When applying the lower-of-cost-or-market rule to inventory valuation according to International Financial Reporting Standards, market always is:
A....
Sullivan Corporation. has determined its year-end inventory on a FIFO basis to be $500,000. Information pertaining to that inventory is as follows:
Sullivan Corporation. has determined its year-end inventory on a FIFO basis to be $500,000.Information pertaining to that inventory is as follows:
selling...
Sullivan Corporation. has determined its year-end inventory on a FIFO basis to be $500,000. Information pertaining to that inventory is as follows:
Sullivan Corporation. has determined its year-end inventory on a FIFO basis to be $500,000.Information pertaining to that inventory is as follows:
selling...
On July 10, 2011, Johnson Corporation signed a purchase commitment to purchase inventory for $200,000 on or before February 15, 2012. The company's fiscal year-end is December 31. The contract was exercised on February 1, 2012 and the inventory was purchased for cash at the contract price. On the purchase date of February 1, the market price of the inventory was $210,000. The market price of the inventory on December 31, 2011, was $180,000. The company uses a perpetual inventory system. At what amount will Johnson record the inventory purchased on February 1, 2012?
On July 10, 2011, Johnson Corporation signed a purchase commitment to purchase inventory for $200,000 on or before February 15, 2012. The company's...
On July 10, 2011, Johnson Corporation signed a purchase commitment to purchase inventory for $200,000 on or before February 15, 2012. The company's fiscal year-end is December 31. The contract was exercised on February 1, 2012 and the inventory was purchased for cash at the contract price. On the purchase date of February 1, the market price of the inventory was $210,000. The market price of the inventory on December 31, 2011, was $180,000. The company uses a perpetual inventory system. How much loss on purchase commitment will Johnson recognize in 2011?
On July 10, 2011, Johnson Corporation signed a purchase commitment to purchase inventory for $200,000 on or before February 15, 2012. The company's...
Prunedale Co. uses a periodic inventory system. Beginning inventory on January 1 was understated by $30,000, and its ending inventory on December 31 was understated by $17,000. In addition, a purchase of merchandise costing $20,000 was incorrectly recorded as a $2,000 purchase. None of these errors were discovered until the next year. As a result, Prunedale's cost of goods sold for this year was:
Prunedale Co. uses a periodic inventory system. Beginning inventory on January 1 was understated by $30,000, and its ending inventory on December 31...
Prunedale Co. uses a periodic inventory system. Beginning inventory on January 1 was overstated by $32,000, and its ending inventory on December 31 was understated by $62,000. These errors were not discovered until the next year. As a result, Prunedale cost of goods sold for this year was:
Prunedale Co. uses a periodic inventory system. Beginning inventory on January 1 was overstated by $32,000, and its ending inventory on December 31...
Retrospective treatment of prior years' financial statements is required when there is a change from:
Retrospective treatment of prior years' financial statements is required when there is a change from:
A. Average cost to FIFO.
B. FIFO to average...
Harlequin Co. has used the dollar-value LIFO retail method since it began operations in early 2010 (its base year). Its beginning inventory for 2011 was $36,000 at cost and $72,000 at retail prices. At the end of 2011, it computed its estimated ending inventory at retail to be $120,000. Assuming its cost-to-retail percentage for 2011 transactions was 60%, what is the inventory balance that Harlequin Co. would report in its 12/31/11 balance sheet?
Harlequin Co. has used the dollar-value LIFO retail method since it began operations in early 2010 (its base year). Its beginning inventory for 2011...
To determine the value of a LIFO layer, using dollar-value LIFO retail:
To determine the value of a LIFO layer, using dollar-value LIFO retail:
A.Divide the LIFO layer by the layer-year price index and multiply by the...
To determine if an increase in the dollar value of inventory is due to increased quantities, using dollar value LIFO retail:
To determine if an increase in the dollar value of inventory is due to increased quantities, using dollar value LIFO retail:
A. Compare beginning...
To use the dollar-value LIFO retail method for inventory, the second step is to determine the estimated:
To use the dollar-value LIFO retail method for inventory, the second step is to determine the estimated:
A. Ending inventory at current year retail...
To use the dollar-value LIFO retail method for inventory, the first step is to:
To use the dollar-value LIFO retail method for inventory, the first step is to:
A. Determine the estimated ending inventory at current year retail...
Using the dollar-value LIFO retail method for inventory:
Using the dollar-value LIFO retail method for inventory:
A. Is the same as dollar-value LIFO, except that the inventory is measured at retail, rather...
Clarabell Inc. uses the conventional retail method to estimate ending inventory. Cost data for the most recent quarter is shown below:
Clarabell Inc. uses the conventional retail method to estimate ending inventory. Cost data for the most recent quarter is shown below:
(cost, retail)
beginning...
Clarabell Inc. uses the conventional retail method to estimate ending inventory. Cost data for the most recent quarter is shown below:
Clarabell Inc. uses the conventional retail method to estimate ending inventory. Cost data for the most recent quarter is shown below:
(cost, retail)
beginning...
Willie Nelson's Boots uses the conventional retail method to estimate ending inventory. Cost data for the most recent quarter is shown below:
Willie Nelson's Boots uses the conventional retail method to estimate ending inventory. Cost data for the most recent quarter is shown below:
(cost,...
Willie Nelson's Boots uses the conventional retail method to estimate ending inventory. Cost data for the most recent quarter is shown below:
Willie Nelson's Boots uses the conventional retail method to estimate ending inventory. Cost data for the most recent quarter is shown below:
(cost,...
Cloverdale, Inc. uses the conventional retail inventory method to account for inventory. The following information relates to current year's operations:
Cloverdale, Inc. uses the conventional retail inventory method to account for inventory. The following information relates to current year's operations:
(cost,...
The conventional retail inventory method is based on:
The conventional retail inventory method is based on:
A. Average cost
B. LIFO cost
C. Average, lower of cost or market
D. LIFO, lower of cost or...
When computing the cost-to-retail percentage for the average cost retail method, included in the denominator are:
When computing the cost-to-retail percentage for the average cost retail method, included in the denominator are:
A. Net markups and net markdowns.
B....
Data below for the year ended December 31, 2011, relates to Houdini Inc. Houdini started business January 1, 2011, and uses the LIFO retail method to estimate ending inventory.
Data below for the year ended December 31, 2011, relates to Houdini Inc. Houdini started business January 1, 2011, and uses the LIFO retail method to...
Data below for the year ended December 31, 2011, relates to Houdini Inc. Houdini started business January 1, 2011, and uses the LIFO retail method to estimate ending inventory.
Data below for the year ended December 31, 2011, relates to Houdini Inc. Houdini started business January 1, 2011, and uses the LIFO retail method to...
Data below for the year ended December 31, 2011, relates to Houdini Inc. Houdini started business January 1, 2011, and uses the LIFO retail method to estimate ending inventory.
Data below for the year ended December 31, 2011, relates to Houdini Inc. Houdini started business January 1, 2011, and uses the LIFO retail method to...
Benny's Bed Co. uses a periodic inventory system and the average cost retail method to estimate ending inventory and cost of goods sold. The following data is available from the company records for the month of September 2011.
Benny's Bed Co. uses a periodic inventory system and the average cost retail method to estimate ending inventory and cost of goods sold. The following...
Benny's Bed Co. uses a periodic inventory system and the average cost retail method to estimate ending inventory and cost of goods sold. The following data is available from the company records for the month of September 2011.
Benny's Bed Co. uses a periodic inventory system and the average cost retail method to estimate ending inventory and cost of goods sold. The following...
Marilee's Electronics uses a periodic inventory system and the average cost retail method to estimate ending inventory and cost of goods sold. The following data is available from the company records for the month of June 2011:
Marilee's Electronics uses a periodic inventory system and the average cost retail method to estimate ending inventory and cost of goods sold. The following...
Marilee's Electronics uses a periodic inventory system and the average cost retail method to estimate ending inventory and cost of goods sold. The following data is available from the company records for the month of June 2011:
Marilee's Electronics uses a periodic inventory system and the average cost retail method to estimate ending inventory and cost of goods sold. The following...
Hawkeye Auto Parts uses the retail method to estimate inventories. Data for the first six months of 2011 include: beginning inventory at cost and retail were $55,000 and $100,000, net purchases at cost and retail were $785,000 and $1,300,000, and sales during the first six months totaled $800,000. The estimated inventory at June 30, 2011, would be:
Hawkeye Auto Parts uses the retail method to estimate inventories. Data for the first six months of 2011 include: beginning inventory at cost and retail...
Lacy's Linen Mart uses the retail method to estimate inventories. Data for the first six months of 2011 include: beginning inventory at cost and retail were $60,000 and $120,000, net purchases at cost and retail were $312,000 and $480,000, and sales during the first six months totaled $490,000. The estimated inventory at June 30, 2011, would be:
Lacy's Linen Mart uses the retail method to estimate inventories. Data for the first six months of 2011 include: beginning inventory at cost and retail...
Harvey's Junk Jewelry started business January 1, 2011, and uses the LIFO retail method to estimate ending inventory. Listed below is data accumulated for the year ended December 31, 2011:
Harvey's Junk Jewelry started business January 1, 2011, and uses the LIFO retail method to estimate ending inventory. Listed below is data accumulated...
Harvey's Junk Jewelry started business January 1, 2011, and uses the LIFO retail method to estimate ending inventory. Listed below is data accumulated for the year ended December 31, 2011:
Harvey's Junk Jewelry started business January 1, 2011, and uses the LIFO retail method to estimate ending inventory. Listed below is data accumulated...
Harvey's Junk Jewelry started business January 1, 2011, and uses the LIFO retail method to estimate ending inventory. Listed below is data accumulated for the year ended December 31, 2011:
Harvey's Junk Jewelry started business January 1, 2011, and uses the LIFO retail method to estimate ending inventory. Listed below is data accumulated...
Fad City sells novel clothes which are subject to a great deal of price volatility. A recent item which cost $20 was marked up $12, marked down for a sale by $6 and then had a markdown cancellation of $3. The latest selling price is:
Fad City sells novel clothes which are subject to a great deal of price volatility. A recent item which cost $20 was marked up $12, marked down for...
In determining the cost-to-retail percentage for the current year:
In determining the cost-to-retail percentage for the current year:
A. Net markups are included.
B. Net markdowns are excluded.
C. Net sales are included.
D....
Under the LIFO retail method, which of the following are not included in the denominator of the cost-to- retail conversion percentage?
Under the LIFO retail method, which of the following are not included in the denominator of the cost-to- retail conversion percentage?
A. Freight-in
B....
Under the conventional retail method, which of the following are not included in the denominator of the current period cost-to-retail conversion percentage?
Under the conventional retail method, which of the following are not included in the denominator of the current period cost-to-retail conversion percentage?
A....
Under the retail inventory method:
Under the retail inventory method:
A. A company measures inventory on its balance sheet by converting retail prices to cost.
B. A company measures...
In calculating the cost-to-retail percentage for the retail method, the retail column will not include:
In calculating the cost-to-retail percentage for the retail method, the retail column will not include:
A. Purchases.
B. Purchase returns.
C. Abnormal...
Included in the computation of the cost-to-retail percentage for the LIFO retail method are:
Included in the computation of the cost-to-retail percentage for the LIFO retail method are:
A. Net markups and net markdowns.
B. Neither net markups...
When computing the cost-to-retail percentage for the conventional retail method, included in the denominator are:
When computing the cost-to-retail percentage for the conventional retail method, included in the denominator are:
A. Net markups and net markdowns.
B....
Coastal Shores Inc. (CSI) was completely destroyed by Hurricane Fred on August 5, 2011. At January 1, CSI reported an inventory of $170,000. Sales from January 1, 2011, to August 5, 2011, totaled $480,000 and purchases totaled $195,000 during that time. CSI consistently marks up its products 60% over cost to arrive at a selling price. The estimated inventory loss due to Hurricane Fred would be:
Coastal Shores Inc. (CSI) was completely destroyed by Hurricane Fred on August 5, 2011. At January 1, CSI reported an inventory of $170,000. Sales from...
Howard's Supply Co. suffered a fire loss on April 20, 2011. The company's last physical inventory was taken on January 30, 2011, at which time the inventory totaled $220,000. Sales from January 30 to April 20 were $600,000 and purchases during that time were $450,000. Howard's consistently reports a 30% gross profit. The estimated inventory loss is:
Howard's Supply Co. suffered a fire loss on April 20, 2011. The company's last physical inventory was taken on January 30, 2011, at which time the inventory...
So. California Inc., through no fault of its own, lost an entire plant due to an earthquake on May 1, 2011. In preparing their insurance claim on the inventory loss, they developed the following data: Inventory January 1, 2011, $300,000; sales and purchases from January 1, 2011, to May 1, 2011, $1,300,000 and $875,000, respectively. So. California consistently reports a 40% gross profit. The estimated inventory on May 1, 2011, is:
So. California Inc., through no fault of its own, lost an entire plant due to an earthquake on May 1, 2011. In preparing their insurance claim on the...
On July 8, a fire destroyed the entire merchandise inventory on hand of Larrenaga Wholesale Corporation. The following information is available:
On July 8, a fire destroyed the entire merchandise inventory on hand of Larrenaga Wholesale Corporation. The following information is available:
sales...
When using the gross profit method to estimate ending inventory, it is not necessary to know:
When using the gross profit method to estimate ending inventory, it is not necessary to know:
A. Beginning inventory.
B. Net purchases.
C. Cost of...
Data related to the inventories of Alpine Ski Equipment and Supplies is presented below:
Data related to the inventories of Alpine Ski Equipment and Supplies is presented below:
(skis, boots, apparel, supplies)
selling price: (180,000;...
Data related to the inventories of Alpine Ski Equipment and Supplies is presented below:
Data related to the inventories of Alpine Ski Equipment and Supplies is presented below:
(skis, boots, apparel, supplies)
selling price: (180,000;...
Data related to the inventories of Alpine Ski Equipment and Supplies is presented below:
Data related to the inventories of Alpine Ski Equipment and Supplies is presented below:
(skis, boots, apparel, supplies)
selling price: (180,000;...
Data related to the inventories of Alpine Ski Equipment and Supplies is presented below:
Data related to the inventories of Alpine Ski Equipment and Supplies is presented below:
(skis, boots, apparel, supplies)
selling price: (180,000; 150,000;...
Data related to the inventories of Costco Medical Supply is presented below:
Data related to the inventories of Costco Medical Supply is presented below:
(surgical equipment, surgical supplies, rehab equipment, rehab supplies)
selling...
Data related to the inventories of Costco Medical Supply is presented below:
Data related to the inventories of Costco Medical Supply is presented below:
(surgical equipment, surgical supplies, rehab equipment, rehab supplies)
selling...
Data related to the inventories of Costco Medical Supply is presented below:
Data related to the inventories of Costco Medical Supply is presented below:
(surgical equipment, surgical supplies, rehab equipment, rehab supplies)
selling...
Data related to the inventories of Costco Medical Supply is presented below:
Data related to the inventories of Costco Medical Supply is presented below:
(surgical equipment, surgical supplies, rehab equipment, rehab supplies)
selling...
Montana Co. has determined its year-end inventory on a FIFO basis to be $600,000. Information pertaining to that inventory is as follows:
Montana Co. has determined its year-end inventory on a FIFO basis to be $600,000. Information pertaining to that inventory is as follows:
Selling price----------620,000
disposal...
An argument against the use of LCM is its lack of:
An argument against the use of LCM is its lack of:
A. Relevance.
B. Reliability.
C. Consistency.
D. Objectivity.
Answer: C. Co...
Masterlink Co., in applying the lower of cost or market method, reports its inventory at net realizable value. Which of the following statements is correct?
Masterlink Co., in applying the lower of cost or market method, reports its inventory at net realizable value. Which of the following statements is...
In applying LCM, market cannot be:
In applying LCM, market cannot be:
A. Less than net realizable value minus a normal profit margin.
B. Net realizable value less reasonable...
In applying LCM, market cannot be:
In applying LCM, market cannot be:
A. Less than net realizable value.
B. Greater than the normal profit.
C. Less than the normal profit...
Retail Inventory Method Questions with Answers.
What are Net Additional Markups?
Answer: A net increase in the original selling price.
What are the steps in Basic Retail Method?
Answer:
#...
What is the effect of net markup on the cost-retail ratio when using the conservative retail method?
What is the effect of net markup on the cost-retail ratio when using the conservative retail method?
A. Increases the cost-retail ratio
B. No effect...
What is the effect of freight in on the cost-retail ratio when using the conservative retail method?
What is the effect of freight in on the cost-retail ratio when using the conservative retail method?
A. Increases the cost retail ratio
B. No effect...
An inventory method which is designed to approximate inventory valuation at the lower of cost and net realizable value is
An inventory method which is designed to approximate inventory valuation at the lower of cost and net realizable value is
A. Average retail method
B....
What condition is not necessary when using the retail inventory method?
What condition is not necessary when using the retail inventory method?
A. Total cost of goods sold for the period
B. Total cost and retail price...
Which of the following is not required when using the retail inventory method?
Which of the following is not required when using the retail inventory method?
A. All inventory item must be categorized according to the retail...
Which of the following is not a reason the retail inventory method is used widely?
Which of the following is not a reason the retail inventory method is used widely?
A. As a control measure in determining inventory shortage
B....
The retail method is based on the assumption that
The retail method is based on the assumption that
A. Final inventory and the total of goods availble for sale contain the same proportion of high...
Which one of the following would cause a decrease in the cost ratio as used in the retail inventory method?
Which one of the following would cause a decrease in the cost ratio as used in the retail inventory method?
A. Higher retail prices
B. Lower net...
The conventional retail method produces an ending inventory that approximates
The conventional retail method produces an ending inventory that approximates
A. Lower of average cost and net realizable value
B. Lower of FIFO...
With regard to the retail inventory method, which of the following statements is the most accurate?
With regard to the retail inventory method, which of the following statements is the most accurate?
A. Generally , accountants ignore net markups...
If the conservative retail inventory method is used, which of the following calculations would include or exclude net markdowns?
If the conservative retail inventory method is used, which of the following calculations would include or exclude net markdowns?
Cost ratio Ending...
The retail inventory method would include which of the following in the calculation of the goods available for sale at both cost and retail?
The retail inventory method would include which of the following in the calculation of the goods available for sale at both cost and retail?
A. Freight...
To produce an inventory valuation which approximates the lower of cost and net realizable value using the retail inventory method, the computation of the ratio of cost to retail should
To produce an inventory valuation which approximates the lower of cost and net realizable value using the retail inventory method, the computation of...
When the conventional retail inventory method is used, markdowns are ignored in the computation of the cost to retail ratio because
When the conventional retail inventory method is used, markdowns are ignored in the computation of the cost to retail ratio because
A. There may...
A major advantage in the retail inventory method is that it
A major advantage in the retail inventory method is that it
A. Permits entities which use it to taking an annual physical inventory
B. Gives...
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