FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 6: Merchandise Inventory

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 71

Essay

Review LaterAdd Note

Review Later

The ending inventory of a company was $552,000 as per the perpetual inventory records.The current replacement cost for the ending inventory is $547,000.Prepare the journal entry to adjust inventory.

Correct Answer

verified

Note:Amount writte...

View Answer

Show Answer

Question 72

Multiple Choice

Review LaterAdd Note

Review Later

Robyn's Retail had 500 units of inventory on hand at the end of the year.These were recorded at a cost of $19 each using the last-in,first-out (LIFO) method.The current replacement cost is $17 per unit.The selling price charged by Robyn's Retail for each finished product is $27.In order to record the adjusting entry needed under the lower-of-cost-or-market rule,the Merchandise Inventory will be ________.

A) debited by $8,500
B) credited by $8,500
C) debited by $1,000
D) credited by $1,000

Correct Answer

verified

Show Answer

Question 73

Essay

Review LaterAdd Note

State the effects of inventory errors on cost of goods sold and net income for periods 1 and 2.The response should be overstated or understated. Period 1 Ending Merchandise Inventory is overstated

Which of the following inventory costing methods yields the lowest cost of goods sold during a period of rising inventory costs?

If the historical cost of inventory is less than its current replacement cost,the business must write down the inventory cost.

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

South Meadows,Inc.sold 500 units of inventory at $25 per unit on account.The company uses the perpetual inventory system.The cost of the units sold was $10 per unit.Provide the journal entries to record the sale.

Which of the following inventory costing methods is based on the actual cost of each particular unit of inventory?

Mayflower,Inc.provided the following for 2017: Calculate the average merchandise inventory held by Thomas,Inc.during the year.

A company that uses the perpetual inventory system sold goods to a customer on account for $4,000.The cost of the goods sold was $2,000.Which of the following journal entries correctly records this transaction?

During a period of declining inventory costs,which of the following inventory costing methods should be used by a company that intends to minimize its income tax expenses?

Under the last-in,first-out (LIFO)method,the cost of goods sold is based on the oldest purchases.

Jones Retail.had the following balances and transactions during 2017: The company maintains its records of inventory on a perpetual basis using the first-in,first-out inventory costing method.Calculate the amount of ending Merchandise Inventory on December 31,2017 using the lower-of-cost-or-market rule.

A company purchased 80 units for $40 each on January 31.It purchased 200 units for $35 each on February 28.It sold 200 units for $50 each from March 1 through December 31.If the company uses the weighted-average inventory costing method,calculate the amount of Cost of Goods Sold on the income statement for the year ending December 31.(Assume the company uses the perpetual inventory system.Round any intermediate calculations two decimal places,and your final answer to the nearest dollar. )

Mosher,Inc.had the following balances and transactions during 2017: What would be reported for Ending Merchandise Inventory on the balance sheet at December 31,2017 if the perpetual inventory system and the first-in,first-out inventory costing method are used?

Better Buy,Inc.has 7 units in inventory on December 31.The units were purchased in November for $160 each.The price lists from the suppliers indicate that the same items would now cost the company a total of $1,155.What would be the amount reported as Ending Merchandise Inventory on the balance sheet?

Using the LIFO method of inventory valuation will always produce the same results whether a company uses perpetual or periodic inventory costing methods.

Which of the following inventory valuation methods should be used for unique items?

Madison,Inc.had the following balances and transactions during 2017. The company maintains its records of inventory on a perpetual basis using the last-in,first-out inventory costing method.Calculate the amount of ending Merchandise Inventory at December 31,2017 using the lower-of-cost-or-market rule.(Round any intermediate calculations two decimal places,and your final answer to the nearest dollar. )

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.