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Exam 6: Inventories

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Question 91

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Inventories are estimated

A) more frequently under a periodic inventory system than a perpetual inventory system.
B) using the wholesale inventory method.
C) more frequently under a perpetual inventory system than the periodic inventory system.
D) using the net method.

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Question 92

Multiple Choice

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Eneri Company's inventory records show the following data: A physical inventory on December 31 shows 4,000 units on hand.Eneri sells the units for $13 each.The company has an effective tax rate of 20%.Eneri uses the periodic inventory method.What is the cost of goods available for sale?

A) $169,200
B) $178,000
C) $206,000
D) $325,000

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Question 93

Multiple Choice

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The lower-of-cost-or-net realizable value basis of valuing inventories is an example of

Clooney Department Store estimates inventory by using the retail inventory method.The following information was developed: The estimated cost of the ending inventory is

Companies adopt different cost flow methods for each of the following reasons except

Inventory items on an assembly line in various stages of production are classified as

If inventories are valued using the LIFO cost flow assumption, they should not be classified as a current asset on the balance sheet.

The first-in, first-out (FIFO) inventory method results in an ending inventory valued at the most recent cost.

Eneri Company's inventory records show the following data: A physical inventory on December 31 shows 4,000 units on hand.Eneri sells the units for $13 each.The company has an effective tax rate of 20%.Eneri uses the periodic inventory method.The weighted-average cost per unit is

A company purchased inventory as follows: The weighted-average unit cost for the inventory is

In a period of inflation, the cost flow method that results in the lowest income taxes is the

Inventory turnover is calculated as cost of goods sold divided by ending inventory.

Under generally accepted accounting principles, management has the choice of physically counting inventory on hand at the end of the year or using the gross profit method to estimate the ending inventory.

Which one of the following inventory methods is often impractical to use?

Goods that have been purchased FOB destination but are in transit, should be excluded from a physical count of goods.

Partridge Bookstore had 500 units on hand at January 1, costing $9 each.Purchases and sales during the month of January were as follows: Partridge does not maintain perpetual inventory records.According to a physical count, 365 units were on hand at January 31. The cost of the inventory at January 31, under the FIFO method is: