FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 6: Inventory Cost of Goods Sold

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 51

True/False

Review LaterAdd Note

Review Later

The Internal Revenue Service allows companies to use LIFO for income tax purposes even if they use FIFO for financial reporting.

Correct Answer

verified

Show Answer

Question 52

Multiple Choice

Review LaterAdd Note

Review Later

Perfect Catering Company's ending inventory was $106,700 at historical cost and $113,500 at current replacement cost.Before consideration of the lower-of-cost-or-market rule,the company's cost of goods sold was $60,000.Following U.S.GAAP,which of the following statements reflect the correct application of the lower-of-cost-or-market rule?

A) The Ending Inventory balance will be $106,700,and Cost of Goods Sold will be $60,000.
B) The Ending Inventory balance will be $113,500,and Cost of Goods Sold will be $60,000.
C) The Ending Inventory balance will be $106,700,and Cost of Goods Sold will be $66,800.
D) The Ending Inventory balance will be $113,500,and Cost of Goods Sold will be $53,200.

Correct Answer

verified

Show Answer

Question 53

Multiple Choice

Review LaterAdd Note

Given the following data,calculate the cost of goods sold using the average-cost method.Round your calculations to two decimal places.

If inventory costs are rising and a company is using LIFO,large purchases of inventory near the end of the year will:

Speedy Corporation reported net income of $425,000 for the current year.After the financial statements had been prepared,it was discovered that ending inventory had been understated by $25,000.If the tax rate is 40%,after the error has been corrected,net income will:

Under the periodic inventory system,which of the following entries is prepared at the end of the accounting period?

All of the following costs would be included in the cost of inventory EXCEPT for:

Summertime had the following data for the month of March: At March 31,300 units are still on hand.Determine the cost of goods sold for March if Summertime uses the FIFO method.

The Postotnik Construction Company has ending inventory with a historical cost of $630,000.Assume the company uses the perpetual inventory system.The current replacement cost of the inventory is $608,000.The net realizable value is $650,000.Before any adjustments at the end of the period,the cost of goods sold account has a balance of $900,000.What journal entry is required under IFRS?

Ending inventory for the year ended December 31,2015,is understated by $8,000.How will this error affect net income for 2016?

In a perpetual inventory system,a business maintains a continuous record of the number of units purchased,sold and on hand for each inventory item.

Boston Company sells twenty items for $1,000 per unit,and has a cost of goods sold percentage of 70%.The gross profit to be reported for selling 20 items is:

Following IFRS,the lower-of-cost-or-market rule requires a company to report inventories at the lower of:

The choice of an inventory costing method does not impact a company's balance sheet.

When inventory costs are rising,FIFO allows managers to manipulate net income by timing the purchases of inventory.

On July 1,the Corrao Company purchased $1,000 of inventory on account with credit terms of 2/10,net 30.Corrao Company uses the perpetual inventory system.On July 5,the Corrao Company paid the amount due.What journal entry did they prepare on July 5?

Marian Company has the following items for the month of July: Inventory turnover is:

The Cost of Goods Sold Model can be used to estimate ending inventory.

If a company uses LIFO for tax purposes,they must use LIFO for financial reporting purposes.

The weighted-average cost per unit is calculated as the cost of goods available for sale divided by the number of units sold.