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Exam 6: Inventories

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Question 91

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Complete the following table using the perpetual FIFO method of inventory flow.

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Question 92

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If the revenues are correctly reported and the gross profit of a company is understated, what is the effect on stockholders' equity?

A) understated
B) overstated
C) correctly stated
D) none of these

E) A) and B)
F) C) and D)

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Question 93

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List three different security measures taken to safeguard inventory.

Use the information below to answer the following questions.The Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1. -Assuming that the company uses the perpetual inventory system, determine the May 31 inventory balance using the LIFO inventory cost method.

Stevens Company started the year with an inventory cost of $145,000. During the month of January, Stevens purchased inventory that cost $53,000. January sales totaled $140,000. Estimated gross profit is 35%. The estimated ending inventory as of January 31 is

The choice of an inventory costing method has no significant impact on the financial statements.

Which of the following companies would be more likely to use the specific identification inventory costing method?

Of the three widely used inventory costing methods (FIFO, LIFO, and average cost), the LIFO method of costing inventory assumes costs are charged based on the most recent purchases first.

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

A perpetual inventory system is an effective means of control over inventory.

Use the information below to answer the following questions.The Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1. -Assuming that the company uses the perpetual inventory system, determine the cost of goods sold for the sale of May 20 using the FIFO inventory cost method.

Brutus Corporation, a newly formed corporation, has the following transactions during May, its first month of operations. -Using the table provided, calculate total sales, cost of goods sold, gross profit, and ending inventory using each of the average cost periodic inventory method. Round the average to the nearest cent.

Average inventory is computed by adding the inventory at the beginning of the period to the inventory at the end of the period and dividing by two.

Direct disposal costs do not include special advertising or sales commissions.

Beginning inventory, purchases, and sales data for tennis rackets are as follows: Complete the inventory cost card assuming the business maintains a perpetual inventory system and determine the cost of goods sold and ending inventory using LIFO.

Addison, Inc. uses a perpetual inventory system. Below is information about one inventory item for the month of September. -Use the information in the table to answer this question. Using a perpetual system, what is the cost of the goods sold for November if the company uses the weighted average cost method?

The following data were taken from Castle, Inc.​ Cost of goods sold $894,000 Inventory, end of year 78,000 Inventory, beginning of the year 92,000 Determine the inventory turnover ratio and the number of days' sales in inventory for Castle Inc. Round to two decimal places.

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. -Under the _____ inventory method, accounting records maintain a continuously updated inventory value.

The following lots of a Commodity P were available for sale during the year. Use this information to answer the questions that follow. The firm uses the periodic system, and there are 20 units of the commodity on hand at the end of the year.​ -Under a periodic inventory system

Too much inventory on hand