Jacob Company had the following balances and transactions during 2019: \[\begin{array} { | l | l | } \hline \text { Beginning Merchandise } & \\ \text { Inventory } & 13 \text { units at } \$ 93 \\ \hline \text { March 10 } & \text { Sold 11 units } \\ \hline \text { Iune 10 } & \text { Purchased 26 units at } \$ 89 \\ \hline \text { October 30 } & \text { Sold 20 units } \\ \hline \end{array}\] What is the amount of the company's ending Merchandise Inventory,as disclosed in the December 31,2019 balance sheet,using the periodic weighted-average inventory costing method? (Round the unit costs to two decimal places and total costs to the nearest dollar.)

A) $116 B) $89 C) $289 D) $723 A) $116 B) $89 C) $289 D) $723

Nichols Company had the following balances and transactions during 2018: \[\begin{array} { | l | l | } \hline \text { Beginning Merchandise Inventory as of } & \\ \text { January } 1,2018 & 300 \text { units at } \$ 82 \\ \hline \text { March } 10 & \text { Sold } 70 \text { units } \\ \hline \text { June } 10 & \text { Purchased } 600 \text { units at } \$ 85 \\ \hline \text { October } 30 & \text { Sold } 370 \text { units } \\ \hline \end{array}\] What would be reported for Ending Merchandise Inventory on the balance sheet at December 31,2018 if the perpetual inventory system and the first-in,first-out inventory costing method are used?

A) $5,740 B) $51,000 C) $39,100 D) $24,600 A) $5,740 B) $51,000 C) $39,100 D) $24,600

Provide a definition for each of the following accounting principles. \[\begin{array} { | l | l | } \hline \text { Accounting Principle } & \text { Definition } \\ \hline \text { Consistency } & \\ \hline \text { Conservatism } & \\ \hline \end{array}\]

\[\begin{array} { | l | l | } \hline \t

Smithson Electrical Fixtures reported the following income statement for the year ended December 31,2019. $\begin{array}{c} \text { Smithson Electrical Fixtures}\\ \text { Income Statement }\\ \text { Year Ended December 31, 2019}\\\begin{array}{|l|r|r|} \hline\text { Sales Revenue } & & \$ 258,000 \\ \hline \text { Cost of Goods Sold } & & \\ \hline \text { Beginning Merchandise Inventory } & \$ 43,500 & \\ \hline \text { Net Cost of Purchases } & \underline{145,000} & \\ \hline \text { Cost of Goods Available for Sale } & 188,500 &\\ \hline \begin{array}{l} \text { Less: Ending Mercha } \\ \text { Inventory } \end{array} & 38,000 & \\ \hline \text { Cost of Goods Sold: } & & 150,500 \\ \hline \text { Gross Profit } & & 107,500 \\ \hline \text { Operating Expenses } & & 87,200 \\ \hline \text { Net Income } & & \$20,300\\ \hline \end{array}\end{array}$ Compute inventory turnover rate for the year.(Round to two decimal places.) Compute days' sales in inventory for the year.(Round to two decimal places.)

Inventory turnover is 3.69 times for the

Exam 6: Merchandise Inventory

State the effects of inventory errors on cost of goods sold and net income for periods 1 and 2.The response should be overstated or understated. Period 1 Ending Merchandise Inventory is understated

(Essay)

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Question 101

Which of the following is the correct formula to calculate inventory turnover?

(Multiple Choice)

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Question 102

An overstatement of ending merchandise inventory in the current period results in an overstatement of net income in the current period.

(True/False)

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Question 103

Which of the following statements is TRUE of a good merchandise inventory control system?

(Multiple Choice)

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Question 104

Which of the following statements regarding LIFO is incorrect?

(Multiple Choice)

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Question 105

Jacob Company had the following balances and transactions during 2019: Beginning Merchandise Inventory 13 units at \ 93 March 10 Sold 11 units Iune 10 Purchased 26 units at \ 89 October 30 Sold 20 units What is the amount of the company's ending Merchandise Inventory,as disclosed in the December 31,2019 balance sheet,using the periodic weighted-average inventory costing method? (Round the unit costs to two decimal places and total costs to the nearest dollar.)

(Multiple Choice)

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Question 106

Which of the following inventory costing methods uses the costs of the oldest purchases to calculate the value of the ending inventory?

(Multiple Choice)

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Question 107

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

(True/False)

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Question 108

The last-in,first-out (LIFO)costing system is permitted under International Financial Reporting Standards (IFRS).

(True/False)

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Question 109

When using the periodic inventory system and weighted-average inventory costing method,when is the weighted average cost per unit computed?

(Essay)

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Question 110

Which of the following amounts could differ if a company,using the LIFO inventory costing method,shifts from a periodic inventory system to a perpetual inventory system?

(Multiple Choice)

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Question 111

A company that uses the perpetual inventory system purchased 500 pallets of industrial soap for $9,000 and paid $780 for the freight-in.The company sold the whole lot to a supermarket chain for $12,000 on account.The company uses the specific-identification method of inventory costing.Which of the following entries correctly records the cost of goods sold?

(Multiple Choice)

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Question 112

Countrywide Sales sold 400 units of product to a customer on account.The selling price was $28 per unit,and the cost,according to the company's inventory records,was $14 per unit.Prepare the journal entry to record the cost of goods sold.(Assume a perpetual inventory system and the FIFO inventory costing method.)Omit explanation.

(Essay)

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Question 113

Nichols Company had the following balances and transactions during 2018: Beginning Merchandise Inventory as of January 1,2018 300 units at \ 82 March 10 Sold 70 units June 10 Purchased 600 units at \ 85 October 30 Sold 370 units What would be reported for Ending Merchandise Inventory on the balance sheet at December 31,2018 if the perpetual inventory system and the first-in,first-out inventory costing method are used?

(Multiple Choice)

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Question 114

Provide a definition for each of the following accounting principles. Accounting Principle Definition Consistency Conservatism

(Essay)

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Question 115

Under the weighted-average method for inventory costing,the cost per unit is determined by ________.

(Multiple Choice)

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Question 116

Smithson Electrical Fixtures reported the following income statement for the year ended December 31,2019. Smithson Electrical Fixtures Income Statement Year Ended December 31, 2019 Sales Revenue \ 258,000 Cost of Goods Sold Beginning Merchandise Inventory \ 43,500 Net Cost of Purchases Cost of Goods Available for Sale 188,500 Less: Ending Mercha Inventory 38,000 Cost of Goods Sold: 150,500 Gross Profit 107,500 Operating Expenses 87,200 Net Income \2 0,300 Compute inventory turnover rate for the year.(Round to two decimal places.) Compute days' sales in inventory for the year.(Round to two decimal places.)

(Essay)

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Question 117

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?

(Multiple Choice)

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Question 118

A company purchased 200 units for $40 each on January 31.It purchased 165 units for $50 each on February 28.It sold 225 units for $65 each from March 1 through December 31.If the company uses the last-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.)

(Multiple Choice)

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Question 119

A high rate of inventory turnover indicates difficulty in selling inventory.

(True/False)

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Question 120

State the effects of inventory errors on cost of goods sold and net income for periods 1 and 2.The response should be overstated or understated. Period 1 Ending Merchandise Inventory is understated

Which of the following is the correct formula to calculate inventory turnover?

An overstatement of ending merchandise inventory in the current period results in an overstatement of net income in the current period.

Which of the following statements is TRUE of a good merchandise inventory control system?

Which of the following statements regarding LIFO is incorrect?

Which of the following inventory costing methods uses the costs of the oldest purchases to calculate the value of the ending inventory?

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

The last-in,first-out (LIFO)costing system is permitted under International Financial Reporting Standards (IFRS).

When using the periodic inventory system and weighted-average inventory costing method,when is the weighted average cost per unit computed?

Which of the following amounts could differ if a company,using the LIFO inventory costing method,shifts from a periodic inventory system to a perpetual inventory system?

Provide a definition for each of the following accounting principles. Accounting Principle Definition Consistency Conservatism

Under the weighted-average method for inventory costing,the cost per unit is determined by ________.

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?

A high rate of inventory turnover indicates difficulty in selling inventory.

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