Exam 5: Accounting for Inventories

During December 2016,Crowe Company sold 125 units @ $225 each.Cash selling and administrative expenses for the year were $11,000.All transactions were cash transactions.The following information is also available: The company's income tax rate is 30%. Required: a)Prepare an income statement for Crowe Company for 2016 assuming: 1)FIFO inventory cost flow 2)LIFO inventory cost flow b)Prepare the operating activities section of the statement of cash flows for 2016 assuming: 1)FIFO inventory cost flow 2)LIFO inventory cost flow

Barker Company paid cash to purchase two identical inventory items.The first purchase cost $18.00 cash and the second cost $20.00 cash.Barker sold one inventory item for $30.00 cash.Based on this information alone,without considering the effect of income tax,:

Use the following information for questions Singleton Company's perpetual inventory records included the following information: -If Singleton uses the weighted-average cost flow method,its weighted-average cost per unit would be $8.00.

Use the following information for questions Singleton Company's perpetual inventory records included the following information: -If Singleton uses the FIFO cost flow method,its cost of goods sold would be $4,490.

What ratio (usually an average from prior periods)can be used in estimating the current period's ending inventory?

When prices are falling:

Which of the following statements is not correct in regard to the importance of inventory turnover to a company's profitability?

Melbourne Company uses the perpetual inventory method.Melbourne purchased 500 units of inventory that cost $4.00 each.At a later date the company purchased an additional 600 units of inventory that cost $5.00 each.If Melboune uses a LIFO cost flow method,and sells 800 units of inventory,the amount of ending inventory appearing on the balance sheet will be:

Which inventory costing method will produce an amount for cost of goods sold that is closest to current market value?

At the end of the 2016 accounting period DeYoung Company determined that the market value of its inventory was $79,800.The historical cost of this inventory was $81,400.DeFazio uses the perpetual inventory method.The entry necessary to reduce the inventory to the lower of cost or market will

During a period of declining prices,a company would report a lower gross margin using the FIFO cost flow method than with LIFO.

Carson Company has an inventory turnover of 12.75,and its inventory amounts to $2,400,000.What is the amount of cost of goods sold?

Which of the following methods of applying the lower-of-cost-or-market rule will result in the fewest write-downs of inventory?

A discount merchandiser is likely to have a higher inventory turnover than more upscale stores with higher merchandise prices.

Use the following information for questions Chase Co.uses the perpetual inventory method.The inventory records for Chase reflected the following -Assuming Chase uses a LIFO cost flow method,the amount of cost of goods sold for the sales transaction on January 18 is (round the final result to the nearest whole dollar):

Use the following information for questions The inventory records for Radford Co.reflected the following -Determine the amount of gross margin assuming the FIFO cost flow method.

The Rowe Company has six different categories of inventory.Quantity,cost,market value for each inventory category is shown below Required: a)Determine the value of ending inventory after applying the lower-of-cost-or-market rule to each individual category of inventory. b)Determine the value of ending inventory after applying the lower-of-cost-or-market rule to inventory in aggregate. c)Prepare the journal entry,if required,to adjust inventory for part a above. d)Prepare the journal entry,if required,to adjust inventory for part b above.

If the replacement cost of inventory is greater than its historical cost,the increase in value does not affect the company's financial statements.

Warner Company purchased two units of a product for $36 and later purchased one more for $40.If the company uses the weighted average cost flow method,and it sold one unit of the product for $60,its gross margin would be $22.00.

Maynard Company started the year with no inventory.During the year,it purchased two identical inventory items at different times.The first unit cost $1,100 and the second,$1,200.One of the items was sold during the year.Based on this information,how much product cost would be allocated to cost of goods sold and ending inventory,assuming use of a.LIFO b.FIFO c.Weighted average