Answers to the following 6 questions:
1) Use this inventory information for the month of May to answer the following questions:
May 1 beginning inventory 40 units @ $76
7 purchase 140 units @ $80
18 sale 50 units
22 purchase 20 units @ $88
29 sale 80 units
assuming that a perpetual inventory system is used, what is ending inventory on a LIFO basis?
a-more information is needed
b-$10,240
c-$5440
2) Use this inventory information to answer the following question:
July 1 beginning inventory 10 units @ $120
5 purchase 60 units @ $112
14 sale 40 units
21 purchase 30 units @ $116
31 sale 28 units
Assuming that a periodic inventory system is used, what is cost of goods sold under the average-cost method? a-$3648 b-$7752 c-$7888
3) An unrealistic picture of the inventory's current value on the balance sheet is an argument against using:
a-specific identification b-LIFO c-FIFO
4) Which of the following would normally be included in the inventory?
a-outgoing goods shipped FOB destination b-goods sold but not yet delivered c-goods held on consignment
5) Which of the following costs would not be included in the inventory cost?
a-invoice price b-cost of goods held on consignment c-freight in
6) The most important accounting problem in dealing with merchandise inventory is the application of which of the following conventions or rules?
a-materiality b-full disclosure c-matching