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Exam 6: Inventories

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Question 111

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The specific identification inventory method should be used when the inventory consists of identical, low-cost units that are purchased and sold frequently.

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Question 112

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On the basis of the following data, determine the value of the inventory at the lower of cost or market. Apply lower of cost or market to each inventory item. Show your work.

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Question 113

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Assume that three identical units of merchandise were purchased during October, as follows: -One unit is sold on October 31 for $28. Using the table provided, determine gross profit under the FIFO method.​ A)$28 B)$13 C)$15 D)$13

In valuing merchandise for inventory purposes, net realizable value is the estimated selling price less any direct costs of disposal.

Kristin's Boutiques has identified the following items for possible inclusion in its December 31 inventory. Which of the following would not be included in the year-end inventory?

Use the information below 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 gross profit for the sale of May 23 using the FIFO inventory cost method.

Which of the following measures the relationship between cost of goods sold and the amount of inventory carried during the period?

Match each description to the appropriate cost flow assumption (a-c). -Rarely used with a perpetual inventory system A)FIFO B)LIFO C)Weighted average

Beginning inventory, purchases and sales data for T-shirts are as follows: Assuming the business maintains a periodic inventory system, calculate the cost of goods sold and ending inventory under the following assumptions: a. FIFO b. LIFO c. Average cost (round cost of goods sold and ending inventory to the nearest dollar)

Unsold consigned merchandise should be included in the consignee's inventory.

Determine the total value of the merchandise using net realizable value.

If ending inventory for the year is understated, net income for the year is overstated.

The following lots of a Commodity P were available for sale during the year. Use this information to answer the questions that follow. 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?

Three identical units of merchandise were purchased during March, as shown: Assume that one unit is sold on March 23 for $1,125. Determine the gross profit for March and ending inventory on March 31 using (a) FIFO and (b) LIFO.

Under the periodic inventory system, the inventory account continuously discloses the amount of inventory on hand.

The units of an item available for sale during the year were as follows: There are 48 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost by (a) the first-in, first-out method, (b) the last-in, first-out method, and (c) the average cost method. Show your work.

Match each situation to its impact (a-c) on the current year's net income. a.Net income for the current year will be overstated.b.Net income for the current year will be understated.c.There will be no error effect on net income. -Merchandise that was sold and shipped FOB shipping point on the last day of the year was not included in the seller's ending inventory.

Inventory controls start when the merchandise is shelved in the store area.

The following lots of Commodity Z were available for sale during the year. Use this information to answer the questions that follow. -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 ending inventory balance at the end of the year according to the FIFO method?

Assume that three identical units of merchandise were purchased during October, as follows: Assume one unit is sold on October 31 for $28. Determine cost of goods sold, gross profit, and ending inventory under the average cost method.