Question 1

The Foxworthy Corporation uses a periodic inventory system and the LIFO inventory cost method for its one product.Beginning inventory of 40,000 units consisted of the following,listed in chronological order of acquisition:  
During 2016,inventory quantity declined by 18,000 units.All units purchased during 2016 cost $8.00 per unit.
Required:
Calculate the before-tax LIFO liquidation profit or loss that the company would report in a disclosure note assuming the amount determined is material.

Accepted Answer

The answer of The Foxworthy Corporation uses a periodic inventory...

Question 2

It is the end of the accounting period,and your boss asks you to help determine the inventory balance to place in the company's balance sheet.Explain which physical quantities of inventory that you will include and which you will exclude.

Accepted Answer

The answer of It is the end of the accounting...

Question 3

Linguini Inc.adopted dollar-value LIFO (DVL)as of January 1,2016,when it had an inventory of $800,000.Its inventory as of December 31,2016,was $811,200 at year-end costs and the cost index was 1.04.What was DVL inventory on December 31,2016?

Accepted Answer

A) $780,000. 
B) $800,000. 
C) $811,200. 
D) $832,000.

Question 4

The choice of cost flow assumption (FIFO,LIFO,or average)does not depend on the actual physical flow of the product.

Accepted Answer

A) True 
 B)False

Question 5

FIFO periodic and FIFO perpetual always produce the same dollar amounts for cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 6

Ending inventory assuming LIFO in a periodic inventory system would be:

Accepted Answer

A) $5,040. 
B) $5,055. 
C) $5,075. 
D) $5,135.

Question 7

The following information is taken from the accounting records of Rapid Runner Inc. for the year 2016.  Missing information has been left blank.
-Required:  Compute the missing amounts.

Accepted Answer

The answer of The following information is taken from the...

Question 8

Cost of goods sold is given by:

Accepted Answer

A) Beginning inventory - net purchases + ending inventory. 
B) Beginning inventory + accounts payable - net purchases. 
C) Net purchases + ending inventory - beginning inventory. 
D) Net Purchases + beginning inventory - ending inventory.

Question 9

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

Accepted Answer

The answer of Required: Compute the January 31 ending inventory...

Question 10

The average days inventory for ATC (rounded)for 2016 is:

Accepted Answer

A) Less than 100 days. 
B) 114 days 
C) 132 days. 
D) 151 days.

Question 11

Buckeye Corporation adopted dollar-value LIFO on January 1,2016,when the inventory value was $500,000 and the cost index was 1.0.On December 31,2016,the inventory value at year-end costs was $535,000 and the cost index was 1.06.Buckeye would report a LIFO inventory of:

Accepted Answer

A) $504,717. 
B) $530,000. 
C) $505,000. 
D) $533,019.

Question 12

The following information is taken from the accounting records of Rapid Runner Inc. for the year 2016.  Missing information has been left blank.

-Required:  Compute the missing amounts.

Accepted Answer

The answer of The following information is taken from the...

Question 13

Required: Compute the January 31 ending inventory and cost of goods sold for January,assuming Random Creations uses FIFO.

Accepted Answer

The answer of Required: Compute the January 31 ending inventory...

Question 14

Briefly describe why companies that use perpetual inventory systems must still perform physical inventories.

Accepted Answer

The answer of Briefly describe why companies that use perpetual...

Question 15

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

Accepted Answer

A) $312,480. 
B) $326,000. 
C) $331,480. 
D) $337,000.

Question 16

Inventory does not include:

Accepted Answer

A) Materials used in the production of goods to be sold. 
B) Assets intended to be sold in the normal course of business. 
C) The cost of office equipment. 
D) Assets currently in production for normal sales.

Question 17

Suppose that Badger's 2017 ending inventory,valued at year-end costs,was $143,000 and that the relative cost index for this inventory in 2017 was 1.10.In determining the inventory balance should Badger report in its 12/31/17 balance sheet:

Accepted Answer

A) An additional layer of $23,000 is added to the 1/1/17 balance. 
B) An additional layer of $22,000 is added to the 1/1/17 balance. 
C) An additional layer of $11,000 is added to the 1/1/17 balance. 
D) None of the above is correct.

Question 18

The primary reason for the popularity of LIFO is that it:

Accepted Answer

A) Provides better matching of physical flow and cost flow. 
B) Saves income taxes currently. 
C) Simplifies recordkeeping. 
D) Provides a permanent reduction of income taxes.

Question 19

Unit LIFO is more costly to implement than dollar-value LIFO.

Accepted Answer

A) True 
 B)False

Question 20

Required: Compute the January 31 ending inventory and cost of goods sold for January,assuming Denver uses FIFO.

Accepted Answer

The answer of Required: Compute the January 31 ending inventory...

Exam 8: Inventories: Measurement

It is the end of the accounting period,and your boss asks you to help determine the inventory balance to place in the company's balance sheet.Explain which physical quantities of inventory that you will include and which you will exclude.

Linguini Inc.adopted dollar-value LIFO (DVL) as of January 1,2016,when it had an inventory of $800,000.Its inventory as of December 31,2016,was $811,200 at year-end costs and the cost index was 1.04.What was DVL inventory on December 31,2016?

The choice of cost flow assumption (FIFO,LIFO,or average)does not depend on the actual physical flow of the product.

FIFO periodic and FIFO perpetual always produce the same dollar amounts for cost of goods sold.

Ending inventory assuming LIFO in a periodic inventory system would be:

The following information is taken from the accounting records of Rapid Runner Inc. for the year 2016. Missing information has been left blank. -Required: Compute the missing amounts.

Cost of goods sold is given by:

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

The average days inventory for ATC (rounded) for 2016 is:

Buckeye Corporation adopted dollar-value LIFO on January 1,2016,when the inventory value was $500,000 and the cost index was 1.0.On December 31,2016,the inventory value at year-end costs was $535,000 and the cost index was 1.06.Buckeye would report a LIFO inventory of:

The following information is taken from the accounting records of Rapid Runner Inc. for the year 2016. Missing information has been left blank. -Required: Compute the missing amounts.

Required: Compute the January 31 ending inventory and cost of goods sold for January,assuming Random Creations uses FIFO.

Briefly describe why companies that use perpetual inventory systems must still perform physical inventories.

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

Inventory does not include:

Suppose that Badger's 2017 ending inventory,valued at year-end costs,was $143,000 and that the relative cost index for this inventory in 2017 was 1.10.In determining the inventory balance should Badger report in its 12/31/17 balance sheet:

The primary reason for the popularity of LIFO is that it:

Unit LIFO is more costly to implement than dollar-value LIFO.

Required: Compute the January 31 ending inventory and cost of goods sold for January,assuming Denver uses FIFO.