Exam 6: Inventories

If the estimated rate of gross profit is 30%, what is the estimated cost of the merchandise inventory on September 30, based on the following data? Sep. 1 Merchandise inventory \ 125,000 Sep. 1-30 Purchases(net) 300,000 Sep. 1-30 Sales (net) 150,000

Under a periodic inventory system

If a manufacturer ships merchandise to a retailer on consignment, the unsold merchandise should be included in the inventory of the

On the basis of the following data, estimate the cost of the merchandise inventory at March 31 by the retail method:

Fill in the missing amounts from the chart below regarding the calculation of Bean Corporation's estimated inventory using the retail method of estimation.

Cost flow is in the reverse order in which costs were incurred when using

Three identical units of Item Steele Plate are purchased during March, as shown below. Item Steele Plate Units Cost Mar. 3 Purchase 1 \ 830 Mar. 10 Purchase 1 840 Mar. 19 Purchase 1 880 Total 3 \ 2,550 Assume that one unit is sold on March 23 for $1,125. Determine the gross profit for March and ending inventory on March 31 using (a) FIFO, (b) LIFO, and (c) average cost methods.

If a company mistakenly counts more items during a physical inventory than actually exist, how will the error affect their bottom line?

During periods of increasing costs, an advantage of the LIFO inventory cost method is that it matches more recent costs against current revenues.

The inventory costing method that reports the earliest costs in ending inventory is

On the basis of the following data, determine the estimated cost of the inventory as of March 31 by the retail method, presenting details of the computation in good order.

A purchase order establishes an initial record of the receipt of the inventory.

During periods of increasing costs, the use of the FIFO method of costing inventory will result in a greater amount of net income than would result from the use of the LIFO cost method.

Addison, Inc. uses a perpetual inventory system. The following is information about one inventory item for the month of September: Sep. 1 Inventory 20 units at \ 20 4 Sold 10 units 10 Purchased 30 units at \ 25 17 Sold 20 units 30 Purchased 10 units at \ 30 If Addison uses LIFO, the cost of the ending merchandise inventory on September 30 is

Unsold consigned merchandise should be included in the consignee's inventory.

"Market," as used in the phrase "lower of cost or market" for valuing inventory, refers to the price at which the inventory is being offered for sale by its owner.

Inventory costing methods place primary emphasis on assumptions about

Direct disposal costs do not include special advertising or sales commissions.

Which of the following companies would be more likely to use the specific identification inventory costing method?

The following data were taken from the annual reports of Jong Inc., a manufacturer of fireworks, and Hobson Inc., a manufacturer of computers. (a) Determine the (1) inventory turnover and (2) number of day's sales in inventory for Jong and Hobson. Round your answer to two decimal places. (b) How would you expect these measures to compare between the companies? Why?