Deck 6: Inventories and Cost of Sales

Question 1

The inventory valuation method that has the advantages of assigning an amount to inventory on the balance sheet that approximates its current cost,and also mimics the actual flow of goods for most businesses is:

A)FIFO.
B)Weighted average.
C)LIFO.
D)Specific identification.
E)Lower of cost or market.

Answer 1

A

Question 2

The full disclosure principle:

A)Prescribes that the notes to the financial statements report the change from one inventory valuation method to another.
B)Requires that companies use the same accounting method for inventory valuation period after period.
C)Is not subject to the consideration of materiality.
D)Is only applied to retailers and manufacturers.
E)Is also called the consistency principle.

Answer 2

A

Question 3

Consignment goods are:

A)Goods shipped by the owner to the consignee who sells the goods for the owner.
B)Reported in the consignee's books as inventory.
C)Goods shipped to the consignor who sells the goods for the owner.
D)Not reported in the consignor's inventory since they do not have possession of the inventory.
E)Always paid for by the consignee when they take possession.

Answer 3

A

Question 4

If a period-end inventory amount is reported in error,it can cause a misstatement in all of the following except:

A)Cost of goods sold.
B)Gross profit.
C)Net sales.
D)Current assets.
E)Net income.

Question 5

Internal controls that should be applied when a business takes a physical count of inventory should include all of the following except:

A)Prenumbered inventory tickets.
B)A manager confirms that all inventories are ticketed only once.
C)Counters confirm the validity of inventory existence,amounts,and quality.
D)Second counts by a different counter.
E)Counters of inventory should be those who are responsible for the inventory.

Question 6

The inventory valuation method that results in the lowest taxable income in a period of inflation is:

A)LIFO method.
B)FIFO method.
C)Weighted-average cost method.
D)Specific identification method.
E)Gross profit method.

Question 7

During a period of steadily rising costs,the inventory valuation method that yields the highest reported net income is:

A)Specific identification method.
B)Average cost method.
C)Weighted-average method.
D)FIFO method.
E)LIFO method.

Question 8

Bedrock Company reported a December 31 ending inventory balance of $412,000.The following additional information is also available: ▪ The ending inventory balance of $412,000 included $72,000 of consigned inventory for which Bedrock was the consignor.
▪ The ending inventory balance of $412,000 included $22,000 of office supplies that were stored in the warehouse and were to be used by the company's supervisors and managers during the coming year.
Based on this information,the correct balance for ending inventory on December 31 is:

A)$412,000
B)$340,000
C)$318,000
D)$362,000
E)$390,000

Question 9

Physical counts of inventory:

A)Are not necessary under the perpetual system.
B)Are necessary to adjust the Inventory account to the actual inventory available.
C)Must be taken at least once a month.
D)Requires the use of hand-held portable computers.
E)Are not necessary under the cost-to benefit constraint.

Question 10

Which of the following prescribes the use of the less optimistic amount when more than one estimate of an amount to be received or paid exists and the estimates are about equally likely?

A)Full disclosure principle.
B)Consistency concept.
C)FIFO inventory valuation method.
D)Conservatism constraint.
E)Matching principle.

Question 11

Buffalo Company reported a December 31 ending inventory balance of $412,000.The following additional information is also available: ▪ The ending inventory balance of $412,000 did not include goods costing $48,000 that were purchased by Buffalo on December 28 and shipped FOB destination on that date.Buffalo did not receive the goods until January 2 of the following year.
▪ The ending inventory balance of $412,000 included damaged goods at their original cost of $38,000.The net realizable value of the damaged goods was $10,000.
Based on this information,the correct balance for ending inventory on December 31 is:

A)$374,000
B)$384,000
C)$460,000
D)$422,000
E)$438,000

Question 12

Costs included in the Merchandise Inventory account can include all of the following except:

A)Invoice price minus any discount.
B)Transportation-in.
C)Storage.
D)Insurance.
E)Damaged inventory that cannot be sold.

Question 13

Regardless of the inventory costing system used,cost of goods available for sale must be allocated at the end of the period between

A)beginning inventory and net purchases during the period.
B)ending inventory and beginning inventory.
C)net purchases during the period and ending inventory.
D)ending inventory and cost of goods sold.
E)beginning inventory and cost of goods sold.

Question 14

Merchandise inventory includes:

A)All goods owned by a company and held for sale.
B)All goods in transit.
C)All goods on consignment.
D)Only damaged goods.
E)Only non-damaged goods.

Question 15

Damaged and obsolete goods that can be sold:

A)Are never counted as inventory.
B)Are included in inventory at their full cost.
C)Are included in inventory at their net realizable value.
D)Should be disposed of immediately.
E)Are assigned a value of zero.

Question 16

On December 31 of the current year,Plunkett Company reported an ending inventory balance of $215,000.The following additional information is also available: ▪ Plunkett sold and shipped goods costing $38,000 to Savannah Enterprises on December 28 with shipping terms of FOB shipping point.The goods were not included in the ending inventory amount of $215,000.
▪ Plunkett purchased goods costing $44,000 on December 29.The goods were shipped FOB destination and were received by Plunkett on January 2 of the following year.The shipment was a rush order that was supposed to arrive by December 31.These goods were included in the ending inventory balance of $215,000.
▪ Plunkett's ending inventory balance of $215,000 included $15,000 of goods being held on consignment from Carole Company.(Plunkett Company is the consignee. )
▪ Plunkett's ending inventory balance of $215,000 did not include goods costing $95,000 that were shipped to Plunkett on December 27 with shipping terms of FOB destination and were still in transit at year-end.
Based on the above information,the amount that Plunkett should report in ending inventory on December 31 is:

A)$194,000
B)$209,000
C)$200,000
D)$171,000
E)$156,000

Question 17

Which of the following inventory costing methods will always result in the same values for ending inventory and cost of goods sold regardless of whether a perpetual or periodic inventory system is used?

A)FIFO and LIFO
B)LIFO and weighted-average cost
C)Specific identification and FIFO
D)FIFO and weighted-average cost
E)LIFO and specific identification

Question 18

The consistency concept:

A)Prescribes a company use the same accounting method of inventory valuation,an exception being when a change from one method to another will improve its financial reporting.
B)Requires a company to use one method of inventory valuation exclusively.
C)Requires that all companies in the same industry use the same accounting methods of inventory valuation.
D)Is also called the full disclosure principle.
E)Is also called the matching principle.

Question 19

Goods in transit are included in a purchaser's inventory:

A)At any time during transit.
B)When the purchaser is responsible for paying freight charges.
C)When the supplier is responsible for freight charges.
D)If the goods are shipped FOB destination.
E)After the half-way point between the buyer and seller.

Question 20

The inventory valuation method that tends to smooth out erratic changes in costs is:

A)FIFO.
B)Weighted average.
C)LIFO.
D)Specific identification.
E)WIFO.

Question 21

A company had the following purchases during the current year: On December 31,there were 26 units remaining in ending inventory.Using the FIFO inventory valuation method,what is the cost of the ending inventory?

A)$3,280.
B)$3,200.
C)$3,445.
D)$3,540.
E)$3,640.

Question 22

Days' sales in inventory:

A)Is also called days' stock on hand.
B)Focuses on average inventory rather than ending inventory.
C)Is used to measure solvency.
D)Is calculated by dividing cost of goods sold by ending inventory.
E)Is a substitute for the acid-test ratio.

Question 23

Days' sales in inventory is calculated as:

A)Ending inventory divided by cost of goods sold.
B)Cost of goods sold divided by ending inventory.
C)Ending inventory divided by cost of goods sold times 365.
D)Cost of goods sold divided by ending inventory times 365.
E)Ending inventory times cost of goods sold.

Question 24

The inventory turnover ratio is calculated as:

A)Cost of goods sold divided by average merchandise inventory.
B)Sales divided by cost of goods sold.
C)Ending inventory divided by cost of goods sold.
D)Cost of goods sold divided by ending inventory.
E)Cost of goods sold divided by ending inventory times 365.

Question 25

The understatement of the ending inventory balance causes:

A)Cost of goods sold to be overstated and net income to be understated.
B)Cost of goods sold to be overstated and net income to be overstated.
C)Cost of goods sold to be understated and net income to be understated.
D)Cost of goods sold to be understated and net income to be overstated.
E)Cost of goods sold to be overstated and net income to be correct.

Question 26

A company had the following purchases during the current year: On December 31,there were 26 units remaining in ending inventory.Using the LIFO inventory valuation method,what is the cost of the ending inventory?

A)$3,280.
B)$3,200.
C)$3,445.
D)$3,540.
E)$3,640.

Question 27

Ulrich had cost of goods sold of $6.7 million,ending inventory of $2.2 million,and average inventory of $1.9 million.Its days' sales in inventory equals:

A)120.
B)104.
C)60.
D)35.
E)180.

Question 28

The inventory valuation method that identifies each item in ending inventory with a specific purchase and invoice is the:

A)Weighted average inventory method.
B)First-in,first-out method.
C)Last-in,first-out method.
D)Specific identification method.
E)Retail inventory method.

Question 29

Hull Company reported the following income statement information for 2015: The beginning inventory balance for Year 1 is correct.However,the ending inventory figure for Year 1 was overstated by $20,000.Given this information,the correct gross profit figure for 2015 would be:

A)$149,000.
B)$169,000.
C)$129,000.
D)$142,000.
E)$112,000.

Question 30

A company had the following purchases during the current year: On December 31,there were 26 units remaining in ending inventory.These 26 units consisted of 2 from January,4 from February,6 from May,4 from September,and 10 from November.Using the specific identification method,what is the cost of the ending inventory?

A)$3,500.
B)$3,800.
C)$3,960.
D)$3,280.
E)$3,640.

Question 31

Since an error in the period-end inventory causes an offsetting error in the next period:

A)Managers can ignore the error.
B)It is said to be self-correcting.
C)It affects only income statement accounts.
D)If affects only balance sheet accounts.
E)Is immaterial for managerial decision making.

Question 32

Beckenworth had cost of goods sold of $9,421 million,ending inventory of $2,089 million,and average inventory of $1,965 million.Its days' sales in inventory equals:

A)0.21.
B)4.51.
C)4.79.
D)76.1 days.
E)80.9 days.

Question 33

The inventory turnover ratio:

A)Is used to analyze profitability.
B)Is used to measure solvency.
C)Reveals how many times a company sells its merchandise inventory during a period.
D)Reveals how many days a company can sell inventory if no new merchandise is purchased.
E)Calculation depends on the company's inventory valuation method.

Question 34

The understatement of the beginning inventory balance causes:

A)Cost of goods sold to be understated and net income to be understated.
B)Cost of goods sold to be understated and net income to be overstated.
C)Cost of goods sold to be overstated and net income to be overstated.
D)Cost of goods sold to be overstated and net income to be understated.
E)Cost of goods sold to be overstated and net income to be correct.

Question 35

Decisions management must make in accounting for inventory cost include all of the following except:

A)Costing method.
B)Perpetual or periodic inventory system.
C)Customer demand for inventory.
D)Use of market values or other estimates.
E)Items included in inventory and their costs.

Question 36

Acceptable methods of assigning specific costs to inventory and cost of goods sold include all of the following except:

A)LIFO method.
B)FIFO method.
C)Specific identification method.
D)Weighted average method.
E)Retail method.

Question 37

Lucia Company reported cost of goods sold for Year 1 and Year 2 as follows: Lucia Company made two errors: 1)ending inventory at the end of Year 1 was understated by $15,000 and 2)ending inventory at the end of Year 2 was overstated by $6,000.Given this information,the correct cost of goods sold figure for Year 2 would be:

A)$291,000
B)$276,000
C)$264,000
D)$285,000
E)$249,000

Question 38

Giorgio had cost of goods sold of $9,421 million,ending inventory of $2,089 million,and average inventory of $1,965 million.Its inventory turnover equals:

A)0.21.
B)4.51.
C)4.79.
D)76.1 days.
E)80.9 days.

Question 39

Perfection Company had cost of goods sold of $853,000,ending inventory of $70,500,and average inventory of $71,600.Its inventory turnover equals:

A)11.9.
B)1.0.
C)6.0.
D)30.6.
E)12.0.

Question 40

An understatement of ending inventory will cause

A)An overstatement of assets and equity on the balance sheet.
B)An understatement of assets and equity on the balance sheet.
C)An overstatement of assets and an understatement of equity on the balance sheet.
D)An understatement of assets and an overstatement of equity on the balance sheet.
E)No effect on the balance sheet.

Question 41

Generally accepted accounting principles require that the inventory of a company be reported at:

A)Market value.
B)Historical cost.
C)Lower of cost or market.
D)Replacement cost.
E)Retail value.

Question 42

A company sells garden hoses and uses the perpetual inventory system to account for its merchandise.The beginning balance of the inventory and its transactions during September were as follows: September 1: Beginning balance of 18 units at $13 each
September 12: Purchased 30 units at $14 each
September 19: Sold 24 units at $30 selling price each
September 20: Purchased 24 units at $17 each
September 27: Sold 27 units at $30 selling price each
If the ending inventory is reported at $276,what inventory method was used?

A)LIFO method.
B)FIFO method.
C)Weighted average method.
D)Specific identification method.
E)Retail inventory methoD.

Question 43

A company's inventory records report the following in November of the current year: On November 8,it sold 18 units for $54 each.Using the LIFO perpetual inventory method,what amount of gross profit was earned from the 18 units sold?

A)$577
B)$452
C)$522
D)$462
E)$562

Question 44

A company's inventory records report the following in November of the current year: On November 8,it sold 18 units for $54 each.Using the LIFO perpetual inventory method,what was the amount recorded in the cost of goods sold account for the 18 units sold?

A)$395
B)$410
C)$450
D)$510
E)$520

Question 45

Raleigh Co.has the following products in its ending inventory.Compute the lower of cost or market total for inventory applied separately to each product.

A)$2,040.50.
B)$2,086.50.
C)$2,018.00.
D)$2,109.00.
E)$2,053.50.

Question 46

A company had inventory on November 1 of 5 units at a cost of $20 each.On November 2,they purchased 10 units at $22 each.On November 6 they purchased 6 units at $25 each.On November 8,8 units were sold for $55 each.Using the LIFO perpetual inventory method,what was the value of the inventory on November 8 after the sale?

A)$304
B)$296
C)$288
D)$280
E)$276

Question 47

In applying the lower of cost or market method to inventory valuation,market is defined as:

A)Historical cost.
B)Current replacement cost.
C)Current sales price.
D)FIFO.
E)LIFO.

Question 48

McCarthy Company has inventory of 8 units at a cost of $200 each on October 1.On October 2,it purchased 20 units at $205 each.11 units are sold on October 4.Using the FIFO perpetual inventory method,what is the value of inventory after the October 4 sale?

A)$3,485.
B)$3,445.
C)$3,500.
D)$3,472.
E)$3,461.

Question 49

Marquis Company uses a weighted-average perpetual inventory system. What is the amount of the cost of goods sold for this sale?

A)$148.00
B)$150.50
C)$158.40
D)$210.00
E)$330.00

Question 50

A company normally sells its product for $20 per unit.However,the selling price has fallen to $15 per unit.This company's current inventory consists of 200 units purchased at $16 per unit.Replacement cost has now fallen to $13 per unit.What is the amount of the lower cost of market adjustment the company must make as a result of this decline in value?

A)$1,000.
B)$1,400.
C)$400.
D)$600.
E)$800.

Question 51

A company's current inventory consists of 5,000 units purchased at $6 per unit.Replacement cost has now fallen to $5 per unit.What is the entry the company must record to adjust inventory to market?

A)Debit Merchandise Inventory $25,000;credit Cost of Goods Sold $25,000.
B)Debit Cost of Goods Sold $30,000;credit Merchandise Inventory $30,000.
C)Debit Cost of Goods Sold $5,000;credit Merchandise Inventory $5,000.
D)Debit Loss on Inventory $5,000;credit Cost of Goods Sold $5,000.
E)Debit Merchandise Inventory $30,000;credit Cost of Goods Sold $25,000.

Question 52

A company's normal selling price for its product is $20 per unit.However,due to market competition,the selling price has fallen to $15 per unit.This company's current inventory consists of 200 units purchased at $16 per unit.Replacement cost has fallen to $13 per unit.Calculate the value of this company's inventory at the lower of cost or market.

A)$2,550.
B)$2,600.
C)$2,700.
D)$3,000.
E)$3,200.

Question 53

A company's inventory records report the following: On August 15,it sold 30 units.Using the FIFO perpetual inventory method,what is the value of the inventory at August 15 after the sale?

A)$140
B)$160
C)$210
D)$380
E)$590

Question 54

Starlight Company has inventory of 8 units at a cost of $200 each on October 1.On October 2,it purchased 20 units at $205 each.11 units are sold on October 4.Using the LIFO perpetual inventory method,what amount will be reported in cost of goods sold for the 11 units that were sold?

A)$2,239.
B)$2,255.
C)$2,200.
D)$2,228.
E)$2,215.

Question 55

The conservatism constraint prescribes that:

A)When multiple estimates of amounts to be received or paid in the future are equally likely,then the least optimistic amount should be used.
B)A company use the same accounting methods period after period.
C)Revenues and expenses are reported in the period in which they are earned or incurred.
D)All items of a material nature are included in financial statements.
E)All inventory items are reported at full cost.

Question 56

McCarthy Company has inventory of 8 units at a cost of $200 each on October 1.On October 2,it purchased 20 units at $205 each.11 units are sold on October 4.Using the FIFO perpetual inventory method,what amount will be reported in cost of goods sold for the 11 units that were sold?

A)$2,239.
B)$2,255.
C)$2,200.
D)$2,228.
E)$2,215.

Question 57

Starlight Company has inventory of 8 units at a cost of $200 each on October 1.On October 2,it purchased 20 units at $205 each.11 units are sold on October 4.Using the LIFO perpetual inventory method,what is the value of inventory after the October 4 sale?

A)$3,485.
B)$3,445.
C)$3,500.
D)$3,472.
E)$3,461.

Question 58

Given the following information,determine the cost of the inventory at June 30 using the LIFO perpetual inventory method. The cost of the ending inventory is:

A)$200
B)$220
C)$380
D)$275
E)$300

Question 59

Grays Company has inventory of 10 units at a cost of $10 each on August 1.On August 3,it purchased 20 units at $12 each.12 units are sold on August 6.Using the FIFO perpetual inventory method,what amount will be reported in cost of goods sold for the 12 units that were sold?

A)$120.
B)$124.
C)$128.
D)$130.
E)$140.

Question 60

Jammer Company uses a weighted average perpetual inventory system and reports the following: What is the per-unit value of ending inventory on August 31?

A)$12.00
B)$13.80
C)$15.42
D)$16.00
E)$17.74

Question 61

All of the following statements related to goods on consignment are true except:

A)Goods on consignment are goods provided by the owner,call the consignor.
B)A consignee sells goods for the owner.
C)The consignor continues to own the consigned goods.
D)The consignee reports the goods in its inventory until sold.
E)The consignor reports the goods in its inventory until sold.

Question 62

A company uses the periodic inventory system and had the following activity during the current monthly period. Using the weighted-average inventory method,the company's ending inventory would be:

A)$2,000
B)$2,200
C)$2,250
D)$2,400
E)$4,400

Question 63

Big Box Store has operated with a 30% average gross profit ratio for a number of years.It had $100,000 in sales during the second quarter of this year.If it began the quarter with $18,000 of inventory at cost and purchased $72,000 of inventory during the quarter,its estimated ending inventory by the gross profit method is:

A)$30,000.
B)$21,000.
C)$20,000.
D)$18,000.
E)$27,000.

Question 64

Some companies choose to avoid assigning incidental costs of acquiring merchandise to inventory by recording them as cost of goods sold when incurred.The principle that supports this is called:

A)The matching principle.
B)The materiality constraint.
C)The cost principle.
D)The conservation constraint principle.
E)The lower of cost or market principle.

Question 65

When costs to purchase inventory regularly decline,which method of inventory costing will yield the lowest gross profit and income?

A)FIFO.
B)LIFO.
C)Weighted average.
D)Specific identification.
E)Gross margin.

Question 66

Oxford Packing Company reported net sales in November of the current year of $1,000,000.At the beginning of November,the company reported beginning inventory of $368,000.Cost of goods purchased during November amounted to $217,500.The company reported ending inventory at the end of November of $226,750. The company's gross profit rate for November of the current year was:

A)35.9%
B)18.8%
C)81.2%
D)64.1%
E)58.6%

Question 67

A company reports the following information regarding its inventory. Beginning inventory: cost is $80,000;retail is $130,000
Net purchases: cost is $65,000;retail is $120,000
Sales at retail: $145,000
The year-end inventory shows $135,000 worth of merchandise available at retail prices.What is the cost of the ending inventory calculated using the retail inventory method?

A)$135,000.
B)$73,125.
C)$78,300.
D)$72,900.
E)$105,000.

Question 68

On March 31 a company needed to estimate its ending inventory to prepare its first quarter financial statements.The following information is available: Beginning inventory,January 1: $4,000
Net sales: $80,000
Net purchases: $78,000
The company's gross margin ratio is 25%.Using the gross profit method,the cost of goods sold would be:

A)$60,000.
B)$20,000.
C)$58,500.
D)$63,000.
E)$19,500.

Question 69

Jefferson Company has sales of $300,000 and cost of goods available for sale of $270,000.If the gross profit ratio is typically 30%,the estimated cost of the ending inventory under the gross profit method would be:

A)$60,000
B)$180,000
C)$30,000
D)$90,000
E)$120,000

Question 70

Interim financial statements:

A)Are required by the Congress.
B)Are necessary to achieve full disclosure about a business's operations.
C)Are statements prepared for periods of less than one year.
D)Require the use of the perpetual method for inventories.
E)Cannot be prepared if the company follows the conservatism principle.

Question 71

Health Defense sells first aid kits and uses the periodic inventory system to account for its merchandise.The beginning balance of the inventory and its transactions during January were as follows: January 1: Beginning balance of 18 units at $13 each
January 12: Purchased 30 units at $14 each
January 19: Sold 24 units at a selling price of $30 each
January 20: Purchased 24 units at $17 each
January 27: Sold 27 units at a selling price of $30 each
If the ending inventory is reported at $357,what inventory method was used?

A)LIFO.
B)FIFO.
C)Weighted average.
D)Specific identification.
E)Retail inventory methoD.

Question 72

A company has beginning inventory of 15 units at a cost of $12 each on October 1.On October 5,it purchases 10 units at $13 per unit.On October 12 it purchases 20 units at $14 per unit.On October 15,it sells 30 units.Using the FIFO periodic inventory method,what is the value of the inventory at October 15 after the sale?

A)$140
B)$160
C)$210
D)$380
E)$590

Question 73

A company had beginning inventory of 10 units at a cost of $20 each on March 1.On March 2,it purchased 10 units at $22 each.On March 6 it purchased 6 units at $25 each.On March 8,it sold 22 units for $54 each.Using the FIFO perpetual inventory method,what was the cost of the 22 units sold?

A)$470
B)$490
C)$450
D)$570
E)$520

Question 74

A company has the following per unit original costs and replacement costs for its inventory.LCM is applied to individual items. Part A: 50 units with a cost of $5,and replacement cost of $4.50
Part B: 75 units with a cost of $6,and replacement cost of $6.50
Part C: 160 units with a cost of $3,and replacement cost of $2.50
Under the lower of cost or market method,the total value of this company's ending inventory is:

A)$1,180.00.
B)$1,075.00.
C)$1,112.50.
D)$1,217.50.
E)$1,137.50.

Question 75

Hasham purchases inventory from overseas and incurs the following costs: the merchandise cost is $80,000,credit terms 1/10,n/30,applicable only to the $80,000;FOB shipping point freight charges are $2,500;insurance during transit is $300;and import duties are $1,500.Hasham paid within the discount period.Compute the cost that should be assigned to the inventory.

A)$83,500
B)$79,200
C)$81,700
D)$84,300
E)$81,000

Question 76

Avanti purchases inventory from overseas and incurs the following costs: the merchandise cost is $50,000,credit terms 2/10,n/30 that apply only to the $50,000;FOB shipping point freight charges are $1,500;insurance during transit is $500;and import duties are $1,000.Avanti paid within the discount period and incurred additional costs of $1,200 for advertising and $5,000 for sales commissions.Compute the cost that should be assigned to the inventory.

A)$50,000
B)$53,000
C)$52,000
D)$51,500
E)$53,200

Question 77

On December 31,a company needed to estimate its ending inventory to prepare its annual financial statements.The following information is currently available: Inventory as of January 1: $120,500
Net sales for the year: $400,000
Net purchases for the year: $270,500
This company typically achieves a gross profit ratio of 15%.Ending Inventory under the gross profit method would be:

A)$102,425.
B)$10,425.
C)$9,000.
D)$51,000.
E)$51,425.

Question 78

On April 24 of the current year,The Memphis Pecan Company experienced a tornado that destroyed the company's entire inventory.At the beginning of April,the company reported beginning inventory of $226,750.Inventory purchased during April (until the date of the tornado)was $197,800.Sales for the month of April through April 24 were $642,500.Assuming the company's typical gross profit ratio is 50%,estimate the amount of inventory destroyed in the tornado.

A)$212,275
B)$103,300
C)$217,950
D)$321,250
E)$157,788

Question 79

A company has beginning inventory of 10 units at a cost of $10 each on February 1.On February 3,it purchases 20 units at $12 each.12 units are sold on February 5.Using the FIFO periodic inventory method,what is the cost of the 12 units that are sold?

A)$120
B)$124
C)$128
D)$130
E)$140

Question 80

A company's warehouse contents were destroyed by a flood on September 12.The following information was the only information that was salvaged: 1.Inventory,beginning: $28,000
2)Purchases for the period: $17,000
3)Sales for the period: $55,000
4)Sales returns for the period: $700
The company's average gross profit ratio is 35%.What is the estimated cost of the lost inventory?

A)$9,705.
B)$25,995.
C)$29,250.
D)$44,000.
E)$45,000.