20.3000
A company purchased inventory as follows:
200 units at $9 1800*
२००
300 units at $10
Using the perpetual inventory system, the average unit cost for inventory is
a. $10.00.
$9.60
c. $9.50.
d. $9.00.
21. Westcoe Company’s goods in transit at December 31 include sales made using
(1) FOB destination
(2) FOB shipping point
and purchases made using
(3) FOB destination
(4) FOB shipping point
Which items should be included in Westcoe’s inventory at December 31?
4@2000 = 8000
a. (2) and (3)
b. (2) and (4)
© 202000 = 4h 2@
c. (1) and (3)
d. (1) and (4)
9 @ 2600 –
13@ 1800 – 23400
Use the following information for the next four questions:
4 2000
Purchases
Sales
Date
Units
Unit Cost Units
Sales Price
2© 2000 2000
June 1
4
$2,000
June 5
2
$3,000 9 072600-
82000
June 9
9
$2,600
Valle 2600
June 16
3 to
$4,500
10 2000 ( oorloo
1 600
22. Using the FIFO cost formula in the perpetual inventory system, what is the value of the cost of goods
sold for June?
a. $10,000
on the
b. $10,600
c. $13,000
d. $20,800
into a
23. Using the average cost formula in the perpetual system, what is the amount of the ending inventory
on June 302
a. $19,323.08
b. $12,076.92
c. $19,927.27
d. $7,472.73
24. Using the FIFO inventory cost formula in the periodic system, what is the amount of the cost of goods
sold for June?
a. $10,000
b. $10,600
c. $16,000
d. $20,800
15. Benedict Shoe Store had a beginning merchandise inventory of $38,000. During the period, Purchases
Welke $80,000; Purchase Returns, $5,000; and Freight in $8,000. A physical count of inventory at the end
of the period revealed that $22,000 was still on hand. The cost of goods sold was:
a. $93,000
b$99,000
c. $137,000.
d. $143,000.
16. Levy’s Used Cars uses the specific identification method of costing inventory. During March, Levy
purchased three cars for $5,000, $6,500, and $8,000, respectively. During March, two cars are sold for
$7,500 each. Levy determines that at March 31, the $8,000 car is still on hand. What is Levi’s gross
profit for March?
a. $ 500
b$2,000
c. $3,500
d. $7,000
17. A company had sales of $150,000 and cost of goods available for sale of $300,000 during January. If its
gross profit rate is estimated to be 40%, the ending inventory value at January 31 is estimated to be:
a. $90,000
b. $120,000
$180,000
Y. $210,000
18. A company has goods available for sale during a period at cost and at retail of $90,000 and $150,000,
respectively. If sales during the period amounted to $120,000, an estimate of the ending inventory at cost
at the end of the period under the retail method is:
al $18,000
b. $30,000.
c. $48,000.
d. $72,000.
9. Deerfield Company developed the following information about its inventories in applying the lower of
cost and net realizable value (LCNRV) basis in valuing inventories:
Product
Cost
NRV
A
70,000
75,000 7000
B
50,000
48,000 48000
С
100,000
102,000
100000
If Deerfield Company applies the LCNVR basis to the total inventory, the value of the inventory reported
on the balance sheet would be:
a. $227,000
b. $225,000
c. $220,000
d. $218,000
/
25. Using the average cost formula in the periodic system, what is the amount of the ending invento
June 302
a. $19,323.08
b. $12,076.92
c. $19,927.27
d. $7,472.73
Matching
Match the items below by entering the appropriate letter in the space provided. (10 marks)
F. First-in, first-out (FIFO)
G. Lower of cost and net realizable value
A. Taking a physical inventory
B. Consigned goods
C. FOB shipping point
H. Average
D. FOB destination
& Inventory turnover ratio
J. Days Sales in Inventory
E. Specific identification
H 1. Involves counting, weighing or measuring each kind of inventory on hand.
С C
2. Ownership of goods transfers when the public carrier accepts the goods.
p 3. Ownership of the goods remains with the seller until the goods reach the buyer.
Tracks the actual physical flow for each inventory item available for sale.
4.
T
5. Ending inventory valuation consists of the most recent inventory purchases.
6. The same unit cost is used to value inventory on hand and cost of goods sold.
B 7. To hold goods belonging to other parties and to sell them for a fee, without et
ownership to the goods
8.
Measures the number of times the inventory sold during the period.
G 9. When the value of inventory is lower than its cost
10. Days in the year divided by inventory turnover
The specific identification method of costing inventories is used when the
a. physical flow of units cannot be determined.
b. company sells large quantities of relatively low cost similar items.
e company sells large quantities of relatively low cost different items.
d. company sells goods which are not interchangeable
9.
The cost of goods available for sale consists of which two elements?
a. the cost of beginning inventory and the cost of ending inventory.
the cost of ending inventory and the cost of goods purchased during the year.
the cost of beginning inventory and the cost of goods purchased during the year.
d. the difference between the cost of goods purchased and the cost of goods sold during the year
10. If beginning inventory is understated by $10,000, the effect of this error in the current accounting period
Cost of Goods Sold Profit
a. Understated
Understated
b/ Overstated
Overstated
c. Overstated
Understated
d. Understated
Overstated
1s
11. Inventory errors can result in errors in determining all of the following, except
a. beginning inventory
b. ending inventory
sales
d. cost of goods purchased
12. Which of the following statements concerning cost formulas in a periodic inventory system is incorrect?
a. The results under FIFO in a periodic system are the same as in a perpetual system.
b. The cost of goods sold would be lower using FIFO than average in a period of rising prices.
C. The results under average in a periodic system are not the same as in a perpetual system.
d. When using the average cost formula, a new average cost per unit is calculated after each purchase.
13. In a periodic inventory system, you must
a. track the number or cost of units sold during the year.
b. adjust inventory after each purchase only.
q
wait until the end of the year to allocate the cost of goods available for sale to ending inventory and
cost of goods sold.
d. adjust inventory after each sale only.
14. On its January 31, 2019 physical inventory count, Barrie Co. has $24,500 in inventory on hand at year
end. In addition, at year end the company has $1,200 in merchandise in transit purchased from a supplier
shipped FOB Destination. Included in its physical inventory is $900 in goods held on consignment from a
local manufacturer. How much inventory should be reported on the company’s January 31, 2018 balance
sheet?
a, 23,600
B. 24,500
c. 24,800
d. 25,700
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
