FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 6: Inventories

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 91

Multiple Choice

Review LaterAdd Note

Review Later

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. $\begin{array} { | c | c | r | r | } \hline \text { Commodity } & \begin{array} { c } \text { Inventory } \\\text { Quantity }\end{array} & \text { Cost per Unit } &{ \begin{array} { c } \text { Market Value } \\\text { per Unit }\end{array} } \\\hline \text { A } & 35 & \$ 52 & \$ 55 \\\hline \text { B } & 20 & 155 & 150 \\\hline \text { C } & 25 & 82 & 85 \\\hline \text { D } & 40 & 58 & 55 \\\hline\end{array}$ What is the amount of reduction in the inventory at April 30 attributable to market decline?

A) $14
B) $40
C) $180
D) $220

E) C) and D)
F) A) and C)

Correct Answer

verified

Show Answer

Question 92

Multiple Choice

Review LaterAdd Note

Review Later

The number of days' sales in inventory measures

A) the length of time it takes to acquire, sell, and replace the inventory
B) the length of time it takes to acquire and receive payment for the inventory
C) the number of days inventory is on hand prior to sale
D) the number of days inventory takes to arrive after ordering

E) B) and C)
F) None of the above

Correct Answer

verified

Show Answer

Question 93

Multiple Choice

Review LaterAdd Note

​The primary objectives of control over inventory are

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

One negative effect of carrying too much inventory is risk that customers will change their buying habits.

What is the ending inventory balance at the end of the year using the FIFO method?

If ending inventory for the year is overstated, stockholders' equity reported on the balance sheet at the end of the year is understated.

Average inventory is computed by adding the inventory at the beginning of the period to the inventory at the end of the period and dividing by two.

Beginning inventory, purchases, and sales data for tennis rackets are as follows: ​ Complete the inventory cost card assuming the business maintains a perpetual inventory system and determine the cost of goods sold and ending inventory using FIFO. ​

During a period of falling prices, which of the following inventory methods generally results in the lowest balance sheet amount for inventory?

If Addison uses FIFO, the September 30 inventory is

Brutus Corporation, a newly formed corporation, has the following transactions during May, its first month of operations. -Using the table provided, calculate total sales, cost of goods sold, gross profit, and ending inventory using each of the LIFO perpetual inventory method.

Use the information below to answer the following questions. 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. ​ ​ -Assuming that the company uses the perpetual inventory system, determine the gross profit for the month of May using the LIFO cost method.

Which of the following companies would be more likely to use the specific identification inventory costing method?

Determine the total value of the merchandise using net realizable value. ​

Brutus Corporation, a newly formed corporation, has the following transactions during May, its first month of operations. -Using the table provided, calculate total sales, cost of goods sold, gross profit, and ending inventory using each of the LIFO periodic inventory method.

During the taking of its physical inventory on December 31, Almond Supplies Company incorrectly counted its inventory as $545,000 instead of the correct amount of $554,000. (a) Indicate the effects of the misstatement on Almond Supplies Company's balance sheet and income statement for the year ended December 31. (b) If uncorrected, what would be the effects of the error on next year's balance sheet and income statement?

The weighted average cost method will always yield results between FIFO and LIFO.

A business using the retail method of inventory costing determines that inventory at retail is $2,300,000. If the ratio of cost to retail price is 55%, what is the amount of inventory to be reported on the financial statements?

During periods of increasing costs, the use of the FIFO method of costing inventory will result in a greater amount of net income than would result from the use of the LIFO cost method.