FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 5: Reporting and Analyzing Inventories

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 31

Multiple Choice

Review LaterAdd Note

Review Later

McCarthy Company has inventory of 8 units at a cost of $200 each on October 1.On October 2,it purchased 20 units at $205 each.11 units are sold on October 4.Using the perpetual FIFO inventory method,what is the value of inventory after the October 4 sale?

A) $3,485.
B) $3,445.
C) $3,500.
D) $3,472.
E) $3,461.

Correct Answer

verified

Show Answer

Question 32

Multiple Choice

Review LaterAdd Note

Review Later

Strods Company reported the following purchases and sales of its only product.Strods uses a perpetual inventory system.Determine the cost assigned to the ending inventory using FIFO.

A) $2,980
B) $2,460
C) $2,850
D) $2,590
E) $2,860

Correct Answer

verified

Show Answer

Question 33

Multiple Choice

Review LaterAdd Note

A company's warehouse contents were destroyed by a flood on September 12.The following information was the only information that was salvaged: 1.Inventory,beginning: $28,000 2.Purchases for the period: $17,000 3.Sales for the period: $55,000 4.Sales returns for the period: $700 The company's average gross profit ratio is 35%.What is the estimated cost of the lost inventory?

The full disclosure principle requires that the notes to the financial statements report any change in the method of accounting for inventory.

A company's cost of inventory was $219,500.Due to phenomenal demand the market value of its inventory increased to $221,700.This company should record the inventory at its market value.

Grays Company has inventory of 10 units at a cost of $10 each on August 1.On August 3,it purchased 20 units at $12 each.12 units are sold on August 6.Using the perpetual FIFO inventory method,what amount will be reported as cost of goods sold for the 12 units that were sold?

It can be expected that companies selling perishable goods have a higher inventory turnover than companies selling nonperishable goods.

The assignment of costs to the cost of goods sold and to ending inventory using FIFO is the same for both the perpetual and periodic inventory systems.

A company's inventory records indicate the following data for the month of April: If the company uses the first-in,first-out (FIFO)method and the perpetual inventory system,what is the amount of cost of goods sold for April?

The ________ method of assigning costs to inventory and cost of goods sold exactly matches the costs of particular items with the revenues they generate and would be used when items can be easily traced to the purchase invoice cost.

A company's inventory records indicate the following data for the month of April: If the company uses the first-in,first-out (FIFO)method and the perpetual inventory system,what would be the cost of the ending inventory?

FIFO is preferred when purchase costs are rising and managers have incentives to report higher income for reasons such as bonus plans,job security,and reputation.

The days' sales in inventory ratio is computed by dividing ending inventory by cost of goods sold and multiplying the result by 365.

A company's inventory records report the following in November of the current year: On November 8,it sold 12 units for $54 each.Using the perpetual LIFO inventory method,what amount of gross profit was earned from the 12 units sold?

The costs of goods purchased will vary under the different inventory methods of specific identification,FIFO,LIFO,and weighted average.

Net realizable value for damaged or obsolete goods is sales price less the cost of making the sale.

A company has inventory with a selling price of $451,000,a market value of $223,000 and a cost of $241,000.According to the lower of cost or market,the inventory should be written down to $223,000.

A company had the following purchases and sales during its first year of operations: On December 31,there were 26 units remaining in ending inventory.Using the Periodic LIFO inventory valuation method,what is the value of cost of goods sold? (Assume all sales were made on the last day of the month.)

Raleigh Co.has the following products in its ending inventory.Compute the lower of cost or market total for inventory applied separately to each product.

An advantage of the ________ method of inventory valuation is that it tends to smooth out the effect of erratic changes in costs.