accounting ch. 5

Abbey Company completed the annual count of its inventory. During the count, certain items were identified as requiring special attention. Decide how each item would be handled for Abbey Company's inventory.

Goods on assignment (Abbey is consignee)-Exclude Goods on assignment (Abbey is consignor)-Include

Merchandise inventory includes all of the following except:

Goods sold

Parris Company has shipped $21,500 of goods to Harlow Company, and Harlow Company has arranged to sell the goods for Parris. Identify the consignor and the consignee. Which company should include any unsold goods as part of its inventory?

Identify the consignor. -Parris Identify the consignee. -Harlow Which company should include any unsold goods as part of its inventory? -Parris

Abbey Company completed the annual count of its inventory. During the count, certain items were identified as requiring special attention. Decide how each item would be handled for Abbey Company's inventory.

Obsolete inventory that can be sold - Include from inventory Damaged inventory that cannot be resold - Exclude from inventory

A company uses a periodic inventory system. On August 1, the company had 6 items of beginning inventory with a cost of $7 per unit. On August 3, the company purchased 16 units at $14 per unit. Then, on August 5, the company sold 12 units. Using FIFO, the cost of the 12 units sold is _____.

$126

A company uses a periodic inventory system. On April 1, the company had 9 items of beginning inventory with a cost of $13 per unit. On April 18, the company purchased 15 units at $14 per unit. Then, on April 29, the company sold 14 units. Using weighted average, the cost of the 14 units sold is closest to _____.

$191

An item was shipped from a supplier under FOB shipping point. The invoice in the amount of $2,000 included payment terms of 2/10, n/30. When the invoice was paid, a purchase discount in the amount of $40 was taken. Other details relating to the purchase of this item included the following: shipping charges of $300, storage fees of $50, and insurance premium of $100. The cost of this inventory item is _____.

$2,410

A company uses a periodic inventory system. On November 1, the company had 8 items of beginning inventory with a cost of $22 per unit. On November 2, the company purchased 10 units at $21 per unit. On November 6, the company purchased 5 units at $25 per unit. Then, on November 8, the company sold 18 units. Using LIFO, the cost of the 18 units sold is _____.

$401

Abbey Company completed the annual count of its inventory. During the count, certain items were identified as requiring special attention. Decide how each item would be handled for Abbey Company's inventory.

- Goods in transit shipped to Abbey (purchaser) FOB Destination - Exclude from inventory - Goods in transit shipped to Abbey (purchaser) FOB Shipping Point - Include from inventory - Goods in transit shipped by Abbey (seller) FOB Destination - Include from inventory - Goods in transit shipped by Abbey (seller) FOB Shipping Point - Exclude from inventory

Inventory turnover is computed by dividing cost of goods sold by ____:

(beginning inventory + ending inventory) / 2

A company reports the following financial information: Inventory, December 31, 2021$ 75,000 Inventory, December 31, 2022$125,000 Net Sales for 2022$850,000 Cost of Goods Sold for 2022$400,000 The company's days' sales in inventory is closest to ____.

114 days

A company has beginning inventory of $10,500, purchases of $5,500, and ending inventory of $2,500. The cost of goods sold is ___.

13,500

A company reports the following financial information: Inventory, December 31, 2019$ 75,000 Inventory, December 31, 2020125,000 Net Sales for 2020850,000 Cost of Goods Sold for 2020400,000 The company's inventory turnover ratio is closest to ____.

4.00 times

A company has the following per unit recorded cost and replacement cost relating to its inventory: Item 15 unitsCost $50Market $45Item 27 unitsCost $60Market $65Item 39 unitsCost $30Market $25 Applying the lower of cost or market method, the reported value of this company's ending inventory if LCM is applied to individual items is _____.

870

Walberg Associates, antique dealers, purchased goods for $38,300. Terms of the purchase were FOB shipping point, and the cost of transporting the goods to Walberg Associates's warehouse was $1,600. Walberg Associates insured the shipment at a cost of $230. Prior to putting the goods up for sale, they cleaned and refurbished them at a cost of $570.Determine the cost of inventory

COST OF INVENTORY Price-38,300 Transport In-1600 Insurance-230 Clean and Refurbish-570 Total-40,700 Add all

A company uses a periodic inventory system. On August 1, the company had 6 items of beginning inventory with a cost of $7 per unit. On August 3, the company purchased 16 units at $14 per unit. Then, on August 5, the company sold 12 units. The 12 units sold consisted of 7 units from the August 3rd purchase and 5 units from the August 1st beginning inventory. Using specific identification, the cost of the 12 units sold is _____.

Cost of the units sold - $133

At year-end, Barr Company had shipped $14,000 of merchandise FOB destination to Lee Company. Which company should include the $14,000 of merchandise in transit as part of its year-end inventory?

Which company should include the $14,000 of merchandise in transit as part of its year-end inventory? -Barr

If a perpetual inventory system is in use _____.

a physical inventory count should be taken at least annually.

Days' sales in inventory is computed as ending inventory divided by _____ × 365.

cost of goods sold

A company reports merchandise inventory on December 31 at $250,000 but LCM applied to items is $200,000.Record the journal entry to report merchandise inventory at the correct amount:

cost of goods sold 50000 merchandise inventory 50000 (250000-200000=50000)

Market value is replacement cost for LIFO, but net ___ value is used for FIFO, Specific Identification and Weighted Average methods.

realizable