Exam 7: Inventory and Cost of Goods Sold

Maxell Company uses the FIFO method to assign costs to inventory and cost of goods sold.The company uses a periodic inventory system.Consider the following information: What amounts would be reported as the cost of goods sold and ending inventory balances for the year?

Which of the following would not be affected by the choice of an inventory costing method (that is,choosing between FIFO,LIFO,weighted average,and specific identification)?

If inventory costs have been falling during the year,which cost method results in the highest gross profit for the year?

Which of the following statements about the calculations used for the weighted average inventory costing method is correct?

Match the term to the appropriate definition.There are more definitions than terms. -Work in Process Inventory

Bonnie Denim Company sells blue jeans.Last year,skinny jeans were fashionable;this year,relaxed-fit jeans are in style.The company has 940 units of skinny jeans with a cost of $38 per unit and a market value of $34 per unit.The inventory also includes 2,360 units of relaxed-fit jeans with a cost of $33 per unit and a market value of $39 per unit. Required: Prepare the journal entry,if any,that is required to adjust the Inventory account.(If no entry is required for a transaction/event,select "No Journal Entry Required" in the first account field. )

Willow Company had no beginning inventory.The company purchases 900 units of inventory in January at $5 each,1,500 units at $4 each in August,and 600 units at $6 each in November.The company sells 450 units during the year.Willow uses a periodic inventory system and the LIFO inventory costing method.What is the cost of goods sold?

The journal entry to record a write-down of inventory from cost to its lower market value includes a:

Alphabet Company,which uses the periodic inventory method,purchases different letters for resale.Alphabet had no beginning inventory.It purchased A thru G in January at $4 per letter.In February,it purchased H thru L at $6 per letter.It purchased M thru R in March at $7 per letter.It sold A,D,E,H,J and N in October.There were no additional purchases or sales during the remainder of the year. If Alphabet Company uses the LIFO method,what is the cost of its ending inventory?

If inventory is sold with terms of FOB shipping point,the goods belong to the customer while in transit.

Eaton Electronics uses a periodic inventory system.On March 31,Eaton has two plasma TVs on hand at a cost of $1,500 each (serial numbers 11534892 and 11534894).In April,the company purchases four more identical TVs from Toshiba for $1,450 each (serial numbers 11542631 through 11542634).In May,the company purchases five more identical TVs for $1,600 each (serial numbers 11550964 through 11550968).In June,Eaton sells two of these TVs (serial numbers 11534894 and 11542631).There were no additional purchases or sales during the remainder of the year. Eaton Electronics uses the FIFO method.What is the cost of its ending inventory?

Charter Company,which uses the perpetual inventory method,purchases different letters for resale.Character had a beginning inventory comprised of seven units at $4 per unit.The company purchased five units at $6 per unit in February,sold seven units in October,and purchased two units at $7 per unit in December. If Charter Company uses the LIFO method,what is the cost of goods sold for the year?

Larkspur Co.had cost of goods sold of $3,600.If beginning inventory was $3,780 and ending inventory was $900,Larkspur's purchases must have been:

Manufacturers have three types of inventory,which include raw materials,work in process,and finished goods,whereas merchandisers have only raw materials inventory.

Recording a Lower of Cost or Market/Net Realizable Value (LCM/NRV)adjustment involves which of the following generic journal entries?

Match the term to the appropriate definition.There are more definitions than terms. -Specific Identification

Which of the following would be considered merchandise inventory?

When a company sells goods,it removes their cost from the balance sheet and reports the cost on the income statement as:

Which inventory costing method assumes that inventory costs flow out in the opposite order from which the goods were purchased?

Probes,Inc.wrote down its inventory to the lower replacement value.The effect on Probes' accounting equation includes a(n):