Question 1

Using a LIFO perpetual cost flow, calculate the value of the ending inventory and the cost of merchandise sold for the month of November of Beamer Company using the data below.  Calculate the following:
a) Inventory valuation at the end of November
b) Calculate the cost of merchandise sold for November

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Question 2

Assume that three identical units of merchandise are purchased during October, as follows: $$\begin{array} { | l | l | l | l | l | } 
\hline & & & \text { Units } & \text { Cost } \
\hline \text { October } & 5 & \text { Purchase } & 1 & \$ 5 \
\hline & 12 & \text { Purchase } & 1 & 13 \
\hline & 28 & \text { Purchase } & 1 & 15 \
\hline \text { Total } & & & 3 & \$ 33 \
\hline
\end{array}$$ Assume one unit is sold on October 31 for $28. Determine cost of merchandise sold, gross profit, and ending inventory under the FIFO method.

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Question 3

Beginning inventory, purchases, and sales for an inventory item are as follows:  Assuming a perpetual inventory system and the first-in, first-out method, determine a) the cost of the merchandise sold for the September 30 sale and b) the inventory on September 30.

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Question 4

Stevens Company started the year with an inventory cost of $145,000. During the month of January, Stevens purchased inventory that cost $53,000. January sales totaled $140,000. Estimated gross profit is 35%. The estimated ending inventory as of January 31 is

Accepted Answer

Beginning inventory + Purchases - Cost of Goods Sold = Ending Inventory
$145,000 + $53,000 - ($140,000 / 1.35) = $106,963. Rounded to the nearest thousand, the estimated ending inventory would be $107,000. Therefore, the best choice is C.

Question 5

Complete the following table using the perpetual FIFO method of inventory flow.

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Question 6

Three identical units of merchandise were purchased during July, as follows:  Assume one unit sells on July 28 for $45.
Determine the gross profit, cost of merchandise sold, and ending inventory on July 31 using a) first-in, first-out, b) last-in, first-out, and c) average cost flow methods.

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Question 7

Three identical units of merchandise were purchased during March, as shown: $$\begin{array} { | c | l | l | l | } 
\hline & { \text { Steele Plate } } & \text { Units } & \text { Cost } \
\hline \text { Mar. } 3 & \text { Purchase } & 1 & \$ 830 \
\hline 10 & \text { Purchase } & 1 & 840 \
\hline 19 & \text { Purchase } & 1 & 880 \
\hline \text { Total } & & 3 & \$ 2,550 \
\hline
\end{array}$$ 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 and b) LIFO.

Accepted Answer

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Question 8

Assume that three identical units of merchandise were purchased during October, as follows: $$\begin{array} { | l | l | l | l | l | } 
\hline & & & \text { Units } & \text { Cost } \
\hline \text { October } & 5 & \text { Purchase } & 1 & \$ 5 \
\hline & 12 & \text { Purchase } & 1 & 13 \
\hline & 28 & \text { Purchase } & 1 & 15 \
\hline \text { Total } & & & \underline { 3 } & \$ 33 \
\hline
\end{array}$$ Assume one unit is sold on October 31 for $28. Determine cost of merchandise sold, gross profit, and ending inventory under the average cost method.

Accepted Answer

The answer of Assume that three identical units of merchandise...

Question 9

Three identical units of merchandise were purchased during May, as follows:
Assume that two units are sold on May 23 for $313 total. Determine the gross profit for May and ending inventory on May 31 using a) FIFO, b) LIFO, and c) average cost methods.

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Question 10

A company will most likely use an estimated method of determining inventory when

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Question 11

Safeguarding inventory from damage or theft is a primary objective for the control of inventory. If you were running a clothing store, name three specific controls you would implement to guard inventory from theft.

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Question 12

Assume that three identical units of merchandise were purchased during October, as follows: $$\begin{array} { | l | l | l | l | l | } 
\hline & & & \text { Units } & \text { Cost } \
\hline \text { October } & 5 & \text { Purchase } & 1 & \$ 5 \
\hline & 12 & \text { Purchase } & 1 & 13 \
\hline & 28 & \text { Purchase } & 1 & 15 \
\hline \text { Total } & & & 3 & \$ 33 \
\hline
\end{array}$$ Assume one unit is sold on October 31 for $28. Determine cost of merchandise sold, gross profit, and ending inventory under the LIFO method.

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Question 13

List three different security measures taken to safeguard inventory.

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Question 14

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 LIFO.

Accepted Answer

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Question 15

Beginning inventory, purchases, and sales for an inventory item are as follows: $\begin{array}{|l|l|}
\hline \text { Beginning inventory } & 150 \text { units } @ \$ 755 \
\hline \text { Sale } & 120 \text { units } \
\hline \text { First purchase } & 400 \text { units } @ \$ 785 \
\hline \text { Sale } & 200 \text { units } \
\hline \text { Second purchase } & 300 \text { units } @ \$ 805 \
\hline \text { Sale } & 290 \text { units } \
\hline
\end{array}$ The firm uses the perpetual inventory system and there are 240 units of the item on hand at the end of the year. What is the total cost of ending inventory according to LIFO?

Accepted Answer

The answer of Beginning inventory, purchases, and sales for an...

Question 16

Beginning inventory, purchases, and sales for an inventory item are as follows: $\begin{array}{|l|l|}
\hline \text { Beginning inventory } & 150 \text { units } @ \$ 755 \
\hline \text { Sale } & 120 \text { units } \
\hline \text { First purchase } & 400 \text { units } @ \$ 785 \
\hline \text { Sale } & 200 \text { units } \
\hline \text { Second purchase } & 300 \text { units } @ \$ 805 \
\hline \text { Sale } & 290 \text { units } \
\hline
\end{array}$ The firm uses the perpetual inventory system and there are 240 units of the item on hand at the end of the year. What is the total cost of ending inventory according to FIFO?

Accepted Answer

The answer of Beginning inventory, purchases, and sales for an...

Question 17

Beginning inventory, purchases, and sales for an inventory item are as follows:  Assuming a perpetual inventory system and the last-in, first-out method, determine a) the cost of the merchandise sold for the September 30 sale and b) the inventory on September 30.

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Question 18

If a company values inventory at the lower of cost or market, which of the following is the value of merchandise inventory on the balance sheet? Apply the lower-of-cost-or-market method to inventory as a whole. $$\begin{array} { | l | l | l | l | } 
\hline \text { Item } & \text { Inventory Quantity } & \text { Unit Cost Price } & \text { Unit Market Price } \
\hline \text { Product C } & 420 & \$ 6 & \$ 5 \
\hline \text { Product D } & 370 & 12 & 14 \
\hline
\end{array}$$

Accepted Answer

The lower-of-cost-or-market method values inventory at the lower of the cost or market price. For Product C, the market price is lower ($5), and for Product D, the cost price is lower ($12). Total value = (420 units * $5) + (370 units * $12) = $6,540.

Question 19

Beginning inventory, purchases, and sales data for tennis rackets are as follows: $$\begin{array} { | l | l | l | l | l | l | l | } 
\hline & \text { April 3 } & \text { Inventory } & & 12 \text { units } & @ & \$ 45 \
\hline & 11 & \text { Purchase } & & 13 \text { units } & @ & \$ 47 \
\hline & 14 & \text { Sale } & & 18 \text { units } & & \
\hline & 21 & \text { Purchase } & & 9 \text { units } & @ & \$ 60 \
\hline & 25 & \text { Sale } & & 10 \text { units } & & \
\hline
\end{array}$$ 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.

Accepted Answer

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Question 20

Determine the total value of the merchandise using net realizable value. $\begin{array}{|l|l|l|l|}
\hline \text { Item } &{\text { Quantity }} &{\text { Selling Price }} &{\text { Commission }} \
\hline \text { Doll } & 10 & \$ 7 & \$ 2 \
\hline \text { Horse } & 5 & 9 & 3 \
\hline
\end{array}$

Accepted Answer

The answer of Determine the total value of the merchandise...

Quiz 6: Inventories

Beginning inventory, purchases, and sales for an inventory item are as follows: Assuming a perpetual inventory system and the first-in, first-out method, determine a) the cost of the merchandise sold for the September 30 sale and b) the inventory on September 30.

Stevens Company started the year with an inventory cost of $145,000. During the month of January, Stevens purchased inventory that cost $53,000. January sales totaled $140,000. Estimated gross profit is 35%. The estimated ending inventory as of January 31 is

Complete the following table using the perpetual FIFO method of inventory flow.

Three identical units of merchandise were purchased during July, as follows: Assume one unit sells on July 28 for $45. Determine the gross profit, cost of merchandise sold, and ending inventory on July 31 using a) first-in, first-out, b) last-in, first-out, and c) average cost flow methods.

Three identical units of merchandise were purchased during May, as follows: Assume that two units are sold on May 23 for $313 total. Determine the gross profit for May and ending inventory on May 31 using a) FIFO, b) LIFO, and c) average cost methods.

A company will most likely use an estimated method of determining inventory when

Safeguarding inventory from damage or theft is a primary objective for the control of inventory. If you were running a clothing store, name three specific controls you would implement to guard inventory from theft.

List three different security measures taken to safeguard inventory.

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 LIFO.

Beginning inventory, purchases, and sales for an inventory item are as follows: Assuming a perpetual inventory system and the last-in, first-out method, determine a) the cost of the merchandise sold for the September 30 sale and b) the inventory on September 30.

Determine the total value of the merchandise using net realizable value. $\begin{array}{|l|l|l|l|}\hline \text { Item } &{\text { Quantity }} &{\text { Selling Price }} &{\text { Commission }} \\\hline \text { Doll } & 10 & \$ 7 & \$ 2 \\\hline \text { Horse } & 5 & 9 & 3 \\\hline\end{array}$