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Exam 6: Inventories

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Question 51

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The following lots of a particular commodity were available for sale during the year: The firm uses the periodic system and there are 25 units of the commodity on hand at the end of the year. What is the amount of the inventory at the end of the year using the average cost method?

A) $1,685
B) $1,575
C) $1,805
D) $3,705

E) None of the above
F) B) and C)

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Question 52

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Use the following information to answer the following questions. The Boxwood Company sells blankets for $60 each.The following was taken from the inventory records during May.The company had no beginning inventory on May 1. Assuming that the company uses the perpetual inventory system,determine the Gross Profit for the month of May using the LIFO cost method.

A) $348
B) $452
C) $444
D) $356

E) B) and D)
F) A) and D)

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Question 53

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Under the periodic inventory system,a physical inventory is taken to determine the cost of the inventory on hand and the cost of the merchandise sold.

Beginning inventory,purchases and sales data for T-shirts are as follows: Assuming the business maintains a periodic inventory system,calculate the cost of merchandise sold and ending inventory under the following assumptions: a.FIFO b.LIFO c.Average cost (round cost of merchandise sold and ending inventory to the nearest dollar)

All of the following are reasons to use an estimated method of costing inventory except:

Complete the chart using the LIFO and FIFO costing methods,assuming a period of increasing costs:

The average cost method will always yield results between FIFO and LIFO.

The following lots of a particular commodity were available for sale during the year: The firm uses the periodic system and there are 20 units of the commodity on hand at the end of the year.What is the amount of inventory at the end of the year according to the average cost method?

The units of Manganese Plus available for sale during the year were as follows: There are 15 units of the product in the physical inventory at November 30.The periodic inventory system is used.Determine the inventory cost by (a)FIFO, (b)LIFO,and (c)average cost methods.

Ending inventory is made up of the oldest purchases when a company uses

When merchandise inventory is shown on the balance sheet,both the method of determining the cost of the inventory and the method of valuing the inventory should be shown.

Under the LIFO inventory costing method,the most recent costs are assigned to ending inventory.

If the revenues are correctly reported and the Gross Profit of a company is understated,what is the effect on Owner's Equity?

Under a perpetual inventory system,the amount of each type of merchandise on hand is available in the

The inventory costing method that reports the earliest costs in ending inventory is

Based on the following information: compute (a) Inventory turnover; (b) Average daily cost of merchandise sold;and (c) Number of days' sales in inventory for 2011.Use a 365-day year.(d) If an inventory turnover of 12 is average for the industry,how is this company doing?

Inventory turnover measures the length of time is takes to acquire,sell and replace the inventory.

Addison,Inc.uses a perpetual inventory system.The following is information about one inventory item for the month of September: If Addison uses LIFO,the cost of the ending merchandise inventory on September 30 is

The following lots of a particular commodity were available for sale during the year: The firm uses the periodic system and there are 20 units of the commodity on hand at the end of the year. What is the amount of cost of goods sold for the year according to the FIFO method?

While taking a physical inventory,a company counts their inventory as less than the actual amount on hand.How will this error affect the income statement?