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Exam 7: Reporting and Interpreting Cost of Goods Sold and Inventory

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Question 71

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The records of Jimmy Company show 2019 purchases of $90,000.An actual count revealed a 2019 ending inventory of $8,000.The 2019 beginning inventory was $5,000.What was cost of goods sold for 2019?

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Cost of goods sold = $87,000 =...

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Question 72

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Carr Corporation has provided the following information for its most recent month of operation: sales $8,000;beginning inventory $1,000;ending inventory $2,000 and gross profit $5,000.How much were Carr's inventory purchases during the period?

A) $9,000.
B) $5,000.
C) $6,000.
D) $4,000.

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Question 73

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Which of the following statements does not accurately describe the lower of cost or net realizable value valuation method for inventory?

In a period of increasing costs,the LIFO Reserve would be deducted from the ending inventory under LIFO costing to convert it to ending inventory under FIFO costing.

What is the net adjustment to net income with respect to the determination of cash flows from operating activities when inventory increases $100,000 and accounts payable increases $20,000?

LIFO liquidation results when a company has a lower level of inventory at the end of the year than it had at the beginning of the year.

The records of Atlantis Company reflected the following for the month of February: Determine the amount of ending inventory and cost of goods sold using the following periodic system inventory costing methods:

Atomic Company did not record a December 2019 purchase of inventory on credit until January 2020.Assume that the December 31,2019 ending inventory was correctly determined. -What is the effect of this error on the financial statements for the year ended December 31,2019?

Barrington Company must write down its inventory from its cost of $260,000 to its net realizable value of $248,000 at December 31,2018.The inventory will all be sold in the year 2019.Which of the following provides a correct effect of the write-down?

Boulder,Inc.is computing its inventory at December 31,2019.The following information relates to the five major inventory items regularly stocked for resale: Using the lower of cost or net realizable value,compute the total valuation for each inventory item at December 31,2019,and the total inventory valuation.

Freeman Company uses LIFO inventory costing.At the end of the annual accounting period,December 31,2019,the accounting records in inventory showed: Calculate the following: 1.Cost of goods available for sale 2.Ending inventory 3.Cost of goods sold

Manufactured goods transferred out of work in process become part of finished goods inventory.

During periods of increasing unit costs,the LIFO inventory method results in lower income taxes.

On December 31,2019,Cruise Company has 10,000 units of an inventory item,which cost $40 per unit when purchased on June 15,2019.The selling price was $60 per unit.On December 30,2019,it was determined that the cost to sell is $24 per unit.At what amount should the 10,000 units of inventory be reported at on the December 31,2019 balance sheet?

Cutting Edge Technologies reported the following information in its 2019 annual report: 1.Determine the inventory turnover ratio.(Round your answer to two decimal places. ) 2.Determine the average days to sell inventory.(Round your answer to a whole number. ) 3.Explain the meaning of each ratio.

RJ Corporation has provided the following information about one of its inventory items: During the year,RJ sold 3,000 units. - What was ending inventory using the FIFO cost flow assumption?

When a company uses the periodic inventory system,which of the following is true?