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Exam 6: Inventories

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Question 31

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Which of the following companies would be more likely to use the specific identification inventory costing method?

A) Gordon's Jewelers
B) Lowe's
C) Best Buy
D) Wal-Mart

E) B) and C)
F) A) and B)

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Question 32

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Hampton Co.took a physical count of its inventory on December 31.In addition,it had to decide whether or not the following items should be added to this count. Indicate which items should be added to (answer: yes)and which items should not be added to (answer: no)the December 31 inventory count.

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Question 33

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Damaged merchandise that can be sold only at prices below cost should be valued at

In valuing damaged merchandise for inventory purposes,net realizable value is the estimated selling price less any direct costs of disposal.

For the year ended December 31,2014 Depot Max's cost of merchandise sold was $56,900.Inventory at the beginning of the year was $6,540.Ending inventory was $7,250.Compute Depot Max's inventory turnover for the year.

The following lots of a particular commodity were available for sale during the year: 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 cost of good sold for the year according to the average cost method?

Kristin's Boutiques has identified the following items for possible inclusion in its December 31,2010 inventory.Which of the following would not be included in the year end inventory?

Taking a physical count of inventory

The following units of an inventory item were available for sale during the year: The firm uses the periodic inventory system.During the year,60 units of the item were sold. The value of ending inventory using average cost is:

Use the following information to answer the following questions. The Boxwood Company sells blankets for $60 each.The following was taken from the inventory records during May.The company had no beginning inventory on May 1. 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.

During the taking of its physical inventory on December 31,2014,Barry's Bike Shop incorrectly counted its inventory as $350,000 instead of the correct amount of $280,000.The effect on the balance sheet and income statement would be as follows:

Inventory controls start when the merchandise is shelved in the store area.

During periods of increasing costs,the use of the FIFO method of costing inventory will yield an inventory amount for the balance sheet that is higher than LIFO would produce.

The following lots of a particular commodity were available for sale during the year: 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 cost of goods sold for the year according to the LIFO method?

Beginning inventory,purchases and sales data for tennis rackets are as follows: Complete the inventory cost card assuming the business maintains a perpetual inventory system and calculates the cost of merchandise sold and ending inventory using FIFO.

Under a periodic inventory system

If a company mistakenly counts more items during a physical inventory than actually exist,how will the error affect their bottom line?

During periods of rapidly rising costs,the use of the LIFO method results in illusory or inventory profits.

The following data were taken from Bowman Inc. Determine the inventory turnover ratio and the number of days' sales in inventory for Bowman Inc.Round to two decimal places.

A subsidiary inventory ledger can be an aid in maintaining inventory levels at their proper levels.