Deck 16: Inventory

Question 1

The inventory valuation method which assumes that the items purchased last are the first items to be sold is called the ____________________ method.

Answer 1

LIFO

Question 2

During the past year, Kool Kats Inc. sold 829 pet bandanas. Inventory records for the year are as follows: Using the LIFO method of inventory pricing, calculate the dollar value of the ending inventory.

A) $13,944.00
B) $10,831.00
C) $15,294.00
D) $19,356.00

Answer 2

$10,831.00

Question 3

Rosen's Department Store had 430 big-screen TVs in stock at the end of the year. Inventory records show the following information: Using the FIFO method of inventory pricing, calculate the dollar value of the ending inventory.

A) $1,119,900
B) $1,419,000
C) $1,384,800
D) $1,122,300

Answer 3

$1,384,800

Question 4

The annual inventory of Big Wheels Inc. shows the following information for 20-inch tires: If 36 tires were on hand on December 31, what is the value of the ending inventory using the LIFO method of inventory pricing?

A) $234
B) $133
C) $165
D) $125

Question 5

The inventory valuation method which assumes that the items purchased first are the first items to be sold is called the ____________________ method.

Question 6

The balance of a perpetual inventory system at any given time is the ____________________ inventory. It must be confirmed with an actual physical count at least once a year.

Question 7

The inventory valuation method which assumes that the cost of each unit of inventory is the average cost of all goods available for sale during the accounting period is called the ____________________ method.

Question 8

Target average inventory are industry ____________________ published by trade associations and the federal government for companies of all sizes and in all industries.

Question 9

The annual inventory of The Bike Shop Inc. shows the following information for mountain bikes: If 36 mountain bikes were on hand on December 31, what is the value of the ending inventory using the LIFO method of inventory pricing?

A) $4,536
B) $3,992
C) $6,536
D) $2,720

Question 10

The inventory valuation method in which each item in inventory is matched or coded with its actual cost is the ____________________ method.

Question 11

During the past year, Velcon National sold 418 jackets. Inventory records for the year are as follows: Using the LIFO method of inventory pricing, calculate the dollar value of the ending inventory.

A) $31,270.00
B) $18,772.00
C) $19,999.64
D) $17,800.36

Question 12

Goods purchased and held for resale are commonly known as ____________________.

Question 13

The number of times during an operating period that the average dollars invested in merchandise inventory were theoretically sold out is called inventory ____________________.

Question 14

The inventory system in which merchandise is physically counted at least once a year to determine the value of the goods available for sale is called a(n) ____________________ inventory system.

Question 15

The annual inventory of Lowest Price Retailers shows the following information for handheld computers: If 839 handheld computers were in stock on December 31, find the value of the ending inventory using the FIFO method of inventory pricing.

A) $113,209
B) $170,141
C) $202,241
D) $228,341

Question 16

During the past year, Franklin Industries sold 562 calculators. Inventory records for the year are as follows: Using the FIFO method of inventory pricing, calculate the dollar value of the ending inventory.

A) $7,324.00
B) $9,874.00
C) $10,815.50
D) $14,834.50

Question 17

During the past year, a plumbing supply house sold 503 faucets. Inventory records for the year are as follows: Using the FIFO method of inventory pricing, calculate the dollar value of the ending inventory.

A) $3,324.00
B) $4,116.75
C) $3,815.50
D) $3,834.50

Question 18

The inventory system in which goods available for sale is updated on a continuous basis by computer is called a(n) ____________________ inventory system.

Question 19

During the past year, Franklin Foundries sold 550 wheels. Inventory records for the year are as follows: Using the FIFO method of inventory pricing, calculate the dollar value of the ending inventory.

A) $15,324.00
B) $12,300.00
C) $19,815.50
D) $14,834.50

Question 20

When inventory turnover is below average for a firm its size, it may be a signal that the company is carrying too ____________________ inventory.

Question 21

Use the lower-of-cost-or-market rule to determine the value of the following inventory for Bargain Bonanza, Inc. $$\begin{array} { l l l l l l } \text { ITEM } & \text { QTY } & \text { COST } & \text { MKT } & \text { BASIS } & \text { AMOUNT } \\\hline \text { Mountain bikes } & 154 & \$ 598 & \$ 554 & & \\\text { Fax machines } & 133 & 163 & 212 & & \\\text { Dishwashers } & 457 & 508 & 772 & \\\text { TVs } & 491 & 196 & 252 & \\\text { VCRs } & 123 & 259 & 235 &\end{array}$$ Total value in Inventory is:

A) $85,316
B) $232,156
C) $464,292
D) $92,092

Question 22

The After Five Boutique took in $825,200 in sales during May. They started the month with inventory worth $524,000 and spent $225,500 on new purchases during the month. Gross margin on sales was 30%. Using the gross profit method, estimate the cost value of the inventory at the end of June.

A) $295,100
B) $345,625
C) $171,860
D) $454,250

Question 23

The After Five Boutique took in $748,200 in sales during May. They started the month with inventory worth $419,000 and spent $154,800 on new purchases during the month. Gross margin on sales was 40%. Using the gross profit method, estimate the cost value of the inventory at the end of June.

A) $385,100
B) $124,880
C) $134,880
D) $724,250

Question 24

Quality-Value, Inc. maintains a gross margin of 75% on all of its merchandise. In September the company had a beginning inventory of $604,900, net purchases of $186,900, and net sales of $487,600. Use the gross profit method to estimate the cost of ending inventory as of September 30.

A) $200,561
B) $418,300
C) $691,800
D) $669,900

Question 25

Walker Manufacturing took in $206,500 in sales during October. They started the month with inventory worth $642,500 and spent $368,600 on new purchases during the month. Gross margin on sales was 66%. Using the gross profit method, estimate the cost value of the inventory at the end of October.

A) $70,210
B) $436,000
C) $940,890
D) $1,011,100

Question 26

During the past year, Golden Zippers sold 631 bronze zippers. Inventory records for the year are as follows: Using the FIFO method of inventory pricing, calculate the dollar value of the ending inventory.

A) $19,028.00
B) $18,772.00
C) $17,172.00
D) $17,760.00

Question 27

Like New Express had 400 multi-function centers machines in stock at the end of the year. Inventory records for the year are as follows: Using the average cost method of inventory pricing calculate the dollar value of the ending inventory.

A) $69,200.00
B) $79,200.00
C) $77,547.00
D) $85,650.00

Question 28

Tim's Sporting Goods had net sales of $1,210,540 for the year. If the beginning inventory at retail was $322,800 and the ending inventory at retail was $412,600, find the inventory turnover at retail. (Round your answer to the nearest tenth)

A) 3.3 Times
B) 4.1 Times
C) 7.2 Times
D) 10.4 Times

Question 29

During the past year, Future Diner's sold 696 dining sets. Inventory records for the year are as follows: Using the average cost method of inventory pricing calculate the dollar value of the ending inventory.

A) $2,492,556.21
B) $1,925,317.76
C) $1,810,540.45
D) $1,726,441.08

Question 30

A partial inventory of Furniture Mart is shown in the table below. Use the lower-of-cost-or-market rule to calculate the value of the inventory $$\begin{array} { l l l l l l } \text { Item } & \text { Quantity } & \text { Cost } & \text { Market } & \text { Basis } & \text { Amount } \\\text { Sofas } & 396 & \$ 1,150 & \$ 1,092 & & \\\text { Beds } & 173 & 7,140 & 5,712 & & \\\text { End tables } & 441 & 5,264 & 6,496 & \\\text { China cabinets } & 497 & 4,797 & 4,290 & & \\\text { Dining sets } & 315 & 2,604 & 2,520 & \\\hline\end{array}$$

A) $7,512,681
B) $6,667,962
C) $5,387,897
D) $5,999,332

Question 31

Best Price Retailers had sales of $497,100 in the month of January. Use the retail method to estimate the value of the inventory as of January 31 given the following financial information: (Round cost ratio to four decimal places) $\begin{array}{llcc} \text { Sticker Price Retailer's } & \\ \text {Financial Highlights } &\\ \text {Januare 1 - January 31 } &\\\end{array}$
$\begin{array}{|lll|} \hline & \text { Cost } & \text { Retail } \\\hline \text { Beginning Inventory } & \$ 229,276 & \$ 315,500 \\\text { Net Purchases (January) } & 362,161 & 451,800 \\\text { Total avalable for sale } & & \\\hline\end{array}$

A) $146,790.22
B) $208,270.16
C) $259,382.69
D) $307,510.33

Question 32

Northern Industries had sales of $428,000 in the month of May. Use the retail method to estimate the value of the inventory as of May 31 given the following financial information: (Round cost ratio to four decimal places) $\begin{array}{llcc} \text { Northern Industries } & \\ \text {Financial Highlights } &\\ \text {May 1-May 31 } &\\ \end{array}$
$\begin{array}{|lll|} \hline & \text { Cost } & \text { Retail } \\\hline \text { Beginning Inventory } & \$ 434,719& \$585,100\\\text { Net Purchases (January) } & 148,9211 & 170,900 \\\text { Total avalable for sale } & & \\\hline\end{array}$

A) $328,199
B) $230,435
C) $253,216
D) $456,812

Question 33

Don's Dairy had sales of $275,000 in the month of March. Use the retail method to estimate the value of the inventory as of March 31 given the following financial information: (Round cost ratio to four decimal places) $\begin{array}{c}\begin{array}{lll}\text { { March } 1 \text { to March } 31 }\\\text { Beginning Inventory}\\\text { Net Purchases (March )}\\\text { Goods Available for Sale}\\\end{array}\begin{array}{lll}\text { COST } & \text { RETAIL } \\\hline \$ 220,380 & \$ 291,800 \\183,771 & 272,200 \\\hline \$ 462,080 &\end{array}\end{array}$

A) $226,000.00
B) $236,777.70
C) $302,900.00
D) $239,631.00

Question 34

During the past year, Sweeter than Honey Inc. sold 920 beehives. Inventory records for the year are as follows: Using the average cost method of inventory pricing, calculate the dollar value of the ending inventory. (Round your answer to 2 decimal places)

A) $19,128.00
B) $28,772.00
C) $15,258.70
D) $22,541.80

Question 35

Bulk Wholesalers took in $377,800 in sales during July. They started the month with inventory worth $173,800 and spent $299,900 on new purchases during the month. Gross margin on sales was 76%. Using the gross profit method, estimate the cost value of the inventory at the end of July.

A) $90,672
B) $383,028
C) $473,700
D) $299,900

Question 36

Use the lower-of-cost-or-market rule to determine the value of the following inventory for Instant Key's. $$\begin{array} { l l l l l l } \text { ITEM } & \text { QTY } & \text { COST } & \text { MKT } & \text { BASIS } & \text { AMOUNT } \\\hline \text { Door Keys } & 154 & \$ 554 & \$ 598 & & \\\text { Car Keys } & 133 & 164 & 210 & \\\text { Bike Keys } & 257 & 510 & 620 & \\\text { Safe Keys } & 491 & 279 & 240 &\end{array}$$ Total value in Inventory is:

A) $85,316
B) $232,156
C) $431,595
D) $356,038

Question 37

Extra Manufacturing maintains a gross margin of 30% on all of its merchandise. In March the company had a beginning inventory of $416,800, net purchases of $201,500, and net sales of $660,200. Use the gross profit method to estimate the cost of ending inventory as of March 31.

A) $420,240
B) $569,940
C) $264,080
D) $156,160

Question 38

The College Book Store had sales of $285,300 in the month of October. Use the retail method to estimate the value of the inventory as of October 31 given the following financial information: (Round cost ratio to four decimal places) $\begin{array}{c}\begin{array}{lll}\text { October 1 to October 31}\\\text { Beginning Inventory}\\\text { Net Purchases (October)}\\\text { Goods Available for Sale}\\\end{array}\begin{array}{lll}\text { COST } & \text { RETAIL } \\\hline \$ 221,708 & \$ 331,800 \\183,771 & 271,100 \\\hline \$ 405,479 &\end{array}\end{array}$

A) $305,479.11
B) $217,600.31
C) $302,900.25
D) $213,586.00

Question 39

Save-Mor Merchandisers had net sales of $422,300 for the year. If the beginning inventory at retail was $250,900 and the ending inventory at retail was $171,400, find the inventory turnover at retail. (Round your answer to the nearest tenth)

A) 2.0 Times
B) 1.7 Times
C) 2.5 Times
D) 1.5 Times

Question 40

Find the value of the following inventory for TV City Inc. using the lower-of-cost-or-market rule. $$\begin{array} { l l l l l l } \text { Item } & \text { Quantity } & \text { Cost } & \text { Market } & \text { Basis } & \text { Amount } \\\text { Portables } & 202 & \$ 2,611 & \$ 2,684 & & \\\text { Combo HD Players } & 203 & 1,784 & 1,682 & \\\text { Projection } & 318 & 1,356 & 1,212 & \\\text { High-definition } & 216 & 1,339 & 1,157 & \\\text { Plasma } & 360 & 1,416 & 936 & \\\hline\end{array}$$

A) $1,841,156
B) $2,224,339
C) $3,563,997
D) $1,212,367

Question 41

The average inventory at retail for The New Age Furniture Store was $2,575,350. The turnover rate at retail was 3.0, based on net sales of $7,726,050. The published inventory turnover at retail is 4.9. Since the actual turnover rate is less than the published rate, calculate the target average inventory at retail.(Round your answer to the nearest dollar)

A) $1,570,200
B) $207,400
C) $888,800
D) $1,576,745

Question 42

Kidz Korner had net sales of $3,001,680 for the year. If the beginning inventory at retail was $241,700 and the ending inventory at retail was $592,100, find the inventory turnover at retail. (Round your answer to the nearest tenth)

A) 2.5 Times
B) 5.1 Times
C) 7.2 Times
D) 12.4 Times

Question 43

Cost of goods sold for Eastern Distributors was $2,225,000 for the year. If the beginning inventory at cost was $750,225 and the ending inventory at cost was $625,995, find the inventory turnover at cost. (Round your answer to the nearest tenth)

A) 2.2 Times
B) 2.9 Times
C) 3.2 Times
D) 2.3 Times

Question 44

Calculate the total number of units available for sale and the cost of goods available for sale from the inventory of peat moss for D.J.'s Nurseries:

A)Total units available: _______
B)Cost of goods available for sale: _______

Question 45

At the start of the year, Sandy's Flowers had inventory worth $587,200 at retail. On December 31, the retail value of the inventory was $137,700. If annual sales amounted to $2,899,600 find the inventory turnover at retail for the year. (Round your answer to the nearest tenth)

A) 8.0
B) 12.5
C) 4.9
D) 4.3

Question 46

The net sales for Casual Fashions, Inc. last year amounted to $1,126,800 and the average inventory at retail was $212,604. The published inventory turnover at retail is 6. Calculate the inventory turnover at retail, and if it is less than the published rate, calculate the target average inventory at retail. (Round your answer to the nearest dollar)

A) Turnover is greater
B) $178,800
C) $187,800
D) $212,500

Question 47

Cost of goods sold for Abe Distributors was $538,330 for the year. If the beginning inventory at cost was $112,700 and the ending inventory at cost was $301,400, find the inventory turnover at cost. (Round your answer to the nearest tenth)

A) 1.8 Times
B) 2.6 Times
C) 2.7 Times
D) 4.8 Times

Question 48

The average inventory at retail for Modern Age Furniture was $1,389,008. The turnover rate at retail was 2.6, based on net sales of $3,611,420. The published inventory turnover at retail is 5.3. Since the actual turnover rate is less than the published rate, calculate the target average inventory at retail. (Round your answer to the nearest dollar)

A) $1,570,200
B) $207,400
C) $888,800
D) $681,400

Question 49

The cost of goods sold for Home Depot last year amounted to $3,530,800 and the average inventory at cost was $1,574,182. The published inventory turnover at cost is 5.2. Calculate the inventory turnover at cost, and if it is less than the published rate, calculate the target average inventory at cost. (Round your answer to the nearest dollar)

A) $302,727
B) $679,000
C) $490,864
D) $981,727

Question 50

Lucent Technology maintains a gross margin of 40% on all of its merchandise. In April the company had a beginning inventory of $518,700, net purchases of $312,400, and net sales of $750,400. Use the gross profit method to estimate the cost of ending inventory as of March 31.

A) $380,860
B) $329,940
C) $120,000
D) $156,160

Question 51

Winston, Inc. had net sales of $754,800 for the year. If the beginning inventory at retail was $171,400 and the ending inventory at retail was $331,800, find the inventory turnover at retail. (Round your answer to the nearest tenth)

A) 1.5 Times
B) .8 Times
C) 3.0 Times
D) 1.9 Times

Question 52

The average inventory at retail for Flying Fishes Inc. was $260,510. The turnover rate at retail was 5.1, based on net sales of $1,328,600. The published inventory turnover at retail is 7. Since the actual turnover rate is less than the published rate, find the target average inventory at retail.(Round your answer to the nearest dollar)

A) $357,563
B) $260,510
C) $189,800
D) $450,310

Question 53

Calculate the inventory turnover at cost for Ricky's Department Store. The starting inventory at cost was $485,800 and the ending inventory at cost was $236,000. Cost of goods sold for the year totaled $2,670,660. (Round your answer to the nearest tenth)

A) 7.4
B) 5.5
C) 3.7
D) 11.3

Question 54

At the beginning of the year, American International had inventory worth $325,500 at cost. At the end of the year, the cost value of the inventory was $540,250. If annual cost of goods sold was $1,978,250 find the inventory turnover at cost for the year. (Round your answer to the nearest tenth)

A) 3.7
B) 4.6
C) 5.2
D) 1.9

Question 55

The average inventory at cost for Western Gear, Inc. was $367,985. The turnover rate at cost was 3.4, based on cost of goods sold of $1,251,150. The published inventory turnover at cost is 5.7. Since the actual turnover rate is less than the published rate, calculate the target average inventory at cost. (Round your answer to the nearest dollar)

A) $148,500
B) $219,500
C) $367,900
D) $368,000

Question 56

At the start of the year, Bottom Dollar Discounters had inventory worth $197,400 at retail. On December 31, the retail value of the inventory was $318,100. If annual sales amounted to $1,907,350 find the inventory turnover at retail for the year. (Round your answer to the nearest tenth)

A) 9.7
B) 7.4
C) 6.0
D) 3.7

Question 57

Cost of goods sold for Century Merchandise Mart was $874,510 for the year. If the beginning inventory at cost was $561,900 and the ending inventory at cost was $302,300, find the inventory turnover at cost. (Round your answer to the nearest tenth)

A) 1.9 Times
B) 2.3 Times
C) 2.0 Times
D) 3.3 Times

Question 58

The current inventory turnover at retail for The Sports Authority is 4.7, based on net sales of $3,551,130. The published inventory turnover at retail is 5.1. Since the actual turnover rate is less than the published rate, find the target average inventory at retail. (Round your answer to the nearest dollar)

A) $362,360
B) $696,300
C) $755,560
D) $59,260

Question 59

Cost of goods sold for Califant Industries was $989,420 for the year. If the beginning inventory at cost was $603,700 and the ending inventory at cost was $414,200, find the inventory turnover at cost. (Round your answer to the nearest tenth)

A) 1.9 Times
B) 2.4 Times
C) 2.0 Times
D) 3.2 Times

Question 60

Cost of goods sold for Galaxy Manufacturers was $3,545,000 for the year. If the beginning inventory at cost was $950,250 and the ending inventory at cost was $735,875, find the inventory turnover at cost. (Round your answer to the nearest tenth)

A) 3.5 Times
B) 1.9 Times
C) 5.4 Times
D) 4.2 Times

Question 61

Narrative 16-1
Use the information below for the following problems:
The following is the inventory for the year for Better Products, Inc.:

Refer to Narrative in your text 16-1 . When the manager of Better Products took physical inventory of his merchandise on December 31, it was found that 95 units were on hand. What is the dollar value of the ending inventory using FIFO?

Question 62

Susan's Salon maintains a gross margin of 58% on all of its merchandise. In April the company had a beginning inventory of $622,500, net purchases of $92,400, and net sales of $127,700. Use the gross profit method to estimate the cost of ending inventory as of April 30.

Question 63

Determine the amount of the inventory for Fred's Appliances Co. using the lower-of-cost-or-market rule: Total value of inventory: ________

Question 64

Calculate the total number of units available for sale and the cost of goods available for sale from the following inventory:

A)How many total units are available for sale?
B)What is the cost of goods available for sale?

Question 65

The following is the inventory for the year for Cyber Energy: Calculate the ending inventory of 1,500 units using both FIFO and LIFO methods.

A)Which method values the ending inventory higher, and
B)How much higher?

Question 66

The information below is given for the Brunswick Corp. for the month of June: Using this information, calculate the following:

A)Goods available for sale: _________
B)Estimated cost of goods sold: _________
C)Estimated ending inventory: _________

Question 67

The Regal Plumbing Shop had 18 bathroom sinks in their ending inventory. The cost of each sink was $182.55. They valued this ending inventory at $3,238.56. If the lower-of-cost-or-market rule was used, what was the market price per unit of this inventory?

Question 68

The information below is given for the Providence Book Company: Using this information, calculate the following:

A)Goods available for sale at cost: _________
B)Goods available for sale at retail: _________
C)Cost ratio: (round to nearest tenth of a percent) _________
D)Ending inventory at retail: _________
E)Ending inventory at cost: _________

Question 69

During the last year Leathers Unlimited sold 702 jackets. Inventory records for the year are as follows: Using the average cost method of inventory pricing calculate the dollar value of the ending inventory.(Round the average cost per unit to the nearest cent)

Question 70

The annual inventory of Great Stuff Emporium shows the following information for refrigerators: If 586 refrigerators were on hand on December 31, what is the value of the ending inventory using the LIFO method of inventory pricing?

Question 71

The following is the inventory for the year for Brown Lumber: Using the average cost pricing method, Brown Lumber determined that the dollar value of the ending inventory was $7,316. How many actual units of plywood are included in this ending inventory? (Round the average cost per unit to the nearest cent)

Question 72

The following is the inventory for the year of Intrepid Enterprises: The ending inventory for Intrepid Enterprises consisted of 12 units valued at $1,216. Which of the three value methods was used to value this ending inventory, LIFO, FIFO, or average cost?

Question 73

Use the lower-of-cost-or-market rule to determine the value of the following inventory for Bargains Galore, Inc.:

Question 74

On June 13, Hagen Products sustained a warehouse fire in which all of the merchandise was destroyed. Company records indicate that at the time of the fire the net sales to date were $2,438,500. Hagen had a beginning inventory of $658,300 and net purchases were $1,562,850. They have maintained a gross margin of 35% on sales over the past three years. Use the gross margin method to estimate the inventory loss for the insurance claim.

Question 75

Calculate the average inventory and inventory turnover. If the actual turnover is below the published rate, calculate the target average inventory necessary to come up to industry standards, rounding to the nearest tenth:

Question 76

Using the figures below from Draco Company, what is the average cost per unit? (Round the average cost per unit to nearest cent)

Question 77

Walker Manufacturing had 517 hot tubs in stock at the end of the year. Inventory records show the following information: Using the FIFO method of inventory pricing, calculate the dollar value of the ending inventory.

Question 78

Narrative 16-1
Use the information below for the following problems:
The following is the inventory for the year for Better Products, Inc.:

Refer to Narrative in your text 16-1. Using the Better Products inventory chart, what is the dollar value of the ending inventory on December 31, if Better Products used the LIFO method of valuing their ending inventory of 105 units?

Question 79

Narrative 16-1
Use the information below for the following problems:
The following is the inventory for the year for Better Products, Inc.:

Refer to Narrative in your text 16-1. Using the Better Products inventory chart, what is the dollar value of the ending inventory on December 31 if Better Products used the average cost method of valuing their ending inventory of 85 units? (Round the average cost per unit to the nearest cent)

Question 80

Jones Sports Shop has the following inventory on hand. Determine the total value of this ending inventory using the lower-of-cost-or-market rule: