Question 1

To the nearest thousand,estimated ending inventory is:

Accepted Answer

A)  $55,000.
B)  $52,000.
C)  $57,000.
D)  None of these answer choices are correct.E) All of the above
F) B) and D)

Question 2

In applying the lower of cost and net realizable value rule,the inventory of rehab supplies would be valued at:

Accepted Answer

A)  $165.
B)  $152.
C)  $162.
D)  $155.E) All of the above
F) A) and D)

Question 3

Howard's Supply Co.suffered a fire loss on April 20,2016.The company's last physical inventory was taken January 30,2016,at which time the inventory totaled $220,000.Sales from January 30 to April 20 were $600,000 and purchases during that time were $450,000.Howard's consistently reports a 30% gross profit.The estimated inventory loss is:

Accepted Answer

A)  $490,000.
B)  $238,000.
C)  $250,000.
D)  None of these answer choices are correct.E) C) and D)
F) All of the above

Question 4

Use the following to answer questions
Weldon Animal Feeds has developed the following data for lower of cost and net realizable valuation for its products (in thousands):
  The costs to sell are 20% of selling price.
-Required: Determine the reported inventory value assuming the lower of cost and net realizable value rule is applied to individual types of feeds.

Accepted Answer

The answer of Use the following to answer questions
Weldon Animal...

Question 5

To the nearest thousand,estimated ending inventory is:

Accepted Answer

A)  $41,000.
B)  $37,000.
C)  $51,000.
D)  None of these answer choices are correct.E) All of the above
F) B) and D)

Question 6

Losses on reduction to NRV may be charged to either cost of goods sold or to a line item among operating expenses.

Accepted Answer

A) True 
 B)False

Question 7

A change from LIFO to any other inventory method is accounted for retrospectively.

Accepted Answer

A) True 
 B)False

Question 8

Cornhusker Can Co.uses the conventional retail method to estimate ending inventories.The following data has been summarized for year ended December 31,2016:
  
Required:
Estimate the cost of ending inventory applying the conventional retail method.Assume that sales are recorded net of employee discounts.

Accepted Answer

The answer of Cornhusker Can Co.uses the conventional retail method...

Question 9

For a purchase commitment contained within a single fiscal year,if the market price is less than the contract price,the purchase is recorded at the contract price.

Accepted Answer

A) True 
 B)False

Question 10

In applying the lower of cost and net realizable value rule,the inventory of surgical equipment would be valued at:

Accepted Answer

A)  $230.
B)  $240.
C)  $170.
D)  $152.E) C) and D)
F) B) and C)

Question 11

Orlando Company has used the average cost method for inventory valuation since it began business in 2012,but has elected to change to the FIFO method starting in 2015.Year-end inventory valuations under each method are shown below:  
Required:
How would Orlando reflect the change in accounting principle in its financial statements (ignore income taxes)?

Accepted Answer

Orlando would revise prior years' financ...

Question 12

Use the following to answer questions 
Novelli's Nursery has developed the following data for lower of cost and net realizable valuation for its products:
  The costs to sell are 10% of selling price.
-Required: Determine the reported inventory value assuming the lower of cost and net realizable value rule is applied to individual trees.

Accepted Answer

Individual...

Question 13

Estimated ending inventory at cost is:

Accepted Answer

A)  $90,720.
B)  $83,500.
C)  $91,600.
D)  None of these answer choices are correct.E) B) and C)
F) A) and C)

Question 14

Prunedale Co.uses a periodic inventory system.Beginning inventory on January 1 was overstated by $32,000,and its ending inventory on December 31 was understated by $62,000.These errors were not discovered until the next year.As a result,Prunedale's cost of goods sold for this year was:

Accepted Answer

A)  Overstated by $94,000.
B)  Overstated by $30,000.
C)  Understated by $94,000.
D)  Understated by $30,000.E) C) and D)
F) None of the above

Question 15

Under the LIFO retail method,the denominator in the cost-to-retail percentage includes:

Accepted Answer

A)  Net markups and net markdowns.
B)  Neither net markups nor net markdowns.
C)  Net markups,but not net markdowns.
D)  Net markdowns,but not net markups.E) B) and C)
F) All of the above

Question 16

Portman Inc.uses the conventional retail inventory method.Expressed in millions of dollars,information about Portman's 2016 inventory account is expressed in the table below:

What is the value of Portman's inventory at 12/31/16?

Accepted Answer

A)  $150 million.
B)  $252 million.
C)  $300 million.
D)  None of these answer choices are correct.E) None of the above
F) C) and D)

Question 17

An argument against use of the lower of cost and net realizable value rule is its lack of:

Accepted Answer

A)  Relevance.
B)  Reliability.
C)  Consistency.
D)  Objectivity.E) A) and D)
F) B) and C)

Question 18

Fad City sells novel clothes that are subject to a great deal of price volatility.A recent item that cost $20 was marked up $12,marked down for a sale by $6 and then had a markdown cancellation of $3.The latest selling price is:

Accepted Answer

A)  $23.
B)  $26.
C)  $29.
D)  $35.E) A) and B)
F) B) and C)

Question 19

In the following questions, inventory errors are noted for 2016. Assume that the errors are not discovered until 2017, and that the company uses a periodic inventory system. Indicate the effect of the error, if any, on the accounts noted in the columns, using the following code:
U = Understated; O = Overstated; NE = No effect

-

Accepted Answer

Note:Both purchase...

Question 20

In applying the lower of cost and net realizable value rule,the inventory of rehab equipment would be valued at:

Accepted Answer

A)  $315.
B)  $340.
C)  $225.
D)  $250.E) C) and D)
F) A) and D)

Exam 9: Inventories: Additional Issues

Losses on reduction to NRV may be charged to either cost of goods sold or to a line item among operating expenses.

Correct Answer
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Correct Answer
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Individual...
View Answer

Correct Answer
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Note:Both purchase...
View Answer

A change from LIFO to any other inventory method is accounted for retrospectively.

Correct Answer
verified

Prunedale Co.uses a periodic inventory system.Beginning inventory on January 1 was overstated by $32,000,and its ending inventory on December 31 was understated by $62,000.These errors were not discovered until the next year.As a result,Prunedale's cost of goods sold for this year was:

Correct Answer
verified

Correct Answer
verified

Portman Inc.uses the conventional retail inventory method.Expressed in millions of dollars,information about Portman's 2016 inventory account is expressed in the table below: What is the value of Portman's inventory at 12/31/16?

Correct Answer
verified

An argument against use of the lower of cost and net realizable value rule is its lack of:

Correct Answer
verified

Estimated ending inventory at cost is:

Correct Answer
verified

Fad City sells novel clothes that are subject to a great deal of price volatility.A recent item that cost $20 was marked up $12,marked down for a sale by $6 and then had a markdown cancellation of $3.The latest selling price is:

Correct Answer
verified

In applying the lower of cost and net realizable value rule,the inventory of surgical equipment would be valued at:

Correct Answer
verified

To the nearest thousand,estimated ending inventory is:

Correct Answer
verified

Correct Answer
verified

For a purchase commitment contained within a single fiscal year,if the market price is less than the contract price,the purchase is recorded at the contract price.

Correct Answer
verified

Correct Answer
verified
Orlando would revise prior years' financ...
View Answer

To the nearest thousand,estimated ending inventory is:

Correct Answer
verified

Under the LIFO retail method,the denominator in the cost-to-retail percentage includes:

Correct Answer
verified

Correct Answer
verified

In applying the lower of cost and net realizable value rule,the inventory of rehab equipment would be valued at:

Correct Answer
verified

In applying the lower of cost and net realizable value rule,the inventory of rehab supplies would be valued at:

Correct Answer
verified

Exam 9: Inventories: Additional Issues

Losses on reduction to NRV may be charged to either cost of goods sold or to a line item among operating expenses.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedIndividual...View AnswerShow Answer

Correct Answerverified Note:Both purchase...View AnswerShow Answer

A change from LIFO to any other inventory method is accounted for retrospectively.

Correct AnswerverifiedShow Answer

Prunedale Co.uses a periodic inventory system.Beginning inventory on January 1 was overstated by $32,000,and its ending inventory on December 31 was understated by $62,000.These errors were not discovered until the next year.As a result,Prunedale's cost of goods sold for this year was:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Portman Inc.uses the conventional retail inventory method.Expressed in millions of dollars,information about Portman's 2016 inventory account is expressed in the table below: What is the value of Portman's inventory at 12/31/16?

Correct AnswerverifiedShow Answer

An argument against use of the lower of cost and net realizable value rule is its lack of:

Correct AnswerverifiedShow Answer

Estimated ending inventory at cost is:

Correct AnswerverifiedShow Answer

Fad City sells novel clothes that are subject to a great deal of price volatility.A recent item that cost $20 was marked up $12,marked down for a sale by $6 and then had a markdown cancellation of $3.The latest selling price is:

Correct AnswerverifiedShow Answer

In applying the lower of cost and net realizable value rule,the inventory of surgical equipment would be valued at:

Correct AnswerverifiedShow Answer

To the nearest thousand,estimated ending inventory is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

For a purchase commitment contained within a single fiscal year,if the market price is less than the contract price,the purchase is recorded at the contract price.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedOrlando would revise prior years' financ...View AnswerShow Answer

To the nearest thousand,estimated ending inventory is:

Correct AnswerverifiedShow Answer

Under the LIFO retail method,the denominator in the cost-to-retail percentage includes:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In applying the lower of cost and net realizable value rule,the inventory of rehab equipment would be valued at:

Correct AnswerverifiedShow Answer

In applying the lower of cost and net realizable value rule,the inventory of rehab supplies would be valued at:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Individual...
View Answer

Correct Answer
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Note:Both purchase...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Orlando would revise prior years' financ...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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