ACG Chapter 6

Salt Corporation has the following inventory data: July 1 Beginning inventory 30 units at $120 5 Purchases 180 units at $112 14 Sale 120 units 21 Purchases 90 units at $115 30 Sale 84 units Assuming that a periodic inventory system is used, what is the amount allocated to ending inventory on a FIFO basis?

$11,022

A company uses LIFO. At the beginning of the current year its inventory was $200,000, and at the end of the current year its inventory is $250,000. At the start of the year its LIFO reserve was $30,000 and at the end of the year its LIFO reserve is $40,000. The company operates in an inflationary environment. If the company used FIFO instead of LIFO, its ending inventory would be

$290,000.

Irwin Industries had the following inventory transactions occur during the current year: Units Cost/unit Feb. 1 Purchase 40 $42 Mar. 14 Purchase 60 $43 May 1 Purchase 55 $44 The company sold 100 units at $75 each and has a tax rate of 20%. Assuming that a periodic inventory system is used and operating expenses are $1,000, what is the company's gross profit using LIFO? (rounded to whole dollars)

$3,145

At December 31, Moore Company's inventory records indicated a balance of $400,000. Upon further investigation it was determined that this amount included the following: (1) $56,000 in inventory purchases made by Moore shipped from the seller December 27 terms FOB shipping point, but not due to be received until January 3. (2) $23,000 in inventory purchases made by Moore shipped from the seller December 27 terms FOB destination, but not due to be received until January 2. (3) $6,000 in goods sold by Moore with terms FOB destination on December 27. The goods are not expected to reach their destination until January 6. (4) $8,000 in goods sold by Moore with terms FOB shipping point on December 27. The goods are not expected to reach their destination until January 4. (5) $13,000 of goods received on consignment from Dollywood Company. What is Moore's correct ending inventory balance at December 31?

$356,000

Bonny's Blankets has the following inventory data: July 1 Beginning inventory 15 units at $60 5 Purchases 90 units at $56 14 Sale 60 units 21 Purchases 45 units at $58 30 Sale 42 units Assuming that a perpetual inventory system is used, what is the cost of goods sold on a LIFO basis for July?

$5,796

At December 31, Sunrise Company's inventory records indicated a balance of $752,000. Upon further investigation it was determined that this amount included the following: (1) $112,000 of inventory purchased by Sunrise under the terms FOB destination, and this inventory did not arrive until January 2, (2) $74,000 of inventory sold and shipped by Sunrise on December 27 under the terms FOB destination, and this inventory was received by the buyer on January 6. (3) $6,000 of inventory held by Sunrise on consignment from another company. (4) $10,000 of inventory consigned to a third-party consignor that it continues to hold at the end of the year. What is Sunrise's correct ending inventory balance at December 31?

$634,000

Cost of goods purchased is $500,000, ending inventory is $20,000, and cost of goods sold is $560,000. How much is beginning inventory?

$80,000

On December 31, Nelson Corporation has three categories of inventory in stock: Category Cost Market value Tin C$400 MV$350 Stainless steel C$200 MV$50 Aluminum C$300 MV$500 Apply the lower of cost or market rule to determine the company's ending inventory.

$800

Bonny's Blankets has the following inventory data: July 1 Beginning inventory 15 units at $60 5 Purchases 90 units at $56 14 Sale 60 units 21 Purchases 45 units at $58 30 Sale 42 units Assuming that a perpetual inventory system is used, what is the ending inventory on a LIFO basis for July?

2,754

Sweet Company has the following inventory data: July 1 Beginning inventory 25 units at $205 per unit 5 Purchases 120 units at $220 per unit 21 Purchases 60 units at $215 per unit The company sold 120 units. Assuming that a periodic inventory system is used, what is the cost of goods sold on a LIFO basis?

26,100

The following information came from the income statement of the Wilkens Company: sales revenue $2,200,000; beginning inventory $220,000; ending inventory $280,000; and gross profit $1,200,000. What is Wilkens' inventory turnover ratio?

4.0 times

Barnett Company recorded the following: 2017 2016 Ending inventory $32,650 $30,490 Cost of goods sold 255,250 261,300 Sales revenue 420,000 480,000 What is the company's days in inventory for 2017? (rounded)

45.1 days

Freehan Company's accounting records has the following information about its inventory: Units Unit Cost Inventory, Jan. 1: 5,000 $ 8 Purchase, April 2 15,000 10 Purchase, Aug. 28 20,000 12 If the company has 7,000 units on hand at December 31, how much is the cost of ending inventory under the average-cost method in a periodic inventory system?

75,250

Ownership passes to the buyer when purchased goods are received by the buyer from a public carrier if the goods are shipped

FOB destination.

In periods of deflation, what will LIFO produce?

Higher net income than FIFO

Which of the following statements is true?

Specific identification method inventory valuation requires the physical flow of goods to be representative of the cost flow.

Which of the following is an inventory account?

Work in process

A company uses the periodic inventory method. An overstatement of the beginning inventory results in

an understatement of net income.

The lower of cost or market basis of valuing inventories is an example of

conservatism.

Inventory costing methods place primary reliance on assumptions about the flow of

costs