Florida Atlantic University - ACC 3131

Chapter 9

1)On July 8, a fire destroyed the entire merchandise inventory on hand of Larrenaga Wholesale Corporation. The following information is available:

What is the estimated inventory on July 8 immediately prior to the fire?

$141,020.

$246,800.

$538,200.

$245,800.

2.Data related to the inventories of Costco Medical Supply are presented below:

In applying the lower of cost and net realizable value rule, the inventory of rehab supplies would be valued at:

$151.

$148.

$155.

$116.

3.California Inc., through no fault of its own, lost an entire plant due to an earthquake on May 1, 2016. In preparing its insurance claim on the inventory loss, the company developed the following data: Inventory January 1, 2016, $360,000; sales and purchases from January 1, 2016, to May 1, 2016, $1,200,000 and $925,000, respectively. California consistently reports a 40% gross profit. The estimated inventory on May 1, 2016, is:

$566,400.

$530,000.

$565,000.

$625,000.

3.California Inc., through no fault of its own, lost an entire plant due to an earthquake on May 1, 2016. In preparing its insurance claim on the inventory loss, the company developed the following data: Inventory January 1, 2016, $360,000; sales and purchases from January 1, 2016, to May 1, 2016, $1,200,000 and $925,000, respectively. California consistently reports a 40% gross profit. The estimated inventory on May 1, 2016, is:

$566,400.

$530,000.

$565,000.

$625,000.

4.Data related to the inventories of Costco Medical Supply are presented below:

In applying the lower of cost and net realizable value rule, the inventory of surgical equipment would be valued at:

$169.

$259.

$222.

$197.

5.Data related to the inventories of Costco Medical Supply are presented below:

In applying the lower of cost and net realizable value rule, the inventory of surgical supplies would be valued at:

$94.

$74.

$115.

$128.

6.Data related to the inventories of Alpine Ski Equipment and Supplies is presented below:

In applying the lower of cost and net realizable value rule, the inventory of boots would be valued at:

$133,200.

$123,000.

$96,200.

$140,000.

7. Poppy Co. uses a periodic inventory system. Beginning inventory on January 1 was understated by $30,100, and its ending inventory on December 31 was understated by

$15,000. In addition, a purchase of merchandise costing $21,600 was incorrectly recorded as a $2,160 purchase. None of these errors were discovered until the next year. As a result, Poppy's cost of goods sold for this year was:

Understatement of beginning inventory understates (–) cost of goods sold and the understatement of ending inventory overstates (+) cost of goods sold. Also, the understatement of purchases understates (–) cost of goods sold:

8.Data related to the inventories of Alpine Ski Equipment and Supplies is presented below:

In applying the lower of cost and net realizable value rule, the inventory of supplies would be valued at:

$43,200.

$46,200.

$42,200.

$59,400.

9.Montana Co. has determined its year-end inventory on a FIFO basis to be $629,000. Information pertaining to that inventory is as follows:

$547,000.

$610,000.

$593,000.

10.Data related to the inventories of Costco Medical Supply are presented below:

In applying the lower of cost and net realizable value rule, the inventory of rehab equipment would be valued at:

$227.

$281.

$295.

$268.

11.Data related to the inventories of Alpine Ski Equipment and Supplies is presented below:

In applying the lower of cost and net realizable value rule, the inventory of apparel would be valued at:

$75,400.

$110,000.

$104,400.

$108,480.

12.