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Exam 6: Inventories

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Question 81

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Beginning inventory,purchases and sales data for widgets are as follows: Complete the inventory cost card assuming the business maintains a perpetual inventory system and calculates the cost of merchandise sold and ending inventory using LIFO.

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Question 82

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Cost flow is in the order in which costs were incurred when using

A) average cost
B) last-in,first-out
C) first-in,first-out
D) weighted average

E) All of the above
F) C) and D)

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Question 83

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Based on the following data,calculate the estimated cost of the merchandise inventory on March 31 using the retail method.

Merchandise inventory at the end of the year was understated.Which of the following statements correctly states the effect of the error?

The inventory data for an item for November are: Using a perpetual system,what is the cost of the merchandise sold for November if the company uses LIFO?

"Market," as used in the phrase "lower of cost or market" for valuing inventory,refers to the price at which the inventory is being offered for sale by its owner.

Under the periodic inventory system,the merchandise inventory account continuously discloses the amount of inventory on hand.

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 FIFO method?

The units of an item available for sale during the year were as follows: There are 30 units of the item in the physical inventory at December 31.The periodic inventory system is used.Determine the ending inventory cost using FIFO.

A perpetual inventory system is an effective means of control over inventory.

The following information was extracted from the Stone Company's records. Complete the following:

If ending inventory for the year is overstated,owner's equity reported on the balance sheet at the end of the year is understated.

On the basis of the following data,determine the value of the inventory at the lower of cost or market.Apply lower of cost or market to each inventory item.Show your work.

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 ending inventory for the month of May using the LIFO inventory cost method.

Basic inventory data for April 30 are presented below for a business that employs the lower of cost or market basis of inventory valuation.

During August,the first month of the fiscal year,sales totaled $875,000 and the cost of merchandise available for sale totaled $700,000.Estimate the cost of the merchandise inventory as of August 31,based on an estimated gross profit rate of 45%.

List the internal control objectives illustrated by the following:

Use of the retail inventory method requires taking a physical count of inventory.

The average cost inventory method is the rarely used with a perpetual inventory system.

Cost flow is in the reverse order in which costs were incurred when using