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Exam 8: Inventories: Measurement

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Question 41

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Fulbright Corp. uses the periodic inventory system. During its first year of operations, Fulbright made the following purchases (listed in chronological order of acquisition) : 40 units at $100 70 units at $80 170 units at $60 Sales for the year totaled 270 units, leaving 10 units on hand at the end of the year. - Ending inventory using the LIFO method is:

A) $650.
B) $1,000.
C) $707.
D) $600.

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

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Question 42

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Robertson Corporation's inventory balance was $22,000 at the beginning of the year and $20,000 at the end. The inventory turnover ratio for the year was 6.0 and the gross profit ratio 40%. What were net sales for the year?

A) $126,000.
B) $200,000.
C) $120,000.
D) $210,000.

E) A) and D)
F) B) and D)

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Question 43

Multiple Choice

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Listed below are 5 terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. -Gross method

During periods when costs are rising and inventory quantities are stable, ending inventory will be:

Listed below are 5 terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. -Consumer Price Index

The following information is taken from the accounting records of Rapid Runner Inc. for the year 2018. Missing information has been left blank. Required: Compute the missing amounts. -

Linguini Inc. adopted dollar-value LIFO (DVL) as of January 1, 2018, when it had an inventory of $800,000. Its inventory as of December 31, 2018, was $811,200 at year-end costs and the cost index was 1.04. What was DVL inventory on December 31, 2018?

Boston Dollar Store uses the gross method to record purchase discounts and uses a perpetual inventory system. Boston engaged in the following transactions during April: 4/12 Purchased $15,000 in merchandise subject to terms of 2/10, n/30. The goods were shipped f.o.b. shipping point. 4/13 Received a billing from Orange Freight Lines for $300 for the 4/12 purchase. 4/15 Returned $1,000 of merchandise from the 4/12 purchase. 4/20 Paid balances due from 4/12 purchase. Required: Prepare journal entries to record the above transactions.

Chavez Inc. adopted dollar-value LIFO on January 1, 2018, when the inventory value was $850,000. The December 31, 2018, ending inventory at year-end cost was $950,000 and the cost index for the year is 1.08. Required: Compute the dollar-value LIFO inventory valuation (rounded) for the December 31, 2018, inventory.

-Required: Compute the January 31 ending inventory and cost of goods sold for January, assuming Random Creations uses average cost and a perpetual inventory system.

-Required: Compute the January 31 ending inventory and cost of goods sold for January, assuming Random Creations uses LIFO and a periodic inventory system.

Anthony Thomas Candies (ATC) reported the following financial data for 2018 and 2017: -ATC's inventory turnover ratio for 2018 is:

Slinky Company purchased merchandise on June 10, 2018, at a price of $20,000, subject to credit terms of 2/10, n/30. Slinky uses the net method for recording purchases and uses a perpetual inventory system. Required: 1. Prepare the journal entry to record the purchase. 2. Prepare the journal entry to record the appropriate payment if the entire invoice is paid on June 18, 2018. 3. Prepare the journal entry to record the appropriate payment if the entire invoice is paid on July 8, 2018.

On January 1, 2017, ECT Co. adopted the dollar-value LIFO method for its one inventory pool. The pool's value on this date was $600 million. The 2017 and 2018 ending inventory valued at year-end costs were $702 million and $840 million, respectively. The appropriate cost indexes are 1.08 for 2017 and 1.20 for 2018. Required: Calculate the inventory balance that ECT Co. would report on its year-end balance sheets for 2017 and 2018, using the dollar-value LIFO method.

Listed below are 5 terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. -Specific identification

Listed below are 5 terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the correct term. -Perpetual inventory system

Anthony Thomas Candies (ATC) reported the following financial data for 2018 and 2017: -The average days inventory for ATC (rounded) for 2018 is:

Nueva Company reported the following pretax data for its first year of operations. -How much more will Nueva report in income tax if it elects FIFO instead of LIFO?

In a periodic inventory system, the cost of inventories sold is:

Liquidated Corporation had a dollar-value LIFO (DVL) inventory of $800,000 at the beginning of the current year when it adopted DVL. Its year-end inventory at year-end prices was $850,000. The index for the current year was 1.08. Required: Compute the DVL inventory (rounded) to be reported at the end of the year.