Question 1

A fire destroyed the inventory of Barber Company.The following information is available:
   Prepare a schedule to compute the amount of inventory lost in the fire.

Accepted Answer

The answer of A fire destroyed the inventory of Barber...

Question 2

An error in the ending inventory for the year ended December 31,2019:

Accepted Answer

A) automatically creates errors in cost of goods sold in the 2019 and 2020 financial statements. 
B) has no effect on the 2019 financial statements,but will create an error in the 2020 financial statements. 
C) automatically creates errors in the ending inventory balance in the 2019 and 2020 financial statements. 
D) affects only the 2019 financial statements. 
A) automatically creates errors in cost of goods sold in the 2019 and 2020 financial statements. 
B) has no effect on the 2019 financial statements,but will create an error in the 2020 financial statements. 
C) automatically creates errors in the ending inventory balance in the 2019 and 2020 financial statements. 
D) affects only the 2019 financial statements. A

Question 3

A company has a beginning inventory of $50,000 and purchases during the year of $150,000.The beginning inventory consisted of 3,000 units and 8,000 units were purchased during the year.3,780 units remain in ending inventory.The cost of the ending inventory using the average-cost method will be: (Round any intermediary calculations to two decimal places and your final answer to the nearest dollar. )

Accepted Answer

A) $131,260. 
B) $199,980. 
C) $68,720. 
D) $268,700. 
A) $131,260. 
B) $199,980. 
C) $68,720. 
D) $268,700. C

Question 4

Margaret Company reported the following information for the current year:   Industry Averages available are:
  How do the inventory turnover and gross profit percentage for Margaret Company compare to the industry averages for the same ratios? (Round inventory turnover to two decimal places.Round gross profit percentage to the nearest percent. )

Accepted Answer

A) Margaret Company has superior gross profit percentage and inventory turnover. 
B) Margaret Company has superior gross profit percentage and inferior inventory turnover. 
C) Margaret Company has inferior gross profit percentage and superior inventory turnover. 
D) Margaret Company has inferior gross profit percentage and inventory turnover. 
A) Margaret Company has superior gross profit percentage and inventory turnover. 
B) Margaret Company has superior gross profit percentage and inferior inventory turnover. 
C) Margaret Company has inferior gross profit percentage and superior inventory turnover. 
D) Margaret Company has inferior gross profit percentage and inventory turnover.

Question 5

The cost of inventory shifts from asset to expense when the seller fulfills its contract with the customer,delivers the goods to the buyer and recognizes revenue.

Accepted Answer

A) True 
 B)False

Question 6

Under the periodic inventory system,a physical inventory count is taken to determine the cost of the inventory on hand and the cost of the merchandise sold.

Accepted Answer

A) True 
 B)False

Question 7

Boston Company sells thirty items for $800 per unit and has a cost of goods sold per unit of $480.The gross profit to be reported for selling 30 items is:

Accepted Answer

A) $320. 
B) $9,600. 
C) $14,400. 
D) $24,000. 
A) $320. 
B) $9,600. 
C) $14,400. 
D) $24,000.

Question 8

Which is the CORRECT order for items to appear on the income statement?

Accepted Answer

A) sales revenue,operating expenses,gross profit,net income 
B) sales revenue,gross profit,net income,operating expenses 
C) sales revenue,gross profit,cost of goods sold,operating expenses 
D) sales revenue,cost of goods sold,gross profit,operating expenses 
A) sales revenue,operating expenses,gross profit,net income 
B) sales revenue,gross profit,net income,operating expenses 
C) sales revenue,gross profit,cost of goods sold,operating expenses 
D) sales revenue,cost of goods sold,gross profit,operating expenses

Question 9

Under U.S.GAAP,inventories are reported on the balance sheet at:

Accepted Answer

A) historical cost only. 
B) current replacement cost only. 
C) selling price. 
D) lower-of-cost-or-market. 
A) historical cost only. 
B) current replacement cost only. 
C) selling price. 
D) lower-of-cost-or-market.

Question 10

Ending inventory for the year ended December 31,2019,is understated by $23,000.How will this error affect net income for 2020?

Accepted Answer

A) Net income will be understated by $46,000. 
B) Net income will be overstated by $46,000. 
C) Net income will be understated by $23,000. 
D) Net income will be overstated by $23,000. 
A) Net income will be understated by $46,000. 
B) Net income will be overstated by $46,000. 
C) Net income will be understated by $23,000. 
D) Net income will be overstated by $23,000.

Question 11

The following data was obtained from the records of Brankovich Tool and Die,Inc. ,for the current year:
   The company sold 200 units during the year.Sales for the year are $70,000;operating expenses are $20,000;and the tax rate is 40%.
Required:
Using the multistep format,prepare the income statement using:
1.FIFO
2.LIFO
3.Average cost (Round all calculations to two decimal places. )

Accepted Answer

1.FIFO
 @#IMG-DLM& *Cost of Goods Sold:
(110 × $10

Question 12

The cost of inventory that is still on hand is called:

Accepted Answer

A) cost of goods sold,an expense that appears on the balance sheet. 
B) inventory,a long-term asset that appears on the balance sheet. 
C) inventory,a current asset that appears on the balance sheet. 
D) purchases,a current asset that appears on the balance sheet. 
A) cost of goods sold,an expense that appears on the balance sheet. 
B) inventory,a long-term asset that appears on the balance sheet. 
C) inventory,a current asset that appears on the balance sheet. 
D) purchases,a current asset that appears on the balance sheet.

Question 13

The selling price of a television is $1,700 and the cost to the retailer is $725.What is the retailer's gross profit from the sale of the television?

Accepted Answer

A) $0 
B) $975 
C) $725 
D) $1,700 
A) $0 
B) $975 
C) $725 
D) $1,700

Question 14

Which inventory costing method provides the most realistic measure of net income?

Accepted Answer

A) FIFO 
B) LIFO 
C) average cost 
D) specific identification 
A) FIFO 
B) LIFO 
C) average cost 
D) specific identification

Question 15

All of the following costs would be included in the cost of inventory EXCEPT for:

Accepted Answer

A) insurance while in transit from seller. 
B) costs to get inventory ready for sale. 
C) taxes paid on the purchase price. 
D) sales commission paid to salesperson when the inventory is sold. 
A) insurance while in transit from seller. 
B) costs to get inventory ready for sale. 
C) taxes paid on the purchase price. 
D) sales commission paid to salesperson when the inventory is sold.

Question 16

The use of the FIFO method generally increases taxable income:

Accepted Answer

A) when inventory costs are constant. 
B) when inventory costs are declining. 
C) when inventory costs are increasing. 
D) under all circumstances. 
A) when inventory costs are constant. 
B) when inventory costs are declining. 
C) when inventory costs are increasing. 
D) under all circumstances.

Question 17

Slowinski Corporation reported net income of $465,000 for the current year.After the financial statements had been prepared,it was discovered that ending inventory had been overstated by $25,000 and beginning inventory was understated by $1,000.The correct net income was:

Accepted Answer

A) $439,000. 
B) $441,000. 
C) $489,000. 
D) $491,000. 
A) $439,000. 
B) $441,000. 
C) $489,000. 
D) $491,000.

Question 18

The cost of the inventory that a business has sold to customers is called:

Accepted Answer

A) inventory. 
B) cost of goods sold. 
C) purchases. 
D) gross profit. 
A) inventory. 
B) cost of goods sold. 
C) purchases. 
D) gross profit.

Question 19

Perfect Catering Company's ending inventory was $103,700 at historical cost and $116,500 at current replacement cost.The company uses LIFO.Before consideration of the lower-of-cost-or-market rule,the company's cost of goods sold was $58,000.Following U.S.GAAP,which of the following statements reflect the correct application of the lower-of-cost-or-market rule?

Accepted Answer

A) The Ending Inventory balance will be $103,700,and Cost of Goods Sold will be $58,000. 
B) The Ending Inventory balance will be $116,500,and Cost of Goods Sold will be $58,000. 
C) The Ending Inventory balance will be $116,500,and Cost of Goods Sold will be $70,800. 
D) The Ending Inventory balance will be $116,500,and Cost of Goods Sold will be $45,200. 
A) The Ending Inventory balance will be $103,700,and Cost of Goods Sold will be $58,000. 
B) The Ending Inventory balance will be $116,500,and Cost of Goods Sold will be $58,000. 
C) The Ending Inventory balance will be $116,500,and Cost of Goods Sold will be $70,800. 
D) The Ending Inventory balance will be $116,500,and Cost of Goods Sold will be $45,200.

Question 20

By having knowledge of the company's inventory method,as well as having clear,complete disclosures in the financial statements,bankers are guaranteed that the company will repay its loans.

Accepted Answer

A) True 
 B)False

A fire destroyed the inventory of Barber Company.The following information is available: Prepare a schedule to compute the amount of inventory lost in the fire.

An error in the ending inventory for the year ended December 31,2019:

The cost of inventory shifts from asset to expense when the seller fulfills its contract with the customer,delivers the goods to the buyer and recognizes revenue.

Under the periodic inventory system,a physical inventory count is taken to determine the cost of the inventory on hand and the cost of the merchandise sold.

Boston Company sells thirty items for $800 per unit and has a cost of goods sold per unit of $480.The gross profit to be reported for selling 30 items is:

Which is the CORRECT order for items to appear on the income statement?

Under U.S.GAAP,inventories are reported on the balance sheet at:

Ending inventory for the year ended December 31,2019,is understated by $23,000.How will this error affect net income for 2020?

The cost of inventory that is still on hand is called:

The selling price of a television is $1,700 and the cost to the retailer is $725.What is the retailer's gross profit from the sale of the television?

Which inventory costing method provides the most realistic measure of net income?

All of the following costs would be included in the cost of inventory EXCEPT for:

The use of the FIFO method generally increases taxable income:

Slowinski Corporation reported net income of $465,000 for the current year.After the financial statements had been prepared,it was discovered that ending inventory had been overstated by $25,000 and beginning inventory was understated by $1,000.The correct net income was:

The cost of the inventory that a business has sold to customers is called:

By having knowledge of the company's inventory method,as well as having clear,complete disclosures in the financial statements,bankers are guaranteed that the company will repay its loans.

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Internal Control Cash

Receivables and Revenue

Plant Assets, natural Resources, Intangibles

Current and Contingent Liabilities

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters

Exam 6: Inventory Cost of Goods Sold

A fire destroyed the inventory of Barber Company.The following information is available: Prepare a schedule to compute the amount of inventory lost in the fire.

An error in the ending inventory for the year ended December 31,2019:

The cost of inventory shifts from asset to expense when the seller fulfills its contract with the customer,delivers the goods to the buyer and recognizes revenue.

Under the periodic inventory system,a physical inventory count is taken to determine the cost of the inventory on hand and the cost of the merchandise sold.

Boston Company sells thirty items for $800 per unit and has a cost of goods sold per unit of $480.The gross profit to be reported for selling 30 items is:

Which is the CORRECT order for items to appear on the income statement?

Under U.S.GAAP,inventories are reported on the balance sheet at:

Ending inventory for the year ended December 31,2019,is understated by $23,000.How will this error affect net income for 2020?

The cost of inventory that is still on hand is called:

The selling price of a television is $1,700 and the cost to the retailer is $725.What is the retailer's gross profit from the sale of the television?

Which inventory costing method provides the most realistic measure of net income?

All of the following costs would be included in the cost of inventory EXCEPT for:

The use of the FIFO method generally increases taxable income:

Slowinski Corporation reported net income of $465,000 for the current year.After the financial statements had been prepared,it was discovered that ending inventory had been overstated by $25,000 and beginning inventory was understated by $1,000.The correct net income was:

The cost of the inventory that a business has sold to customers is called:

By having knowledge of the company's inventory method,as well as having clear,complete disclosures in the financial statements,bankers are guaranteed that the company will repay its loans.

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Internal Control Cash

Receivables and Revenue

Plant Assets, natural Resources, Intangibles

Current and Contingent Liabilities

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters