Exam 6: Cost Of Goods Sold and Inventory

On August 1, White Appliances purchased 75 refrigerators for $45,000 cash and also paid $1,500 transportation costs related to this purchase. On the same date, White purchased 100 dishwashers for $20,000 on credit; however, the seller paid the $1,200 freight. The credit terms for the dishwashers were 2/10, n/30. On August 3rd, White determined that 5 of the refrigerators were defective, so they were returned to the seller. White paid for the dishwashers on August 9th. On August 10th, White purchased 90 microwave ovens for $9,000 on credit with terms 1/10, n/30. The seller paid the freight. White paid for the microwave ovens on August 21st. -Refer to the information presented for White Appliances. On August 12th, White sold 10 dishwashers to customers for $550 each. White paid $200 each for these dishwashers when it purchased them from the supplier on August 1st. On August 15th, customers returned 2 of these dishwashers for a cash refund. ​ Record the journal entries for this sale and sales return.

The following data are available for one of the products sold by Paschal Exports, which uses a perpetual inventory system. -Refer to the information provided for Paschal Exports. If the LIFO method of inventory costing is used, determine the following amounts: A) Cost of goods sold for the units sold on July 10th B) Ending inventory on July 31st

Stallworth Corp. uses a periodic inventory system. The following information is available for the month of November: -Refer to the information provided for Stallworth Corp. How many units did the company sell during November?

Which inventory cost flow method assigns the cost of the most recent items purchased to cost of goods sold?

Cost of goods sold is equal to beginning inventory plus the net cost of purchases minus _____.

Dollar Town is a merchandising company that uses the periodic inventory system. Selected account balances are listed below: -Refer to the information provided for Dollar Town. Calculate the company's gross margin.

Cost of goods sold is equal to

Parlato Corp. has an inventory turnover rate of 8 times. Calculate the company's average days to sell inventory.

Klump Co. uses a perpetual inventory system and had the following inventory transactions for the month of June.June -Refer to the information provided for Klump Co. If the company uses the (moving) Average Cost inventory costing method, cost of goods sold for the month of June is:

Accountants define the market value of inventory as its ____________________.

Dollar Town is a merchandising company that uses the periodic inventory system. Selected account balances are listed below: -Refer to the information provided for Dollar Town. Calculate net sales.

Tedder uses a periodic inventory system. At the end of January, 20 units were on hand. The following additional information is available for the month of January: -Refer to the information provided for Tedder Co. If the company uses FIFO inventory costing, how much is cost of goods sold for January?

Regan Company Regan Company reported net income of $95,000 for 2019. Early in 2020, the company discovered that its 2019 ending inventory was overstated by $5,000. -Refer to the information provided for Regan Company. Determine the financial statement effects of the inventory error for 2020.

Beginning inventory was $32,000. During the year, Yancey Company purchased goods totaling $634,000 on account with terms of 2/10, n/30, FOB shipping point. Yancey Company paid $1,000 in total freight charges directly to the freight company. At the end of the year, inventory on hand totaled $45,000. Net sales reported on the income statement for the year totaled $1,300,000. -Refer to the information provided for Yancey Company. How much is cost of goods available for sale for the year ended December 31 assuming that Yancey Company take advantage of one-half of the cash discounts?

The inventory turnover ratio is a measure of how many times during a period a company sells off its inventory.

Which inventory cost flow method assigns the same cost to all units whether sold or left in ending inventory?

Match the costs that might be included as part of the cost of inventory to the listed accounting treatment. (Choices may be used more than once.) -Prices are declining; gross margin is higher with this method.

You are the Orlando store manager for Kruge Enterprises. When you came in this morning, you found the front door ajar. Once Security had arrived and you eventually got inside, you discovered that most of your inventory had been stolen. In order to file a claim with your insurance company you need to estimate the amount of inventory you had yesterday at closing time. Unfortunately, Kruge Enterprises uses a periodic inventory system. How can you estimate your lost inventory amount?

Match the terms with the descriptions related to merchandise sales and purchases. -Sold merchandise on credit to customers.

You are the inventory accounting manager at XB Tools. Your company is considering the purchase of software that would allow the company to switch from the periodic inventory system to a perpetual system. Prepare a compare and contrast table to summarize the similarities and differences between the two systems. (Use the table that has been started for you below.)