Question 1

Rick Company's beginning inventory and purchases during the fiscal year ended December 31, 2012 were as follows: (NOTE: The company uses a perpetual system of inventory.)
  
What is the ending inventory of Rick Company for 2012 using FIFO?

Accepted Answer

The answer of Rick Company's beginning inventory and purchases during...

Question 2

Casey Company's beginning inventory and purchases during the fiscal year ended December 31, 2012 were as follows: (NOTE: The company uses a perpetual system of inventory.)
  
What is the ending inventory of Casey Company for 2012 using FIFO?

Accepted Answer

The answer of Casey Company's beginning inventory and purchases during...

Question 3

Journalize the following transactions using the perpetual inventory method.
June 11 Purchased $6,700 of merchandise on account, terms 4/10, n/45.
June 14 Returned $990 of merchandise that was damaged for credit.
June 18 Paid balance of account from purchase of June 11.

Accepted Answer

The answer of Journalize the following transactions using the perpetual...

Question 4

When merchandise is sold and the perpetual system of inventory is used, the journal entry to record a
sale of merchandise on account would include:

Accepted Answer

The answer of When merchandise is sold and the perpetual...

Question 5

Brandon Company has the following list of inventory:
  
Under specific-identification, what is Brandon's cost of goods sold if EOR and CIS were not sold during the current period?

Accepted Answer

The answer of Brandon Company has the following list of...

Question 6

A piece of artwork would probably be inventoried using the specific-identification method.

Accepted Answer

The specific-identification method involves tracking individual items and their cost, which makes it appropriate for unique items such as artwork. This allows for accurate valuation of the item on the balance sheet.

Question 7

The amount of cost of goods sold is MOST influenced by the:

Accepted Answer

The inventory method used (such as FIFO, LIFO, or weighted average) significantly influences the amount of cost of goods sold because it determines how the costs of items are accounted for when they are sold.

Question 8

Isaiah Sporting Goods uses the perpetual average cost method of determining inventory costs.
Below is the inventory record for Product C124.
  
What is the average cost per unit after the receipt of the June 21 inventory?

Accepted Answer

The answer of Isaiah Sporting Goods uses the perpetual average...

Question 9

Compare the effects of the different costing methods on the financial statements
-The choice of inventory costing method does not have an effect on net income.

Accepted Answer

The choice of inventory costing method can have an effect on net income, as well as other financial statements such as the balance sheet and cash flow statement. For example, using the FIFO method (first in, first out) may result in higher net income and higher inventory values on the balance sheet in a period of rising prices, while using the LIFO method (last in, first out) may result in lower net income and lower inventory values on the balance sheet in the same period.

Question 10

Journalize the following inventory transactions using the perpetual inventory method.
April 17 Purchased $4,800 of inventory, on account, terms 2/10, n/30.
April 22 Returned $750 of damaged merchandise to supplier.
April 25 Paid balance due on inventory purchase of April 17.

Accepted Answer

The answer of Journalize the following inventory transactions using the...

Question 11

The objective of inventory tracking is to allocate the cost of goods available for sale between the cost of units sold and the cost of unsold inventory.

Accepted Answer

This is a correct statement regarding the objective of inventory tracking. By tracking inventory, businesses can determine the cost of goods sold and the value of their remaining unsold inventory, which is essential for financial statements and tax purposes.

Question 12

Rick Company's beginning inventory and purchases during the fiscal year ended December 31, 2012 were as follows: (NOTE: The company uses a perpetual system of inventory.)
  
What is the cost of goods sold for Rick Company for 2012 using FIFO showing detailed calculations.

Accepted Answer

The answer of Rick Company's beginning inventory and purchases during...

Question 13

Compare the effects of the different costing methods on the financial statements
-In periods of ricing prices, the average cost method generates gross profit, net income, and income tax amounts that fall below the FIFO method.

Accepted Answer

This statement is true. The average cost method calculates the cost of goods sold by dividing the total cost of goods available for sale by the total quantity of goods available for sale. In rising price environments, this method results in a higher cost of goods sold, which lowers gross profit and net income. As a result, income tax amounts will also be lower. In contrast, the FIFO method assumes that the oldest inventory items are sold first, resulting in a higher cost of goods sold when prices are rising, which leads to higher gross profit, net income, and income tax amounts.

Question 14

Brandon Company has the following list of inventory:
  
Under specific-identification, what is Brandon's ending inventory if EOR and CIS are not sold during the current period?

Accepted Answer

The answer of Brandon Company has the following list of...

Question 15

Compare the effects of the different costing methods on the financial statements
-In order to pay the least income tax possible in periods of decreasing inventory costs, the company should use which of the following inventory costing methods?

Accepted Answer

Using First-in, First-out (FIFO) method of inventory costing will result in lower taxable income during decreasing inventory costs period as it assumes that inventory that was purchased first is sold first. Therefore, the cost of goods sold will be based on the oldest cost of inventory, which is higher than the current replacement cost resulting in lower taxable income. However, it is important to note that the choice of inventory costing method should not be based solely on tax considerations as it can also affect financial statements and decision-making processes.

Question 16

Prepare the journal entry to record the purchase of $7,400 of inventory on account under the perpetual
inventory method.

Accepted Answer

The answer of Prepare the journal entry to record the...

Question 17

Inventory is shown on the:

Accepted Answer

Inventory is considered an asset and is included in the balance sheet. It is typically listed under the current assets section.

Question 18

The LEAST widely used of the inventory valuation methods is:

Accepted Answer

Specific-identification method is the least widely used inventory valuation method because it requires a high level of record-keeping and is only practical for businesses with unique and high-value items, such as car dealerships and jewelry stores. Most businesses use either FIFO, average cost, or LIFO methods for inventory valuation.

Question 19

Cost of goods sold is shown on the:

Accepted Answer

Cost of goods sold (COGS) is shown on the income statement before gross profit. It is subtracted from revenue to calculate gross profit.

Question 20

Prepare the journal entries to record the cost of an item for $28 that sold for $40 cash under the perpetual
inventory method.

Accepted Answer

The answer of Prepare the journal entries to record the...

Quiz 6: Inventory

Rick Company's beginning inventory and purchases during the fiscal year ended December 31, 2012 were as follows: (NOTE: The company uses a perpetual system of inventory.) What is the ending inventory of Rick Company for 2012 using FIFO?

Casey Company's beginning inventory and purchases during the fiscal year ended December 31, 2012 were as follows: (NOTE: The company uses a perpetual system of inventory.) What is the ending inventory of Casey Company for 2012 using FIFO?

Journalize the following transactions using the perpetual inventory method. June 11 Purchased $6,700 of merchandise on account, terms 4/10, n/45. June 14 Returned $990 of merchandise that was damaged for credit. June 18 Paid balance of account from purchase of June 11.

When merchandise is sold and the perpetual system of inventory is used, the journal entry to record a sale of merchandise on account would include:

Brandon Company has the following list of inventory: Under specific-identification, what is Brandon's cost of goods sold if EOR and CIS were not sold during the current period?

A piece of artwork would probably be inventoried using the specific-identification method.

The amount of cost of goods sold is MOST influenced by the:

Isaiah Sporting Goods uses the perpetual average cost method of determining inventory costs. Below is the inventory record for Product C124. What is the average cost per unit after the receipt of the June 21 inventory?

Compare the effects of the different costing methods on the financial statements -The choice of inventory costing method does not have an effect on net income.

Journalize the following inventory transactions using the perpetual inventory method. April 17 Purchased $4,800 of inventory, on account, terms 2/10, n/30. April 22 Returned $750 of damaged merchandise to supplier. April 25 Paid balance due on inventory purchase of April 17.

The objective of inventory tracking is to allocate the cost of goods available for sale between the cost of units sold and the cost of unsold inventory.

Rick Company's beginning inventory and purchases during the fiscal year ended December 31, 2012 were as follows: (NOTE: The company uses a perpetual system of inventory.) What is the cost of goods sold for Rick Company for 2012 using FIFO showing detailed calculations.

Compare the effects of the different costing methods on the financial statements -In periods of ricing prices, the average cost method generates gross profit, net income, and income tax amounts that fall below the FIFO method.

Brandon Company has the following list of inventory: Under specific-identification, what is Brandon's ending inventory if EOR and CIS are not sold during the current period?

Compare the effects of the different costing methods on the financial statements -In order to pay the least income tax possible in periods of decreasing inventory costs, the company should use which of the following inventory costing methods?

Prepare the journal entry to record the purchase of $7,400 of inventory on account under the perpetual inventory method.

Inventory is shown on the:

The LEAST widely used of the inventory valuation methods is:

Cost of goods sold is shown on the:

Prepare the journal entries to record the cost of an item for $28 that sold for $40 cash under the perpetual inventory method.