1)



Merchandise shipped FOB shipping point on the last day of the year should ordinarily be added to The buyer’s inventory balance B. the sellers inventory balance C. neither the buyers nor the sellers inventory balance D. both the buyer and the sellers inventory balance I choose A is that rightMiller Inc. is a wholesale of office supplies. The activity for Model III calculators during August is shown below.DateBal/Transaction unit costAug 1Inventory 2,00036.00Aug 7Purchase3,00037.20Aug 12Sales 3,600Aug 21Purchase4,80038.00Aug 22Sales3,800Aug 29Purchase1,60038.00If Miller Inc. uses a FIFO inventory system , the ending inventory of Model III calculators at August 31 is reported as A. 150,080 B. 150,160 C. 152,288 D. 152,960The use of discounts lost account implies that the recorded cost of a purchased inventory item is itsInvoice price. B. invoice price plus the purchase discount lost. C. invoice price less the purchase taken. D. invoice price less the purchase discount allowable whether taken or not. I choose D, is that correct.A company sells four products; I,II, III and IV. The company values all inventories using the lower –of-cost-or-market procedure. The company has consistently experienced a profit margin of 20 percent of sales and expects this rate to hold for the future. Additional information, shown below, is available for the most recent year as of December 31. Product Original CostCost to replaceEst. cost to sellExpected selling price I$60$70$10$100II709020120III80601060 IV90802090Using the lower-of-cost-or-market procedure, what is the reported inventory value at December 31 for one unit of product III? A. $50 B. $60 C. $70 D. $80Ami Retailers purchased merchandise with a list price of $100,000, subject to a trade discount of 20 percent and credit terms of 2/10, n/30. If you use the gross method, at what amount should Ami record the cost of this merchandise? 100,00 B. 80,000 C. 98,000 D. 78,400Elrond company began operations in 2007. During the first two years of operations, Elrond made undiscovered errors in taking its year –end inventories, which overstated 2007 ending inventory by $50,000 and overstated 2008 ending inventory by $40,000. The combined effect of these errors on reported income is 200720082009A. overstated 50,000overstated 90,000understated 40,000B. overstated 50,000overstated 40,000not affected C. understated 50,000understated 90,000not affected D. overstated 50,000understated 10,000understated 40,000Consider the following for the XYZ corporation as of May 1, 2007:Beginning Inventory $ 500Ending inventory1,500Purchases2,000Cost of goods sold for May 1, 2007 would be 500 B. 1,000 C. 1,500 D. 3,500Jupiter company prepares monthly income statements. A physical inventory is taken only at year-end; hence, month-end inventories must be estimated. All sales are made on account. The rate of markup on cost is 50 percent. The following information relates to the month of May.Accounts receivable, May 1 20,000Accounts receivable, May 31 30,000Collection of accounts receivable during May 50,000Inventory, may 1 36,000Purchases of inventory during May 32,000The estimated cost of the May 31 inventory is 24,000 B. 28,000 C. 38,000 D. 44,000The following information is available for Lyman Company.Cost of goods sold 2007 $1,200,000Inventories at Dec 31, 2006 350,000Inventories at Dec 31, 2007 310,000Assuming that a business year consists of 360 days , what was the number of days sales in average inventories for 2007? 49.5 B. 93 C. 99 D. 105On October 31, a flood at Payne Company’s only warehouse caused severe damage to its entire inventory. Based on recent history. Payne has a gross profit of 25 percent of net sales. The following information is available from Payne’s record for the 10 months ended October 31.Inventory, jan 1520,000Purchase 4,120,000Purchase returns 60,000Sales5,600,000Sales discounts 400,000A physical inventory disclosed usable damage goods that Payne estimates it can sell for 70,000. Using the gross profit method, the estimated cost of goods sold for the 10 months ended October 31 should be 680,000 B. 3,830,000 C. 3,900,000 D. 4,200,000Consider the following : What is the weighted-average cost per unit? 15.00 B. 10.00 C. 8.00 D. 7.00Which of the following refers to the difference between the catalog price and the selling price of a product? Cash discount B. net discount C. trade discount D. purchase discount The following information is available for Carter Corp for the month of June Beginning Inventory 8 units at 20.00 =160Purchased, June 3 5 units at 22.00=110Purchased, June 5 7 units at 24.00=168Sold, June 9 9 units Purchased, June 15 8 units at 26.00= 208Sold, June 19 7 units Given this information, the ending inventory balance using the average cost method is 276 B. 302 C. 368 D. 386The Fairbanks Department store uses the LIFO method to approximate a LIFO value for ending inventory. Information relating to the computation of the inventory at December 31 is as follows:Cost retailInventory, Jan 1 32,00080,000Sales640,000Purchase246,000600,000What is the ending inventory at cost at December 31 using the retail inventory method and a LIFO approximation?16,000 B. 16,400 C. 32,000 D. 40,000Goods on consignment are Included in the consignee’s inventory B. recorded in a consignment out account, which is an inventory account C. recorded in a consignment in account, which is an inventory account D. recorded as salesExcessive spoilage, idle capacity and reprocessing are examples of Product(inventoriable costs) B. cost drivers C. trade discounts D. replacement costsI choose B on this one is that correct The following information was taken from Frandsen Company’s accounting records.Increase in raw materials inventory7,500Decrease in finished goods inventory17,500Raw materials purchased 215,000Direct-labor payroll100,000Factory overhead150,000Freight-out22,500There was no work-in-process inventory at the beginning or end of the year. Frandsen’s cost of goods sold is 497,500 B. 487,500 C. 482,500 D. 475,000The gross profit method can be calculated using which of the following formulas?Cost of goods sold – sales /sales Sales – cost of goods sold/ sales Sales – cost of goods sold/ cost of goods sold Cost of goods sold – sales/cost of goods sold With LIFO, cost of goods sold is 195,000 and ending inventory is 45,000 If FIFO ending inventory is 65,000 how much is FIFO cost of goods sold?215,000 B. 195,000 C. 175,000 D. 65,000Western Manufacturing Company uses a perpetual inventory system for its raw materials. The inventory records reflect a raw materials balance of 378,500 at December 31. A physical inventory taken in that date revealed raw materials of 375,750. How will the 2,750 difference affect raw materials inventory and cost of goods sold, assuming it’s attributed to normal shrinkage?Raw Materials Cost of goods soldIncrease decreaseDecreaseno effectDecreaseincrease No effectincrease ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download