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Exam 6: Inventories

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Question 71

Multiple Choice

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Indrisano's Used Cars uses the specific identification method of costing inventory.During March, Indrisano purchased three cars for $12,000, $14,400, and $19,200, respectively.During March, two cars are sold for a total of $34,600.Indrisano determines that at March 31, the $14,400 car is still on hand.What is Indrisano's gross profit for March?

A) $1,000.
B) $3,400.
C) $4,200.
D) $8,200.

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Question 72

Multiple Choice

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For companies that use a perpetual inventory system, all of the following are purposes for taking a physical inventory except

A) to check the accuracy of the records.
B) to determine the amount of wasted raw materials.
C) to determine losses due to employee theft.
D) to determine ownership of the goods.

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Question 73

Multiple Choice

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Priscilla has the following inventory information. A physical count of merchandise inventory on July 31 reveals that there are 35 units on hand.Using the average-cost method, the value of ending inventory (rounded to the nearest dollar) is

The managers of Constantine Company receive performance bonuses based on the net income of the firm.Which inventory costing method are they likely to favor in periods of declining prices?

Effie Company uses a periodic inventory system.Details for the inventory account for the month of January 2022 are as follows: An end of the month (1/31/22) inventory showed that 160 units were on hand.If the company uses LIFO, what is the value of the ending inventory?

The cost of goods available for sale is allocated between

In a manufacturing business, inventory that is ready for sale is called

Eneri Company's inventory records show the following data: A physical inventory on December 31 shows 4,000 units on hand.Eneri sells the units for $13 each.The company has an effective tax rate of 20%.Eneri uses the periodic inventory method. Under the FIFO method, the December 31 inventory is valued at

An auto manufacturer would classify vehicles in various stages of production as

Moroni Industries has the following inventory information. Assuming that a periodic inventory system is used, what is the amount allocated to ending inventory on a FIFO basis?

The cost of goods available for sale consists of the beginning inventory plus the cost of goods purchased.

Shellhammer Company's inventory records show the following data for the month of September: A physical inventory on September 30 shows 200 units on hand.Calculate the value of ending inventory and cost of goods sold if the company uses LIFO inventory costing and a periodic inventory system.

Nick's Place recorded the following data: The weighted-average unit cost of the inventory at January 31 is:

The specific identification method of inventory valuation is desirable when a company sells a large number of low-unit cost items.

Eneri Company's inventory records show the following data: A physical inventory on December 31 shows 4,000 units on hand.Eneri sells the units for $13 each.The company has an effective tax rate of 20%.Eneri uses the periodic inventory method.Under the LIFO method, cost of goods sold is

Netta Shutters has the following inventory information. A physical count of merchandise inventory on November 30 reveals that there are 90 units on hand.Assume a periodic inventory system is used.Ending inventory under FIFO is

Moroni Industries has the following inventory information. Assuming that a periodic inventory system is used, what is the amount allocated to ending inventory on a LIFO basis?

A problem with the specific identification method is that

Flaherty Company had beginning inventory on May 1 of $12,000.During the month, the company made purchases of $40,000 but returned $2,000 of goods because they were defective.At the end of the month, the inventory on hand was valued at $15,500. Calculate cost of goods available for sale and cost of goods sold for the month.

Selection of an inventory costing method by management does not usually depend on