FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 5: Reporting and Analyzing Inventories

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 61

True/False

Review LaterAdd Note

Review Later

There is no simple rule for inventory turnover,except that a high ratio is preferable provided inventory is adequate to meet demand.

A) True
B) False

Correct Answer

verified

Show Answer

Question 62

Multiple Choice

Review LaterAdd Note

Review Later

Given the following events,what is the per-unit value of ending inventory on November 30 if this company uses a weighted average perpetual inventory system? November 1: 5 units were purchased at $6 per unit. November 12: 10 units were purchased at $7.50 per unit. November 14: 7 units were sold for $14 per unit. November 24: 12 units were purchased at $10 per unit.

A) $6.00
B) $7.00
C) $8.80
D) $13.00
E) $21.80

F) A) and B)
G) A) and E)

Correct Answer

verified

Show Answer

Question 63

True/False

Review LaterAdd Note

The full disclosure principle requires that the notes to the financial statements report a change in accounting method for inventory costing.

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.

Acme-Jones Corporation uses a LIFO 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 cost of goods sold?

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?

Match each of the following terms with the appropriate definition.

According to IRS requirements,companies are allowed to use FIFO for financial reporting and LIFO for tax reporting.

The matching principle requires that the inventory valuation method follow the physical flow of inventory.

A company uses a weighted average perpetual inventory system. August 2: 10 units were purchased at $12 per unit. August 18: 15 units were purchased at $15 per unit. August 29: 20 units were sold. August 31: 14 units were purchased at $16 per unit. What is the per-unit value of ending inventory on August 31?

All incidental costs of inventory acquisition and handling,whether necessary or not,are assigned to inventory.

Given the following items and costs as of the balance sheet date,determine the value of Faltron Company's merchandise inventory. - $1,000 goods sold by Faltron to another company.The goods are in transit and shipping terms are FOB destination. - $2,000 goods sold by another company to Faltron.The goods are in transit and shipping terms are FOB destination. - $3,000 owned by Faltron but in the possession of another company,the consignee. - Damaged goods owned by Faltron that originally cost $4,000 but now have a $500 net realizable value.

Given the following information,determine the cost of goods sold at December 31 using the weighted average perpetual 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.

Explain how the inventory turnover ratio and the days' sales in inventory ratio are used to evaluate inventory management.

Apply the retail method to the following company information to calculate the cost of the ending inventory for the current period:

A company reported the following data: Required: 1. Calculate the company's merchandise inventory turnover for each year. 2. Comment on the company's efficiency in managing its inventory.

The cost of an inventory item includes its invoice cost and any added or incidental costs necessary to make it saleable less any discount.

Monitor Company uses the LIFO method for valuing its ending inventory.The following financial statement information is available for their first year of operation: Monitor's ending inventory using the LIFO method was $8,200.Monitor's accountant determined that had they used FIFO,the ending inventory would have been $8,500. a.Determine what the income before taxes would have been had Monitor used the FIFO method of inventory valuation instead of LIFO b.What would be the difference in income taxes between LIFO and FIFO,assuming a 30% tax rate?

Generally accepted accounting principles require that the inventory of a company be reported at:

Goods on consignment: