Inventories Reporting | Test Bank – 10th Edition

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Student name:__________

TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
1) Goods in transit are automatically included in inventory regardless of whether title has passed to the buyer.

⊚ true
⊚ false

2) Goods on consignment are goods sent by the owner, called the consignor, to another party, the consignee. The consignee sells goods for the owner.

⊚ true
⊚ false

3) If damaged, obsolete (out-of-date), or deteriorated goods can be sold, they will be included in inventory at their original cost.

⊚ true
⊚ false

4) If the shipping terms are FOB destination, then ownership of inventory passes when goods arrive at their destination.

⊚ true
⊚ false

5) Net realizable value for damaged, obsolete (out-of-date), or deteriorated goods is sales price less the cost of making the sale.

⊚ true
⊚ false

6) The cost of an inventory item includes its invoice cost minus any discount, plus any other costs, such as, shipping, storage, import duties, and insurance.

⊚ true
⊚ false

7) One application of internal control when taking a physical count of inventory is the use of pre-numbered inventory tickets.

⊚ true
⊚ false

8) Incidental costs for acquiring merchandise inventory, such as import duties, shipping, storage, and insurance, should not be added to the cost of inventory.

⊚ true
⊚ false

9) The physical count of inventory is used to adjust the Inventory account balance to the actual inventory available.

⊚ true
⊚ false

10) Most companies do not take a physical count of inventory each year, but rather rely on inventory records to determine the inventory value.

⊚ true
⊚ false

11) According to the expense recognition principle, inventory costs are expensed as cost of goods sold when inventory is sold.

⊚ true
⊚ false

12) The weighted average method matches the costs of inventory items with the revenue generated by the sale of the inventory items.

⊚ true
⊚ false

13) Assuming items in inventory were purchased at different prices, the inventory cost method used affects net income.

⊚ true
⊚ false

14) Whether purchase costs are rising or falling, FIFO always will yield the highest gross profit and net income.

⊚ true
⊚ false

15) An advantage of the weighted average inventory method is that it smooths out erratic changes in costs.

⊚ true
⊚ false

16) In a period of rising purchase costs, LIFO yields the lowest gross profit and net income, which provides a temporary tax advantage.

⊚ true
⊚ false

17) When purchase costs regularly rise, FIFO reports the lowest cost of goods sold, which yields the highest gross profit and net income.

⊚ true
⊚ false

18) The LIFO method of inventory costing best matches current costs with revenues.

⊚ true
⊚ false

19) The choice of costing method will impact both the balance sheet and the income statement.

⊚ true
⊚ false

20) An advantage of FIFO is that it assigns the most recent costs to cost of goods sold, and does a better job of matching current costs with revenues on the income statement.

⊚ true
⊚ false

21) According to IRS guidelines, companies may use FIFO for financial reporting and LIFO for tax reporting.

⊚ true
⊚ false

22) An error in the ending inventory balance will cause an error in the calculation of cost of goods sold.

⊚ true
⊚ false

23) Errors in the ending inventory balance only affect the current period's records and financial statements.

⊚ true
⊚ false

24) Understating ending inventory understates both current and total assets.

⊚ true
⊚ false

25) An understatement of the ending inventory balance will overstate cost of goods sold and understate net income.

⊚ true
⊚ false

26) Overstating beginning inventory will understate cost of goods sold and net income.

⊚ true
⊚ false

27) An understatement of ending inventory will cause an understatement of assets and equity on the balance sheet.

⊚ true
⊚ false

28) An overstatement of ending inventory will cause an overstatement of assets and an understatement of equity on the balance sheet.

⊚ true
⊚ false

29) A high inventory turnover ratio is preferable if inventory is adequate to meet demand.

⊚ true
⊚ false

30) The inventory turnover ratio is computed by dividing cost of goods sold by average inventory.

⊚ true
⊚ false

31) The days' sales in inventory ratio is computed by dividing ending inventory by cost of goods sold and multiplying the result by 365.

⊚ true
⊚ false

32) The simple rule for inventory turnover is that a low ratio is preferable.

⊚ true
⊚ false

33) A low inventory turnover ratio can suggest a company is struggling to sell inventory.

⊚ true
⊚ false

34) A company's cost of goods sold was $15,300 and its average inventory was $4,500. Its inventory turnover equals 3.4.

⊚ true
⊚ false

35) Underwood had cost of goods sold of $8 million and its ending inventory was $2 million. Therefore, its days' sales in inventory equals 25 days.

⊚ true
⊚ false

36) Methods used to assign costs to inventory and to cost of goods sold include specific identification, first-in, first-out (FIFO), last-in, first-out (LIFO), and weighted average.

⊚ true
⊚ false

37) The physical flow and cost flow of inventory does not have to be the same, except when using the specific identification costing method.

⊚ true
⊚ false

38) LIFO assumes that inventory costs flow in the order incurred.

⊚ true
⊚ false

39) A company unknowingly understated ending inventory in year 1. In year 2, there will be an understatement of cost of goods sold and an overstatement of net income.

⊚ true
⊚ false

40) The FIFO inventory method assumes that costs for the latest units purchased are the first to be charged to the cost of goods sold.

⊚ true
⊚ false

41) The cost flow method chosen must match the actual physical flow of the goods.

⊚ true
⊚ false

42) The assignment of costs to the cost of goods sold and to ending inventory using FIFO is the same for both the perpetual and periodic inventory systems.

⊚ true
⊚ false

43) Under FIFO, the most recent costs are assigned to ending inventory.

⊚ true
⊚ false

44) The choice of an inventory costing method has little to no impact on gross profit and cost of sales.

⊚ true
⊚ false

45) In applying the lower of cost or market method to inventory valuation, market is defined as the current replacement cost for LIFO.

⊚ true
⊚ false

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

⊚ true
⊚ false

47) A company has inventory with a selling price of $451,000, a market value of $223,000, and a cost of $241,000. According to the lower of cost or market, the inventory should be written down to $223,000.

⊚ true
⊚ false

48) The lower of cost or market rule for inventory valuation is always applied to individual units separately rather than to major categories of inventory or to the entire inventory.

⊚ true
⊚ false

49) Accounting principles require that inventory be reported at the market value (cost) of replacing inventory when cost is lower than market value.

⊚ true
⊚ false

50) LIFO inventory is reported at the market value (cost) of replacing inventory when market value is lower than cost.

⊚ true
⊚ false

51) A company's total cost of FIFO inventory was $329,000 and its net realizable value is $307,000. Applying lower cost or market, the amount reported should be $329,000.

⊚ true
⊚ false

52) A company's cost of inventory was $219,500. Due to phenomenal demand the market value of its inventory increased to $221,700. This company should adjust the inventory to its market value.

⊚ true
⊚ false

53) When LIFO is used with the periodic inventory system, cost of goods sold is assigned costs from the most recent purchases at the point of each sale, rather than from the most recent purchases for the period.

⊚ true
⊚ false

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

⊚ true
⊚ false

55) The reasoning behind the retail inventory method is that if we can get a good estimate of the cost-to-retail ratio, we can multiply ending inventory at retail by this ratio to estimate ending inventory at cost.

⊚ true
⊚ false

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

⊚ true
⊚ false

57) In the retail inventory method of inventory valuation, the retail amount of inventory is measured using selling prices of inventory items.

⊚ true
⊚ false

58) To avoid the time-consuming process of taking an inventory each year, most companies use the gross profit method to estimate ending inventory.

⊚ true
⊚ false

59) Using the retail inventory method, if the cost to retail ratio is 80% and ending inventory at retail is $160,000, then estimated ending inventory at cost is $222,143.

⊚ true
⊚ false

60) Using the retail inventory method, if the cost to retail ratio is 70% and ending inventory at retail is $145,000, then estimated ending inventory at cost is $207,143.

⊚ true
⊚ false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question.
61) Damaged and obsolete goods that can be sold:

A) Are never counted as inventory.
B) Are included in inventory at their full cost.
C) Are included in inventory at their net realizable value.
D) Should be disposed of immediately.
E) Are assigned a value of zero.

62) Merchandise inventory includes:

A) All goods that a company owns and holds for sale.
B) All goods in transit.
C) All goods on consignment.
D) Only damaged goods.
E) Only non-damaged goods.

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

A) At any time during transit.
B) When the goods are shipped FOB shipping point.
C) When the supplier is responsible for freight charges.
D) If the goods are shipped FOB destination.
E) After the half-way point between the buyer and seller.

64) Goods on consignment are:

A) Goods sent by the owner to the consignee who sells the goods for the owner.
B) Reported in the consignee's books as inventory.
C) Goods shipped to the consignor who sells the goods for the owner.
D) Not reported in the consignor's inventory since they do not have possession of the inventory.
E) Always paid for by the consignee when they take possession.

65) Regardless of the inventory costing system used, cost of goods available for sale must be allocated at the end of the period between

A) beginning inventory and net purchases during the period.
B) ending inventory and beginning inventory.
C) net purchases during the period and ending inventory.
D) ending inventory and cost of goods sold.
E) beginning inventory and cost of goods sold.

66) On December 31 of the current year, Plunkett Company reported an ending inventory balance of $210,500. The following additional information is also available:
Plunkett sold and shipped goods costing $37,100 to Savannah Enterprises on December 28 with shipping terms of FOB shipping point. The goods were not included in theending inventory amount of $210,500.Plunkett purchased goods costing $43,100 on December 29. The goods were shipped FOB destination and were received by Plunkett on January 2 of the following year. The shipment was a rush order that was supposed to arrive by December 31. These goods were included in the ending inventory balance of $210,500.Plunkett's ending inventory balance of $210,500 included $14,100 of goods being held on consignment from Carole Company. (Plunkett Company is the consignee.)Plunkett's ending inventory balance of $210,500 did not include goods costing $94,100 that were shipped to Plunkett on December 27 with shipping terms of FOB destination and were still in transit at year-end.
Based on the above information, the amount that Plunkett should report in ending inventory on December 31 is:

A) $190,400
B) $167,400
C) $196,400
D) $153,300
E) $204,500

67) On December 31 of the current year, Plunkett Company reported an ending inventory balance of $215,000. The following additional information is also available:Plunkett sold and shipped goods costing $38,000 to Savannah Enterprises on December 28 with shipping terms of FOB shipping point. The goods were not included in the ending inventory amount of $215,000.Plunkett purchased goods costing $44,000 on December 29. The goods were shipped FOB destination and were received by Plunkett on January 2 of the following year. The shipment was a rush order that was supposed to arrive by December 31. These goods were included in the ending inventory balance of $215,000.Plunkett's ending inventory balance of $215,000 included $15,000 of goods being held on consignment from Carole Company. (Plunkett Company is the consignee.)Plunkett's ending inventory balance of $215,000 did not include goods costing $95,000 that were shipped to Plunkett on December 27 with shipping terms of FOB destination and were still in transit at year-end.
Based on the above information, the amount that Plunkett should report in ending inventory on December 31 is:

A) $194,000
B) $209,000
C) $200,000
D) $171,000
E) $156,000

68) Bedrock Company reported a December 31 ending inventory balance of $412,000. The following additional information is also available:The ending inventory balance of $412,000 included $73,200 of consigned inventory for which Bedrock was the consignor.The ending inventory balance of $412,000 included $24,400 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.
Based on this information, the correct balance for ending inventory on December 31 is:

A) $387,600
B) $241,000
C) $338,600
D) $358,400
E) $303,000

69) Bedrock Company reported a December 31 ending inventory balance of $412,000. The following additional information is also available:The ending inventory balance of $412,000 included $72,000 of consigned inventory for which Bedrock was the consignor.The ending inventory balance of $412,000 included $22,000 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. Based on this information, the correct balance for ending inventory on December 31 is:

A) $412,000
B) $340,000
C) $318,000
D) $362,000
E) $390,000

70) Buffalo Company reported a December 31 ending inventory balance of $412,000. The following additional information is also available:The ending inventory balance of $412,000 did not include goods costing $48,000 that were purchased by Buffalo on December 28 and shipped FOB destination on that date. Buffalo did not receive the goods until January 2 of the following year.The ending inventory balance of $412,000 included damaged goods at their original cost of $38,000. The net realizable value of the damaged goods was $10,000.Based on this information, the correct balance for ending inventory on December 31 is:

A) $374,000
B) $384,000
C) $460,000
D) $422,000
E) $438,000

71) Which of the following costs is not included in the Merchandise Inventory account?

A) Invoice price minus any discount.
B) Import duties.
C) Storage.
D) Insurance.
E) Damaged inventory that cannot be sold.

72) Which of the following is not an internal control that should be applied when a business takes a physical count of inventory?

A) Prenumbered inventory tickets.
B) A manager confirms that all inventories are ticketed only once.
C) Counters confirm the existence, amounts, and condition of inventory.
D) Second counts by a different counter.
E) Counters of inventory should be those who are responsible for the inventory.

73) Physical counts of inventory:

A) Are not necessary under the perpetual system.
B) Are necessary to adjust the Inventory account to the actual inventory available.
C) Must be taken at least once a month.
D) Requires the use of hand-held portable computers.
E) Are not necessary under the cost-to benefit constraint.

74) When purchase costs regularly rise, the inventory costing method that yields the highest reported net income is:

A) Specific identification method.
B) Average cost method.
C) Weighted-average method.
D) FIFO method.
E) LIFO method.

75) The inventory costing method that smooths out erratic changes in costs is:

A) FIFO.
B) Weighted average.
C) LIFO.
D) Specific identification.
E) WIFO.

76) The inventory costing method that has the advantages of assigning an amount to inventory on the balance sheet that approximates its current cost, and also follows the actual flow of goods for most businesses is:

A) FIFO.
B) Weighted average.
C) LIFO.
D) Specific identification.
E) Lower of cost or market.

77) The inventory costing method that results in the lowest taxable income in a period of rising costs is:

A) LIFO method.
B) FIFO method.
C) Weighted-average cost method.
D) Specific identification method.
E) Gross profit method.

78) The LIFO conformity rule:

A) Requires when LIFO is used for tax reporting, it must also be used for financial reporting.
B) Requires a company to use one method of inventory valuation exclusively.
C) Requires that all companies in the same industry use the same accounting methods of inventory valuation.
D) Is also called the taxation principle.
E) Is only applicable to the automotive industry.

79) The selected inventory costing method impacts:

A) Gross profit and net income.
B) Sales.
C) The physical flow of goods.
D) The quantity of inventory items on hand.
E) The shipping terms to the buyer.

80) Companies can and often do use different costing methods for financial reporting and tax reporting. An exception to this is the:

A) Full disclosure principle.
B) Consistency concept.
C) FIFO inventory valuation method.
D) LIFO conformity rule.
E) Matching principle.

81) Which of the following inventory costing methods will always result in the same values for ending inventory and cost of goods sold regardless of whether a perpetual or periodic inventory system is used?

A) FIFO and LIFO
B) LIFO and weighted-average cost
C) Specific identification and FIFO
D) FIFO and weighted-average cost
E) LIFO and specific identification

82) Which of the following is not affected by an error related to ending inventory?

A) Cost of goods sold.
B) Gross profit.
C) Net sales.
D) Current assets.
E) Net income.

83) An error in ending inventory causes an error in the next period’s:

A) Sales.
B) Beginning inventory.
C) Accounts payable.
D) Accounts receivable.
E) Shipping costs.

84) The understatement of the ending inventory balance causes:

A) Cost of goods sold to be overstated and net income to be understated.
B) Cost of goods sold to be overstated and net income to be overstated.
C) Cost of goods sold to be understated and net income to be understated.
D) Cost of goods sold to be understated and net income to be overstated.
E) Cost of goods sold to be overstated and net income to be correct.

85) The understatement of the beginning inventory balance causes:

A) Cost of goods sold to be understated and net income to be understated.
B) Cost of goods sold to be understated and net income to be overstated.
C) Cost of goods sold to be overstated and net income to be overstated.
D) Cost of goods sold to be overstated and net income to be understated.
E) Cost of goods sold to be overstated and net income to be correct.

86) Lucia Company reported cost of goods sold for Year 1 and Year 2 as follows:

Lucia Company made two errors: 1) ending inventory at the end of Year 1 was understated by $16,300 and 2) ending inventory at the end of Year 2 was overstated by $7,300. Given this information, the correct cost of goods sold figure for Year 2 would be:

A) $255,500
B) $292,800
C) $283,800
D) $300,100
E) $269,200

87) Lucia Company reported cost of goods sold for Year 1 and Year 2 as follows:

Lucia Company made two errors: 1) ending inventory at the end of Year 1 was understated by $15,000 and 2) ending inventory at the end of Year 2 was overstated by $6,000. Given this information, the correct cost of goods sold figure for Year 2 would be:

A) $291,000
B) $276,000
C) $264,000
D) $285,000
E) $249,000

88) Hull Company reported the following income statement information for the current year:

The beginning inventory balance is correct. However, the ending inventory figure was overstated by $33,000. Given this information, the correct gross profit would be:

A) $109,500.
B) $142,500.
C) $175,500.
D) $122,500.
E) $118,500.

89) Hull Company reported the following income statement information for the current year:

The beginning inventory balance is correct. However, the ending inventory figure was overstated by $20,000. Given this information, the correct gross profit would be:

A) $149,000.
B) $169,000.
C) $129,000.
D) $142,000.
E) $112,000.

90) An understatement of ending inventory will cause

A) An overstatement of assets and equity on the balance sheet.
B) An understatement of assets and equity on the balance sheet.
C) An overstatement of assets and an understatement of equity on the balance sheet.
D) An understatement of assets and an overstatement of equity on the balance sheet.
E) No effect on the balance sheet.

91) The inventory turnover ratio:

A) Is used to analyze collectability.
B) Is used to measure solvency.
C) Reveals how many times a company turns over (sells) its merchandise inventory during a period.
D) Reveals how many days a company can sell inventory if no new merchandise is purchased.
E) Calculation depends on the company's inventory valuation method.

92) Days' sales in inventory:

A) Shows the buffer against out-of-stock inventory.
B) Focuses on average inventory rather than ending inventory.
C) Is used to measure solvency.
D) Is calculated by dividing cost of goods sold by ending inventory.
E) Is a substitute for the acid-test ratio.

93) The inventory turnover ratio is calculated as:

A) Cost of goods sold divided by average inventory.
B) Sales divided by cost of goods sold.
C) Ending inventory divided by cost of goods sold.
D) Cost of goods sold divided by ending inventory.
E) Cost of goods sold divided by ending inventory times 365.

94) Days' sales in inventory is calculated as:

A) Ending inventory divided by cost of goods sold.
B) Cost of goods sold divided by ending inventory.
C) Ending inventory divided by cost of goods sold times 365.
D) Cost of goods sold divided by ending inventory times 365.
E) Ending inventory times cost of goods sold.

95) Giorgio had cost of goods sold of $9,457 million, ending inventory of $2,125 million, and average inventory of $2,001 million. Its inventory turnover equals:

A) 82.0 days.
B) 4.50.
C) 4.73.
D) 77.2 days.
E) 0.22.

96) Giorgio had cost of goods sold of $9,421 million, ending inventory of $2,089 million, and average inventory of $1,965 million. Its inventory turnover equals:

A) 0.21.
B) 4.51.
C) 4.79.
D) 76.1 days.
E) 80.9 days.

97) Perfection Company had cost of goods sold of $853,000, ending inventory of $70,500, and average inventory of $71,600. Its inventory turnover equals:

A) 11.9.
B) 1.0.
C) 6.0.
D) 30.6.
E) 14.0.

98) Beckenworth had cost of goods sold of $10,021 million, ending inventory of $2,689 million, and average inventory of $2,025 million. Its days' sales in inventory equals: (Use 365 days a year.)

A) 0.3.
B) 23.9.
C) 24.2.
D) 97.9 days.
E) 73.8 days.

99) Beckenworth had cost of goods sold of $9,421 million, ending inventory of $2,089 million, and average inventory of $1,965 million. Its days' sales in inventory equals: (Use 365 days a year.)

A) 0.21.
B) 4.51.
C) 4.79.
D) 76.1 days.
E) 80.9 days.

100) Ulrich had cost of goods sold of $6.7 million, ending inventory of $2.2 million, and average inventory of $1.9 million. Its days' sales in inventory equals (round your final answer to the nearest whole number):

A) 120.
B) 104.
C) 60.
D) 35.
E) 180.

101) Which of the following is not an inventory costing method?

A) LIFO method.
B) FIFO method.
C) Weighted average method.
D) Specific identification method.
E) Gross margin method.

102) The inventory costing method that best matches current costs with current revenues is the:

A) Specific identification method.
B) FIFO method.
C) LIFO method.
D) Weighted average method.
E) Net method.

103) The inventory costing method that identifies each item in ending inventory with a specific purchase and invoice is the:

A) Weighted average inventory method.
B) First-in, first-out method.
C) Last-in, first-out method.
D) Specific identification method.
E) Retail inventory method.

104) A company had the following purchases during its first year of operations:

On December 31, there were 48 units remaining in ending inventory. These 48 units consisted of 8 from January, 9 from February, 13 from May, 7 from September, and 11 from November. Using the specific identification method, what is the cost of the ending inventory?

A) $6,644.
B) $5,338.
C) $6,490.
D) $6,336.
E) $5,374.

105) A company had the following purchases during its first year of operations:

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?

A) $3,500.
B) $3,800.
C) $3,960.
D) $3,280.
E) $3,640.

106) A company had the following purchases and sales during its first year of operations:

On December 31, there were 26 units remaining in ending inventory. Using the perpetual FIFO inventory costing method, what is the cost of the ending inventory? (Assume all sales were made on the last day of the month.)

A) $3,405.
B) $3,200.
C) $3,365.
D) $3,540.
E) $3,270.

107) A company had the following purchases and sales during its first year of operations:

On December 31, there were 26 units remaining in ending inventory. Using the periodic FIFO inventory costing method, what is the cost of the ending inventory? (Assume all sales were made on the last day of the month.)

A) $3,405.
B) $3,200.
C) $3,445.
D) $3,540.
E) $3,270.

108) A company had the following purchases and sales during its first year of operations:

On December 31, there were 33 units remaining in ending inventory. Using the perpetual LIFO inventory costing method, what is the cost of the ending inventory? (Assume all sales were made on the last day of the month.)

A) $8,107.
B) $5,625.
C) $7,713.
D) $8,704.
E) $11,690.

109) A company had the following purchases and sales during its first year of operations:

On December 31, there were 26 units remaining in ending inventory. Using the perpetual LIFO inventory costing method, what is the cost of the ending inventory? (Assume all sales were made on the last day of the month.)

A) $3,405.
B) $3,270.
C) $3,200.
D) $3,364.
E) $5,400.

110) A company had the following purchases and sales during its first year of operations:

On December 31, there were 26 units remaining in ending inventory. Using the periodic LIFO inventory costing method, what is the cost of the ending inventory? (Assume all sales were made on the last day of the month.)

A) $3,405.
B) $3,270.
C) $3,200.
D) $3,364.
E) $5,400.

111) A company had the following purchases and sales during its first year of operations:

On December 31, there were 26 units remaining in ending inventory. Using the perpetual FIFO inventory costing method, what is the value of cost of goods sold? (Assume all sales were made on the last day of the month.)

A) $8,670.
B) $3,540.
C) $5,400.
D) $5,130.
E) $3,270.

112) A company had the following purchases and sales during its first year of operations:

On December 31, there were 26 units remaining in ending inventory. Using the periodic FIFO inventory costing method, what is the value of cost of goods sold? (Assume all sales were made on the last day of the month.)

A) $8,670.
B) $3,540.
C) $5,400.
D) $5,130.
E) $3,270.

113) A company had the following purchases and sales during its first year of operations:

On December 31, there were 26 units remaining in ending inventory. Using the perpetual LIFO inventory costing method, what is the value of cost of goods sold? (Assume all sales were made on the last day of the month.)

A) $8,670.
B) $5,400.
C) $5,470.
D) $5,130.
E) $5,305.

114) A company had the following purchases and sales during its first month of operations:

Using the perpetual weighted average method, what is the value of cost of goods sold? (Round weighted average costs per unit to 2 decimal places.)

A) $59.00.
B) $40.00.
C) $25.00.
D) $24.00.
E) $23.35.

115) A company had the following purchases and sales during its first year of operations:

On December 31, there were 26 units remaining in ending inventory. Using the periodic LIFO inventory costing method, what is the value of cost of goods sold? (Assume all sales were made on the last day of the month.)

A) $8,670.
B) $5,400.
C) $5,470.
D) $3,200.
E) $5,130.

116) A company had the following purchases and sales during its first month of operations:

Using the Periodic weighted average method, what is the value of cost of goods sold? (Round weighted average cost per unit to 2 decimal places, and final answer to the nearest whole dollar.)

A) $84.
B) $61.
C) $23.
D) $27.
E) $5.

117) A company had inventory on November 1 of 5 units at a cost of $12 each. On November 2, they purchased 17 units at $14 each. On November 6 they purchased 13 units at $17 each. On November 8, 15 units were sold for $47 each. Using the LIFO perpetual inventory method, what was the value of the inventory on November 8 after the sale?

A) $252
B) $282
C) $319
D) $270
E) $267

118) A company had inventory on November 1 of 5 units at a cost of $20 each. On November 2, they purchased 10 units at $22 each. On November 6 they purchased 6 units at $25 each. On November 8, 8 units were sold for $55 each. Using the LIFO perpetual inventory method, what was the value of the inventory on November 8 after the sale?

A) $304
B) $296
C) $288
D) $280
E) $276

119) Marquis Company uses a weighted-average perpetual inventory system and has the following purchases and sales:

What is the amount of the cost of goods sold for this sale? (Round average cost per unit to 2 decimal places.)

A) $84.00
B) $203.00
C) $86.50
D) $98.40
E) $133.00

120) Marquis Company uses a weighted-average perpetual inventory system and has the following purchases and sales:

What is the amount of the cost of goods sold for this sale? (Round average cost per unit to 2 decimal places.)

A) $148.00
B) $150.50
C) $158.40
D) $210.00
E) $330.00

121) Monarch Company uses a weighted-average perpetual inventory system, and has the following purchases and sales:

What is the value of ending inventory? (Round average cost per unit to 2 decimal places and final answer to the nearest dollar.)

A) $278.
B) $272.
C) $126.
D) $398.
E) $120.

122) Monarch Company uses a weighted-average perpetual inventory system and has the following purchases and sales:

What is the value of cost of goods sold?

A) $278.
B) $272.
C) $126.
D) $398.
E) $120.

123) Eastview Company uses a perpetual LIFO inventory system, and has the following purchases and sales:

What is the value of cost of goods sold?

A) $2,730.
B) $2,750.
C) $2,670.
D) $440.
E) $380.

124) Eastview Company uses a perpetual LIFO inventory system, and has the following purchases and sales:

What is the value of ending inventory?

A) $2,730.
B) $2,750.
C) $2,670.
D) $440.
E) $380.

125) Eastview Company uses a periodic LIFO inventory system, and has the following purchases and sales:

What is the value of cost of goods sold?

A) $2,730.
B) $2,750.
C) $2,670.
D) $440.
E) $380.

126) Eastview Company uses a periodic LIFO inventory system, and has the following purchases and sales:

What is the value of ending inventory?

A) $2,730.
B) $2,750.
C) $2,670.
D) $440.
E) $360.

127) Grays Company has inventory of 17 units at a cost of $12 each on August 1. On August 3, it purchased 27 units at $11 each. 19 units are sold on August 6. Using the FIFO perpetual inventory method, what amount will be reported as cost of goods sold for the 19 units that were sold?

A) $232.
B) $323.
C) $226.
D) $230.
E) $93.

128) Grays Company has inventory of 10 units at a cost of $10 each on August 1. On August 3, it purchased 20 units at $12 each. 12 units are sold on August 6. Using the FIFO perpetual inventory method, what amount will be reported as cost of goods sold for the 12 units that were sold?

A) $120.
B) $124.
C) $128.
D) $130.
E) $140.

129) McCarthy Company has inventory of 8 units at a cost of $200 each on October 1. On October 2, it purchased 20 units at $205 each. 11 units are sold on October 4. Using the FIFO perpetual inventory method, what amount will be reported as cost of goods sold for the 11 units that were sold?

A) $2,239.
B) $2,255.
C) $2,200.
D) $2,228.
E) $2,215.

130) McCarthy Company has inventory of 8 units at a cost of $200 each on October 1. On October 2, it purchased 20 units at $205 each. 11 units are sold on October 4. Using the FIFO perpetual inventory method, what is the value of inventory after the October 4 sale?

A) $3,485.
B) $3,445.
C) $3,500.
D) $3,472.
E) $3,461.

131) Starlight Company has inventory of 8 units at a cost of $200 each on October 1. On October 2, it purchased 20 units at $205 each. 11 units are sold on October 4. Using the LIFO perpetual inventory method, what amount will be reported in cost of goods sold for the 11 units that were sold?

A) $2,239.
B) $2,255.
C) $2,200.
D) $2,228.
E) $2,215.

132) Starlight Company has inventory of 8 units at a cost of $200 each on October 1. On October 2, it purchased 20 units at $205 each. 11 units are sold on October 4. Using the LIFO perpetual inventory method, what is the value of inventory after the October 4 sale?

A) $3,485.
B) $3,445.
C) $3,500.
D) $3,472.
E) $3,461.

133) A company’s inventory records report the following:

On August 15, it sold 48 units. Using the FIFO perpetual inventory method, what is the value of the inventory at August 15 after the sale?

A) $272
B) $252
C) $672
D) $1,188
E) $774

134) A company's inventory records report the following:

On August 15, it sold 30 units. Using the FIFO perpetual inventory method, what is the value of the inventory at August 15 after the sale?

A) $140
B) $160
C) $210
D) $380
E) $590

135) A company’s inventory records report the following in November of the current year:

On November 8, it sold 14 units for $54 each. Using the LIFO perpetual inventory method, what was the amount recorded in the cost of goods sold account for the 14 units sold?

A) $380
B) $360
C) $572
D) $680
E) $528

136) A company's inventory records report the following in November of the current year:

On November 8, it sold 12 units for $54 each. Using the LIFO perpetual inventory method, what was the amount recorded in the cost of goods sold account for the 12 units sold?

A) $254
B) $260
C) $282
D) $188
E) $210

137) A company's inventory records report the following in November of the current year:

On November 8, it sold 12 units for $54 each. Using the LIFO perpetual inventory method, what amount of gross profit was earned from the 12 units sold?

A) $260
B) $577
C) $366
D) $438
E) $388

138) A company sells garden hoses and uses the perpetual inventory system to account for its merchandise. The beginning balance of the inventory and its transactions during September were as follows:

September 1: Beginning balance of 18 units at $13 each
September 12: Purchased 30 units at $14 each
September 19: Sold 24 units at $30 selling price each
September 20: Purchased 24 units at $17 each
September 27: Sold 27 units at $30 selling price each

If the ending inventory is reported at $276, what inventory method was used?

A) LIFO method.
B) FIFO method.
C) Weighted average method.
D) Specific identification method.
E) Retail inventory method.

139) Jammer Company uses a weighted average perpetual inventory system and reports the following:

What is the per-unit value of ending inventory on August 31? (Round your per unit answers to 2 decimal places.)

A) $10.00
B) $14.14
C) $12.81
D) $11.69
E) $13.00

140) Jammer Company uses a weighted average perpetual inventory system and reports the following:

What is the per-unit value of ending inventory on August 31?

A) $12.00
B) $13.80
C) $15.42
D) $16.00
E) $17.74

141) Given the following information, determine the cost of the inventory at June 30 using the LIFO perpetual inventory method.

The cost of the ending inventory is:

A) $550
B) $600
C) $750
D) $710
E) $440

142) Given the following information, determine the cost of the inventory at June 30 using the LIFO perpetual inventory method.

The cost of the ending inventory is:

A) $200
B) $220
C) $380
D) $275
E) $300

143) In applying the lower of cost or market method to LIFO inventory costing, market is defined as:

A) Historical cost.
B) Replacement cost.
C) Current sales price.
D) FIFO.
E) LIFO.

144) Raleigh Company has the following products in its ending inventory. Compute the lower of cost or market total for inventory applied separately to each product.

A) $2,053.50.
B) $2,040.50.
C) $2,086.50.
D) $2,018.00.
E) $2,109.00.

145) After companies apply one of the four costing methods, inventory is reviewed to ensure it is reported at the:

A) Market value.
B) Historical cost.
C) Lower of cost or market.
D) Replacement cost.
E) Retail value.

146) Lower of cost or market:

A) Can be applied to each individual item, major categories of items, or the whole inventory.
B) Is only applicable to companies using FIFO.
C) Records only an increase in inventory value.
D) Is only applicable to companies using LIFO.
E) Reports all inventory items at full cost.

147) A company’s normal selling price for its product is $25 per unit. However, due to market competition, the selling price has fallen to $20 per unit. This company's current FIFO inventory consists of 250 units purchased at $21 per unit. Net realizable value has fallen to $18 per unit. Calculate the value of this company's inventory at the lower of cost or market.

A) $4,500.
B) $4,450.
C) $5,250.
D) $4,600.
E) $5,000.

148) A company's normal selling price for its product is $20 per unit. However, due to market competition, the selling price has fallen to $15 per unit. This company's current FIFO inventory consists of 200 units purchased at $16 per unit. Net realizable value has fallen to $13 per unit. Calculate the value of this company's inventory at the lower of cost or market.

A) $2,550.
B) $2,600.
C) $2,700.
D) $3,000.
E) $3,200.

149) A company normally sells its product for $20 per unit. However, the selling price has fallen to $15 per unit. This company's current FIFO inventory consists of 200 units purchased at $16 per unit. Net realizable value has now fallen to $13 per unit. What is the amount of the lower cost of market adjustment the company must make as a result of this decline in value?

A) $1,000.
B) $1,400.
C) $400.
D) $600.
E) $800.

150) A company's current LIFO inventory consists of 5,000 units purchased at $6 per unit. Replacement cost has now fallen to $5 per unit. What is the entry the company must record to adjust inventory to market?

A) Debit Merchandise Inventory $25,000; credit Cost of Goods Sold $25,000.
B) Debit Cost of Goods Sold $30,000; credit Merchandise Inventory $30,000.
C) Debit Cost of Goods Sold $5,000; credit Merchandise Inventory $5,000.
D) Debit Loss on Inventory $5,000; credit Cost of Goods Sold $5,000.
E) Debit Merchandise Inventory $30,000; credit Cost of Goods Sold $25,000.

151) A company has the following per unit original costs and market values for its inventory. Lower of cost or market is applied to individual items.

Part A: 50 units with a cost of $5, and replacement cost of $4.50
Part B: 75 units with a cost of $6, and replacement cost of $6.50
Part C: 160 units with a cost of $3, and replacement cost of $2.50

Under the lower of cost or market method, the total value of this company's ending inventory is:

A) $1,180.00.
B) $1,075.00.
C) $1,112.50.
D) $1,217.50.
E) $1,137.50.

152) A company has beginning inventory of 10 units at a cost of $30 each on February 1. On February 3, it purchases 40 units at $32 each. 13 units are sold on February 5. Using the FIFO periodic inventory method, what is the cost of the 13 units that are sold?

A) $396
B) $430
C) $400
D) $390
E) $420

153) A company has beginning inventory of 10 units at a cost of $10 each on February 1. On February 3, it purchases 20 units at $12 each. 12 units are sold on February 5. Using the FIFO periodic inventory method, what is the cost of the 12 units that are sold?

A) $120
B) $124
C) $128
D) $130
E) $140

154) A company has beginning inventory of 26 units at a cost of $12.00 each on October 1. On October 5, it purchases 19 units at $13.00 per unit. On October 12 it purchases 29 units at $14.00 per unit. On October 15, it sells 57 units. Using the FIFO periodic inventory method, what is the value of the inventory at October 15 after the sale?

A) $204.00
B) $266.00
C) $442.00
D) $504.00
E) $238.00

155) A company has beginning inventory of 15 units at a cost of $12 each on October 1. On October 5, it purchases 10 units at $13 per unit. On October 12 it purchases 20 units at $14 per unit. On October 15, it sells 30 units. Using the FIFO periodic inventory method, what is the value of the inventory at October 15 after the sale?

A) $140
B) $160
C) $210
D) $380
E) $590

156) A company had beginning inventory of 10 units at a cost of $13 each on March 1. On March 2, it purchased 10 units at $20 each. On March 6 it purchased 6 units at $18 each. On March 8, it sold 22 units for $61 each. Using the FIFO perpetual inventory method, what was the cost of the 22 units sold?

A) $366
B) $438
C) $330
D) $338
E) $396

157) A company had beginning inventory of 10 units at a cost of $20 each on March 1. On March 2, it purchased 10 units at $22 each. On March 6 it purchased 6 units at $25 each. On March 8, it sold 22 units for $54 each. Using the FIFO perpetual inventory method, what was the cost of the 22 units sold?

A) $470
B) $490
C) $450
D) $570
E) $520

158) A company uses the periodic inventory system and had the following activity during the current monthly period.

Using the weighted-average inventory method, the company's ending inventory would be:

A) $4,010
B) $5,694
C) $5,510
D) $3,510
E) $7,520

159) A company uses the periodic inventory system and had the following activity during the current monthly period.

Using the weighted-average inventory method, the company's ending inventory would be:

A) $2,000
B) $2,200
C) $2,250
D) $2,400
E) $4,400

160) Health Defense sells first aid kits and uses the periodic inventory system to account for its merchandise. The beginning balance of the inventory and its transactions during January were as follows:

January 1: Beginning balance of 18 units at $13 each
January 12: Purchased 30 units at $14 each
January 19: Sold 24 units at a selling price of $30 each
January 20: Purchased 24 units at $17 each
January 27: Sold 27 units at a selling price of $30 each

If the ending inventory is reported at $357, what inventory method was used?

A) Weighted average.
B) LIFO.
C) Specific identification.
D) FIFO.
E) Retail inventory method.

161) Aflood destroyed a company’s warehouse contents on September 12. The following information was the only information that was salvaged:Inventory, beginning: $29,800Purchases for the period: $18,800Sales for the period: $56,800Sales returns for the period: $880
The company's average gross profit ratio is 22%. What is the estimated cost of the lost inventory using the gross profit method?

A) $47,600.00.
B) $48,600.00.
C) $4,982.40.
D) $36,297.60.
E) $37,908.00.

162) A flood destroyed a company’s warehouse contents on September 12. The following information was the only information that was salvaged:Inventory, beginning: $28,000Purchases for the period: $17,000Sales for the period: $55,000Sales returns for the period: $700
The company's average gross profit ratio is 35%. What is the estimated cost of the lost inventory using the gross profit method?

A) $9,705.
B) $25,995.
C) $29,250.
D) $44,000.
E) $45,000.

163) A company reports the following information regarding its inventory.

Beginning inventory: cost is $80,000; retail is $130,000
Net purchases: cost is $65,000; retail is $120,000
Sales at retail: $145,000

The year-end inventory shows $105,000 worth of merchandise available at retail prices. What is the cost of the ending inventory calculated using the retail inventory method?

A) $135,000.
B) $73,125.
C) $60,900.
D) $72,900.
E) $105,000.

164) On March 31 a company needed to estimate its ending inventory to prepare its first quarter financial statements. The following information is available:

Beginning inventory, January 1: $4,700
Net sales: $47,000
Net purchases: $48,000

The company's gross margin ratio is 15%. Using the gross profit method, the cost of goods sold would be:

A) $4,700.
B) $5,700.
C) $24,850.
D) $29,550.
E) $39,950.

165) On March 31 a company needed to estimate its ending inventory to prepare its first quarter financial statements. The following information is available:

Beginning inventory, January 1: $4,000
Net sales: $80,000
Net purchases: $78,000

The company's gross margin ratio is 25%. Using the gross profit method, the cost of goods sold would be:

A) $60,000.
B) $20,000.
C) $58,500.
D) $63,000.
E) $19,500.

166) On March 31 a company needed to estimate its ending inventory to prepare its first quarter financial statements. The following information is available:

Beginning inventory, January 1: $5,400
Net sales: $83,000
Net purchases: $81,000

The company's gross margin ratio is 25%. Using the gross profit method, the estimated ending inventory value would be:

A) $20,750.
B) $20,250.
C) $24,150.
D) $62,250.
E) $86,400.

167) On March 31 a company needed to estimate its ending inventory to prepare its first quarter financial statements. The following information is available:

Beginning inventory, January 1: $4,000
Net sales: $80,000
Net purchases: $78,000

The company's gross margin ratio is 25%. Using the gross profit method, the estimated ending inventory value would be:

A) $82,000.
B) $60,000.
C) $20,000.
D) $22,000.
E) $19,500.

168) Big Box Store has operated with a 30% average gross profit ratio for a number of years. It had $119,000 in net sales during the second quarter of this year. If it began the quarter with $19,900 of inventory at cost and purchased $73,900 of inventory during the quarter, its estimated ending inventory by the gross profit method is:

A) $10,500.
B) $19,900.
C) $32,700.
D) $35,700.
E) $24,990.

169) Big Box Store has operated with a 30% average gross profit ratio for a number of years. It had $100,000 in net sales during the second quarter of this year. If it began the quarter with $18,000 of inventory at cost and purchased $72,000 of inventory during the quarter, its estimated ending inventory by the gross profit method is:

A) $30,000.
B) $21,000.
C) $20,000.
D) $18,000.
E) $27,000.

170) On January 31, a company needed to estimate its ending inventory to prepare its monthly financial statements. The following information is currently available:

Inventory as of January 1: $120,500
Net sales for January: $400,000
Net purchases for January: $270,500

This company typically achieves a gross profit ratio of 15%. Ending Inventory under the gross profit method would be:

A) $102,425.
B) $10,425.
C) $9,000.
D) $51,000.
E) $51,425.

171) Interim financial statements:

A) Are required by the Congress.
B) Are necessary to achieve full disclosure about a business's operations.
C) Are financial statements prepared for periods of less than one year.
D) Require the use of the perpetual method for inventories.
E) Cannot be prepared if the company follows the conservatism principle.

172) Jefferson Company has net sales of $305,000 and cost of goods available for sale of $270,500. If the gross profit ratio is typically 30%, the estimated cost of the ending inventory under the gross profit method would be:

A) $179,000
B) $91,500
C) $57,000
D) $114,000
E) $34,500

173) Jefferson Company has net sales of $300,000 and cost of goods available for sale of $270,000. If the gross profit ratio is typically 30%, the estimated cost of the ending inventory under the gross profit method would be:

A) $60,000
B) $180,000
C) $30,000
D) $90,000
E) $120,000

174) Oxford Packing Company reported net sales in November of the current year of $1,000,000. At the beginning of November, the company reported beginning inventory of $368,000. Cost of goods purchased during November amounted to $217,500. The company reported ending inventory at the end of November of $226,750.

The company's gross profit rate for November of the current year was:

A) 35.9%
B) 18.8%
C) 81.2%
D) 64.1%
E) 58.6%

175) On April 24 of the current year, The Memphis Pecan Company experienced a tornado that destroyed the company's entire inventory. At the beginning of April, the company reported beginning inventory of $227,150. Inventory purchased during April (until the date of the tornado) was $198,200. Net sales for the month of April through April 24 were $642,900. Assuming the company's typical gross profit ratio is 50%, estimate the amount of inventory destroyed in the tornado.

A) $321,450
B) $212,675
C) $157,988
D) $217,550
E) $103,900

176) On April 24 of the current year, The Memphis Pecan Company experienced a tornado that destroyed the company's entire inventory. At the beginning of April, the company reported beginning inventory of $226,750. Inventory purchased during April (until the date of the tornado) was $197,800. Net sales for the month of April through April 24 were $642,500. Assuming the company's typical gross profit ratio is 50%, estimate the amount of inventory destroyed in the tornado.

A) $212,275
B) $103,300
C) $217,950
D) $321,250
E) $157,788

177) Avanti purchases inventory from overseas and incurs the following costs: the merchandise cost is $50,000, credit terms 2/10, n/30 that apply only to the $50,000; FOB shipping point freight charges are $1,500; insurance during transit is $500; and import duties are $1,000. Avanti paid within the discount period and incurred additional costs of $1,200 for advertising and $5,000 for sales commissions. Compute the cost that should be assigned to the inventory.

A) $50,000
B) $53,000
C) $52,000
D) $51,500
E) $53,200

178) Hasham purchases inventory from overseas and incurs the following costs: the merchandise cost is $80,000, credit terms 1/10, n/30, applicable only to the $80,000; FOB shipping point freight charges are $2,500; insurance during transit is $300; and import duties are $1,500. Hasham paid within the discount period. Compute the cost that should be assigned to the inventory.

A) $83,500
B) $79,200
C) $81,700
D) $84,300
E) $81,000

179) A company decides which inventory amounts to record to cost of goods sold and which amounts remain in ending inventory:

A) Through application of the cost-benefit constraint.
B) By selecting one of four possible inventory costing methods.
C) By selecting the cost principle.
D) Through application of the conservation constraint principle.
E) Is the lower of cost or market principle.

180) Which of the following statements related to goods on consignment is false?

A) Goods on consignment are goods provided by the owner, call the consignor.
B) A consignee sells goods for the owner.
C) The consignor continues to own the consigned goods.
D) The consignee reports the goods in its inventory until sold.
E) The consignor reports the goods in its inventory until sold.

181) When costs to purchase inventory regularly decline, which method of inventory costing will yield the lowest gross profit and income?

A) FIFO.
B) LIFO.
C) Weighted average.
D) Specific identification.
E) Gross margin.

182) When costs to purchase inventory regularly decline, which method of inventory costing will yield the lowest cost of goods sold?

A) FIFO.
B) LIFO.
C) Weighted average.
D) Specific identification.
E) Gross margin.

183) Which of the following statements regarding the financial statement impact of inventory costing is false?

A) When purchase prices are changing, the methods to assign inventory costs result in different amounts for cost of goods sold.
B) Inventory on the balance sheet approximates current cost when FIFO is used.
C) The weighted average method smooths out erratic changes in costs.
D) Selected costing method does not impact net income.
E) Cost of goods sold on the income statement approximates current cost when LIFO is used.

184) Sandoval needs to determine its year-end inventory. The warehouse contains 24,000 units, of which 3,400 were damaged by flood and are not sellable. Another 2,400 units were purchased from Markor Company, FOB shipping point, and are currently in transit. The company also consigns goods and has 4,400 units at a consignee's location. How many units should Sandoval include in its year-end inventory?

A) 27,400
B) 22,600
C) 34,200
D) 25,000
E) 30,800

185) Sandoval needs to determine its year-end inventory. The warehouse contains 20,000 units, of which 3,000 were damaged by flood and are not sellable. Another 2,000 units were purchased from Markor Company, FOB shipping point, and are currently in transit. The company also consigns goods and has 4,000 units at a consignee's location. How many units should Sandoval include in its year-end inventory?

A) 29,000
B) 21,000
C) 23,000
D) 19,000
E) 26,000

186) Salmone Company reported the following purchases and sales of its only product. Salmone uses a perpetual inventory system. Determine the cost assigned to the ending inventory using FIFO.

A) $3,750
B) $3,160
C) $3,600
D) $3,310
E) $3,640

187) Salmone Company reported the following purchases and sales of its only product. Salmone uses a perpetual inventory system. Determine the cost assigned to the ending inventory using FIFO.

A) $2,980
B) $2,460
C) $2,850
D) $2,590
E) $2,860

188) Salmone Company reported the following purchases and sales of its only product. Salmone uses a perpetual inventory system. Determine the cost assigned to cost of goods sold using FIFO.

A) $9,880
B) $8,760
C) $9,650
D) $8,990
E) $18,640

189) Salmone Company reported the following purchases and sales of its only product. Salmone uses a perpetual inventory system. Determine the cost assigned to cost of goods sold using FIFO.

A) $2,980
B) $2,460
C) $2,850
D) $2,590
E) $5,440

190) Salmone Company reported the following purchases and sales of its only product. Salmone uses a perpetual inventory system. Determine the cost assigned to ending inventory using LIFO.

A) $9,415
B) $4,360
C) $4,540
D) $5,055
E) $4,960

191) Salmone Company reported the following purchases and sales of its only product. Salmone uses a perpetual inventory system. Determine the cost assigned to ending inventory using LIFO.

A) $5,440
B) $2,460
C) $2,590
D) $2,980
E) $2,860

192) Salmone Company reported the following purchases and sales for its only product. Salmone uses a perpetual inventory system. Determine the cost assigned to cost of goods sold using LIFO.

A) $5,360
B) $4,840
C) $5,000
D) $5,555
E) $5,715

193) Salmone Company reported the following purchases and sales for its only product. Salmone uses a perpetual inventory system. Determine the cost assigned to cost of goods sold using LIFO.

A) $2,860
B) $2,460
C) $2,590
D) $2,850
E) $2,980

194) Salmone Company reported the following purchases and sales of its only product. Salmone uses a periodic inventory system. Determine the cost assigned to the ending inventory using FIFO.

A) $5,715
B) $10,555
C) $4,840
D) $5,555
E) $5,000

195) Salmone Company reported the following purchases and sales of its only product. Salmone uses a periodic inventory system. Determine the cost assigned to the ending inventory using FIFO.

A) $2,980
B) $5,440
C) $2,460
D) $2,850
E) $2,590

196) Salmone Company reported the following purchases and sales of its only product. Salmone uses a periodic inventory system. Determine the cost assigned to cost of goods sold using FIFO.

A) $3,160
B) $3,640
C) $3,750
D) $3,600
E) $3,310

197) Salmone Company reported the following purchases and sales of its only product. Salmone uses a periodic inventory system. Determine the cost assigned to cost of goods sold using FIFO.

A) $2,460
B) $2,860
C) $2,980
D) $2,850
E) $2,590

198) Salmone Company reported the following purchases and sales of its only product. Salmone uses a periodic inventory system. Determine the cost assigned to ending inventory using LIFO.

A) $2,750
B) $4,260
C) $3,300
D) $4,400
E) $2,530

199) Salmone Company reported the following purchases and sales of its only product. Salmone uses a periodic inventory system. Determine the cost assigned to ending inventory using LIFO.

A) $2,260
B) $2,580
C) $3,180
D) $3,580
E) $2,100

200) Salmone Company reported the following purchases and sales for its only product. Salmone uses a periodic inventory system. Determine the cost assigned to cost of goods sold using LIFO.

A) $7,750
B) $8,380
C) $7,740
D) $8,390
E) $7,540

201) Salmone Company reported the following purchases and sales for its only product. Salmone uses a periodic inventory system. Determine the cost assigned to cost of goods sold using LIFO.

A) $2,590
B) $2,850
C) $2,580
D) $2,860
E) $2,460

202) On September 1 of the current year, Scots Company experienced a flood that destroyed the company's entire inventory. Because the company had not completed its month end reporting for August, it must estimate the amount of inventory lost using the gross profit method. At the beginning of August, the company reported beginning inventory of $215,450. Inventory purchased during August was $192,530. Net sales for the month of August were $542,500. Assuming the company's typical gross profit ratio is 40%, estimate the amount of inventory destroyed in the flood.

A) $134,520
B) $190,980
C) $82,480
D) $87,480
E) $81,480

203) On September 1 of the current year, Scots Company experienced a flood that destroyed the company's entire inventory. Because the company had not completed its month end reporting for August, it must estimate the amount of inventory lost using the gross profit method. At the beginning of August, the company reported beginning inventory of $215,450. Inventory purchased during August was $192,530. Net sales for the month of August were $542,500. Assuming the company's typical gross profit ratio is 40%, estimate the amount of inventory destroyed in the flood.

A) $87,480
B) $134,520
C) $109,980
D) $82,480
E) $81,480

204) Use the following information for Shafer Company to compute inventory turnover for year 2.

A) 7.23
B) 4.02
C) 4.87
D) 5.87
E) 8.27

205) Use the following information for Shafer Company to compute inventory turnover for year 2.

A) 9.98
B) 5.08
C) 4.99
D) 8.30
E) 8.44

206) Use the following information for Davis Company to compute inventory turnover for Year 2.

A) 5.86
B) 5.76
C) 5.67
D) 11.77
E) 5.89

207) Use the following information for Ephron Company to compute days' sales in inventory for Year 2.

A) 52.4
B) 82.3
C) 50.5
D) 76.8
E) 79.3

Answer Key

Test name: John Wild Ch05 Algorithmic and Static

1) FALSE

2) TRUE

3) FALSE

4) TRUE

5) TRUE

6) TRUE

7) TRUE

8) FALSE

9) TRUE

10) FALSE

11) TRUE

12) FALSE

13) TRUE

14) FALSE

15) TRUE

16) TRUE

17) TRUE

18) TRUE

19) TRUE

20) FALSE

21) FALSE

22) TRUE

23) FALSE

24) TRUE

25) TRUE

26) FALSE

27) TRUE

28) FALSE

29) TRUE

30) TRUE

31) TRUE

32) FALSE

33) TRUE

34) TRUE

35) FALSE

36) TRUE

37) TRUE

38) FALSE

39) TRUE

40) FALSE

41) FALSE

42) TRUE

43) TRUE

44) FALSE

45) TRUE

46) FALSE

47) TRUE

48) FALSE

49) FALSE

50) TRUE

51) FALSE

52) FALSE

53) FALSE

54) FALSE

55) TRUE

56) TRUE

57) TRUE

58) FALSE

59) FALSE

60) FALSE

61) C

62) A

63) B

64) A

65) D

66) D

67) E

68) A

69) E

70) B

71) E

72) E

73) B

74) D

75) B

76) A

77) A

78) A

79) A

80) D

81) C

82) C

83) B

84) A

85) B

86) D

87) A

88) A

89) C

90) B

91) C

92) A

93) A

94) C

95) C

96) C

97) A

98) D

99) E

100) A

101) E

102) C

103) D

104) C

105) B

106) D

107) D

108) B

109) B

110) C

111) D

112) D

113) B

114) A

115) C

116) B

117) D

118) E

119) D

120) C

121) A

122) E

123) A

124) E

125) B

126) E

127) C

128) B

129) E

130) A

131) B

132) B

133) B

134) C

135) B

136) B

137) E

138) A

139) C

140) C

141) D

142) C

143) B

144) D

145) C

146) A

147) A

148) B

149) D

150) C

151) B

152) A

153) B

154) E

155) C

156) A

157) A

158) B

159) B

160) D

161) C

162) A

163) C

164) E

165) A

166) C

167) D

168) A

169) C

170) D

171) C

172) C

173) A

174) D

175) E

176) B

177) C

178) A

179) B

180) D

181) A

182) B

183) D

184) A

185) C

186) A

187) A

188) B

189) B

190) C

191) C

192) D

193) D

194) A

195) A

196) A

197) A

198) C

199) B

200) D

201) D

202) C

203) D

204) C

205) C

206) B

207) E