Question 1

Given the following information about purchases and sales during the year,compute the cost to be assigned to ending inventory under each of three methods: (a)average-cost, (b)FIFO,and (c)LIFO.(Show your work. )
Assuming that a periodic inventory system is used

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Question 2

Why will an understated beginning inventory produce an overstated income before income taxes for the same period? Will the understatement have a favorable or unfavorable effect on current year income taxes?

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Question 3

What is a LIFO liquidation,and what is its effect on income before income taxes?

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Question 4

Assuming a perpetual inventory system is used,use the following information to calculate cost of goods sold on an average-cost basis.

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Question 5

Use the following information to calculate cost of goods sold under each of three methods: (a)FIFO, (b)LIFO,and (c)average-cost.Assume the periodic inventory system is used.(Show your work. )

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Question 6

Given the following information about purchases and sales during the year,compute the cost to be assigned to ending inventory under each of three methods: (a)average-cost, (b)FIFO,and (c)LIFO.(Show your work. )
Assume that a periodic inventory system is used.

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Question 7

Emily Holmes owns and operates a large antique shop.She uses the specific identification method to account for transactions that affect inventory.Holmes recently completed a physical inventory of the merchandise in her shop as part of her year-end work.Today,her accountant called to inform her that it would be necessary to adjust the inventory figure shown on the balance sheet,which will increase Holme's tax liability.Holmes argued that the inventory had to be correct,because she counted it twice and matched every item to an invoice.Cite reasons why the accountant would find it necessary to adjust the inventory even if Holme's count is accurate.

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Question 8

How does the perpetual inventory system differ from the periodic inventory system in the determination of cost of goods sold?

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Question 9

Lee Sisters reports income before income taxes of $20,000 during 2014.If beginning inventory was understated by $6,000 and ending inventory was overstated by $2,400,calculate corrected income before income taxes for the year.(Show your work. )

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Question 10

Atwood Company uses a periodic inventory system.During the first quarter of 2014,it sold 12,000 cases of Product A for $120,000.Facts related to its beginning inventory and purchases are as follows:
 For the quarter ended March 31,2014,compute the ending inventory,cost of goods sold,and gross margin under three methods: (a)average-cost, (b)FIFO,and (c)LIFO.(Show your work. )

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Question 11

Assume that during the physical count of the inventory of a large corporation for this year,$450,000 of merchandise was counted twice.The error was not detected,and the financial statements were prepared.Identify the individual statements that would be affected and explain the effect the count error would have on each.(Omit income tax considerations. )

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Question 12

Why are the amounts determined for ending inventory and cost of goods sold the same under both the periodic and perpetual inventory systems when FIFO is used but not when LIFO is used?

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Question 13

Graczyk Company uses a periodic inventory system.During October,it sold 360 units of Product Z.Its beginning inventory and purchases during the month were as follows:
 Compute the cost of goods sold under each of three methods: (a)average-cost, (b)LIFO,and (c)FIFO.(Show your work. )

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Question 14

What is the chief objective of supply-chain management? How is it accomplished?

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Question 15

Under rising prices,why will the FIFO method produce a higher ending inventory than LIFO?

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Question 16

Use the following information to calculate ending inventory on (a)a LIFO basis, (b)a FIFO basis,and (c)an average-cost basis.Assume a perpetual inventory system.

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Question 17

McCaffy Company uses a periodic inventory system.It sold 1,000 units of Product H.Its beginning inventory and purchases during the month were as follows:
 Compute the cost of the ending inventory under each of three methods: (a)average-cost, (b)LIFO,and (c)FIFO.(Show your work. )

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Question 18

Use the following figures (stated in millions of dollars)to compute the inventory
turnover and the days' inventory on hand within one decimal point:
  a.Inventory turnover = ___________________
b.Days' inventory on hand = ___________________

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Question 19

In practice,why is it often difficult to apply the retail method in determining the cost of ending inventory?

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Question 20

Assume that during the physical count of the inventory of a large corporation last year,$650,000 of merchandise was not counted.The error was not detected,and the financial statements for the current fiscal year were prepared.Identify the individual statements that would be affected and explain the effect the error would have on each of these statements.

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Quiz 7: Inventories

Given the following information about purchases and sales during the year,compute the cost to be assigned to ending inventory under each of three methods: (a)average-cost, (b)FIFO,and (c)LIFO.(Show your work. ) Assuming that a periodic inventory system is used

Why will an understated beginning inventory produce an overstated income before income taxes for the same period? Will the understatement have a favorable or unfavorable effect on current year income taxes?

What is a LIFO liquidation,and what is its effect on income before income taxes?

Assuming a perpetual inventory system is used,use the following information to calculate cost of goods sold on an average-cost basis.

Use the following information to calculate cost of goods sold under each of three methods: (a)FIFO, (b)LIFO,and (c)average-cost.Assume the periodic inventory system is used.(Show your work. )

Given the following information about purchases and sales during the year,compute the cost to be assigned to ending inventory under each of three methods: (a)average-cost, (b)FIFO,and (c)LIFO.(Show your work. ) Assume that a periodic inventory system is used.

How does the perpetual inventory system differ from the periodic inventory system in the determination of cost of goods sold?

Lee Sisters reports income before income taxes of $20,000 during 2014.If beginning inventory was understated by $6,000 and ending inventory was overstated by $2,400,calculate corrected income before income taxes for the year.(Show your work. )

Why are the amounts determined for ending inventory and cost of goods sold the same under both the periodic and perpetual inventory systems when FIFO is used but not when LIFO is used?

Graczyk Company uses a periodic inventory system.During October,it sold 360 units of Product Z.Its beginning inventory and purchases during the month were as follows: Compute the cost of goods sold under each of three methods: (a)average-cost, (b)LIFO,and (c)FIFO.(Show your work. )

What is the chief objective of supply-chain management? How is it accomplished?

Under rising prices,why will the FIFO method produce a higher ending inventory than LIFO?

Use the following information to calculate ending inventory on (a)a LIFO basis, (b)a FIFO basis,and (c)an average-cost basis.Assume a perpetual inventory system.

McCaffy Company uses a periodic inventory system.It sold 1,000 units of Product H.Its beginning inventory and purchases during the month were as follows: Compute the cost of the ending inventory under each of three methods: (a)average-cost, (b)LIFO,and (c)FIFO.(Show your work. )

Use the following figures (stated in millions of dollars)to compute the inventory turnover and the days' inventory on hand within one decimal point: a.Inventory turnover = _ b.Days' inventory on hand = _

In practice,why is it often difficult to apply the retail method in determining the cost of ending inventory?

Quiz 7: Inventories

Given the following information about purchases and sales during the year,compute the cost to be assigned to ending inventory under each of three methods: (a)average-cost, (b)FIFO,and (c)LIFO.(Show your work. ) Assuming that a periodic inventory system is used

Why will an understated beginning inventory produce an overstated income before income taxes for the same period? Will the understatement have a favorable or unfavorable effect on current year income taxes?

What is a LIFO liquidation,and what is its effect on income before income taxes?

Assuming a perpetual inventory system is used,use the following information to calculate cost of goods sold on an average-cost basis.

Use the following information to calculate cost of goods sold under each of three methods: (a)FIFO, (b)LIFO,and (c)average-cost.Assume the periodic inventory system is used.(Show your work. )

Given the following information about purchases and sales during the year,compute the cost to be assigned to ending inventory under each of three methods: (a)average-cost, (b)FIFO,and (c)LIFO.(Show your work. ) Assume that a periodic inventory system is used.

How does the perpetual inventory system differ from the periodic inventory system in the determination of cost of goods sold?

Lee Sisters reports income before income taxes of $20,000 during 2014.If beginning inventory was understated by $6,000 and ending inventory was overstated by $2,400,calculate corrected income before income taxes for the year.(Show your work. )

Why are the amounts determined for ending inventory and cost of goods sold the same under both the periodic and perpetual inventory systems when FIFO is used but not when LIFO is used?

Graczyk Company uses a periodic inventory system.During October,it sold 360 units of Product Z.Its beginning inventory and purchases during the month were as follows: Compute the cost of goods sold under each of three methods: (a)average-cost, (b)LIFO,and (c)FIFO.(Show your work. )

What is the chief objective of supply-chain management? How is it accomplished?

Under rising prices,why will the FIFO method produce a higher ending inventory than LIFO?

Use the following information to calculate ending inventory on (a)a LIFO basis, (b)a FIFO basis,and (c)an average-cost basis.Assume a perpetual inventory system.

McCaffy Company uses a periodic inventory system.It sold 1,000 units of Product H.Its beginning inventory and purchases during the month were as follows: Compute the cost of the ending inventory under each of three methods: (a)average-cost, (b)LIFO,and (c)FIFO.(Show your work. )

Use the following figures (stated in millions of dollars)to compute the inventory turnover and the days' inventory on hand within one decimal point: a.Inventory turnover = ___________________ b.Days' inventory on hand = ___________________

In practice,why is it often difficult to apply the retail method in determining the cost of ending inventory?

Use the following figures (stated in millions of dollars)to compute the inventory turnover and the days' inventory on hand within one decimal point: a.Inventory turnover = _ b.Days' inventory on hand = _