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Exam 7: Inventories

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Question 81

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The units of Manganese Plus available for sale during the year were as follows: There are 15 units of the product in the physical inventory at November 30. The periodic inventory system is used. Determine the inventory cost by (a) FIFO, (b) LIFO, and (c) average cost methods.

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Question 82

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When using the FIFO inventory costing method, the most recent costs are assigned to the cost of goods sold.

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Question 83

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The three inventory costing methods will normally each yield different amounts of net income.

For the year ended December 31, 2014 Depot Max's cost of merchandise 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.

The selection of an inventory costing method has no significant impact on the financial statements.

Use the following information 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 cost of merchandise sold for the sale of May 20 using the FIFO inventory cost method.

During a period of consistently rising prices, the method of inventory that will result in reporting the greatest cost of merchandise sold is

Based on the following information: compute (a) Inventory turnover; (b) Average daily cost of merchandise sold; and (c) Number of days' sales in inventory for 2011. Use a 365-day year. (d) If an inventory turnover of 12 is average for the industry, how is this company doing?

During periods of rapidly rising costs, the use of the LIFO method results in illusory or inventory profits.

If the estimated rate of gross profit is 30%, what is the estimated cost of the merchandise inventory on September 30, based on the following data?

If merchandise 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

The following lots of a particular commodity were available for sale during the year: 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?

The beginning inventory and purchases of an item for the period were as follows: The company uses the periodic system, and there were 15 units in the inventory at the end of the period. Determine the cost of the 15 units in the inventory by each of the following methods, presenting details of your computations: (a) first-in, first-out; (b) last-in, first-out; (c) average cost. Do not round your intermediate calculations. Round your final answer to two decimal places.

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

Addison, Inc. uses a perpetual inventory system. The following is information about one inventory item for the month of September: If Addison uses FIFO, the cost of the ending merchandise inventory on September 30 is

If a company mistakenly counts less items during a physical inventory than actually exist, how will the error affect the cost of merchandise sold?

Basic inventory data for April 30 are presented below for a business that employs the lower of cost or market basis of inventory valuation.

When merchandise inventory is shown on the balance sheet, both the method of determining the cost of the inventory and the method of valuing the inventory should be shown.

The units of Manganese Plus available for sale during the year were as follows: There are 15 units of the product in the physical inventory at November 30. The periodic inventory system is used. Determine the difference in gross profit between the LIFO and FIFO inventory cost systems.

The following lots of a particular commodity were available for sale during the year: 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 amount of the inventory at the end of the year using the FIFO method?