Exam 5: Reporting and Analyzing Inventories

A corporation has provided the following information about one of its products: During the year,510 units were sold.What is ending inventory using the weighted average periodic inventory method? (Round the weighted average cost per unit to two decimal points; round the ending inventory to the nearest whole dollar.)

A company had inventory of 10 units at a cost of $14 each on November 1.On November 2,they purchased 15 units at $15 each.On November 6,they purchased 11 units at $16 each.On November 8,they sold 28 units for $59 each.Using the LIFO periodic inventory method,what was the cost of the 28 units sold?

Identify the items that are included in merchandise inventory.(In your answer address the special situations of goods in transit,consigned goods,and damaged goods.)

A company that has operated with a 30% average gross profit ratio for a number of years had $100,000 in sales during the first quarter of this year.If it began the quarter with $18,000 of inventory at cost and purchased $72,000 of inventory during the quarter,its estimated ending inventory using the gross profit method is:

The days' sales in inventory ratio is computed by dividing ending inventory by cost of goods sold and multiplying the result by 365.

The consistency concept:

The assignment of costs to the cost of goods sold and to inventory under FIFO is the same for both the perpetual and periodic inventory systems.

In applying the lower of cost or market method to inventory valuation,market is defined as the current replacement cost.

An advantage of the weighted average inventory method is that it tends to smooth out the effects of price changes.

When purchase costs regularly rise,the ___________________ method of inventory valuation yields the lowest gross profit and net income,providing a tax advantage.

Under LIFO,the most recent costs are assigned to ending inventory.

A company that uses a perpetual inventory system made the following cash purchases and sales.There was no beginning inventory. Prepare general journal entries to record the March 16 sale using the FIFO inventory valuation method.

An advantage of the _________________ method of inventory valuation is that it tends to smooth out the effect of erratic changes in costs.

Identify and describe the four inventory valuation methods.

Explain the difference between the retail inventory method and gross profit inventory method for valuing inventory.

Which inventory valuation method assigns a value to the inventory on the balance sheet that approximates current cost and also mimics the actual flow of goods for most businesses?

A company had inventory on November 1 of 5 units at a cost of $20 each.On November 2,they purchased 10 units at $22 each.On November 6 they purchased 6 units at $25 each.On November 5,8 units were sold for $55 each.Using the weighted average perpetual inventory method,what was the value of the inventory on November 30?

The inventory turnover ratio is computed by dividing average merchandise inventory by cost of goods sold.

The ____________________ ratio reflects how much inventory is available in terms of days' sales.

Given the following information,determine the cost of goods sold at December 31 using the LIFO perpetual inventory method. December 2: 5 units were purchased at $7 per unit. December 9: 10 units were purchased at $9.40 per unit. December 11: 12 units were sold at $35 per unit. December 15: 20 units were purchased at $10.15 per unit. December 22: 18 units were sold at $35 per unit.