Question Details

Kershaw Bookstore had 600 units on hand 


1.	Kershaw Bookstore had 600 units on hand at January 1, costing €18 each. Purchases and sales during the month of January were as follows:
Date		Purchases		Sales
Jan.    14		450 @ €28
17	300 @ €20
25	300 @ €22
29	300 @ €32
Kershaw does not maintain perpetual inventory records. According to a physical count, 450 units were on hand at January 31.
The cost of the inventory at January 31, under the LIFO method is:
a.	€1,200.
b.	€8,100.
c.	€9,300.
d.	€9,600.

2.	The LIFO inventory method assumes that the cost of the latest units purchased are
a.	the last to be allocated to cost of goods sold.
b.	the first to be allocated to ending inventory.
c.	the first to be allocated to cost of goods sold.
d.	not allocated to cost of goods sold or ending inventory.

	3.	A company just starting business made the following four inventory purchases in June:
June	1	150 units	¥   5,200
June	10	200 units	7,800
June	15	200 units	8,400
June	28	150 units	     6,600
			¥28,000
A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand. Using the LIFO inventory method, the value of the ending inventory on June 30 is
a.	¥7,150.
b.	¥8,700.
c.	¥19,300.
d.	¥20,850.

4.	Graham Company uses a periodic inventory system. Details for the inventory account for the month of January, 2011 are as follows:
	Units	Per unit price	Total
Balance, 1/1/11	300	$5.00	$1,500
Purchase, 1/15/11	150	5.30	795
Purchase, 1/28/11	150	5.50	825
An end of the month (1/31/11) inventory showed that 180 units were on hand. If the company uses LIFO, what is the value of the ending inventory?
a.	$780
b.	$900
c.	$984
d.	$2,220

5.	Holliday Company's inventory records show the following data:
		Units	Unit Cost
Inventory, January 1		5,000	₤4.50
Purchases:June 18		4,500	4.00
	November 8	3,000	3.50
A physical inventory on December 31 shows 2,000 units on hand. Holliday sells the units for ₤6 each. The company has an effective tax rate of 20%. Holliday uses the periodic inventory method. Under the LIFO method, cost of goods sold is
a.	₤5,250.
b.	₤9,000.
c.	₤42,000.
d.	₤44,000.




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