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Exam 6: Merchandise Inventory

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Question 41

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The days' sales in inventory ratio is calculated by dividing cost of goods sold by the average merchandise inventory.

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Question 42

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A company uses the weighted-average method of inventory valuation under a periodic inventory system.The company began the year with a zero inventory balance.They had the following transactions during the year. 1) Purchased 65 units at $7 per unit 2) Purchased 130 units at $7 per unit 3) Sold 110 units at $11 per unit 4) Purchased 55 units at $8 per unit 5) Sold 110 units at $13.25 per unit At the end of the year,the company counted the inventory and found 30 units remaining.Calculate the cost of goods sold for the year.(Round the unit costs to two decimal places and total costs to the nearest dollar. )

A) $7
B) $217
C) $1,805
D) $1,588

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Question 43

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When a company uses the perpetual inventory method,which of the following would be the entry to adjust inventory to lower-of-cost-or-market?

Which of the following values is considered the market value when valuing inventory at lower-of-cost-or-market under U.S.GAAP?

When using the weighted-average inventory costing method,the dollar amounts for ending inventory and cost of goods sold are the same for both the perpetual and periodic inventory costing methods.

Baldwin,Inc.had the following balances and transactions during 2019: What would be reported as Cost of Goods Sold on the income statement for the year ending December 31,2019 if the perpetual inventory system and the first-in,first-out inventory costing method are used?

Which of the following assets must be reported at the lower-of-cost-or-market value?

James Sales sold 450 units of product to a customer on account.The company uses the perpetual inventory system and the FIFO inventory costing method.The selling price was $28 per unit,and the cost,according to the company's inventory records,was $12 per unit.Prepare the journal entries to record the sale.Omit explanations.

Western Sky,Inc.sold 500 units of inventory at $25 per unit for cash.The company uses the perpetual inventory system and the FIFO inventory costing method.The beginning inventory included 550 units at a cost of $15 per unit.The cost of the most recent purchases is $10 per unit.Prepare the journal entries to record the sale.Omit explanations.

When a company uses the first-in,first-out (FIFO)method,the cost of goods sold represents the cost of the most recently purchased goods and the value of ending inventory represents the cost of the oldest goods in stock.

Which of the following amounts would be reported as Merchandise Inventory on the balance sheet of a company if the cost of an item is $110 and the current replacement cost is $70?

What does inventory turnover measure? What does a high rate of inventory turnover indicate?

The periodic inventory records of Hawk Dental Supply indicate the following for the month of April: As of April 30,Hawk counts 8 units of merchandise inventory on hand. Compute ending merchandise inventory and cost of goods sold for Hawk using the FIFO inventory method.

In computing the lower-of-cost-or-market,under IFRS,the market value is defined as the net realizable value,which is essentially the sales price.

In a period of rising costs,the last-in,first-out (LIFO)method results in a higher cost of goods sold and a lower net income than the first-in,first-out (FIFO)method.

Which of the following inventory costing methods yields the lowest net income during a period of rising inventory costs?

A company decides to ignore a very small error in its inventory balance.This is an example of the application of the ________.

A company that uses the perpetual inventory system sold goods to a customer for cash for $4,200.The cost of the goods sold was $1,000.Which of the following journal entries correctly records this transaction?

Which of the following statements is true of a good merchandise inventory control system?

"The amounts obtained for cost of goods sold and ending merchandise inventory are always the same for FIFO perpetual and FIFO periodic." Is this statement true? Why or why not?