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#### 1)Determine the ending inventory using the periodic inventory system and the LIFO inventory method:   Date Item Units   Cost   Total   June 1 Beginning Inventory 6   \$5   \$30   June 12 Purchase 10   \$6   \$60   June 18 Purchase 8   \$7   \$56     Totals 24   -   \$146     Assume that 18 units were sold at a sales price of \$14

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1)Determine the ending inventory using the periodic inventory system and the LIFO inventory method:

 Date Item Units Cost Total June 1 Beginning Inventory 6 \$5 \$30 June 12 Purchase 10 \$6 \$60 June 18 Purchase 8 \$7 \$56 Totals 24 - \$146

Assume that 18 units were sold at a sales price of \$14.

1. \$56.
2. \$30.
3. \$146.
4. \$60.

 LIFO @ \$7 and 10 @ \$6 → × 7 = 56 and 10 × 6 = 60 → 56 + 60 = 116 → 146 – 116 = 30

2 Determine the ending inventory using the periodic inventory system and the weighted average cost method (rounded to the closest cent):

 Date Item Units Cost Total June 1 Beginning Inventory 6 \$5 \$30 June 12 Purchase 10 \$6 \$60 June 18 Purchase 8 \$7 \$56 Totals 24 - \$146

Assume that 18 units were sold at a sales price of \$14.

1. \$145.92.
2. \$109.44.
3. \$56.00.
4. \$36.48.

 Weighted Average ÷ 24 ≈ 6.10 → 6.10 × 18 = 109.8 → – 109.8 = 36.2 → 36.2 ≈ 36.48

3 Determine the cost of merchandise sold for the transaction on October 25 using the perpetual inventory system and the FIFO method.

 Date Item Units Cost Total Beginning Inventory 5 \$10 \$50 October 4 Purchase 8 \$11 \$88 October 8 Sale 6 October 20 Purchase 15 \$12 \$180 October 25 Sale 12

1. \$105.
2. \$138.
3. \$137.
4. \$180.

 Date Sale/Cost of Merchandise Purchase Inventory 5 × \$10 = \$50 October 4 8 × \$11 = \$88 5 × \$10 = \$50 8 × \$11 = \$88 October 8 5 × \$10 = \$50 1 × \$11 = \$11 7 × \$11 = \$77 October 20 15 × \$12 = \$180 7 × \$11 = \$77 15 × \$12 = \$180 October 25 7 × \$11 = \$77 5 × \$12 = \$60 10 × \$12 = \$120 TOTAL \$77 + \$60 = \$137 0 120

1. The cost method that will yield the highest taxable income during times of inflation is the
1. Specific identification inventory cost method.
2. Weighted average inventory cost method.
3. LIFO inventory cost method.
4. FIFO inventory cost method.

1. Number of days' sales in inventory is calculated as
1. Average Inventory Average Daily Cost of Merchandise Sold .
2. Sales (net)Average Daily Cost of Merchandise Sold .
3. Sales (net)365 days .
4. Cost of Merchandise SoldAverage Inventory .

1. Determine the ending inventory assuming that only one item was sold on March 24 for \$14 using the LIFO cost flow method.

 Date Item Units Cost Total March 3 Purchase 1 \$4 \$4 March 8 Purchase 1 \$6 \$6 March 22 Purchase 1 \$8 \$8 Totals 3 \$18

1. \$15.
2. \$16.
3. \$14.
4. \$10.

 LIFO 1 @ \$8 → 1 × 8 = 8 → 18 – 8 = 10

1. The inventory is added to the inventory records after three documents are reconciled. One of those documents is the
1. Sales invoice.
2. Receiving report.
3. Company check.
4. Sales receipt.

1. Several controls are used to safeguard inventory, and one of those is to
1. Allow one employee to order inventory, check in shipments, and stock shelves with inventory to prevent errors.
2. Hire security guards.
3. Keep low-priced inventory behind lock and key.
4. Allow all employees access to the materials warehouse.

1. The cost method that will yield an ending inventory value that is somewhere between possible high and low prices using traditional costing methods is the
1. LIFO inventory cost method.
2. Specific identification inventory cost method.
3. Weighted average inventory cost method.
4. FIFO inventory cost method.

1. A physical inventory is used to
1. All of these choices are correct.
2. Investigate major errors.
3. Help prevent employee thefts or misuses of inventory.
4. Compare physical inventory to book inventory.

1. Determine the gross profit using the periodic inventory system and the FIFO inventory method:

 Date Item Units Cost Total June 1 Beginning Inventory 6 \$5 \$30 June 12 Purchase 10 \$6 \$60 June 18 Purchase 8 \$7 \$56 Totals 24 - \$146

Assume that 18 units were sold at a sales price of \$14.

1. \$148.
2. \$252.
3. \$104.
4. \$152.

 Gross profit 6 @ \$5, 10 @ \$6, and 2 @ \$7 → 2 × \$7 = 14 → 30 + 60 + 14 = 104 → 18 × 14 = 252 → 252 – 104 = 148

1. Determine the cost of merchandise sold for the transaction on October 8 using the perpetual inventory system and the LIFO method.

 Date Item Units Cost Total Beginning Inventory 5 \$10 \$50 October 4 Purchase 8 \$12 \$96 October 8 Sale 6 October 20 Purchase 15 \$14 \$210 October 25 Sale 12

1. \$62.
2. \$72.
3. \$96.
4. \$210.

1. Determine the ending inventory assuming that only one item was sold on March 24 for \$14 using the FIFO cost flow method.

 Date Item Units Cost Total March 3 Purchase 1 \$6 \$6 March 8 Purchase 1 \$7 \$7 March 22 Purchase 1 \$8 \$8 Total 3 \$21

1. \$14.
2. \$13.
3. \$15.
4. \$7.

 FIFO 1 @ \$6 → 21 – 6 = 15

1. Financial statement data for December 31, 20, for Alpine Company is shown below:

 Cost of merchandise sold \$1,050,000 Inventories: Beginning of year \$380,000 End of year \$320,000

Determine inventory turnover for 2014.

1. 3.0.
2. 2.8.
3. 1.2.
4. 3.3.

 Inventory turnover 1,050,000[380,000+320,000÷2]=3

1. During the taking of the physical inventory, the company inadvertently counted its inventory as \$89,000 instead of the correct amount of \$87,000. Indicate the effect of the misstatement on the balance sheet of the current year.
1. Owner's equity is overstated by \$2,000.
2. Liabilities are overstated by \$2,000.
3. Owner's equity is understated by \$2,000.
4. Assets are understated by \$2,000.

 Balance sheet error 89,000 – 87,000 = 2,000

1. Determine the gross profit assuming that only one item was sold on March 24 for \$14 using the weighted average cost flow method.

 Date Item Units Cost Total March 3 Purchase 1 \$4 \$4 March 8 Purchase 1 \$6 \$6 March 22 Purchase 1 \$8 \$8 Totals 3 \$18

1. \$8.
2. \$6.
3. \$14.
4. \$7.

 Gross profit

1. When the weighted average cost method is used for the perpetual inventory system, a weighted average unit cost for each item is determined
1. None of these choices are correct.
2. at the beginning of the time period.
3. each time a purchase is made.
4. at the end of the time period.

1. Financial statement data for December 31, 2014, for Alpine Company is shown below:

 Cost of merchandise sold \$1,050,000 Inventories: Beginning of year \$380,000 End of year \$320,000

Determine the number of days' sales in inventory for 2014.

1. 118.8 days.
2. 111.2 days.
3. 132.1 days.
4. 121.7 days.

 Number of days' sales in inventory [380,000+320,000÷2](1,050,000÷365)≈121.66→121.7

1. The cash, land, inventory, and accounts receivable are listed in the balance sheet. Which of the following is the correct order they should be found on the balance sheet?
1. Inventory, accounts receivable, cash, land.
2. Cash, inventory, accounts receivable, land.
3. Cash, accounts receivable, inventory, land.
4. Land, inventory, accounts receivable, cash.

1. The cost method that will yield an ending inventory that is closer to current prices is the
1. Weighted average inventory cost method.
2. LIFO inventory cost method.
3. FIFO inventory cost method.
4. Specific identification inventory cost method.

1. During the taking of the physical inventory, the company inadvertently counted its inventory as \$34,000 instead of the correct amount of \$43,000. Indicate the effect of the misstatement on the balance sheet of the current year.
1. Owner's equity is overstated by \$9,000.
2. Liabilities are overstated by \$9,000.
3. Assets are overstated by \$9,000.
4. Assets are understated by \$9,000.

 Balance sheet error 34,000 – 43,000 = 9,000

## 2.83 USD

### Option 2

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