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Exam 6: Inventories

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Question 1

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Fill in the missing amounts from the chart below regarding the calculation of Bean Corporation's estimated inventory using the retail method of estimation.

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Question 2

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Direct disposal costs do not include special advertising or sales commissions.

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FIFO is the inventory costing method that follows the physical flow of the goods.

The following lots of a particular commodity were available for sale during the year: The firm uses the periodic system and there are 25 units of the commodity on hand at the end of the year. What is the amount of the inventory at the end of the year using the LIFO method?

Which of the following methods is appropriate for a business whose inventory consists of a relatively small number of unique,high-cost items?

When using the FIFO inventory costing method,the most recent costs are assigned to the cost of goods sold.

The following data were taken from the annual reports of Jong Inc. ,a manufacturer of fireworks,and Hobson Inc. ,a manufacturer of computers. (a)Determine the (1)inventory turnover and (2)number of day's sales in inventory for Jong and Hobson.Round your answer to two decimal places. (b)How would you expect these measures to compare between the companies? Why?

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

On the basis of the following data,what is the estimated cost of the merchandise inventory on May 31 using the retail method?

Inventory errors,if not discovered,will self-correct in two years.

Average inventory is computed by adding the inventory at the beginning of the period to the inventory at the end of the period and dividing by two.

Three identical units of Item Steele Plate are purchased during March,as shown below. Assume that one unit is sold on March 23 for $1,125.Determine the gross profit for March and ending inventory on March 31 using (a)FIFO, (b)LIFO,and (c)average cost methods.

Too much inventory on hand

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

During a period of falling prices,which of the following inventory methods generally results in the lowest balance sheet amount for inventory.

The inventory costing method that reports the most current prices in ending inventory is

The beginning inventory and purchases of an item for the period were as follows: The company uses the periodic system,and there were 15 units in the inventory at the end of the period.Determine the cost of the 15 units in the inventory by each of the following methods,presenting details of your computations: (a)first-in,first-out; (b)last-in,first-out; (c)average cost.Do not round your intermediate calculations.Round your final answer to two decimal places.

If merchandise inventory is being valued at cost and the price level is steadily rising,the method of costing that will yield the highest net income is

One of the two internal control procedures over inventory is to properly report inventory on the financial statements.

If a manufacturer ships merchandise to a retailer on consignment,the unsold merchandise should be included in the inventory of the