Post University - ACC 303 ACC 303 Chapter 8 Quiz 1)During periods when costs are rising and inventory quantities are stable, cost of goods sold will be: •          Higher under FIFO than LIFO

Post University - ACC 303

ACC 303 Chapter 8 Quiz

1)During periods when costs are rising and inventory quantities are stable, cost of goods sold will be:

•          Higher under FIFO than LIFO.

•          Higher under FIFO than average cost.

•          Lower under average cost than LIFO.

•          Lower under LIFO than FIFO.

2.         In a period when costs are falling and inventory quantities are stable, the lowest taxable income would be reported by using the inventory method of:

•          Weighted average.

•          LIFO.

•          Moving average.

•          FIFO.

3.         Alison's dress shop buys dresses from McGuire Manufacturing. Alison purchased dresses from McGuire on July 17 and received an invoice with a list price amount of $6,000 and payment terms of 1/10, n/30. Alison uses the net method to record purchases. Alison should record the purchase at:

•          $6,060.

•          $6,000.

•          $5,940.

•          $2,970.

4.         Fulbright Corp. uses the periodic inventory system. During its first year of operations, Fulbright made the following purchases (listed in chronological order of acquisition):

•          43 units at $99

•          74 units at $85

•          172 units at $53

Sales for the year totaled 273 units, leaving 16 units on hand at the end of the year.

Ending inventory using the average cost method is (Do not round unit cost calculation. Round your final answer to the nearest whole dollar amount):

•          $898.

•          $848.

•          $1,089.

•          $1,584.

5.         Fulbright Corp. uses the periodic inventory system. During its first year of operations, Fulbright made the following purchases (listed in chronological order of acquisition):

•          43 units at $108

•          70 units at $78

•          170 units at $69

Sales for the year totaled 268 units, leaving 15 units on hand at the end of the year. Ending inventory using the FIFO method is:

•          $1,157.

•          $1,035.

•          $1,620.

•          $1,085.

6.         Fulbright Corp. uses the periodic inventory system. During its first year of operations, Fulbright made the following purchases (listed in chronological order of acquisition):

•          44 units at $108

•          74 units at $71

•          171 units at $51

Sales for the year totaled 270 units, leaving 19 units on hand at the end of the year.

Ending inventory using the LIFO method is:

•          $2,052.

•          $1,231.

•          $1,019.

•          $969.

7.         Inventory records for Herb's Chemicals revealed the following: March 1, 2016, inventory: 1,000 gallons @ $7.20 = $7,200

Purchases:                   Sales:  

Mar. 10           600 gals @ $7.25        Mar. 5 400 gals

Mar. 16           800 gals @ $7.30        Mar. 14           700 gals

Mar. 23           600 gals @ $7.35        Mar. 20           500 gals

                        Mar. 26           700 gals

Ending inventory assuming LIFO in a periodic inventory system would be:

•          $5,040.

•          $5,055.

•          $5,075.

•          $5,135.

Beginning inventory in gallons           1,000

Gallons purchased (600 + 800 + 600) 2,000

Gallons sold (400 + 700 + 500 + 700) (2,300)

Ending inventory gallons        700

8.         Thompson TV and Appliance reported the following in its 2016 financial statements:

            2016

Sales    $420,000

Cost of goods sold:     

Inventory, January 1   82,000

Net purchases   340,000

Goods available for sale         422,000

Inventory, December 31             86,000

Cost of goods sold         336,000

Gross profit     $ 84,000

9.         Cinnamon Buns Co. (CBC) started 2016 with $52,000 of merchandise on hand. During 2016, $280,000 in merchandise was purchased on account with credit terms of 2/10, n/30. All discounts were taken. Purchases were all made f.o.b. shipping point. CBC paid freight charges of $9,000. Merchandise with an invoice amount of $4,000 was returned for credit. Cost of goods sold for the year was $316,000. CBC uses a perpetual inventory system.

Assuming CBC uses the gross method to record purchases, ending inventory would be:

•          $6,480.

•          $15,400.

•          $15,480.

•          $21,000.

10.       Cinnamon Buns Co. (CBC) started 2016 with $52,000 of merchandise on hand. During 2016, $280,000 in merchandise was purchased on account with credit terms of 2/10, n/30. All discounts were taken. Purchases were all made f.o.b. shipping point. CBC paid freight charges of $9,000. Merchandise with an invoice amount of $4,000 was returned for credit. Cost of goods sold for the year was $316,000. CBC uses a perpetual inventory system.

What is cost of goods available for sale, assuming CBC uses the gross method?

•          $312,480.

•          $326,000.

•          $331,480.

•          $337,000.