Question Details

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
a.	$10,976.
b.	$11,368.
c.	$11,376.
d.	$11,196.

	2.	Groh Co. recorded the following data pertaining to raw material X during January 2010:
					     Units		
Date		Received	 Cost		Issued	On Hand
1/1/10	Inventory		$8.00		3,200
1/11/10	Issue			1,600	1,600
1/22/10	Purchase	4,000	$9.40		5,600
The moving-average unit cost of X inventory at January 31, 2010 is
a.	$8.70.
b.	$8.85.
c.	$9.00.
d.	$9.40.

3.	During periods of rising prices, a perpetual inventory system would result in the same dollar amount of ending inventory as a periodic inventory system under which of the following inventory cost flow methods?
		FIFO	Average
	a.	Yes	No
	b.	Yes	Yes
	c.	No	Yes
	d.	No	No

	4.	Hite Co. was formed on January 2, 2010, to sell a single product. Over a two-year period, Hite's acquisition costs have increased steadily. Physical quantities held in inventory were equal to three months' sales at December 31, 2010, and zero at December 31, 2011. Assuming the periodic inventory system, the inventory cost method which reports the highest amount of each of the following is
		Inventory	Cost of Sales
		December 31, 2010		2011	
	a.	Average	FIFO
	b.	Average	Average
	c.	FIFO	FIFO
	d.	FIFO	Average

	5.	Keck Co. had 450 units of product A on hand at January 1, 2010, costing $42 each. Purchases of product A during January were as follows:
		  Date		Units	Unit Cost
		Jan. 10	600	$44
		18	750	46
		28	300	48
		A physical count on January 31, 2010 shows 600 units of product A on hand. The cost of the inventory at January 31, 2010 under the FIFO method is
a.	$25,500.
b.	$26,700.
c.	$28,200.
d.	$24,600.
6.	When the double extension approach to the dollar-value LIFO inventory cost flow method is used, the inventory layer added in the current year is multiplied by an index number. How would the following be used in the calculation of this index number ?
		Ending inventory	Ending inventory
		at current year cost	at base year cost
a.		Numerator			Denominator
b.		Numerator			Not used
c.		Denominator			Numerator
d.		Not used			Denominator

7.	Farr Co. adopted the dollar-value LIFO inventory method on December 31, 2010. Farr's entire inventory constitutes a single pool. On December 31, 2010, the inventory was $320,000 under the dollar-value LIFO method. Inventory data for 2011 are as follows:
		12/31/11 inventory at year-end prices	$440,000
		Relevant price index at year end (base year 2010)	110
		Using dollar value LIFO, Farr's inventory at December 31, 2011 is
a.	$352,000.
b.	$408,000.
c.	$400,000.
d.	$440,000.




Business Management Assignment Help, Business Management Homework help, Business Management Study Help, Business Management Course Help