Exam 7: Reporting and Interpreting Cost of Goods Sold and Inventory

William Company uses the periodic inventory system and has provided the following data: Required: A.Calculate the following using both: FIFO and LIFO inventory methods. B.In times of rising unit costs, how does pretax income using FIFO compare to pretax income using LIFO? Explain your answer.

Which of the following costs will not affect cost of goods sold?

Inventory turnover under LIFO is greater than inventory turnover under FIFO when unit costs are increasing.

RJ Corporation has provided the following information about one of its inventory items: During the year, RJ sold 3,000 units. What was ending inventory using the FIFO cost flow assumption under a periodic inventory system?

Freeman Company uses the periodic inventory system and applied LIFO inventory costing. At the end of the annual accounting period, December 31, 2016, the accounting records in inventory showed: Required: Calculate the following: 1. Cost of goods available for sale 2. Ending inventory 3. Cost of goods sold

Lauer Corporation uses the periodic inventory system and has provided the following information about one of its laptop computers: During the year, Lauer sold 750 laptop computers. What was cost of goods sold using the LIFO cost flow assumption?

Which of the following statements is correct when inventory unit costs are increasing?

On December 31, 2016, Cruise Company has 10,000 units of an inventory item, which cost $40 per unit when purchased on June 15, 2016. The selling price was $60 per unit. On December 30, 2016 it was determined that disposal cost was $24 per unit. At what amount should the 10,000 units of inventory be reported at on the December 31, 2016 balance sheet?

Which of the following statements is false?

Maxim Corp. has provided the following information about one of its products: During the year, Maxim sold 400 units. What is ending inventory using the average cost method?

RJ Corporation has provided the following information about one of its inventory items: During the year, RJ sold 3,000 units. What was cost of goods sold using the average cost flow assumption under a periodic inventory system?

Cutting Edge Technologies reported the following information in its 2016 annual report: Required: 1. Determine the inventory turnover ratio. (Round your answer to two decimal places.) 2. Determine the average days to sell inventory. (Round your answer to a whole number.) 3. Explain the meaning of each ratio.

An overstatement of the 2015 ending inventory results in an understatement of net income during 2016.

During periods of increasing unit costs, the LIFO inventory method results in lower income taxes.

Which of the following costs is not included as inventory on the balance sheet?

When a company uses the periodic inventory system, which of the following is true?

Which of the following statements is correct?

Compute the missing amounts that are numbered in parentheses for the income statement of each independent case. (Hint: Each case need not be calculated in the numerical order of the missing numbers.)

How much was ending inventory when sales revenue was $500,000, purchases were $310,000, beginning inventory was $22,000, and gross profit was $200,000.

Assume Webster Company buys bicycle helmets at a unit cost of $30 and sells them at a unit price of $52. There was no inventory at the beginning of the period. Required: Provide the journal entries required below by entering the account code of the appropriate account and the amount for each debit and credit: