Exam 8: Inventories and the Cost of Goods Sold

[The following information applies to the questions displayed below.] Midwest Office Products uses the retail method to estimate ending inventory in its monthly financial statements.The following information is available for the month ended May 31: -Refer to the information above.Estimate the cost of goods sold for May using the retail method.(Round your final answer to the nearest dollar value. )

In a perpetual inventory system,an inventory cost flow assumption is used primarily for determining which costs to use in:

Under the LIFO cost flow assumption,the cost of this item to be included as inventory in the company's year-end balance sheet is:

The principle of consistency prohibits a company from changing an inventory valuation method once one is selected.

[The following information applies to the questions displayed below.] Green Leaf Company had the following information available on December 31: -Management applies the LCM rule on the basis of inventory category and includes wheelbarrows and hoses in the large implement category and shovels and gloves in the small implement category.What is the write-down required?

The LIFO conformity requirement permits a company to use LIFO for tax purposes only if the company also uses LIFO for internal reporting purposes.

In a period of rising prices,a company is most likely to use the FIFO method of pricing inventory if:

For the purpose of delaying income taxes,during an inflationary period,which method would be best?

[The following information applies to the questions displayed below.] Venus Wholesale Co.started carrying a new product in December.Purchases and sales of this product during the month were: -Assuming the LIFO flow assumption is in use,the perpetual inventory records will indicate an ending inventory of this product of:

The "just-in-time" concept of inventory management is best illustrated by:

In a period of rising prices,a company is most likely to use the specific identification method of pricing inventory if:

[The following information applies to the questions displayed below.] Harding Systems,Inc.uses a periodic inventory system.The purchases of a particular product during the year are shown below: At December 31 the ending inventory consisted of 1,500 units. -Compute the cost of goods sold for the current year based on the FIFO method of inventory valuation.

If the beginning inventory of the current year and the ending inventory of the past year were overstated by the same amount:

The principle of consistency states that:

In which of these inventory approaches is it important to determine the actual cost of a particular inventory item being sold in order to determine cost of goods sold?

[The following information applies to the questions displayed below.] Beech Soda,Inc.uses a perpetual inventory system.The company's beginning inventory of a particular product and its purchases during the month of January were as follows: On January 14,Beech Soda,Inc.sold 25 units of this product.The other 28 units remained in inventory at January 31. -Assuming that Beech Soda uses the LIFO cost flow assumption,the cost of goods sold to be recorded at January 14 is:

[The following information applies to the questions displayed below.] Soriano Company had net sales of $300,000 for the month (after returns and allowances of $1,500 and sales discounts of $3,250).Beginning inventory for the month was $60,000;purchases for the month were $175,000;and gross profit was 43%. -Refer to the information above.What was the gross profit for the month?

[The following information applies to the questions displayed below.] Castle TV,Inc.purchased 1,000 monitors on January 5 at a per-unit cost of $185,and another 1,000 units on January 31 at a per-unit cost of $230.In the period from February 1 through year-end,the company sold 1,800 units of this product.At year-end,200 units remained in inventory. -Assume that Castle TV,Inc.uses the FIFO flow assumption.The cost of the 200 units in inventory at year-end is:

[The following information applies to the questions displayed below.] Green Leaf Company had the following information available on December 31: -Management applies the LCM rule on the basis of individual inventory items.What is the write-down required?

Harris Corporation's inventory of a particular product includes 200 units purchased at a per-unit cost of $50,and another 100 units purchased at a unit cost of $60.If Harris sells 10 units of this product,the cost of goods sold will be: