Accounting quiz 7 Chapter 8

For the last several years Conway corporation has operated with a gross profit rate of 40% on January 1of the current year, the company had on hand inventory with a cost of $600,000. Purchases of merchandise during January amounted to $150,000 and sales for the month were $360,000. Using the gross profit method, what is the estimated inventory at January 31st?

$534,000

During the current year, Carl Equipment stores had net sales of $600 million, a cost of goods sold of $500 million, average accounts receivable of $75 million and average inventory of $50 million Assuming a 365day year, the average number of days required for Carl's Equipment to sell its inventory is :

365/ 10 = 36.6 days

During the current year, Carl Equipment stores had net sales of $600 million, a cost of goods sold of $500 million, average accounts receivable of $75 million and average inventory of $50 million Refer to the information above. Carl equipment's inventory turnover rate is :

500 mil/ 50 Mill= 10 times

On may 10, Hudson Computing sold 90 Millennium laptop computers to Apex Publishers.At the data of this site, Hudson's perpetual inventory records included the following cost layers for the Millennium laptops

COGS FIFO 70 @ 1500 20 @ 32000 =7000 COGS LIFO 30 @ 1600 60 @ 1500 = 138,000 COGS average method 153,000 / 100 = 1530 90 @ 1530 = 137,700

in a periodic inventory system the costs of goods sold is determined as follows:

Cost of goods available for sale during the year, less the ending inventory

Elite Systems sells a single product. At December 31st, the company's perpetual inventory records indicate 2,500 units on hand with a total cost (FIFO Bias) of $155,00. The replacement cost of this product at this date is $35 per unit. Prepare the journal entries to record the write down of the inventory to the lower of cost of market value at dec 31st

Dec 31st. Debit- Loss of write own on inventory 67,500 Credit- inventory 67,500 35 x 2500= 87,500 155,000- 87,500= 67500

the primary reason a physical inventory is taken is to:

adjust the perpetual inventory record for unrecorded shrinkage losses.

Goods in transit between the buyer and the seller belong to:

the answer depends upon whether the goods were shipped F.O.B.shipping or F.O.B. destination