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What is the cost of goods sold using the FIFO method 1. Nichols Company had 500 units of “Dink” in its inventory at a cost of $5 each. It purchased, for $2,400, 300 more units of “Dink”. Nichols then sold 600 units at a selling price of $10 each, resulting in a gross profit of $2,700. The cost flow assumption used by Kingman a. is FIFO. b. is LIFO. c. is weighted average. d. cannot be determined from the informat ...

Other / Other 06 May 2016

Which inventory costing method most closely approximates current cost for ending inventory Use the following information for questions 1 and 2. During 2010, which was the first year of operations, Oswald Company had merchandise purchases of $985,000 before cash discounts. All purchases were made on terms of 2/10, n/30. Three-fourths of the items purchased were paid for within 10 days of purchase. All of the goods available had been ...

Other / Other 06 May 2016

What is Hay Company’s ending inventory Use the following information for 1 and 2 RF Company had January 1 inventory of $100,000 when it adopted dollar-value LIFO. During the year, purchases were $600,000 and sales were $1,000,000. December 31 inventory at year-end prices was $143,360, and the price index was 112. 1. What is RF Company’s ending inventory? a. $100,000. b. $128,000. c. $131,360. d. $143,360. 2. What ...

Other / Other 06 May 2016

What is a LIFO reserve 1. In a period of falling prices, which inventory method generally provides the lowest amount of net income? a. Average cost. b. Moving average. c. FIFO. d. Specific identification. 2. The International Accounting Standards Board requires the specific identification method in certain circumstances. Which of the following is likely to be a circumstance where the specific identification criteria can be met? a ...

Other / Other 06 May 2016

Which of the following is true regarding the use of LIFO for inventory valuation 1. Which of the following statements is not true as it relates to the dollar-value LIFO inven¬tory method? a. It is easier to erode LIFO layers using dollar-value LIFO techniques than it is with specific goods pooled LIFO. b. Under the dollar-value LIFO method, it is possible to have the entire inventory in only one pool. c. Several pools are commonly e ...

Other / Other 06 May 2016

What is consigned inventory 1. How is a significant amount of consignment inventory reported in the statement of financial position? a. The inventory is reported separately on the consignor's statement of financial position. b. The inventory is combined with other inventory on the consignor's statement of financial position. c. The inventory is reported separately on the consignee's statement of financial position. d. The inventory is ...

Other / Other 06 May 2016

How would the following be used in the calculation of this index number 1. On June 1, 2010, Penny Corp. sold merchandise with a list price of $20,000 to Linn on account. Penny allowed trade discounts of 30% and 20%. Credit terms were 2/15, n/40 and the sale was made f.o.b. shipping point. Penny prepaid $400 of delivery costs for Linn as an accommodation. On June 12, 2010, Penny received from Ison a remittance in full payment amounting to ...

Other / Other 06 May 2016

LIFO liquidations can occur frequently when using a specific-goods approach TRUE OR FALSE: 1. The LIFO perpetual method results in the same ending inventory and cost of goods sold amounts as under the LIFO periodic method. 2. The change in the LIFO Reserve from one period to the next is recorded as an adjustment to Cost of Goods Sold. 3. Many companies use LIFO for both tax and internal reporting purposes. 4. LIFO liquidatio ...

Other / Other 06 May 2016

IFRS requires manufacturers to disclose their inventory components TRUE OR FALSE: 1. A manufacturing concern would report the cost of units only partially processed as inventory in the statement of financial position. 2. Both merchandising and manufacturing companies normally have multiple inventory accounts. 3. IFRS requires manufacturers to disclose their inventory components on the statement of financial position or in relate ...

Other / Other 06 May 2016

Wynne had not recorded the transaction or included the merchandise in its inventory 1. Dolan Co. received merchandise on consignment. As of March 31, Dolan had recorded the transaction as a purchase and included the goods in inventory. The effect of this on its financial statements for March 31 would be a. no effect. b. net income was correct and current assets and current liabilities were overstated. c. net income, current assets, an ...

Other / Other 06 May 2016