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Exam 6: Inventories

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Question 51

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Inventory at the end of the year is overstated.Which of the following statements correctly states the effect of the error?

A) stockholders' equity is overstated
B) cost of goods sold is overstated
C) gross profit is understated
D) net income is understated

E) A) and D)
F) None of the above

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Question 52

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Beginning inventory,purchases,and sales data for widgets are as follows: ​ Complete the inventory cost card assuming the business maintains a perpetual inventory system and calculates the cost of goods sold and ending inventory using LIFO.

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Question 53

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The method of estimating inventory that uses records of the selling prices of the merchandise is called

Use of the retail inventory method requires taking a physical count of inventory.

The lower of cost or market is a method of inventory valuation.

The inventory method that assigns the most recent costs to cost of goods sold is

Taking a physical count of inventory

Which of the following is used to analyze the efficiency and effectiveness of inventory management?

What is the amount of cost of goods sold for the year according to the FIFO method?

A physical inventory should be taken at the end of every month.

The firm uses the periodic system,and there are 20 units of the commodity on hand at the end of the year.What is the amount of inventory at the end of the year according to the FIFO method?

The inventory costing method that reports the earliest costs in ending inventory is

Stevens Company started the year with an inventory cost of $145,000.During the month of January,Stevens purchased inventory that cost $53,000.January sales totaled $140,000.Estimated gross profit is 35%.The estimated ending inventory as of January 31 is

Assuming that the company uses the perpetual inventory system,determine the ending inventory value for the month of May using the FIFO inventory cost method.

Under the periodic inventory system,the inventory account continuously discloses the amount of inventory on hand.

Garrison Company uses the retail method of inventory costing.It started the year with an inventory that had a retail cost of $45,000.During the year,Garrison purchased an inventory with a retail sales value of $300,000.After performing a physical inventory,Garrison calculated the inventory at retail to be $80,000.The markup is 100% of cost.Determine the ending inventory at its estimated cost. ​

If the estimated rate of gross profit is 30%,what is the estimated cost of the inventory on September 30,based on the following data? ​

If Addison uses LIFO,the cost of the ending inventory on September 30 is

The following data regarding purchases and sales of a commodity were taken from the related perpetual inventory account: ​

The units of Product Green-2 available for sale during the year were as follows: ​ There are 17 units of the product in the physical inventory at September 30.The periodic inventory system is used.Determine the cost of goods sold by (a)FIFO,(b)LIFO,and (c)average cost methods.