FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 6: Inventories

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 61

Essay

Review LaterAdd Note

Review Later

Applying the lower of cost or market to each item of inventory, what should the total inventory value be for the following items? ​

Correct Answer

verified

Show Answer

Question 62

Multiple Choice

Review LaterAdd Note

Review Later

Three identical units of merchandise were purchased during March, as shown: ​ ​ Assume that one unit is sold on March 23 for $1,125. What is the ending inventory on March 31 using LIFO?

A) $245
B) $295
C) $1,670
D) $1,720

E) B) and C)
F) None of the above

Correct Answer

verified

Show Answer

Question 63

Multiple Choice

Review LaterAdd Note

Three identical units of merchandise were purchased during March, as shown Assume that one unit is sold on March 23 for $1,125. What is the ending inventory on March 31 using LIFO.

The use of the lower-of-cost-or-market method of inventory valuation increases net income for the period in which the inventory replacement price declined.

Three identical units of merchandise were purchased during March, as shown: Assume that one unit is sold on March 23 for $1,125. What is the gross profit for March using FIFO?

If a company uses a periodic inventory system, the gross profit method can be used to estimate inventory for monthly or quarterly statements.

Based on the following information, compute (a) inventory turnover; (b) average daily cost of goods sold using a 365 day year; and (c) number of days' sales in inventory. ​ Cost of goods sold $195,640 Inventory: Beginning of year 20,500 End of year 18,628

Describe three inventory cost flow assumptions and how they impact the financial statements.

It's not unusual for large companies to use different inventory costing methods for different segments of its inventory.

A subsidiary inventory ledger can be an aid in maintaining inventory levels at their proper levels.

Three identical units of merchandise were purchased during July, as follows: ​ Assume one unit sells on July 28 for $45. Determine the gross profit, cost of goods sold, and ending inventory on July 31 using (a) first-in, first-out, (b) last-in, first-out, and (c) average cost flow methods.

Assume that three identical units of merchandise were purchased during October, as follows: $\begin{array} { | l | c | l | c | c | } \hline & & & \text { Units } & \text { Cost } \\\hline \text { October } & 5 & \text { Purchase } & 1 & \$ 5 \\\hline & 12 & \text { Purchase } & 1 & 13 \\\hline & 28 & \text { Purchase } & \underline { 1 } & \underline { 15 } \\\hline \text { Total } & & & 3 & \$ 33 \\\hline\end{array}$ -One unit is sold on October 31 for $28. Using the table provided, determine gross profit under the FIFO method.

FIFO reports higher gross profit and net income than the LIFO method when ?

Complete the following table using the perpetual LIFO method of inventory flow ​

During August, the first month of the fiscal year, sales totaled $875,000 and the cost of merchandise available for sale totaled $850,000. Estimate the cost of the inventory as of August 31, based on an estimated gross profit rate of 45%.

Inventory errors, if not discovered, will self-correct within two years.

During times of rising prices, which of the following is not an accurate statement?

Inventory at the end of the year is overstated. Which of the following statements correctly states the effect of the error?

Inventory controls start when the merchandise is shelved in the store area.

Kristin's Boutiques has identified the following items for possible inclusion in its December 31 inventory. Which of the following would not be included in the year-end inventory?