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Exam 7: Inventories

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Question 21

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The following units of an inventory item were available for sale during the year: The firm uses the periodic inventory system. During the year, 60 units of the item were sold. The value of ending inventory using LIFO is:

A) $1,250
B) $1,350
C) $1,375
D) $1,150

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Question 22

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During periods of increasing costs, the use of the FIFO method of costing inventory will yield an inventory amount for the balance sheet that is higher than LIFO would produce.

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Question 23

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

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?

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

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 value for the month of May using the FIFO inventory cost method.

Control of inventory should begin as soon as the inventory is received. Which of the following internal control steps is not done to meet this goal?

For the year ended December 31, 2014 Depot Max's cost of merchandise sold was $56,900. Inventory at the beginning of the year was $6,540. Ending inventory was $7,250. Depot Max's number of days sales in inventory is closest to

When merchandise sold is assumed to be in the order in which the purchases were made, the company is using

Taking a physical count of inventory

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

The following information was extracted from the Stone Company's records. Gross Sales $232,566 Gross Profit $87,990 Sales Discounts $1,125 (= 1/2 % of Net Sales) Total Operating Expenses $88, 440 Selling Expenses $33, 560 Complete the following: Complete the following:

The three identical units of Product Basic H are purchased during July, as shown below. Assume one unit sells on July 28 for $45. Determine the gross profit, cost of merchandise sold, and ending inventory on July 31 using (a) first in first out, (b) last in last out, (c) average cost flow methods.

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 LIFO method?

If merchandise inventory is being valued at cost and the purchase price is steadily falling, which method of costing will yield the largest net income?

If a company uses the periodic inventory system to cost its inventory, the gross profit method is a method that can be used to check on theft when the actual inventory is taken by the company.

On the basis of the following data, determine the estimated cost of the inventory as of March 31 by the retail method, presenting details of the computation in good order.

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

Match the following documents used for inventory control: