Readers.com uses a perpetual inventory system and has the following data for the month of February: If Readers.com uses the moving average method,how much is cost of goods sold for the units sold on February 15? \[\begin{array} { r l r } \text { Feb. } 1 & \text { On hand, } 30 \text { units } @ \$ 5.00 \text { each } & \$ 150 \\ 8 & \text { Purchased 40 units } @ \$ 5.35 \text { each } & 214 \\ 15 & \text { Sold } 50 \text { units } & \\ 22 & \text { Purchased } 40 \text { units } @ \$ 5.20 \text { each } & 208 \\ 28 & \text { On hand, 60 units } & \end{array}\]

A) $245 B) $255 C) $260 D) $270 A) $245 B) $255 C) $260 D) $270

If Stevens Co.overstates its ending inventory for the current year,what are the effects on cost of goods sold and net income for the current year? $\begin{array} { c c } \text { Effect on Cost of Goods Sold } & \text { Effect on Net Income } \\ \end{array}$ a. $\begin{array} { c c } &&&\text { Understated } &&&&& \text { Overstated } \\ \end{array}$ b.$\begin{array} { c c } &&&\text { Overstated } &&&&&& \text { No effect } \\ \end{array}$ c.$\begin{array} { c c } &&&\text { Understated } &&&&& \text { Understated } \\ \end{array}$ d. $\begin{array} { c c } &&&\text { Overstated }&&&& & \text { Overstated } \end{array}$

The answer of If Stevens Co.overstates its ending inventory for...

The following data is available for one of the products sold by Wild Optics Company,which uses the periodic inventory system: At the end of December,Wild Optics had 25 units on hand.The 75 units sold created revenue of $13 each.Determine the amounts for the December 31 ending inventory,the cost of goods sold for December,and the gross margin for December for each of the inventory costing methods listed below. \[\begin{array} { r l r } \text { Dec. } 1 & \text { On hand, } 10 \text { units at } \$ 8.00 \text { each } & \$ 80 \\ 5 & \text { Purchased 30 units at } \$ 7.80 \text { each } & 234 \\ 18 & \text { Purchased } 40 \text { units at } \$ 8.15 \text { each } & 326 \\ 24 & \text { Purchased 20 units at } \$ 8.25 \text { each } & 165 \\ & \text { Available for sale during December-100 units } & \$ 805 \end{array}\] ? \[\begin{array} {| l | l | l | l| } \hline& \text { Ending Inventory } & \text { Cost of Goods Sold } & \text { Gross Profit } \\ \hline \text { a. Weighted average } & & & \\ \hline \text { b. FIFO } & & & \\ \hline \text { c. LIFO } & & & \\ \hline \end{array}\]

The answer of The following data is available for one...

Roki Inc.uses the periodic inventory system and has the following data for the month of June: \[\begin{array} { r l r } \text { June } & 1\quad \text { On hand, 50 units } @ \$ 15.00 \text { each } & 750.00\\ &5\quad \text { Purchased 115 units } \$ 15.10 \text { each } & 1,736.50 \\ &14 \quad \text { Purchased } 75 \text { units } @ \$ 15.20 \text { each } &1,140.00 \\ &\quad \text { Total cost of goods avalable for sale } &\$ 3,626.50 \\ &30\quad \text { On hand, 90 units } & \\ & \end{array}\] -If Roki uses the FIFO method,the amount assigned to the June 30 inventory would be

A) $1,354.00. B) $1,366.50. C) $1,590.42. D) $1,594.00. A) $1,354.00. B) $1,366.50. C) $1,590.42. D) $1,594.00.

Exam 5: Inventories and Cost of Goods Sold

Sherman,Inc.counted its ending inventory as $178,000 at year-end,January 31,2017.Upon review of the records,it was noted that the following items were in transit during the count: ? A) $\$ 2,000$ of goods shipped by a supplier to Sherman sent FOB destination point on January 31 were received February 5 , and were not counted by Sherman. B) $\$ 5,000$ of goods shipped by a supplier to Sherman sent FOB shipping point on January 30 were received February 2, and were not counted by Sherman. C) $\$ 6,000$ of goods shipped by Sherman to a customer sent FOB shipping point on January 31 were received February 3 , and were counted by Sherman. Determine the correct inventory balance at January 31.

(Multiple Choice)

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Question 41

Which inventory costing method assigns the cost of the most recent items purchased to ending inventory?

(Multiple Choice)

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Question 42

Which method of inventory costing is not acceptable for financial accounting purposes?

(Multiple Choice)

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Question 43

Which one of the following best explains the distinction between inventory and an operating asset?

(Multiple Choice)

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Question 44

Cooking Corner Cooking Corner reported inventory on its balance sheet at December 31, 2016 at $32,000. During 2017, Cooking Corner purchased goods totaling $634,000 on account with terms of 2/10, n/30, FOB shipping point. Total charges paid by Cooking Corner directly to the freight company were $1,000. At the end of 2017, inventory on hand totaled to $45,000. Net sales for 2017 totaled $1,300,000. Cooking Corner employs a periodic inventory system. -Refer to the information about Cooking Corner. How much is cost of goods available for sale for 2017 assuming Cooking Corner takes advantage of one-half of the cash discounts?

(Essay)

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Question 45

Moving average is the name given to the use of an average cost method used with a periodic inventory system.

(True/False)

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Question 46

Readers.com uses a perpetual inventory system and has the following data for the month of February: If Readers.com uses the moving average method,how much is cost of goods sold for the units sold on February 15? Feb. 1 On hand, 30 units @\ 5.00 each \ 150 8 Purchased 40 units @\ 5.35 each 214 15 Sold 50 units 22 Purchased 40 units @\ 5.20 each 208 28 On hand, 60 units

(Multiple Choice)

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Question 47

If Stevens Co.overstates its ending inventory for the current year,what are the effects on cost of goods sold and net income for the current year? Effect on Cost of Goods Sold Effect on Net Income a. Understated Overstated b. Overstated No effect c. Understated Understated d. Overstated Overstated

(Short Answer)

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Question 48

The following data is available for one of the products sold by Wild Optics Company,which uses the periodic inventory system: At the end of December,Wild Optics had 25 units on hand.The 75 units sold created revenue of $13 each.Determine the amounts for the December 31 ending inventory,the cost of goods sold for December,and the gross margin for December for each of the inventory costing methods listed below. Dec. 1 On hand, 10 units at \ 8.00 each \ 80 5 Purchased 30 units at \ 7.80 each 234 18 Purchased 40 units at \ 8.15 each 326 24 Purchased 20 units at \ 8.25 each 165 Available for sale during December-100 units \ 805 ? Ending Inventory Cost of Goods Sold Gross Profit a. Weighted average b. FIFO c. LIFO

(Essay)

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Question 49

For what reason might retailers like Target select an accounting period that ends on or near the end of January?

(Multiple Choice)

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Question 50

Zebra Company overstated its December 31,2017,inventory by $5,200.Which of the following statement is true concerning Zebra's financial statement amounts for 2017?

(Multiple Choice)

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Question 51

It important that the proper amount be assigned to inventory because the amount assigned to inventory will affect the amount eventually recorded as net sales.

(True/False)

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Question 52

Which one of the following is a common analytical tool used by merchandising companies,but not by service companies?

(Multiple Choice)

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Question 53

When a company using LIFO experiences a partial or complete liquidation of its older,lower-priced inventory,its gross margin will be __________ (higher,lower,or unchanged)for the period.

(Short Answer)

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Question 54

Cost of goods sold is equal to beginning inventory plus the net cost of purchases minus __________.

(Short Answer)

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Question 55

Shipping terms of __________ mean that the buyer pays shipping costs.

(Short Answer)

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Question 56

Which of the following statements regarding inventory is true?

(Multiple Choice)

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Question 57

Roki Inc.uses the periodic inventory system and has the following data for the month of June: June 1 On hand, 50 units @\ 15.00 each 750.00 5 Purchased 115 units \ 15.10 each 1,736.50 14 Purchased 75 units @\ 15.20 each 1,140.00 Total cost of goods avalable for sale \ 3,626.50 30 On hand, 90 units -If Roki uses the FIFO method,the amount assigned to the June 30 inventory would be

(Multiple Choice)

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Question 58

Which one of the following would appear on the income statement of a merchandising company,but not on the income statement of a service company?

(Multiple Choice)

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Question 59

The __________ method most nearly approximates replacement cost of inventory on the balance sheet.

(Short Answer)

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Question 60

Which inventory costing method assigns the cost of the most recent items purchased to ending inventory?

Which method of inventory costing is not acceptable for financial accounting purposes?

Which one of the following best explains the distinction between inventory and an operating asset?

Moving average is the name given to the use of an average cost method used with a periodic inventory system.

If Stevens Co.overstates its ending inventory for the current year,what are the effects on cost of goods sold and net income for the current year? Effect on Cost of Goods Sold Effect on Net Income a. Understated Overstated b. Overstated No effect c. Understated Understated d. Overstated Overstated

For what reason might retailers like Target select an accounting period that ends on or near the end of January?

Zebra Company overstated its December 31,2017,inventory by $5,200.Which of the following statement is true concerning Zebra's financial statement amounts for 2017?

It important that the proper amount be assigned to inventory because the amount assigned to inventory will affect the amount eventually recorded as net sales.

Which one of the following is a common analytical tool used by merchandising companies,but not by service companies?

When a company using LIFO experiences a partial or complete liquidation of its older,lower-priced inventory,its gross margin will be __________ (higher,lower,or unchanged)for the period.

Cost of goods sold is equal to beginning inventory plus the net cost of purchases minus __________.

Shipping terms of __________ mean that the buyer pays shipping costs.

Which of the following statements regarding inventory is true?

Which one of the following would appear on the income statement of a merchandising company,but not on the income statement of a service company?

The __________ method most nearly approximates replacement cost of inventory on the balance sheet.

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

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