Question 1

A company reported the following data:
 
Required:
1. Calculate the days' sales in inventory for each year.
2. Comment on the trend in inventory management.

Accepted Answer

1. @#IMG-DLM&_TB6947_00_TB6947_00_TB6947_00 2.The

Question 2

Whether prices are rising or falling,FIFO always will yield the highest gross profit and net income.

Accepted Answer

A) True 
 B)False

Question 3

Toys "R" Us had cost of goods sold of $9,421 million,ending inventory of $2,089 million,and average inventory of $1,965 million.The inventory turnover equals:

Accepted Answer

A) 0.21 
B) 4.51 
C) 4.79 
D) 76.1 days 
E) 80.9 days 
A) 0.21 
B) 4.51 
C) 4.79 
D) 76.1 days 
E) 80.9 days

Question 4

Given the following items and costs as of the balance sheet date,determine the value of Light Company's merchandise inventory. - $2,000 goods sold by Light to another company.The goods are in transit and shipping terms are FOB shipping point.
- $3,000 goods sold by another company to Light.The goods are in transit and shipping terms are FOB shipping point.
- $4,000 owned by Light but in the possession of another company,the consignee.
- Damaged goods owned by Light that originally cost $5,000 but now have an $800 net realizable value.

Accepted Answer

A) $7,000 
B) $7,800 
C) $9,800 
D) $9,000 
E) $6,800 
A) $7,000 
B) $7,800 
C) $9,800 
D) $9,000 
E) $6,800

Question 5

On June 30 a company needed to estimate its ending inventory to prepare its second quarter financial statements.The following information is available: Beginning inventory,April 1: $6,000
Net sales: $70,000
Net purchases: $36,000
The company's gross margin ratio is 12%.Using the gross profit method,the cost of goods sold would be:

Accepted Answer

A) $8,400 
B) $34,000 
C) $61,600 
D) $40,000 
E) $35,200 
A) $8,400 
B) $34,000 
C) $61,600 
D) $40,000 
E) $35,200

Question 6

A company had the following ending inventory costs:
   Instructions:
(a) Calculate the lower of cost or market (LCM) value for the inventory as a whole.
(b) Calculate the lower of cost or market (LCM) value for each individual item.

Accepted Answer

(a) @#IMG-DLM&_TB6947_00_TB694

Question 7

It can be expected that companies that sell perishable goods have higher inventory turnover than companies that sell nonperishable goods.

Accepted Answer

A) True 
 B)False

Question 8

During January,a company that uses a perpetual inventory system had beginning inventory,purchases and sales as follows.What was the FIFO cost of the company's January 31 inventory?

Accepted Answer

@#IMG-DLM&_TB6947_00

Question 9

A company had 260 units of inventory at a cost of $152 each on January 1.On June 5,the company purchased 460 units for $172 each.On November 10,the company purchased 160 units for $212 each.On December 15,the company sold 520 units.Given this information,determine the cost of the 520 units sold using the weighted average periodic inventory method.(Do not round your intermediate calculations; round the final answer to nearest dollar amount.)

Accepted Answer

A) $67,920 
B) $69,920 
C) $90,149 
D) $92,149 
E) $152,557 
A) $67,920 
B) $69,920 
C) $90,149 
D) $92,149 
E) $152,557

Question 10

Net realizable value for damaged or obsolete goods is equal to the sales price plus the cost of making the sale.

Accepted Answer

A) True 
 B)False

Question 11

A company markets a climbing kit and uses the perpetual inventory system to account for its merchandise.The beginning balance of the inventory and its transactions during January were as follows:
  If the ending inventory is reported at $276,which inventory method was used?

Accepted Answer

A) LIFO method 
B) FIFO method 
C) Weighted average method 
D) Specific identification method 
E) Retail inventory method 
A) LIFO method 
B) FIFO method 
C) Weighted average method 
D) Specific identification method 
E) Retail inventory method

Question 12

Kalamazoo Corporation uses the periodic inventory system and has provided the following information about one of their inventory items:
   During the year,925 units were sold.What was the cost of goods sold using the FIFO cost flow assumption?

Accepted Answer

Cost of goods sold =

Question 13

How do the consistency concept and the full disclosure principle affect inventory valuation?

Accepted Answer

The consistency concept requires that co

Question 14

A company had 22 units of inventory at a cost of $26 each on November 1.On November 2,the company purchased 27 units at $27 each.On November 6,the company purchased 23 units at $28 each.On November 8,the company sold 52 units for $71 each.Given this information,determine the cost of the 52 units sold using the LIFO periodic inventory method.

Accepted Answer

A) $1,997 
B) $1,456 
C) $1,436 
D) $1,425 
E) $1,385 
A) $1,997 
B) $1,456 
C) $1,436 
D) $1,425 
E) $1,385

Question 15

A company had gross profit of $134,200 on net sales of $205,000.If ending inventory was $8,000 and average inventory was $7,080,what is the company's inventory turnover?

Accepted Answer

A) 10.0 
B) 8.85 
C) 16.77 
D) 18.95 
E) 28.95 
A) 10.0 
B) 8.85 
C) 16.77 
D) 18.95 
E) 28.95

Question 16

A company 8 units of inventory at a cost of $12 each on November 1.On November 2,the company purchased 13 units at $13 each.On November 6,the company purchased 9 units at $14 each.On November 8,the company sold 24 units for $57 each.Given this information,determine the cost of the 24 units sold using the LIFO periodic inventory method.

Accepted Answer

A) $307 
B) $319 
C) $336 
D) $415 
E) $442 
A) $307 
B) $319 
C) $336 
D) $415 
E) $442

Question 17

To avoid the time-consuming process of taking an inventory each year,the majority of companies use the gross profit method to estimate ending inventory.

Accepted Answer

A) True 
 B)False

Question 18

The _____________________ is a measure of how quickly a merchandiser sells its merchandise inventory.

Accepted Answer

The answer of The _____________________ is a measure of how...

Question 19

A company has inventory of 10 units at a cost of $10 each on June 1.On June 3,they purchased 20 units at $12 each.12 units are sold on June 5.Using the FIFO periodic inventory method,what is the cost of the 12 units that were sold?

Accepted Answer

A) $120 
B) $124 
C) $128 
D) $130 
E) $140 
A) $120 
B) $124 
C) $128 
D) $130 
E) $140

Question 20

Physical inventory counts:

Accepted Answer

A) Are not necessary under the perpetual system. 
B) Are necessary to measure and adjust for inventory shrinkage. 
C) Must be taken at least once a month. 
D) Require the use of hand-held portable computers. 
E) Are not necessary under the cost-to benefit constraint. 
A) Are not necessary under the perpetual system. 
B) Are necessary to measure and adjust for inventory shrinkage. 
C) Must be taken at least once a month. 
D) Require the use of hand-held portable computers. 
E) Are not necessary under the cost-to benefit constraint.

A company reported the following data: Required: 1. Calculate the days' sales in inventory for each year. 2. Comment on the trend in inventory management.

Whether prices are rising or falling,FIFO always will yield the highest gross profit and net income.

Toys "R" Us had cost of goods sold of $9,421 million,ending inventory of $2,089 million,and average inventory of $1,965 million.The inventory turnover equals:

A company had the following ending inventory costs: Instructions: (a) Calculate the lower of cost or market (LCM) value for the inventory as a whole. (b) Calculate the lower of cost or market (LCM) value for each individual item.

It can be expected that companies that sell perishable goods have higher inventory turnover than companies that sell nonperishable goods.

During January,a company that uses a perpetual inventory system had beginning inventory,purchases and sales as follows.What was the FIFO cost of the company's January 31 inventory?

Net realizable value for damaged or obsolete goods is equal to the sales price plus the cost of making the sale.

A company markets a climbing kit and uses the perpetual inventory system to account for its merchandise.The beginning balance of the inventory and its transactions during January were as follows: If the ending inventory is reported at $276,which inventory method was used?

Kalamazoo Corporation uses the periodic inventory system and has provided the following information about one of their inventory items: During the year,925 units were sold.What was the cost of goods sold using the FIFO cost flow assumption?

How do the consistency concept and the full disclosure principle affect inventory valuation?

A company had gross profit of $134,200 on net sales of $205,000.If ending inventory was $8,000 and average inventory was $7,080,what is the company's inventory turnover?

To avoid the time-consuming process of taking an inventory each year,the majority of companies use the gross profit method to estimate ending inventory.

The _____________________ is a measure of how quickly a merchandiser sells its merchandise inventory.

A company has inventory of 10 units at a cost of $10 each on June 1.On June 3,they purchased 20 units at $12 each.12 units are sold on June 5.Using the FIFO periodic inventory method,what is the cost of the 12 units that were sold?

Physical inventory counts:

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters

Exam 5: Reporting and Analyzing Inventories

A company reported the following data: Required: 1. Calculate the days' sales in inventory for each year. 2. Comment on the trend in inventory management.

Whether prices are rising or falling,FIFO always will yield the highest gross profit and net income.

Toys "R" Us had cost of goods sold of $9,421 million,ending inventory of $2,089 million,and average inventory of $1,965 million.The inventory turnover equals:

A company had the following ending inventory costs: Instructions: (a) Calculate the lower of cost or market (LCM) value for the inventory as a whole. (b) Calculate the lower of cost or market (LCM) value for each individual item.

It can be expected that companies that sell perishable goods have higher inventory turnover than companies that sell nonperishable goods.

During January,a company that uses a perpetual inventory system had beginning inventory,purchases and sales as follows.What was the FIFO cost of the company's January 31 inventory?

Net realizable value for damaged or obsolete goods is equal to the sales price plus the cost of making the sale.

A company markets a climbing kit and uses the perpetual inventory system to account for its merchandise.The beginning balance of the inventory and its transactions during January were as follows: If the ending inventory is reported at $276,which inventory method was used?

Kalamazoo Corporation uses the periodic inventory system and has provided the following information about one of their inventory items: During the year,925 units were sold.What was the cost of goods sold using the FIFO cost flow assumption?

How do the consistency concept and the full disclosure principle affect inventory valuation?

A company had gross profit of $134,200 on net sales of $205,000.If ending inventory was $8,000 and average inventory was $7,080,what is the company's inventory turnover?

To avoid the time-consuming process of taking an inventory each year,the majority of companies use the gross profit method to estimate ending inventory.

The _____________________ is a measure of how quickly a merchandiser sells its merchandise inventory.

A company has inventory of 10 units at a cost of $10 each on June 1.On June 3,they purchased 20 units at $12 each.12 units are sold on June 5.Using the FIFO periodic inventory method,what is the cost of the 12 units that were sold?

Physical inventory counts:

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters