Why Choose Us?
0% AI Guarantee
Human-written only.
24/7 Support
Anytime, anywhere.
Plagiarism Free
100% Original.
Expert Tutors
Masters & PhDs.
100% Confidential
Your privacy matters.
On-Time Delivery
Never miss a deadline.
1)The following information relates to inventory for Shoeless Joe Inc
1)The following information relates to inventory for Shoeless Joe Inc.
| Date | Quantity | Price | |
| March 1 | Beginning Inventory | 20 | $2 |
| March 7 | Purchase | 15 | 3 |
| March 11 | Sale | 25 | 7 |
| March 12 | Purchase | 20 | 4 |
At what amount would Shoeless report ending inventory using FIFO cost flow assumptions?
2. Ace Bonding Company purchased inventory on account. The inventory costs $2,000 and is expected to sell for $3,000. How should Ace record the purchase using a perpetual inventory system?
| A. | Inventory | 2,000 | |
| Accounts Payable | 2,000 | ||
| B. | Cost of Goods Sold | 2,000 | |
| Deferred Revenue | 1,000 | ||
| Sales Revenue | 3,000 | ||
| C. | Cost of Goods Sold | 2,000 | |
| Accounts Payable | 2,000 | ||
| D. | Cost of Goods Sold | 2,000 | |
| Gain | 1,000 | ||
| Accounts Payable | 3,000 |
3. Consider the following inventory data:
| Beginning inventory | $150,000 |
| Ending inventory | 100,000 |
| Purchases | 310,000 |
What is the average days in inventory for the year?
152.0 days.
101.4 days.
126.7 days.
111.7 days.
4. Given the information below, what is the gross profit?
| Sales revenue | $320,000 |
| Accounts receivable | 50,000 |
| Ending inventory | 100,000 |
| Cost of goods sold | 250,000 |
| Sales Returns | 20,000 |
|
$50,000. |
||
|
$250,000. |
||
|
$70,000. |
||
|
$220,000. |
5. The primary reason for the popularity of LIFO is that it gives:
|
Simplified recordkeeping. |
||
|
Better matching of physical flow and cost flow. |
||
|
A lower income tax obligation when inventory costs are rising. |
||
|
A simpler method to apply |
6. Ravens Inc. has net sales of $200,000, cost of goods sold of $120,000, selling expenses of $6,000, and nonoperating expenses of $2,000. What is the company's gross profit?
|
$72,000. |
||
|
$76,000. |
||
|
$74,000. |
||
|
$80,000. |
7. Inventory records for Marvin Company revealed the following:
| Date | Transaction | Number of Units | Unit Cost |
| Mar. 1 | Beginning inventory | 1,000 | $7.20 |
| Mar. 10 | Purchase | 600 | 7.25 |
| Mar. 16 | Purchase | 800 | 7.30 |
| Mar. 23 | Purchase | 600 | 7.35 |
Marvin sold 2,300 units of inventory during the month. Ending inventory assuming FIFO would be:
|
$5,140. |
||
|
$5,060. |
||
|
$5,050. |
||
|
$5,080. |
Expert Solution
Answer:
| 1 | Ending inventory = ($3 ×10) + ($4 ×20) = $110. | |||
| 2 | A. | Inventory | 2000 | |
| Accounts Payable | 2000 | |||
| 3 | 126.7 days. | |||
| Average days in inventory = 365/2.88 = 126.7 | ||||
| Cost of goods sold = $150,000 + $310,000 - $100,000 = $360,000 | ||||
| Inventory turnover ratio = $360,000 [($150,000 + $100,000)/2)] = 2.88. | ||||
| 4 | Gross Profit | $50,000 | ||
| Sales revenue | $3,20,000 | |||
| Less: Sales Retuns | $20,000 | |||
| Net sale | $3,00,000 | |||
| Less: COGS | $2,50,000 | |||
| Gross Profit | $50,000 | |||
| 5 | A lower income tax obligation when inventory costs are rising. | |||
| 6 | Gross Profit | $80,000 | ||
| Net sale | $2,00,000 | |||
| Less: COGS | $1,20,000 | |||
| Gross Profit | $80,000 | |||
| 7 | Ending inventory = ($7.35 ×600) + ($7.30 ×100) = $5,140 | |||
Archived Solution
You have full access to this solution. To save a copy with all formatting and attachments, use the button below.
For ready-to-submit work, please order a fresh solution below.
