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Exam 5: Inventories and Cost of Sales

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Question 1

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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.

F) B) and D)
G) A) and B)

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Question 2

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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

F) B) and D)
G) None of the above

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Question 3

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A company reported the following data related to its ending inventory: Calculate the lower-of-cost-or-market on the inventory applied separately to each product.

If a period-end inventory amount is reported in error,it can cause a misstatement in all of the following except:

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

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?

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 company's inventory records indicate the following data for the month of April: If the company uses the first-in,first-out (FIFO)method and the perpetual inventory system,what would be the cost of the ending inventory?

Use the information below to determine the sales revenue,cost of goods sold and gross profit that would be reported for the company related to the March 16 sale assuming the company uses LIFO inventory valuation and a perpetual inventory system.

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?

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.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.

Using the information given below for a company that uses a perpetual inventory system,calculate the ending inventory using weighted average.

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?

The ________ is a measure of how many times a company sells its inventory in a period.

A company reported the current month purchase and sales data for its only product and uses the perpetual inventory system.Determine the cost assigned to ending inventory and cost of goods sold using LIFO.

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

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 company's inventory records indicate the following data for the month of January: If the company uses the LIFO perpetual inventory system,what is the amount of cost of goods sold for January?

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

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.