ACCT 211 Read & Interact Chapter 5 Inventories and Cost of Sales solutions complete answers

ACCT 211 Read & Interact Chapter 5 Inventories and Cost of Sales solutions complete answers 

 

When purchase costs are (rising/declining)  , LIFO will report the lowest cost of goods sold yielding the highest gross profit and net income.

 

Assuming purchase costs are declining and a periodic inventory system is used, determine the statements below which correctly describe what is happening to cost of goods sold under FIFO, LIFO and weighted average cost flow methods. (Check all that apply.)

 

Assume that Wally World uses a periodic weighted average inventory system. During the year, it had two sales. Calculate the weighted average cost per unit on hand as of June 30 when it figured its cost of goods sold for the month.

 

Assume that Q-Mart uses a periodic LIFO inventory system. During the year, it sold 14 units. Calculate the dollar value of its cost of goods sold for the period.

 

Assume that Widgets, Inc. uses a periodic specific identification inventory system. During the period, it sold 4 units from beginning inventory, 8 units from the Jan. 5 purchase, and 2 units from the Jan. 29 purchase. Calculate the dollar value of its cost of goods sold for the period based on the information provided below.

 

Assume that Q-Mart uses a periodic FIFO inventory system. During the year, it sold 14 units. Calculate the dollar value of its cost of goods sold for the period.

 

Recall the formula for computing a company's inventory turnover ratio.

 

Assume that Wally World uses a perpetual weighted average inventory system. During the period, it had two sales. Calculate the average cost per unit on hand as of June 30 when it made its second sale.

 

Assume that Sparks uses a perpetual specific identification inventory system. Its ending inventory consists of 2 units from beginning inventory, 4 units from the Jan. 5 purchase, and 10 units from the Jan. 29 purchases. Calculate the dollar value of its ending inventory.

 

Assuming purchase costs are rising in a periodic inventory system, determine which of the statements below are correct regarding the cost of goods sold under FIFO, LIFO and weighted average cost flow methods. (Check all that apply.)

 

Assume that Wally World uses a periodic weighted average inventory system. During the period, it had two sales. Calculate the weighted average cost per unit on hand as of June 30 when it figured its cost of goods sold for the month.

 

 

When purchase costs are (rising/declining)      , FIFO will report the lowest cost of goods sold yielding the highest gross profit and net income.

 

Analyze the information below and select the correct statements regarding XYZ Inc.'s inventory turnover. (Check all that apply.)

 

 

Assume that Q-Mart uses a periodic LIFO inventory system. During the period, it sold 14 units. Calculate the dollar value of its cost of goods sold for the period.

 

 

All of the following are inventory costing methods used under a periodic inventory system except:

 

Recall the formula for figuring a company's inventory turnover ratio.

 

Assume that Q-Mart uses a periodic FIFO inventory system. During the period, it sold 14 units. Calculate the dollar value of its cost of goods sold for the period.

 

 

Determine cost of goods sold for X-mart, assuming that beginning inventory was $5,000. Net purchases were $20,000 and ending inventory was $9,000.

 

Explain what lower of cost or market means in regards to reporting merchandise inventory on the balance sheet.

 

Recall the four inventory costing methods used to assign costs to inventory and cost of goods sold under the periodic inventory system. (Check all that apply.)

 

Assume that Sparks uses a perpetual FIFO inventory system. Its ending inventory consists of 9 units. Calculate the dollar value of its ending inventory.

 

 

Which of the following statements correctly explains what the inventory turnover ratio assesses.

 

Assume that J-Mart uses a perpetual weighted average inventory system. During the period, it sold 14 units. Calculate the dollar value of its cost of goods sold for the period.

 

 

Assume that Q-Mart uses a perpetual FIFO inventory system. During the period, it sold 12 units. Calculate the dollar value of its cost of goods sold for the period.

 

 

Assume that Sparks uses a perpetual specific identification inventory system. Its ending inventory consists of 2 units from beginning inventory, 4 units from the Jan. 5 purchase, and 10 units from the Jan. 30 purchases. Calculate the dollar value of its ending inventory.

 

 

Given the following information, determine the ending inventory at the end of the period.

 

 

ABC Co. uses a perpetual inventory system and uses the FIFO cost flow assumption. During the month, it had two sales. Calculate the dollar value of its cost of goods sold for the first sale made on Jan. 10.

 

 

The kind of business that would use the specific identification method of inventory costing includes:

 

Determine which of the following statements are correct regarding the difference between physical flow and the cost flow of inventory. (Check all that apply.)

 

Why would the physical count of inventory be different than what is shown in perpetual inventory records? (Check all that apply.)

 

Given the following information, determine the total goods available for sale during a period.

 

 

The _____ principle states that inventory costs are expensed as cost of goods sold when inventory is sold.

 

Which of the following statements is correct regarding goods in transit?

 

Which of the statements below explain why LCM is used?

 

Assumes that Q-Mart uses a periodic LIFO inventory system. During the period, it sold 12 units. Calculate the dollar value of its cost of goods sold for the period.

 

One identical unit is purchased on each of the following three dates and at the respective costs: June 1 at $10 June 2 at $15 July 4 at $20 The company sells two units during the period. Conclude which inventory items are sold first and which unit remains in ending inventory if the company is using the FIFO cost flow assumption. 

 

ABC Co. uses a perpetual inventory system and uses the LIFO cost flow assumption. Calculate the dollar value of its cost of goods sold for the sale made on Jan. 10.

 

Explain the inventory and cost of goods sold relationship by selecting the correct formula below.

 

Many companies choose to use LIFO inventory costing during periods of rising purchase costs because reported cost of goods sold will be    . This means that income taxes paid will be     than if the company used FIFO or weighted average inventory costing.

 

Assumes that Q-Mart uses a periodic LIFO inventory system. During the period, it sold 14 units. Calculate the dollar value of its cost of goods sold for the period.

 

Estimates of inventory are not usually required when a company uses a     inventory system because they would presumably have updated inventory data.

 

The LIFO cost flow assumption assumes that the cost of items purchased     are the costs that will be transferred first to cost of goods sold on the        .

 

Assume that Wally World uses a perpetual LIFO inventory system. Its ending inventory consists of 13 units. Calculate the dollar value of its ending inventory.

 

Q-mart failed to include inventory that was kept in a separate warehouse in its end-of-the-period inventory count. Explain how this error will affect this year’s balance sheet.

 

Assume that sparks uses a periodic FIFO inventory system. Its ending inventory consists of 9 units. Calculate the dollar value of its ending inventory.

 

Sparky's incorrectly included inventory that was on consignment in its ending inventory count. Consequently, the ending inventory was overstated on the balance sheet. Explain how this error effect this year's income statement.

 

Q-mart failed to include inventory that was kept in a separate warehouse in its 12/31 end-of-the-period inventory count. Consequently, the ending inventory on 12/31 was understated on the balance sheet. Explain how this error will effect the current year's income statement. (Check all that apply.)

 

Assume that Maycces uses a periodic weighted average inventory system. Its ending inventory consists of 13 units. Calculate the dollar value of its ending inventory assuming the following information.

 

Assume that Maycces uses a perpetual weighted average inventory system. Its ending inventory consists of 13 units. Calculate the dollar value of its ending inventory assuming the following information.

 

Assume that J-Mart uses a perpetual weighted average inventory system. During the period, it had two sales. Calculate the average cost per unit on hand as of June 8 when it made its first sale.

 

Review the steps below that apply LCM to individual items of inventory. Place them in the correct order of occurrence.

 

Show your understanding of the ownership of goods in transit by completing the following statement. If goods are shipped FOB shipping point, then the     is responsible for paying freight charges and the     will not include the merchandise In their Inventory.

 

Chocolate Inc. uses a perpetual inventory system and uses the FIFO cost flow assumption. Calculate the cost of goods sold for the sale made on Mar. 20.

 

Assume that Widgets, Inc. uses a perpetual specific identification inventory system. During the period, it sold 4 units from beginning inventory, 8 units from the Jan. 5 purchase, and 2 units from the Jan. 30 purchases. Calculate the dollar value of its cost of goods sold for the period.

 

Which statement(s) below correctly describe(s) the relationship of cost of goods sold and ending inventory? (Check all that apply

 

Match the cost flow assumption on the left with its definition on the right.

 

Recount the methods used to assign costs to inventory and cost of goods sold under both a perpetual and a periodic system

 

Assume that J-Mart uses a periodic weighted average inventory system. Calculate the average cost per unit.

 

The FIFO cost flow assumption assumes that the cost of items purchased     are the cost that will be transferred first to cost of goods sold on the    .

 

2.
Assume that Bee Bee's Fish Store uses a periodic LIFO inventory system. Its ending inventory consists of 13 fish. Calculate the dollar amount of the ending inventory.
 
 
4.
Assume that Q-Mart uses a periodic FIFO inventory system. During the period it sold 14 units. Calculate the dollar value of its cost of goods sold for the period.
 
 
5.
Assume that Toy-Cars Inc. uses a periodic specific identification inventory system. Its ending inventory consists of 2 cars from beginning inventory, 4 cars from the Jan 5 purchase and 10 cars from the Jan 30 purchase. Calculate the dollar value of its ending inventory, based on the information provided below.
 
 
6.
Assuming purchase costs are declining, determine which statements below correctly describe what happens to cost of goods sold under FIFO, LIFO and weighted average cost flow methods.
 
 
7.
Assuming purchase costs are rising, determine which of the statements below are correct regarding the cost of goods sold under FIFO, LIFO and weighted average cost flow methods.
 
 
8.
Demonstrate how inventory costs are treated both as assets and expenses.
 
 
9.
Explain what lower of cost of market means in regards to reporting merchandise inventory balance sheet.
 
 
10.
Identify the safeguards that companies implement to protect their inventory.
 
 
11.
Identify the ways in which lower of cost or market can be applied to merchandise inventory.
 
 
12.
If goods are shipped FOB shipping point, then the ______ is responsible for paying freight charges and the ____ will not include the merchandise in their inventory.
 
 
13.
In year 1, Shelly Company understated their ending inventory. What is the effect of this error in year 2?
 
 
16.
Review the steps that apply to LCM in order:
 
 
 
 
 
 
 
 
 
 
 
 

18.
XYZ Co. uses a perpetual inventory system and uses the FIFO cost flow assumption. During the month, it had two sales. Calculate the dollar value of its cost of goods sold for the first sale made on Jan 10.
 
 
 

FIFO / LIFO ../ Weighted Average ../ Specific Identification •  Assumes costs flow in the order incurred ; Assumes costs flow in the reverse order incurred ; Assumes costs flow at an average of the costs available ; Assumes costs flow can be specifically matched with the physical flow of items

 

assume that j-mart uses a periodic weighted average inventory system. During the period, it sold 14 units. calculate the dollar value of its cost of goods sold for the period

 

ABC Co. uses the perpetual inventory system and uses the LIFO cost flow assumption. During the month, it had 2 sales. Calculate the dollar value of its cost of goods sold for the sale made on Jan. 10.

Recall that computers and technology have made the perpetual (periodic/perpetual) inventory costing system affordable and timely

 

Chocolate Inc. uses the weighted average cost flow assumption in a perpetual inventory system. During the month, it had two sales totaling 15 units. Calculate the cost of goods sold for the first sale made on Mar. 20.

 

 

Identify the ways Inc.  which lower of cost or market can be applied to merchandise Inventory. (Check all that apply.)

 

Storm Windows Company understated their ending inventory during their first year of operations by $2,000. What is the effect of this error at the end of the year? Select all answers which apply.

 

Assume that J-mart uses a periodic weighted average inventory system. Calculate the average cost per unit

 

Determine which of the following statements are correct regarding damaged or obsolete goods. (Check all that apply.)

 

Assume that Bee Bee's Fish Store uses a periodic LIFO inventory system. Its ending inventory consists of 13 fish. Calculate the dollar amount of the ending inventory.

 

Assume that Widgets, Inc. uses a perpetual FIFO Inventory system. During the period, It sold 12 units on credit to one customer. Demonstrate tile joun1al entry required to record the sale and the cost of tile sale by selecting of the correct items below. (Check all that apply.)

 

Review the statements below and select the ones that are correct regarding the days' sales in Inventory ratio. (Check all that apply.)

 

Sometimes companies must estimate ending Inventory. Review the reasons given below for estlmat1ng Inventory and choose all of the correct responses. (Check all that apply.)

 

Which of the costs below would be Included In the recorded cost of merchandise Inventory? (Check all that apply.)

 

Demonstrate how inventory costs are treated both as assets and expenses by selecting the correct statement(s) below. (Check all that apply.)

 

Identify the statement below that best describes the consistency concept as It applies to Inventory costing.

 

Determine which of the following statements is correct regarding the relationship of ending inventory and beginning inventory.

 

In year 1, Shell Company understated their ending inventory. What is the effect of this error in year 2?

 

Assuming purchase costs are declining and a periiodic Inventory system Is used, determine the statements below which correctly describe what Is happening to cost of goods sold under FIFO, LIFO and weighted average cost flow methods. (Check all that apply.)

 

Determine which of the following statements ls co"ect regarding consigned goods.

 

Recall the formula tor figuring Days' Sales in Inventory.

 

XYZ Company made a mistake in counting its ending inventory. Determine which of the items below will be affected by this error. (Check all that apply.)

 

Identify the statement below that best describes what the full-disclosure principle prescribes if a company changes from one acceptable accounting method to another.

 

Calculate the cost-to-retail ratio and the cost of goods sold for T-Mart, assuming the following Information. (Check all that apply.)

 

Determine which of the following statements are correct regarding the difference between physical flow and the cost flow of goods. (Check all that apply.)

 

Recount the methods used to assign costs to inventory and cost of goods sold under both a perpetual and a periodic system

 

The FIFO cost flow assumption assumes that the cost of items purchased are the costs that will be transferred first to cost of goods sold on the 

 

If goods are shipped FOB shipping point, then the is responsible for paying freight charges and the will not include the merchandise in their inventory.

 

Review the steps below that apply LCM to individual items of inventory. Place them in the correct order of occurrence

 

Assume that the Wally World uses a perpetual weighted average inventory system. During the period, it had two sales. Calculate the average cost per unit on hand as of June 30 when it made its second sale

 

Which of the following lists the four methods used to assign costs to inventory and to cost of goods sold?

 

Recall that computers and technology have made the inventory costing system affordable and timely

 

Assume that Toy-Cars Inc. uses a periodic specific identification inventory system. Its ending inventory consists of 2 cars from beginning inventory, 4 cars from the Jan. 5 purchase, and 10 cars from the Jan. 30 purchase. Calculate the dollar value of its ending inventory, based on the information provided below.

 

Demonstrate how inventory costs are treated both as assets and expenses by selecting the correct statements

 

Assume that J-Mart uses a perpetual weighted average inventory system. During the period, it sold 14 units on account to one customer. Demonstrate the journal entry required to record the sale and the cost of the sale by selecting all of the correct item below

 

Sometimes companies must estimate ending inventory. Review the reasons given below for estimating inventory and choose all of the correct responses

 

Assume that J-Mart uses a periodic weighted average inventory system. During the period, it sold 14 units. Calculate the dollar value of its cost of goods sold the period

 

Determine cost of goods sold for X-mart, assuming that beginning inventory was $ 5,000. Net purchases were $ 20,000 and ending inventory was $ 9,000

 

Assume that Bee Bees Fish Store uses a periodic LIFO inventory system. Its ending inventory consists of 13 fish. Calculate the dollar value of its ending inventory.

 

Assume that Widgets, Inc. uses a periodic specific identification inventory system. During the period, it sold 4 units from beginning inventory, 8 units from the Jan. 5 purchase, and 2 units from the Jan. 30 purchase. Calculate the dollar value of its cost of goods sold for the period based on the information provided below.

 

Review the statements below and select the ones that are correct regarding the days’ sales in inventory ratio

 

Summarize the similarities of US GAAPE and IFRS in regards to inventory by selecting the correct statements below

 

In year 1, Shell Company understated their ending inventory. What is the effect of this error in year 2?

 

There are advantages to using each of the four inventory costing methods. Identify the statements below that are correct 

 

Information for Q-mart appears in the following table. Calculate the reported cost of inventory when LCM is applied to individual items of inventory

 

When LCM is applied to the whole inventory, the merchandise inventory account must be adjusted from the $ 1,700 recorded cost down to the $1,620 market amount

 

Identify the statement below that best describes the consistency concept as it applies to inventory costing

 

Toy Mart has inventory that was destroyed by fire. Apply the gross profit method to estimate their ending inventory assuming the following information

 

Which of the costs below would be included in the recorded cost of merchandise inventory?

 

Assuming purchase costs are declining, determine which statements below correctly describe what happen to cost of goods sold under FIFO, LIFO and weighted average cost flow methods

 

Assuming purchase costs are rising, determine which statements below correctly describe what happen to cost of goods sold under FIFO, LIFO and weighted average cost flow methods

 

Assume that Toy-Cars Inc. uses a periodic specific identification inventory system. Its ending inventory consists of 2 cars form beginning inventory, 4 cars form the Jan. 5 purchase, and 10 cars from the Jan. 30 purchase. Calculate the dollar value of its ending inventory, based on the information provided below

 

Formula for figuring a company’s inventory turnover ratio

 

Assume that Widgets, Inc. uses a perpetual specific identification inventory system. During the period, it sold 3 units on credit to one customer. The sale included one item from the beginning inventory and 2 items from May 5 purchase. Demonstrate the journal entry required to record the sale and the cost of the sale by selecting all of the correct item below

 

Which statement(s) below is(are) correct regarding the purpose of taking a physical inventory count? (Check all that apply.)