Exam 6: Cost Of Goods Sold and Inventory

The following information is available for Porter Company for its fiscal year ending January 31, 2020: ​ Compute the following financial ratios for Porter Company: A) Gross Profit Ratio B) Inventory Turnover Ratio C) Average Days to Sell Inventory

Match the terms with the descriptions provided. -Generally speaking, the lower this measure the better.

Match the inventory-related accounts to costs that may be included in inventories for retailers and manufacturers. -Cost of completed, unsold items.

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 effects of the inventory errors for 2019.

Describe how the inventories of manufacturers differ from the inventories of retailers.

Lowery Company uses a perpetual inventory system. The following information is available for the month of March: -Refer to the information provided for Lowery Company. If the company uses the LIFO inventory costing method, how much is cost of goods sold for the month of March?

The following data are available for one item of merchandise sold by Jocque Fabrics, which uses a periodic inventory system. -Refer to the information provided for Jocque Fabrics. If the Average Cost method is used, determine the following amounts: A) Ending inventory on February 28th B) Cost of Goods sold for the month of February C) Gross Margin for February

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 would Yancey Company pay its supplier if it paid for one-half of the goods acquired within the discount period, and the other half after the expiration of the discount period?

Lowery Company uses a perpetual inventory system. The following information is available for the month of March: -Refer to the information provided for Lowery Company. If the company uses the FIFO inventory costing method, how much is cost of goods sold for March?

Under the periodic inventory system, all purchases are assumed to occur before any ______.

Under the LIFO method of inventory costing, the units in the ending inventory represent the most recent purchase(s).

The following data are available for one of the products sold by Robey Company, which uses a perpetual inventory system. -Refer to the information provided for Robey Company. If the company uses the FIFO method, determine the following amounts: A) Ending inventory on February 28th B) Cost of Goods sold for the month of February

The following information is from Gbane Company's accounting records for the year ended December 31: -Refer to the information provided for Gbane Company. How much will the company report as net purchases for the year ended December 31?

In order to determine inventory for its balance sheet, a company must count the inventory at the end of its accounting period according to

Match the terms with the descriptions provided. -A reduction in the amount of goods available for sale caused by defective merchandise.

A customer returned damaged goods for credit. Under a perpetual system, which of the seller's accounts decreases?

Match the terms with the descriptions related to merchandise sales and purchases. -The seller is responsible for the cost of delivering the merchandise to the buyer.

Match the terms with the descriptions provided. -Arrangement whereby goods owned by one party are held and offered for sale by another party.

Match the inventory-related accounts to costs that may be included in inventories for retailers and manufacturers. -Costs to purchase goods ready to sell.

A company can calculate its average days to sell inventory by dividing 365 days per year by its _____.