Exam 6: Merchandise Inventory

Perez Company sold 500 units of inventory at $25 per unit for cash. The company uses the perpetual inventory system. The cost of the units sold was $10 per unit. Provide the journal entries to record the sale.

The sum of the cost of goods sold and the ending inventory equals the cost of goods available for sale.

Metro Computer Company had the following balances and transactions during 2014: What would the company's ending merchandise inventory amount be on December 31, 2014 if the perpetual last-in, first-out costing method is used?

A company purchased 100 units for $30 each on January 31. It purchased 150 units for $25 on February 28. It sold 150 units for $50 each from March 1 through December 31. If the company uses the weighted-average inventory costing method, calculate the amount of Cost of Goods Sold on the income statement for the year ending December 31. (Assume the company uses the perpetual inventory system.)

A company can show a higher net income in its income statement by:

In a period of rising costs, the last-in, first-out (LIFO)method results in higher cost of goods sold and lower net income than the first-in, first-out (FIFO)method.

A company uses weighted-average method of inventory valuation under periodic inventory system. The company began the year with a zero inventory balance. They had the following transactions during the year. 1. Purchased 65 units at $5 per unit 2. Purchased 100 units at $5 per unit 3. Sold 80 units at a price of $12.00 per unit 4. Purchased 55 units at $6 per unit 5. Sold 80 units at a price of $12.75 per unit At the end of the year, they counted the inventory and found 60 units remaining. Calculate the Cost of goods sold for the year. (Round your intermediate calculations to two decimal places)

Adams Consultancy has the following account balances at the end of the current accounting period. The normal gross profit percent is 40%. What is the estimated ending inventory as determined by the gross profit method?

Thomas Company provided the following particulars for year 2015: Calculate the average merchandise inventory held by Thomas Company during the year.

Given the same purchase and sales data, the three major costing methods for inventory will result in three different amounts for net income. Assume the cost of inventory is rising.

The cost of goods available for sale is equal to the:

A company that uses the perpetual inventory system purchased 500 pallets of industrial soap for $7,000 and paid $750 for the freight-in. The company sold the whole lot to a supermarket chain for $13,000 on account. The company uses the specific-identification method of inventory costing. Which of the following entries correctly records the cost of goods sold?

The total cost spent on inventory that was available to be sold during a period is called cost of goods sold.

Clark Sales sold 450 units of product to a customer on account. The company uses the perpetual inventory system. The selling price was $28 per unit, and the cost, according to the company's inventory records, was $12 per unit. Provide the journal entry to record the sales revenue.

A company purchased 100 units for $30 each on January 31. It purchased 150 units for $25 on February 28. It sold 150 units for $50 each from March 1 through December 31. If the company uses the first-in, first-out inventory costing method, what is the amount of Cost of Goods Sold on the income statement for the year ending December 31? (Assume that the company uses a perpetual inventory system.)

The disclosure principle states that a company should disclose all major accounting methods and procedures in the:

Williams Company had the following balances and transactions during 2014: Williams maintains its records of inventory on a perpetual basis using the first-in, first-out method. Calculate the amount of ending Merchandise Inventory on December 31, 2014 using the lower-of-cost-or-market rule.

Perez Company purchased 500 units of inventory at $25 per unit by payment of cash. Provide the journal entry to record the purchase of inventory. (Assume a perpetual inventory system)

A company that uses the periodic inventory method provides the following information: 1. Beginning Inventory $10,000 2. Net Purchases $90,000 At the end of the period, the company does an inventory count and finds $15,000 of inventory on hand. What is the amount of Cost of goods sold?

Which of the following is affected as a result of an error in performing the physical count of inventory at the end of the accounting period?