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Exam 6: Reporting and Analyzing Inventory

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Question 111

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Raw materials inventories are the goods that a manufacturing company has completed and are ready to be sold to customers.

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Question 112

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Jenks Company developed the following information about its inventories in applying the lower of cost or market (LCM) basis in valuing inventories: If Jenks applies the LCM basis, the value of the inventory reported on the balance sheet would be

A) $177,000.
B) $179,000.
C) $175,000.
D) $181,000.

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Question 113

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Management may choose any inventory costing method it desires as long as the cost flow assumption chosen is consistent with the physical movement of goods in the company.

A low number of days in inventory may indicate all of the following except

Torrey Company uses the periodic inventory system to account for inventories. Information related to Torrey Company's inventory at October 31 is given below: Instructions 1. Show computations to value the ending inventory using the FIFO cost assumption if 500 units remain on hand at October 31. 2. Show computations to value the ending inventory using the weighted-average cost method if 500 units remain on hand at October 31. 3. Show computations to value the ending inventory using the LIFO cost assumption if 500 units remain on hand at October 31.

Orange-Aide Company has the following inventory data: A physical count of merchandise inventory on July 30 reveals that there are 25 units on hand. Using the average cost method, the value of ending inventory is

Use the following information for Boxter, Inc., Clifford Company, Danforth Industries, and Evans Services to answer the question "What is Danforth's LIFO reserve for 2013?"

Which of the following statements is correct with respect to inventories?

Alpha First Company just began business and made the following four inventory purchases in June: A physical count of merchandise inventory on June 30 reveals that there are 210 units on hand. Using the LIFO inventory method, the value of the ending inventory on June 30 is

Clear Clarinets has the following inventory data: Assuming that a periodic inventory system is used, what is the amount allocated to ending inventory on a FIFO basis.

Redeker Company had the following records: What is Redeker's inventory turnover for 2013? (rounded)

A major criticism of the FIFO inventory method is that it magnifies the effects of the business cycle on business income.

What is the primary basis of accounting for inventories? What is the major objective in accounting for inventories?

An error in the physical count of goods on hand at the end of a period resulted in a $10,000 overstatement of the ending inventory. The effect of this error in the current period is

In periods of falling prices, FIFO will result in a larger net income than the LIFO method.

If beginning inventory is understated by $10,000, the effect of this error in the current period is

An aircraft company would most likely have a

The specific identification method of costing inventories is used when the

Reeves Company is taking a physical inventory on March 31, the last day of its fiscal year. Which of the following must be included in this inventory count?

Use the following information regarding Black Company and Red Company to answer the question "Which of the following is Black Company's "cost of goods sold" for 2013 (to the closest dollar) ?"