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Exam 5: Reporting and Analyzing Inventories

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Question 101

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A company made the following merchandise purchases and sales during the month of May: There was no beginning inventory.If the company uses the weighted average periodic method,what would be the cost of the ending inventory?

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Question 102

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LIFO inventory value is often less than the inventory's replacement cost because LIFO inventory is valued using the oldest purchase cost.

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Question 103

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A company had the following purchases during the current year: On December 31,there were 26 units remaining in ending inventory.These 26 units consisted of 2 from January,4 from February,6 from May,4 from September and 10 from November.Using the specific identification method,what is the cost of the ending inventory?

The inventory valuation method that results in the lowest taxable income in a period of inflation is:

A company has inventory of 15 units at a cost of $12 each on August 1.On August 5,they purchased 10 units at $13 per unit.On August 12,they purchased 20 units at $14 per unit.On August 15,they sold 30 units.Using the FIFO perpetual inventory method,what is the value of the inventory on August 15 after the sale?

A company made the following merchandise purchases and sales during the month of May: There was no beginning inventory.If the company uses the weighted average perpetual inventory method,what would be the cost of its ending inventory?

A company's warehouse was destroyed by a tornado on March 15.The following information was salvaged from the ruins: Inventory,beginning: $28,000 Purchases for the period: $17,000 Sales for the period: $55,000 Sales returns for the period: $700 The company's average gross profit ratio is 35%.What is the estimated cost of the lost inventory?

A corporation uses a FIFO perpetual inventory system. August 2,25 units were purchased at $12 per unit. August 5,10 units were purchased at $13 per unit. August 15,12 units were sold at $25 per unit. August 18,15 units were purchased at $14 per unit. What was the amount of the ending inventory for the month of August?

Merchandise inventory includes:

Goods on consignment are goods shipped by their owner,called the consignee,to another party called the consignor.

The ______________________ method of assigning costs to inventory and cost of goods sold is usually only practical for companies with expensive,custom-made inventory.

Goods in transit are included in a purchaser's inventory:

Monthly or quarterly statements are called interim statements because they are prepared between the traditional annual statement dates.

The Inventory account is a controlling account for the inventory subsidiary ledger that contains a separate record for each individual product.

A merchandiser that uses a periodic inventory system made the following cash purchases and sales during the year.There was no beginning inventory. The company has a calendar year-end and uses the weighted average inventory valuation method.Prepare the general journal entry to record the December 1 sale and the year-end adjusting entry relating to inventory.(Round the weighted average cost per unit to two decimal points; round the ending inventory to the nearest whole dollar.)

Given the following information,determine the cost of goods sold at December 31 using the LIFO periodic inventory method: December 2: 5 units were purchased at $7 per unit. December 9: 10 units were purchased at $9.40 per unit. December 11: 12 units were sold at $35 per unit. December 15: 20 units were purchased at $10.15 per unit. December 22: 18 units were sold at $35 per unit.

The retail inventory method estimates the cost of ending inventory by applying the gross profit ratio to net sales.

The conservatism constraint:

In applying the lower of cost or market method to inventory valuation,market is defined as the current selling price.

A company had inventory of 5 units at a cost of $20 each on November 1.On November 2,they purchased 10 units at $22 each.On November 6,they purchased 6 units at $25 each.On November 8,they sold 18 units for $54 each.Using the LIFO perpetual inventory method,what was the cost of the 18 units sold?