Lisa Fashions has just completed its annual physical inventory count.The ending inventory was obtained by adding up all the retail price tags for the goods on hand.Determine ending inventory at cost. \[\begin{array} { l c c } & \text { Cost } & \text { Retail } \\ \text { Beginning Inventory } & \$ 9,000 & \$ 14,000 \\ \text { Purchases } & 135000 & 226,000 \\ \text { Goods Available for Sale } & \$ 144,000 & \$ 240,000 \\ \text { Sales } & & 210,000 \end{array}\]

A) $19 286 B) $17 920 C) $18 000 D) $12 000 A) $19 286 B) $17 920 C) $18 000 D) $12 000 C

The inventory on hand at year-end for Golen Enterprises is: $\begin{array}{lcccc}\text { Inventory } & \text { Number } & \text { Original } & \text { Current Net } & \text { Current } \\ \text { Item } & \text { of Units } & \text { Unit Cost } & \text { Selling Price } & \text { Replacement }\\&&&\text { per Unit } & \text { Cost per Unit } \\&&\$&\$&\$\\ \mathrm{A} & 10 & 40 & 60 & 50 \\ \mathrm{~B} & 8 & 70 & 60 & 65 \end{array}$ At what amount should Golen report ending inventory if the lower of cost or net realisable value rule is applied to individual items?

A) $960 B) $880 C) $1020 D) $1160 A) $960 B) $880 C) $1020 D) $1160

Kappa uses the FIFO assumption with the periodic inventory method. $\begin{array}{lccc}&\text { Units }&\text {Unit }&\text {Total }\\&&\text{Cost}&\text{Cost}\\ \text { Beginning Inventory } & 10 & \$ 10 & \$ 100 \\ \text { Purchase } & 10 & \$ 12 & \$ 120 \\ \text { Purchase } & 8 & \$ 9 & \$ 72 \end{array}$ Sales during year were 14 units.What was the value assigned to the closing stock of this item at the end of the period?

A) $84 B) $98 C) $108 D) $144 A) $84 B) $98 C) $108 D) $144

Riverbottom Liquidators was wiped out by a recent flood when all it's inventory was observed floating down the river.On the day after the flood,management filed an insurance claim on the inventory that was totally destroyed.From records maintained elsewhere it was established: \[\begin{array} { l c } \text { Sales revenue (to date this period) } & \$ 700000 \\ \text { Beginning inventory } & \$ 90000 \\ \text { Purchases (so far this period) } & \$ 600000 \\ \text { Historical gross profit percentage } & 60 \% \end{array}\] Assuming the historical gross profit was maintained during the current period what was the cost of inventory lost in the flood?

A) $690 000 B) $410 000 C) $280 000 D) $270 000 A) $690 000 B) $410 000 C) $280 000 D) $270 000

Exam 19: Inventories

Lisa Fashions has just completed its annual physical inventory count.The ending inventory was obtained by adding up all the retail price tags for the goods on hand.Determine ending inventory at cost. Cost Retail Beginning Inventory \ 9,000 \ 14,000 Purchases 135000 226,000 Goods Available for Sale \ 144,000 \ 240,000 Sales 210,000

Free

(Multiple Choice)

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Question 1

Correct Answer:

Verified

C

In performing a stocktake care must be taken with goods in transit.Which of these statements is true?

Free

(Multiple Choice)

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Question 2

Correct Answer:

Verified

B

Under IAS 2/AASB 102 the costing method that is not permitted is:

Free

(Multiple Choice)

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Question 3

Correct Answer:

Verified

D

A physical count of inventory on hand is known as:

(Multiple Choice)

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Question 4

Montreal Furniture uses a periodic inventory system.During an accounting year many purchases and sales of goods occur.For Montreal,the balance in the general ledger Inventory account:

(Multiple Choice)

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Question 5

Under the FIFO method sales returns are costed back into inventory at:

(Multiple Choice)

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Question 6

Identify the statement relating to the lower of cost and net realisable value rule that is untrue.

(Multiple Choice)

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Question 7

The statement that is not true concerning inventory is:

(Multiple Choice)

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Question 8

The inventory on hand at year-end for Golen Enterprises is: Inventory Number Original Current Net Current Item of Units Unit Cost Selling Price Replacement per Unit Cost per Unit \&\& \ 10 40 60 50 8 70 60 65 At what amount should Golen report ending inventory if the lower of cost or net realisable value rule is applied to individual items?

(Multiple Choice)

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Question 9

Avanti Co purchased inventory for $700.While on display the goods were damaged and made nearly worthless.It is determined that the goods can be sold at auction for $65 with the auctioneer taking $10 of that amount for his fee.The net realisable value of the goods is $_______.

(Short Answer)

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Question 10

The statement that is untrue is:

(Multiple Choice)

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Question 11

The qualitative characteristic of c________________ requires that a business should,in general,apply the same method of inventory valuation from one period to the next.

(Short Answer)

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Question 12

The essence of the perpetual method of accounting for inventory is:

(Multiple Choice)

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Question 13

The statement relating to the determination of the cost of inventory in a computerised system that is not true is:

(Multiple Choice)

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Question 14

The statement relating to the moving average method of costing inventories,used with the perpetual inventory system,that is true is:

(Multiple Choice)

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Question 15

Kappa uses the FIFO assumption with the periodic inventory method. Units Unit Total Cost Cost Beginning Inventory 10 \ 10 \ 100 Purchase 10 \ 12 \ 120 Purchase 8 \ 9 \ 72 Sales during year were 14 units.What was the value assigned to the closing stock of this item at the end of the period?

(Multiple Choice)

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Question 16

The statement that is correct is:

(Multiple Choice)

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Question 17

If inventory prices are rising the method of inventory valuation that gives the highest profit and the highest ending inventory is:

(Multiple Choice)

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Question 18

Riverbottom Liquidators was wiped out by a recent flood when all it's inventory was observed floating down the river.On the day after the flood,management filed an insurance claim on the inventory that was totally destroyed.From records maintained elsewhere it was established: Sales revenue (to date this period) \ 700000 Beginning inventory \ 90000 Purchases (so far this period) \ 600000 Historical gross profit percentage 60\% Assuming the historical gross profit was maintained during the current period what was the cost of inventory lost in the flood?

(Multiple Choice)

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Question 19

Which item should not be included in the income statement's cost of inventory?

(Multiple Choice)

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Question 20

Exam 19: Inventories

In performing a stocktake care must be taken with goods in transit.Which of these statements is true?

Under IAS 2/AASB 102 the costing method that is not permitted is:

A physical count of inventory on hand is known as:

Montreal Furniture uses a periodic inventory system.During an accounting year many purchases and sales of goods occur.For Montreal,the balance in the general ledger Inventory account:

Under the FIFO method sales returns are costed back into inventory at:

Identify the statement relating to the lower of cost and net realisable value rule that is untrue.

The statement that is not true concerning inventory is:

Avanti Co purchased inventory for $700.While on display the goods were damaged and made nearly worthless.It is determined that the goods can be sold at auction for $65 with the auctioneer taking $10 of that amount for his fee.The net realisable value of the goods is $_______.

The statement that is untrue is:

The qualitative characteristic of c________________ requires that a business should,in general,apply the same method of inventory valuation from one period to the next.

The essence of the perpetual method of accounting for inventory is:

The statement relating to the determination of the cost of inventory in a computerised system that is not true is:

The statement relating to the moving average method of costing inventories,used with the perpetual inventory system,that is true is:

Kappa uses the FIFO assumption with the periodic inventory method. Units Unit Total Cost Cost Beginning Inventory 10 \ 10 \ 100 Purchase 10 \ 12 \ 120 Purchase 8 \ 9 \ 72 Sales during year were 14 units.What was the value assigned to the closing stock of this item at the end of the period?

The statement that is correct is:

If inventory prices are rising the method of inventory valuation that gives the highest profit and the highest ending inventory is:

Which item should not be included in the income statement's cost of inventory?

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