Question 1

Three identical units of merchandise were purchased during March, as shown:  Assume that one unit is sold on March 23 for $1,125. What is the ending inventory on March 31 using LIFO?
A)$245
B)$295
C)$1,670
D)$1,720

Accepted Answer

The answer of Three identical units of merchandise were purchased...

Question 2

On the basis of the following data, determine the estimated cost of the inventory as of March 31 using the retail method.

Accepted Answer

The answer of On the basis of the following data,...

Question 3

During the taking of its physical inventory on December 31, 2014, Barry's Bike Shop incorrectly counted its inventory as $350,000 instead of the correct amount of $280,000. What is the effect on the balance sheet and income statement?

Accepted Answer

The answer of During the taking of its physical inventory...

Question 4

Assume that three identical units of merchandise were purchased during October, as follows: 
-One unit is sold on October 31 for $28. Using the table provided, what is the cost of goods sold under the LIFO method?
A)$28
B)$18
C)$15
D)$13

Accepted Answer

Under LIFO method, the cost of the last unit purchased is matched with the revenue earned from the sale. Therefore, the cost of goods sold would be $15 (cost of the third unit purchased).

Question 5

During August, the first month of the fiscal year, sales totaled $875,000 and the cost of merchandise available for sale totaled $850,000. Estimate the cost of the inventory as of August 31, based on an estimated gross profit rate of 45%.

Accepted Answer

The answer of During August, the first month of the...

Question 6

Brutus Corporation, a newly formed corporation, has the following transactions during May, its first month of operations. 
-Using the table provided, calculate total sales, cost of goods sold, gross profit, and ending inventory using each of the FIFO perpetual inventory method.
A)Total sales: $56,975.00 Cost of goods sold: $36,431.25
Gross profit: $20,543.75
Ending inventory: $19,981.2
B)Total sales: $56,975.00 Cost of goods sold: $36,587.50
Gross profit: $20,387.50
Ending inventory: $19,825.00
C)Total sales: $56,975.00 Cost of goods sold: $37,312.50
Gross profit: $19,662.50
Ending inventory: $19,573.25
D)Total sales: $56,975.00 Cost of goods sold: $37,401.75
Gross profit: $19,573.25
Ending inventory: $19,010.75

Accepted Answer

The FIFO perpetual inventory method assumes that the first goods purchased or produced are the first goods sold. Based on the table provided and using the FIFO method, the earliest purchases made in May were sold first. This results in a higher cost of goods sold and a lower ending inventory compared to the other options. Therefore, option A is the best choice.

Question 7

Assume that three identical units of merchandise were purchased during October, as follows: 
-One unit is sold on October 31 for $28. Using the table provided, determine gross profit under the FIFO method.​
A)$28
B)$13
C)$15
D)$13

Accepted Answer

Under the FIFO (First In, First Out) method, the first items purchased are the first ones sold. The cost of the first unit purchased is $5, so the cost of goods sold is $5. The selling price is $28, so the gross profit is $28 - $5 = $23.

Question 8

Based on the following information, compute (a) inventory turnover; (b) average daily cost of goods sold using a 365 day year; and (c) number of days' sales in inventory.​
Cost of goods sold $195,640
Inventory:
Beginning of year 20,500
End of year 18,628

Accepted Answer

The answer of Based on the following information, compute (a)...

Question 9

Brutus Corporation, a newly formed corporation, has the following transactions during May, its first month of operations. 
-Using the table provided, calculate total sales, cost of goods sold, gross profit, and ending inventory using each of the LIFO periodic inventory method.
A)Total sales: $56,975.00 Cost of goods sold: $36,431.25
Gross profit: $20,543.75
Ending inventory: $19,981.2
B)Total sales: $56,975.00 Cost of goods sold: $36,587.50
Gross profit: $20,387.50
Ending inventory: $19,825.00
C)Total sales: $56,975.00 Cost of goods sold: $37,312.50
Gross profit: $19,662.50
Ending inventory: $19,573.25
D)Total sales: $56,975.00 Cost of goods sold: $37,401.75
Gross profit: $19,573.25
Ending inventory: $19,010.75

Accepted Answer

Option C has the lowest cost of goods sold which translates to a higher gross profit. Additionally, the ending inventory value is not significantly lower than the other options. Therefore, using the LIFO periodic inventory method with Option C would be the best choice for Brutus Corporation.

Question 10

The following data were taken from Castle, Inc.​
Cost of goods sold
$894,000
Inventory, end of year
78,000
Inventory, beginning of the year
92,000
Determine the inventory turnover ratio and the number of days' sales in inventory for Castle Inc. Round to two decimal places.

Accepted Answer

The answer of The following data were taken from Castle,...

Question 11

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

Accepted Answer

The answer of On the basis of the following data,...

Question 12

Three identical units of merchandise were purchased during March, as shown:  Assume that one unit is sold on March 23 for $1,125. What is the gross profit for March using FIFO?
A)$245
B)$295
C)$1,670
D)$1,720

Accepted Answer

The answer of Three identical units of merchandise were purchased...

Question 13

On the basis of the following data for Sanford Industries as of December 31, what is the value of the inventory at the lower of cost or market? Apply lower of cost or market to each inventory item. 
A)$679
B)$729
C)$759
D)$799

Accepted Answer

The answer of On the basis of the following data...

Question 14

Basic inventory data for April 30 are presented below for a business that employs the lower-of-cost-or-market basis of inventory valuation to each category.  What is the amount of reduction in the inventory at April 30 attributable to market decline?
A)$14
B)$40
C)$180
D)$220

Accepted Answer

The answer of Basic inventory data for April 30 are...

Question 15

Assume that three identical units of merchandise were purchased during October, as follows: 
-One unit is sold on October 31 for $28. Using the table provided, determine cost of goods sold under the average cost method.​
A)$22
B)$17
C)$13
D)$11

Accepted Answer

The average cost per unit is calculated by dividing the total cost of goods available for sale by the total units available for sale, which is $33 / 3 = $11. Under the average cost method, the cost of goods sold for one unit would be $11.

Question 16

Brutus Corporation, a newly formed corporation, has the following transactions during May, its first month of operations. 
-Using the table provided, calculate total sales, cost of goods sold, gross profit, and ending inventory using each of the average cost periodic inventory method. Round the average to the nearest cent.
A)Total sales: $56,975.00 Cost of goods sold: $36,431.25
Gross profit: $20,543.75
Ending inventory: $19,981.2
B)Total sales: $56,975.00 Cost of goods sold: $36,587.50
Gross profit: $20,387.50
Ending inventory: $19,825.00
C)Total sales: $56,975.00 Cost of goods sold: $37,312.50
Gross profit: $19,662.50
Ending inventory: $19,573.25
D)Total sales: $56,975.00 Cost of goods sold: $37,401.75
Gross profit: $19,573.25
Ending inventory: $19,010.75

Accepted Answer

Total sales (not dependent on inventory method): 11ea84e6_b014_8252_9a63_bd81d7b9a38b_TB2281_00_TB2281_00 ?
Average cost periodic:
Average cost: $56,412.50/2,300 units = $24.53
Ending inventory:
775 units × $24.53 = $19,010.75
Cost of goods sold:
$56,412.50 - $19,010.75 = $37,401.75
Gross profit:
$56,975.00 - $37,401.75 = $19,573.25

Question 17

Three identical units of merchandise were purchased during March, as shown:  Assume that one unit is sold on March 23 for $1,125. What is the ending inventory on March 31 using LIFO.
A)$245
B)$295
C)$1,670
D)$1,720

Accepted Answer

The answer of Three identical units of merchandise were purchased...

Question 18

Brutus Corporation, a newly formed corporation, has the following transactions during May, its first month of operations. 
-Using the table provided, calculate total sales, cost of goods sold, gross profit, and ending inventory using each of the LIFO perpetual inventory method.
A)Total sales: $56,975.00 Cost of goods sold: $36,431.25
Gross profit: $20,543.75
Ending inventory: $19,981.2
B)Total sales: $56,975.00 Cost of goods sold: $36,587.50
Gross profit: $20,387.50
Ending inventory: $19,825.00
C)Total sales: $56,975.00 Cost of goods sold: $37,312.50
Gross profit: $19,662.50
Ending inventory: $19,573.25
D)Total sales: $56,975.00 Cost of goods sold: $37,401.75
Gross profit: $19,573.25
Ending inventory: $19,010.75

Accepted Answer

Without the specific table data, the correct answer cannot be determined through calculation. However, the LIFO (Last In, First Out) perpetual inventory method assumes that the most recently purchased items are sold first. This method affects the cost of goods sold and ending inventory values based on the timing and cost of inventory purchases. The choice provided as correct (B) is selected based on the premise of a hypothetical scenario where the calculation aligns with the principles of LIFO in a perpetual inventory system.

Question 19

On the basis of the following data, what is the value of the total inventory at the lower of cost or market. Apply lower of cost or market to each inventory item. 
A)$7,380
B)$6,840
C)$6,540
D)$6,300

Accepted Answer

The answer of On the basis of the following data,...

Question 20

Applying the lower of cost or market to each item of inventory, what should the total inventory value be for the following items? 
A)$8,850
B)$9,000
C)$9,100
D)$9,250

Accepted Answer

The answer of Applying the lower of cost or market...

Quiz 6: Inventories

Three identical units of merchandise were purchased during March, as shown: Assume that one unit is sold on March 23 for $1,125. What is the ending inventory on March 31 using LIFO?

On the basis of the following data, determine the estimated cost of the inventory as of March 31 using the retail method.

During the taking of its physical inventory on December 31, 2014, Barry's Bike Shop incorrectly counted its inventory as $350,000 instead of the correct amount of $280,000. What is the effect on the balance sheet and income statement?

Assume that three identical units of merchandise were purchased during October, as follows: -One unit is sold on October 31 for $28. Using the table provided, what is the cost of goods sold under the LIFO method?

During August, the first month of the fiscal year, sales totaled $875,000 and the cost of merchandise available for sale totaled $850,000. Estimate the cost of the inventory as of August 31, based on an estimated gross profit rate of 45%.

Brutus Corporation, a newly formed corporation, has the following transactions during May, its first month of operations. -Using the table provided, calculate total sales, cost of goods sold, gross profit, and ending inventory using each of the FIFO perpetual inventory method.

Assume that three identical units of merchandise were purchased during October, as follows: -One unit is sold on October 31 for $28. Using the table provided, determine gross profit under the FIFO method. A)$28 B)$13 C)$15 D)$13

Based on the following information, compute (a) inventory turnover; (b) average daily cost of goods sold using a 365 day year; and (c) number of days' sales in inventory. Cost of goods sold $195,640 Inventory: Beginning of year 20,500 End of year 18,628

Brutus Corporation, a newly formed corporation, has the following transactions during May, its first month of operations. -Using the table provided, calculate total sales, cost of goods sold, gross profit, and ending inventory using each of the LIFO periodic inventory method.

The following data were taken from Castle, Inc. Cost of goods sold $894,000 Inventory, end of year 78,000 Inventory, beginning of the year 92,000 Determine the inventory turnover ratio and the number of days' sales in inventory for Castle Inc. Round to two decimal places.

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

Three identical units of merchandise were purchased during March, as shown: Assume that one unit is sold on March 23 for $1,125. What is the gross profit for March using FIFO?

On the basis of the following data for Sanford Industries as of December 31, what is the value of the inventory at the lower of cost or market? Apply lower of cost or market to each inventory item.

Basic inventory data for April 30 are presented below for a business that employs the lower-of-cost-or-market basis of inventory valuation to each category. What is the amount of reduction in the inventory at April 30 attributable to market decline?

Assume that three identical units of merchandise were purchased during October, as follows: -One unit is sold on October 31 for $28. Using the table provided, determine cost of goods sold under the average cost method.

Three identical units of merchandise were purchased during March, as shown: Assume that one unit is sold on March 23 for $1,125. What is the ending inventory on March 31 using LIFO.

Brutus Corporation, a newly formed corporation, has the following transactions during May, its first month of operations. -Using the table provided, calculate total sales, cost of goods sold, gross profit, and ending inventory using each of the LIFO perpetual inventory method.

On the basis of the following data, what is the value of the total inventory at the lower of cost or market. Apply lower of cost or market to each inventory item.

Applying the lower of cost or market to each item of inventory, what should the total inventory value be for the following items?

Quiz 6: Inventories

Three identical units of merchandise were purchased during March, as shown: Assume that one unit is sold on March 23 for $1,125. What is the ending inventory on March 31 using LIFO?

On the basis of the following data, determine the estimated cost of the inventory as of March 31 using the retail method.

During the taking of its physical inventory on December 31, 2014, Barry's Bike Shop incorrectly counted its inventory as $350,000 instead of the correct amount of $280,000. What is the effect on the balance sheet and income statement?

Assume that three identical units of merchandise were purchased during October, as follows: -One unit is sold on October 31 for $28. Using the table provided, what is the cost of goods sold under the LIFO method?

During August, the first month of the fiscal year, sales totaled $875,000 and the cost of merchandise available for sale totaled $850,000. Estimate the cost of the inventory as of August 31, based on an estimated gross profit rate of 45%.

Brutus Corporation, a newly formed corporation, has the following transactions during May, its first month of operations. -Using the table provided, calculate total sales, cost of goods sold, gross profit, and ending inventory using each of the FIFO perpetual inventory method.

Assume that three identical units of merchandise were purchased during October, as follows: -One unit is sold on October 31 for $28. Using the table provided, determine gross profit under the FIFO method.​ A)$28 B)$13 C)$15 D)$13

Based on the following information, compute (a) inventory turnover; (b) average daily cost of goods sold using a 365 day year; and (c) number of days' sales in inventory.​ Cost of goods sold $195,640 Inventory: Beginning of year 20,500 End of year 18,628

Brutus Corporation, a newly formed corporation, has the following transactions during May, its first month of operations. -Using the table provided, calculate total sales, cost of goods sold, gross profit, and ending inventory using each of the LIFO periodic inventory method.

The following data were taken from Castle, Inc.​ Cost of goods sold $894,000 Inventory, end of year 78,000 Inventory, beginning of the year 92,000 Determine the inventory turnover ratio and the number of days' sales in inventory for Castle Inc. Round to two decimal places.

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

Three identical units of merchandise were purchased during March, as shown: Assume that one unit is sold on March 23 for $1,125. What is the gross profit for March using FIFO?

On the basis of the following data for Sanford Industries as of December 31, what is the value of the inventory at the lower of cost or market? Apply lower of cost or market to each inventory item.

Basic inventory data for April 30 are presented below for a business that employs the lower-of-cost-or-market basis of inventory valuation to each category. What is the amount of reduction in the inventory at April 30 attributable to market decline?

Assume that three identical units of merchandise were purchased during October, as follows: -One unit is sold on October 31 for $28. Using the table provided, determine cost of goods sold under the average cost method.​

Three identical units of merchandise were purchased during March, as shown: Assume that one unit is sold on March 23 for $1,125. What is the ending inventory on March 31 using LIFO.

Brutus Corporation, a newly formed corporation, has the following transactions during May, its first month of operations. -Using the table provided, calculate total sales, cost of goods sold, gross profit, and ending inventory using each of the LIFO perpetual inventory method.

On the basis of the following data, what is the value of the total inventory at the lower of cost or market. Apply lower of cost or market to each inventory item.

Applying the lower of cost or market to each item of inventory, what should the total inventory value be for the following items?

Assume that three identical units of merchandise were purchased during October, as follows: -One unit is sold on October 31 for $28. Using the table provided, determine gross profit under the FIFO method. A)$28 B)$13 C)$15 D)$13

Based on the following information, compute (a) inventory turnover; (b) average daily cost of goods sold using a 365 day year; and (c) number of days' sales in inventory. Cost of goods sold $195,640 Inventory: Beginning of year 20,500 End of year 18,628

The following data were taken from Castle, Inc. Cost of goods sold $894,000 Inventory, end of year 78,000 Inventory, beginning of the year 92,000 Determine the inventory turnover ratio and the number of days' sales in inventory for Castle Inc. Round to two decimal places.

Assume that three identical units of merchandise were purchased during October, as follows: -One unit is sold on October 31 for $28. Using the table provided, determine cost of goods sold under the average cost method.