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Exam 6: Inventories

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Question 121

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Graham Company uses a periodic inventory system. Details for the inventory account for the month of January 2014 are as follows: An end of the month (1/31/14) inventory showed that 120 units were on hand. If the company uses LIFO, what is the value of the ending inventory?

A) $520
B) $600
C) $656
D) $1,480

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Question 122

Multiple Choice

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Reinhoff Inc. reported total assets of €2,600,000, including €435,000 for inventory, and equity of €1,690,0000 on the December 31, 2014 statement of financial position. Reinhoff subsequently determined that the ending inventory was understated by €63,000. What is the corrected amount of equity for the year?

A) €0.
B) €1,627,000.
C) €1,690,000.
D) €1,753,000.

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Question 123

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At January 1, 2014, Britannica Inc. reported inventory of £425,000. At December 31, 2014, the inventory on hand was £501,000. If cost of goods sold for 2014 was £4,996,875, What is the inventory turnover ratio for the year?

Shandy Shutters has the following inventory information. A physical count of merchandise inventory on November 30 reveals that there are 100 units on hand. Assume a periodic inventory system is used. Ending inventory under FIFO is

Accountants believe that the write down from cost to net realizable value should not be made in the period in which the price decline occurs.

In a period of falling prices, the average-cost method results in a lower cost of goods sold than the FIFO method.

A company just starting business made the following four inventory purchases in June: A physical count of merchandise inventory on June 30 reveals that there are 100 units on hand. The inventory method which results in the highest gross profit for June is

A new average cost is computed each time a purchase is made in the

The manager of Yates Company is given a bonus based on income before income taxes. Net income, after taxes, is $10,500 for FIFO and $9,450 for average-cost. The tax rate is 30%. The bonus rate is 20%. How much higher is the manager's bonus if FIFO is adopted instead of average-cost?

Carlsberg Corporation has 2,000 units of product#1and 4,000 units of product#2 in its inventory at December 31, 2014. Specific data with respect to each product follows: What amount will be reported on the company statement of financial position at December 31, 2014 for ending inventory using lower-of-cost-or-net realizable value?

In the first month of operations, Santos Company made three purchases of merchandise in the following sequence: (1) 200 units at $6, (2) 300 units at $7, and (3) 400 units at $8. Assuming there are 300 units on hand, compute the cost of the ending inventory under (1) the FIFO method and (2) the average-cost method. Santos uses a periodic inventory system.

It is generally recognized that a major objective of accounting for inventory is the proper determination of ______________.

Net realizable value refers to

Sauder Company reports goods available for sale at cost, $90,000. Beginning inventory at retail is $40,000 and goods purchased during the period at retail were $80,000. Sales for the period amounted to $96,000. Instructions Determine the estimated cost of the ending inventory using the retail inventory method.

Nolvo Company uses the periodic inventory system. For February 2014, the beginning inventory consisted of 400 units that cost CHF65 each. During the month, the company made two purchases: 1,600 units at CHF68 each and 600 units at CHF72 each. Nolvo sold 2,000 units during the month of February at CHF110 per unit. Using the average cost method, what is the amount of ending inventory at February 28, 2014?

A company purchased inventory as follows: The average unit cost for inventory is

Blosser Company's goods in transit at December 31 include: sales made purchases made (1) FOB destination (3) FOB destination (2) FOB shipping point (4) FOB shipping point Which items should be included in Blosser's inventory at December 31?

Julian Junkets has the following inventory information. Assuming that a perpetual inventory system is used, what is the ending inventory (rounded) under the average-cost method?

Manufacturers usually classify inventory into all the following general categories except

India Eastern Corporation's computation of cost of goods sold is: The average days to sell inventory for India East is