Exam 5: Inventories and Cost of Goods Sold

Sunset,Inc.purchased merchandise from Rumble Music Company on June 5,2014.The goods were shipped the same day.The merchandise's selling price was $15,000.The credit terms were 1/10,n/30.The shipping terms were FOB shipping point.Sunset received the merchandise on June 10,2014.Sunset paid the amount due on June 13,2014. Sunset uses a perpetual inventory system.When will the cost of merchandise sold be recorded as an expense?

Hawk Store counted some of its inventory twice.As a result,its operating expenses will be

Transportation-in is

Quan uses a periodic inventory system.At the end of April,Quan had 20 units on hand. If Quan,Inc.uses the weighted average cost inventory method,how much is cost of goods sold for April?

If cost of goods sold does not equal the cost of merchandise purchased during the period,an adjustment must be made to correct the error.

Adam Inc.uses a perpetual inventory system. If Adam uses the FIFO method,how much is ending inventory on January 31?

FIFO results in the least amount of income before taxes,assuming a period of rising prices.

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.

A customer returned damaged goods for credit.Which of the seller's accounts decreases?

Herndon Corp.purchased merchandise on account from Likert Corp.on November 18,2014.On November 21,2014,Herndon returned damaged merchandise to Likert and was granted an adjustment on its account.Herndon uses the periodic inventory system.What effect does the merchandise return have on Herndon's accounting equation?

Grout,Inc.offers terms of 2/10,n/30 to credit customers.Tile Mart Corp.purchased 100 tile cutters with a list price of $20 each on March 5,2014,on account. If Tile Mart Corp.pays the amount of the invoice for its purchase on March 14,2014,how much cash will Grout receive from Tile Mart Corp.?

In order to determine inventory for its balance sheet,it is best for a company to count the inventory at the end of its accounting period for

Cost of goods sold is equal to

Under the indirect method,a decrease in inventory is added to net income to determine cash flow from operating activities.

What is LIFO inventory liquidation? Why is it important to disclose the effects of a LIFO inventory liquidation

Which one of the following statements regarding the application of the lower of cost or market method is true?

Which one of the following statements is false?

Sunset,Inc.purchased merchandise from Rumble Music Company on June 5,2014.The goods were shipped the same day.The merchandise's selling price was $15,000.The credit terms were 1/10,n/30.The shipping terms were FOB shipping point.Sunset received the merchandise on June 10,2014.Sunset paid the amount due on June 13,2014. If Sunset uses the periodic inventory system,the effect of recording the payment on June 13,2014,will include

Based upon the following data,determine the cost of merchandise sold for April.

The excess of the value of a company's inventory stated at FIFO over the value stated at LIFO is called a(n)_________________________.