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Exam 6: Inventories

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Question 21

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Brutus Corporation, a newly formed corporation, has the following transactions during May, its first month of operations.​ Calculate total sales, cost of goods sold, gross profit, and ending inventory using each of the following inventory methods: 1. FIFO perpetual 2. FIFO periodic 3. LIFO perpetual 4. LIFO periodic 5. Average cost periodic (round average to nearest cent)

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Total sales (not dependent on inventory ...

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Question 22

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Addison, Inc. uses a perpetual inventory system. Below is information about one inventory item for the month of September. Use this information to answer the questions that follow. -If Addison uses LIFO, the September 30 inventory balance is

A) $800
B) $650
C) $750
D) $700

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

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Question 23

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The units of Manganese Plus available for sale during the year were as follows: There are 15 units of the product in the physical inventory at November 30. The periodic inventory system is used. Determine the difference in gross profit between the LIFO and FIFO inventory cost systems.

The following data were taken from the annual reports of Big Bang Inc., a manufacturer of fireworks, and Orange Inc., a manufacturer of computers. What is the inventory turnover for Big Bang and Orange.

Assume that three identical units of merchandise were purchased during October, as follows: Assume one unit is sold on October 31 for $28. Determine cost of goods sold, gross profit, and ending inventory under the LIFO method.

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

A company will most likely use an estimated method of determining inventory when

Match each situation to its impact (a-c) on the current year's net income. a.Net income for the current year will be overstated.b.Net income for the current year will be understated.c.There will be no error effect on net income. -Purchased merchandise was shipped FOB shipping point on the last day of the year. The cost of the merchandise was not included in ending inventory.

Inventory turnover measures the length of time it takes to acquire, sell, and replace the inventory.

For the year ended December 31, Depot Max's cost of goods 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

Match each description to the appropriate cost flow assumption (a-d). -The cost of the units sold and in ending inventory is a weighted average of the purchase costs. A)Weighted average B)First-in, first-out (FIFO)c.Last-in, first-out (LIFO)d.Specific identification

The lower-of-cost-or-market method of determining the value of ending inventory can be applied on an item by item, by major classification of inventory, or by the total inventory.

While taking a physical inventory, a company counts its inventory as less than the actual amount on hand. How will this error affect the income statement?

Based on the following information: what is the company's (1) inventory turnover; (2) average daily cost of goods sold; and (3) number of days' sales in inventory for the current year? Use a 365-day year.

Addison, Inc. uses a perpetual inventory system. Below is information about one inventory item for the month of September. Use this information to answer the questions that follow. -When using a perpetual inventory system, the journal entry to record the cost of goods sold is:

Under a perpetual inventory system, the amount of each type of merchandise on hand is available in the

A consignor who has goods out on consignment with an agent should include the goods in ending inventory even though they are not in the possession of the consignor.

Taking a physical count of inventory

Assuming a perpetual inventory system and the last-in, first-out method, determine (a) the inventory on November 30 and (b) the cost of the goods sold for November.​

On the basis of the following data, determine the estimated cost of the inventory as of March 31 using the retail method.