CH 6 TEXTBOOK QUESTIONS

using the data in question 5, the cost of the ending inventory under LIFO is

100,000

poppins company has the following: inventory jan 1 : 8,000 cost $11, purchase june 19 : 13,000 cost 12, purchase nov 8 : 5,000 cost 13. if 9,000 units are on hand at december 31, the cost of the ending inventory under FIFO is

113,000

Santana Company had beginning inventory of $80,000, ending inventory of $110,000, cost of goods sold of $285,000, and sales of $475,000. Santana's days in inventory is:

121.7 days

Norton Company purchased 1,000 widgets and has 200 widgets in its ending inventory at a cost of $91 each and a current replacement cost of $80 each. The ending inventory under lower-of-cost-or-market is:

16,000

As a result of a thorough physical inventory, Railway Company determined that it had inventory worth $180,000 at December 31. This count did not take into consideration the following facts: Rogers Consignment store currently has goods worth $35,000 on its sales floor that belong to Railway but are being sold on consignment by Rogers. The selling price of these goods is $50,000. Railway purchased $13,000 of goods that were shipped on December 27, FOB destination, that will be received by Railway on January 3. Determine the correct amount of inventory that Railway should report.

228,000

Excluded from inventory was an FOB shipping point sale to Reza Corporation made on December 29, for goods with a selling price of $87,500 and a cost of $61,000. The goods arrived on January 3. Reza had only ordered goods with a selling price of $16,500 and a cost of $8,200. However, a sales manager at Pharoah Company had authorized the shipment and said that if Reza wanted to ship the goods back next week, it could.

61,000 - 82000 = 52,800 (add this to inventory)

in a perpetual inventory system

FIFO cost of goods sold will be the same as in a periodic inventory system

The company received an order on December 29 that was boxed and sitting on the loading dock awaiting pick-up on December 31. The shipper picked up the goods on January 1 and delivered them on January 6. The shipping terms were FOB shipping point. The goods had a selling price of $49,500 and a cost of $36,500. The goods were not included in the count because they were sitting on the dock.

add 36,500 to ending inventory

cost of goods available for sale consists of two elements: beginning inventory and

cost of goods purchased`

which of these would cause the inventory turnover to increase the most

decrease the amount of inventory on hand and increasing sales

which of the following should not be included in the physical inventory of a company

goods held on consignment from another company

in periods of rising prices, LIFO will produce

lower net income than FIFO

The physical count did not include goods purchased by Pharoah Company with a cost of $41,000 that were shipped FOB destination on December 28 and did not arrive at Pharoah Company's warehouse until January 3.

no effect to ending inventory

pauline companies overstated its inventory by 15,000 at december 31, 2018. it did not correct the error in 2018 or 2019. as a result, pauline's stockholders equity was

overstated at december 31, 2018 and properly stated at december 31. 2019

Falk company's ending inventory is understated 4,000. the effects of this error on the current years cost of goods sold and net income, respectively, are:

overstated, understated

considerations that affect the selection of an inventory costing method do not include

perpetual vs. periodic inventory system

Included in the inventory account was $17,000 of office supplies that were stored in the warehouse and were to be used by the company's supervisors and managers during the coming year.

subtract 17,000 from ending inventory

included in the company count were goods with a cost of 346,000 that the company is holding on consignment. the goods belong to harmon corporation

subtract 346,000 from ending inventory

Included in the count was $44,500 of goods that were parts for a machine that the company no longer made. Given the high-tech nature of Pharoah Company's products, it was unlikely that these obsolete parts had any other use. However, management would prefer to keep them on the books at cost, "since that is what we paid for them, after all."

subtract 44,500 from ending inventory

the lower of cost or net realizable value rule for inventory is an example of the application of

the conservatism convention

When is a physical inventory usually taken?

when a limited number of goods are being sold or received and at the end of the company fiscal year