: Inventories: Measurement

Company C is identical to Company D in every respect except that Company C uses LIFO and Company D uses average costs. In an extended period of rising inventory costs, Company C's gross profit and inventory turnover ratio, compared to Company D's, would be:

Ending inventory is equal to the cost of items on hand plus:

On January 1, 2013, the National Furniture Company adopted the dollar-value LIFO method of computing inventory. An internal cost index is used to convert ending inventory to base year. Inventory on January 1 was $200,000. Year-end inventories at year-end costs and cost indexes for its one inventory pool were as follows: Required: Compute inventory amounts at the end of each year.

The average days inventory for ATC (rounded) for 2013 is:

In a periodic inventory system, the cost of purchases is debited to:

Ending inventory using the FIFO method is:

The use of LIFO during a long inflationary period can result in:

Dollar-value LIFO:

During periods of falling prices, LIFO ending inventory will be less than FIFO ending inventory.

Shipping charges on outgoing goods are included in either cost of goods sold or selling expenses.

Under the gross method, purchase discounts taken are:

Required: Compute the January 31 ending inventory and cost of goods sold for January, assuming Denver uses LIFO and a periodic inventory system.

Buckeye Corporation adopted dollar-value LIFO on January 1, 2013, when the inventory value was $500,000 and the cost index was 1.0. On December 31, 2013, the inventory value at year-end costs was $535,000 and the cost index was 1.06. Buckeye would report a LIFO inventory of:

What is Nueva's net income if it elects LIFO?

In a perpetual inventory system, the cost of purchases is debited to:

Inventory does not include:

What is cost of goods available for sale, assuming CBC uses the gross method?

ATC's inventory turnover ratio for 2013 is:

The following information comes from the 2010 Occidental Petroleum Corporation annual report to shareholders: NOTE 4 INVENTORIES Net carrying values of inventories valued under the LIFO method were approximately $177 million and $175 million at December 31, 2010 and 2009, respectively. Inventories in continuing operations consisted of the following: ($ in millions) The LIFO reserve indicates that inventories would have been $72 million and $81 million higher at the end of 2010 and 2009, respectively, if Occidental Petroleum had used FIFO to value its entire inventory. Required: If Occidental Petroleum had used FIFO to value its entire inventory how would its 2010 pre-tax income be affected?

In a perpetual inventory system, the cost of inventory sold is: