CH6 assmenet
The following units of an inventory item were available for sale during the year. Beginning inventory10 units at $55First purchase25 units at $60Second purchase30 units at $65Third purchase15 units at $70 The firm uses the periodic inventory system. During the year, 60 units of the item were sold. The ending inventory cost using LIFO is
$1,150
The following lots of a particular commodity were available for sale during the year Beginning inventory12 units at $52First purchase18 units at $55Second purchase26 units at $27Third purchase13 units at $63 The firm uses the periodic system, and there are 26 units of the commodity on hand at the end of the year. What is the ending inventory balance at the end of the year rounded to nearest dollar according to the average cost method? Do not round intermediate calculations
$1,181
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
$107,000
Based on the following information, what is (1) inventory turnover; (2) average daily cost of goods sold using a 365 day year; and (3) number of days' sales in inventory. Cost of goods sold $195,640Inventory: Beginning of year 20,500 End of year 18,628
(1) 10 times(2) $536(3) 36.5 days
Which of the following companies would be more likely to use the specific identification inventory costing method?
Gordon's Jewelers
Which of the following is not an example for safeguarding inventory?
Returning inventory that is defective or broken.
The following units of an inventory item were available for sale during the year. Beginning inventory10 units at $55First purchase25 units at $60Second purchase30 units at $65Third purchase15 units at $70 The firm uses the periodic inventory system. During the year, 60 units of the item were sold. The ending inventory cost using FIFO is
$1,375
The following lots of Commodity Z were available for sale during the year. Beginning inventory7 units at $49First purchase19 units at $52Second purchase50 units at $56Third purchase19 units at $59 The firm uses the periodic system, and there are 24 units of the commodity on hand at the end of the year. What is the ending inventory balance at the end of the year according to the LIFO method?
$1,227
The following lots of a Commodity P were available for sale during the year. Beginning inventory5 units at $61First purchase15 units at $63Second purchase10 units at $74Third purchase10 units at $77 The firm uses the periodic system, and there are 20 units of the commodity on hand at the end of the year. What is the amount of cost of goods sold for the year according to the FIFO method?
$1,250
The following lots of a Commodity P were available for sale during the year. Beginning inventory5 units at $61First purchase15 units at $63Second purchase10 units at $74Third purchase10 units at $77 The firm uses the periodic system, and there are 20 units of the commodity on hand at the end of the year. What is the year-end inventory balance using the LIFO method?
$1,250
The following units of an inventory item were available for sale during the year. Beginning inventory10 units at $55First purchase25 units at $60Second purchase30 units at $65Third purchase15 units at $70 The firm uses the periodic inventory system. During the year, 60 units of the item were sold. The ending inventory cost rounded to nearest dollar using average cost is
$1,263
Three identical units of merchandise were purchased during March, as shown: Steele PlateUnits CostMar. 3 Purchase1 $ 83010 Purchase1 84019 Purchase1 880Total 3 $2,550 Assume that one unit is sold on March 23 for $1,125. What is the ending inventory on March 31 using LIFO.
$1,670
If the cost of an item of inventory is $54 and the current replacement cost is $62, the amount included in inventory according to the lower of cost or market is
$54
Determine the total value of the merchandise using net realizable value. ItemQuantitySelling PriceCommissionDoll10$7$2Horse5 9 3
$80
If Beginning Inventory (BI) + Purchases (P) - Ending Inventory (EI) = Cost of Goods Sold (COGS), an equivalent equation can be written as
BI + P = COGS + EI
The inventory costing method that reports the earliest costs in ending inventory is
LIFO
If a company mistakenly counts more items during a physical inventory than actually exist, how will the error affect their bottom line?
net income will be overstated
Damaged merchandise that can be sold only at prices below cost should be valued at
net realizable value
Which of the following measures the length of time it takes to acquire, sell, and replace inventory?
number of days' sales in inventory
Which of the following will be the same amount regardless of the cost flow assumption adopted?
number of items ordered
If a company mistakenly counts less items during a physical inventory than actually exist, how will the error affect the cost of goods sold?
overstated
Under the _____ inventory method, accounting records maintain a continuously updated inventory value.
perpetual
FIFO reports higher gross profit and net income than the LIFO method when
prices are increasing
Which document establishes an initial record of the receipt of the inventory?
receiving report
The method of estimating inventory that uses records of the selling prices of the merchandise is called
retail method
The primary objectives of control over inventory are
safeguarding inventory from damage and reporting inventory in the financial statements
Taking a physical count of inventory
should be done near year-end
Which of the following methods is appropriate for a business whose inventory consists of a relatively small number of unique, high-cost items?
specific identification
The following lots of a Commodity P were available for sale during the year. Beginning inventory5 units at $61First purchase15 units at $63Second purchase10 units at $74Third purchase10 units at $77 The firm uses the periodic system, and there are 20 units of the commodity on hand at the end of the year. What is the amount of cost of goods sold for the year according to the average cost method?
$1,380
The following lots of a Commodity P were available for sale during the year. Beginning inventory5 units at $61First purchase15 units at $63Second purchase10 units at $74Third purchase10 units at $77 The firm uses the periodic system, and there are 20 units of the commodity on hand at the end of the year. What is the year-end inventory balance using the average cost method?
$1,380
The following lots of Commodity Z were available for sale during the year. Beginning inventory7 units at $50First purchase18 units at $53Second purchase28 units at $55Third purchase18 units at $57 The firm uses the periodic system, and there are 26 units of the commodity on hand at the end of the year. What is the ending inventory balance at the end of the year according to the FIFO method?
$1,466
The following lots of a Commodity P were available for sale during the year. Beginning inventory5 units at $61First purchase15 units at $63Second purchase10 units at $74Third purchase10 units at $77 The firm uses the periodic system, and there are 20 units of the commodity on hand at the end of the year. What is the amount of cost of goods sold for the year according to the LIFO method?
$1,510
The following lots of a Commodity P were available for sale during the year. Beginning inventory5 units at $61First purchase15 units at $63Second purchase10 units at $74Third purchase10 units at $77 The firm uses the periodic system, and there are 20 units of the commodity on hand at the end of the year. What is the year-end inventory balance using the FIFO method?
$1,510
The following lots of Commodity D were available for sale during the year. Beginning inventory10 units at $60First purchase25 units at $65Second purchase30 units at $68Third purchase15 units at $75 The firm uses the periodic system, and there are 25 units of the commodity on hand at the end of the year. What is the ending inventory balance at the end of the year using the LIFO method?
$1,575
Three identical units of merchandise were purchased during March, as shown: Steele PlateUnits CostMar. 3 Purchase1 $ 83010 Purchase1 84019 Purchase1 880Total 3 $2,550 Assume that one unit is sold on March 23 for $1,125. What is the ending inventory on March 31 using LIFO?
$1,670
The following lots of Commodity D were available for sale during the year. Beginning inventory10 units at $60First purchase25 units at $65Second purchase30 units at $68Third purchase15 units at $75 The firm uses the periodic system, and there are 25 units of the commodity on hand at the end of the year. What is the ending inventory balance at the end of the year rounded to nearest dollar using the average cost method?
$1,685
The following lots of Commodity D were available for sale during the year. Beginning inventory10 units at $60First purchase25 units at $65Second purchase30 units at $68Third purchase15 units at $75 The firm uses the periodic system, and there are 25 units of the commodity on hand at the end of the year. What is the ending inventory balance at the end of the year using the FIFO method?
$1,805
The Boxwood Company sells blankets for $33 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1. DateBlanketsUnitsCostMay 3 Purchase10 $15 10 Sale417 Purchase14 $18 20 Sale723 Sale230 Purchase8 $19 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.
$108
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. DateBlanketsUnitsCostMay 3 Purchase5$2010 Sale3 17 Purchase10$2420 Sale6 23 Sale3 30 Purchase10$30 Assuming that the company uses the perpetual inventory system, determine the gross profit for the sale of May 23 using the FIFO inventory cost method.
$108
Assume that three identical units of merchandise were purchased during October, as follows: UnitsCostOctober5Purchase1$5 12Purchase113 28Purchase115 Total 3$33 One unit is sold on October 31 for $28. Using the table provided, determine cost of goods sold under the average cost method.
$11
On the basis of the following data, what is the estimated cost of the inventory on May 31 using the retail method? CostRetailMay 1Inventory$24,420$40,700May 1-31Purchases45,13067,280May 1-31Sales90,570 Do not round intermediate calculations. Round your final answer to the nearest whole dollar.
$11,214
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. DateBlanketsUnitsCostMay 3 Purchase5$2010 Sale3 17 Purchase10$2420 Sale6 23 Sale3 30 Purchase10$30 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.
$136
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. DateBlanketsUnitsCostMay 3 Purchase5$2010 Sale3 17 Purchase10$2420 Sale6 23 Sale3 30 Purchase10$30 Assuming that the company uses the perpetual inventory system, determine the cost of goods sold for the sale of May 20 using the LIFO inventory cost method.
$144
Assume that three identical units of merchandise were purchased during October, as follows: UnitsCostOctober5Purchase1$5 12Purchase113 28Purchase115 Total 3$33 One unit is sold on October 31 for $28. Using the table provided, what is the cost of goods sold under the LIFO method?
$15
If the estimated rate of gross profit is 30%, what is the estimated cost of the inventory on September 30, based on the following data? Sep. 1Inventory (at cost)$84,784Sep. 1-30Purchases, net (at cost)163,000Sep. 1-30Sales136,800
$152,024
On the basis of the following data, what is the estimated cost of the inventory on May 31 using the retail method? CostRetailMay 1Inventory$125,000$166,667May 1-31Purchases235,000313,333May 1-31Sales 230,000
$187,500
Basic inventory data for April 30 are presented below for a business that employs the lower-of-cost-or-market basis of inventory valuation to each category. CommodityInventory QuantityCost per UnitMarket Value per UnitA35$52$55B20155150C25 82 85D40 58 55 What is the amount of reduction in the inventory at April 30 attributable to market decline?
$220
Assume that three identical units of merchandise were purchased during October, as follows: UnitsCostOctober5Purchase1$5 12Purchase113 28Purchase115 Total 3$33 One unit is sold on October 31 for $28. Using the table provided, determine gross profit under the FIFO method.
$23
Garrison Company uses the retail method of inventory costing. It started the year with an inventory that had a retail cost of $35,600. During the year, Garrison purchased an inventory with a retail sales value of $708,200. After performing a physical inventory, Garrison calculated the inventory cost at retail to be $52,400. The mark up is 100% of cost. Determine the ending inventory at its estimated cost.
$26,200
Three identical units of merchandise were purchased during March, as shown: Steele PlateUnits CostMar. 3 Purchase1 $ 83010 Purchase1 84019 Purchase1 880Total 3 $2,550 Assume that one unit is sold on March 23 for $1,125. What is the gross profit for March using FIFO?
$295
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. DateBlanketsUnitsCostMay 3 Purchase5$2010 Sale3 17 Purchase10$2420 Sale6 23 Sale3 30 Purchase10$30 Assuming that the company uses the perpetual inventory system, determine the May 31 inventory balance using the LIFO inventory cost method.
$364
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. DateBlanketsUnitsCostMay 3 Purchase5$2010 Sale3 17 Purchase10$2420 Sale6 23 Sale3 30 Purchase10$30 Assuming that the company uses the perpetual inventory system, determine the May 31 inventory balance using the FIFO inventory cost method.
$372
The Boxwood Company sells blankets for $36 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1. DateBlanketsUnitsCostMay 3 Purchase9$1710 Sale417 Purchase12$1820 Sale523 Sale230 Purchase9$23 Assuming that the company uses the perpetual inventory system, determine the ending inventory for the month of May using the LIFO inventory cost method.
$382
Garrison Company uses the retail method of inventory costing. It started the year with an inventory that had a retail cost of $45,000. During the year, Garrison purchased an inventory with a retail sales value of $300,000. After performing a physical inventory, Garrison calculated the inventory at retail to be $80,000. The markup is 100% of cost. Determine the ending inventory at its estimated cost.
$40,000
The Boxwood Company sells blankets for $40 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1. DateBlanketsUnitsCostMay 3 Purchase8 $19 10 Sale517 Purchase13 $16 20 Sale423 Sale330 Purchase11 $24 Assuming that the company uses the perpetual inventory system, determine the May 31 inventory balance using the FIFO inventory cost method.
$408
The Boxwood Company sells blankets for $31 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1. DateBlanketsUnitsCostMay 3 Purchase31 $18 10 Sale1217 Purchase36 $20 20 Sale2223 Sale430 Purchase32 $21 Assuming that the company uses the perpetual inventory system, determine the gross profit for the sale of May 23 using the FIFO inventory cost method.
$44
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. DateBlanketsUnitsCostMay 3 Purchase5$2010 Sale3 17 Purchase10$2420 Sale6 23 Sale3 30 Purchase10$30 Assuming that the company uses the perpetual inventory system, determine the gross profit for the month of May using the LIFO cost method.
$444
Addison, Inc. uses a perpetual inventory system. Below is information about one inventory item for the month of September. Sep. 1 Inventory20 units at $204 Sold10 units10 Purchased30 units at $2517 Sold20 units30 Purchased10 units at $30 If Addison uses LIFO, the September 17 cost of goods sold would be:
$500
The inventory data for an item for November are: Nov. 1 Inventory20 units at $194 Sold10 units10 Purchased30 units at $2017 Sold20 units30 Purchased10 units at $21 Using a perpetual system, what is the cost of the goods sold for November if the company uses FIFO?
$580
The inventory data for an item for November are: Nov. 1 Inventory18 units at $194 Sold9 units10 Purchased25 units at $2317 Sold18 units30 Purchased25 units at $22 Using a perpetual system, what is the cost of the goods sold for November if the company uses LIFO?
$585
The inventory data for an item for November are: Nov. 1 Inventory20 units at $194 Sold10 units10 Purchased30 units at $2017 Sold20 units30 Purchased10 units at $22 Using a perpetual system, what is the cost of the goods sold for November if the company uses the weighted average cost method?
$585
The inventory data for an item for November are: Nov. 1 Inventory20 units at $194 Sold10 units10 Purchased30 units at $2017 Sold20 units30 Purchased10 units at $21 Using a perpetual system, what is the cost of the goods sold for November if the company uses LIFO?
$590
The inventory data for an item for November are: Nov. 1 Inventory20 units at $194 Sold10 units10 Purchased30 units at $2017 Sold20 units30 Purchased10 units at $22 Using a perpetual system, what is the cost of the goods sold for November if the company uses LIFO?
$590
On the basis of the following data, what is the value of the total inventory at the lower of cost or market. Apply lower of cost or market to each inventory item. ItemInventory QuantityUnit Cost PriceUnit Market PriceProduct C300$ 6$ 5Product D420 12 14
$6,540
If a company values inventory at the lower of cost or market, which of the following is the value of inventory on the balance sheet? Apply the lower-of-cost-or-market method to inventory as a whole. ItemInventory QuantityUnit Cost PriceUnit Market PriceProduct C420$6$5Product D3701214
$6,960
If the cost of an item of inventory is $60 and the current replacement cost is $75, the amount included in inventory according to the lower of cost or market is
$60
The following lots of Commodity Z were available for sale during the year. Beginning inventory10 units at $30First purchase25 units at $32Second purchase30 units at $34Third purchase10 units at $35 The firm uses the periodic system, and there are 20 units of the commodity on hand at the end of the year. What is the ending inventory balance at the end of the year according to the LIFO method?
$620
The following lots of Commodity Z were available for sale during the year. Beginning inventory10 units at $30First purchase25 units at $32Second purchase30 units at $34Third purchase10 units at $35 The firm uses the periodic system, and there are 20 units of the commodity on hand at the end of the year. What is the ending inventory balance at the end of the year rounded to nearest dollar according to the average cost method?
$659
The following lots of Commodity Z were available for sale during the year. Beginning inventory10 units at $30First purchase25 units at $32Second purchase30 units at $34Third purchase10 units at $35 The firm uses the periodic system, and there are 20 units of the commodity on hand at the end of the year. What is the ending inventory balance at the end of the year according to the FIFO method?
$690
The Boxwood Company sells blankets for $35 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1. DateBlanketsUnitsCostMay 3 Purchase7 $14 10 Sale417 Purchase13 $18 20 Sale423 Sale230 Purchase12 $21 Assuming that the company uses the perpetual inventory system, determine the cost of goods sold for the sale of May 20 using the LIFO inventory cost method.
$72
On the basis of the following data for Sanford Industries as of December 31, what is the value of the inventory at the lower of cost or market? Apply lower of cost or market to each inventory item. CommodityInventory QuantityCost per UnitMarket Value per UnitSize 4 9$17$19Size 510 17 14Size 614 20 22Size 712 13 15
$729
Addison, Inc. uses a perpetual inventory system. Below is information about one inventory item for the month of September. Sep. 1 Inventory20 units at $204 Sold10 units10 Purchased30 units at $2517 Sold20 units30 Purchased10 units at $30 If Addison uses LIFO, the September 30 inventory balance is
$750
Addison, Inc. uses a perpetual inventory system. Below is information about one inventory item for the month of September. Sep. 1 Inventory20 units at $204 Sold10 units10 Purchased30 units at $2517 Sold20 units30 Purchased10 units at $30 If Addison uses the weighted average cost method, what is the inventory balance at the end of September?
$775.00
Applying the lower of cost or market to each item of inventory, what should the total inventory value be for the following items? ItemInventory QuantityCost per UnitMarket Value per UnitTotalCostTotalMarketA300$15.00$14.50$4,500$4,350B200$14.00$15.00$2,800$3,000C100$17.00$17.50$1,700$1,750
$8,850
Addison, Inc. uses a perpetual inventory system. Below is information about one inventory item for the month of September. Sep. 1 Inventory20 units at $204 Sold10 units10 Purchased30 units at $2517 Sold20 units30 Purchased10 units at $30 If Addison uses FIFO, the September 30 inventory is
$800
The following data were taken from Castle, Inc. Cost of goods sold$894,000Inventory, end of year78,000Inventory, beginning of the year92,000 What is (1) the inventory turnover ratio and (2) the number of days' sales in inventory for Castle Inc.?
(1) 10.52 times(2) 34.70 days
Based on the following information: what is the company's (1) inventory turnover; (2) average daily cost of goods sold; and (3) number of days' sales in inventory for the current year? Use a 365-day year. ItemPrior YearCurrent YearCost of goods sold$172,900$215,000Inventory18,00012,000
(1) 14.33 times(2) $589.04(3) 25.5 days
If the estimated rate of gross profit is 30%, what is the estimated cost of the inventory on September 30, based on the following data? Sep. 1Inventory (at cost)$125,000Sep. 1-30Purchases, net (at cost)300,000Sep. 1-30Sales150,000
.$320,000
During a period of consistently rising prices, the method of inventory that will result in reporting the greatest cost of goods sold is
.LIFO
For the year ended December 31, Depot Max's cost of goods sold was $56,900. Inventory at the beginning of the year was $6,540. Ending inventory was $7,250. Depot Max's number of days' sales in inventory is closest to
44
For the year ended December 31, Depot Max's cost of goods sold was $56,900. Inventory at the beginning of the year was $6,540. Ending inventory was $7,250. Compute Depot Max's inventory turnover for the year.
8.3
The following data were taken from the annual reports of Big Bang Inc., a manufacturer of fireworks, and Orange Inc., a manufacturer of computers. Big Bang, Inc.Orange, Inc.Cost of goods sold$830,000$11,540,000Inventory, end of year190,000320,000Inventory, beginning of year240,000290,000 What is the inventory turnover for Big Bang and Orange.
Big Bang, Inc.: 3.86Orange, Inc.: 37.84
Addison, Inc. uses a perpetual inventory system. Below is information about one inventory item for the month of September. Sep. 1 Inventory20 units at $204 Sold10 units10 Purchased30 units at $2517 Sold20 units30 Purchased10 units at $30 If Addison uses FIFO, the September 17 entry for cost of goods sold would be:
Cost of Goods Sold450Inventory450
If inventory is being valued at cost and the price level is steadily rising, the method of costing that will yield the highest net income is
FIFO
The inventory costing method that reports the most current prices in ending inventory is
FIFO
During a period of falling prices, which of the following inventory methods generally results in the lowest balance sheet amount for inventory?
FIFO method
Kristin's Boutiques has identified the following items for possible inclusion in its December 31 inventory. Which of the following would not be included in the year-end inventory?
Kristin has in its warehouse merchandise on consignment from Abby Co.
If inventory is being valued at cost and the purchase price is steadily falling, which method of costing will yield the largest net income?
LIFO
The inventory method that assigns the most recent costs to cost of goods sold is
LIFO
During times of rising prices, which of the following is not an accurate statement?
LIFO will result in higher income taxes than FIFO.
All of the following are reasons to use an estimated method of costing inventory except
Purchase records are not maintained.
Brutus Corporation, a newly formed corporation, has the following transactions during May, its first month of operations. May1Purchased 500 units @ $25.00 each 4Purchased 300 units @ $24.00 each 6Sold 400 units @ $38.00 each 8Purchased 700 units @ $23.00 each 13Sold 450 units @ $37.50 each 20Purchased 250 units @ $25.25 each 22Sold 275 units @ $36.00 each 27Sold 300 units @ $37.00 each 28Purchased 550 units @ $26.00 each 30Sold 100 units @ $39.00 each Using the table provided, calculate total sales, cost of goods sold, gross profit, and ending inventory using each of the FIFO perpetual inventory method.
Total sales: $56,975.00 Cost of goods sold: $36,431.25 Gross profit: $20,543.75 Ending inventory: $19,981.20
Brutus Corporation, a newly formed corporation, has the following transactions during May, its first month of operations. May1Purchased 500 units @ $25.00 each 4Purchased 300 units @ $24.00 each 6Sold 400 units @ $38.00 each 8Purchased 700 units @ $23.00 each 13Sold 450 units @ $37.50 each 20Purchased 250 units @ $25.25 each 22Sold 275 units @ $36.00 each 27Sold 300 units @ $37.00 each 28Purchased 550 units @ $26.00 each 30Sold 100 units @ $39.00 each Using the table provided, calculate total sales, cost of goods sold, gross profit, and ending inventory using each of the LIFO perpetual inventory method.
Total sales: $56,975.00 Cost of goods sold: $36,587.50 Gross profit: $20,387.50 Ending inventory: $19,825.00
Brutus Corporation, a newly formed corporation, has the following transactions during May, its first month of operations. May1 Purchased 500 units @ $25.00 each 4 Purchased 300 units @ $24.00 each 6 Sold 400 units @ $38.00 each 8 Purchased 700 units @ $23.00 each 13 Sold 450 units @ $37.50 each 20 Purchased 250 units @ $25.25 each 22 Sold 275 units @ $36.00 each 27 Sold 300 units @ $37.00 each 28 Purchased 550 units @ $26.00 each 30 Sold 100 units @ $39.00 each Using the table provided, calculate total sales, cost of goods sold, gross profit, and ending inventory using each of the LIFO periodic inventory method.
Total sales: $56,975.00 Cost of goods sold: $37,312.50 Gross profit: $19,662.50 Ending inventory: $19,573.25
Brutus Corporation, a newly formed corporation, has the following transactions during May, its first month of operations. May1Purchased 500 units @ $25.00 each 4Purchased 300 units @ $24.00 each 6Sold 400 units @ $38.00 each 8Purchased 700 units @ $23.00 each 13Sold 450 units @ $37.50 each 20Purchased 250 units @ $25.25 each 22Sold 275 units @ $36.00 each 27Sold 300 units @ $37.00 each 28Purchased 550 units @ $26.00 each 30Sold 100 units @ $39.00 each 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.
Total sales: $56,975.00 Cost of goods sold: $37,401.75 Gross profit: $19,573.25 Ending inventory: $19,010.75
A company will most likely use an estimated method of determining inventory when
a natural disaster has destroyed most of the inventory
All of the following are documents used for inventory control except
a petty cash voucher
Under a periodic inventory system
a physical inventory is taken at the end of the period
Too much inventory on hand
all of these
During the taking of its physical inventory on December 31, 2014, Barry's Bike Shop incorrectly counted its inventory as $222,729 instead of the correct amount of $177,462. The effect on the balance sheet and income statement would be
assets, retained earnings, and net income all overstated by $45,267
During the taking of its physical inventory on December 31, 2014, Barry's Bike Shop incorrectly counted its inventory as $350,000 instead of the correct amount of $280,000. The effect on the balance sheet and income statement would be
assets, retained earnings, and net income all overstated by $70,000
Which of the following is used to analyze the efficiency and effectiveness of inventory management?
both inventory turnover and number of days' sales in inventory
Control of inventory should begin as soon as the inventory is received. Which of the following internal control steps is not done to meet this goal?
check the invoice with the person who specifically purchased the item
When using a perpetual inventory system, the journal entry to record the cost of goods sold is:
debit Cost of Goods Sold; credit Inventory
Cost flow is in the order in which costs were incurred when using
first-in, first-out
When merchandise sold is assumed to be in the order in which the purchases were made, the company is using
first-in, first-out
Under a perpetual inventory system, the amount of each type of merchandise on hand is available in the
inventory ledger
Which of the following measures the relationship between cost of goods sold and the amount of inventory carried during the period?
inventory turnover
Cost flow is in the reverse order in which costs were incurred when using
last-in, first-out
Ending inventory is made up of the oldest purchases when a company uses
last-in, first-out
Excess inventory results in all of the following except
lost sales
If a manufacturer ships merchandise to a retailer on consignment, the unsold merchandise should be included in the inventory of the
manufacturer
Inventory at the end of the year was inadvertently overstated. Which of the following statements correctly states the effect of the error on net income, assets, and stockholders' equity?
net income is overstated, assets are overstated, and stockholders' equity is overstated
Inventory at the end of the year was understated. Which of the following statements correctly states the effect of the error?
net income is understated
Inventory at the end of the year is overstated. Which of the following statements correctly states the effect of the error?
stockholders' equity is overstated
The number of days' sales in inventory measures
the length of time it takes to acquire, sell, and replace the inventory
Which document authorizes the purchase of the inventory from an approved vendor?
the purchase order
If the revenues are correctly reported and the gross profit of a company is understated, what is the effect on stockholders' equity?
understated
