Question :
111. Using either the FIFO and LIFO cost flow assumption will : 1246012
111. Using either the FIFO and LIFO cost flow assumption will result in the same cost of goods sold when A. the number of units in beginning and ending inventory are the same.B. two consecutive years are combined.C. the prices of the goods do not change.D. lower-of-cost-or-market is applied.E. none of the above
112. Which of the following cost flow assumptions will report ending inventory closest to current cost? A. LIFO methodB. FIFO methodC. weighted-average methodD. acquisition costE. specific identification method
113. LIFO inventory layers A. occur when ending inventory is less than beginning inventory.B. are liquidated when ending inventory exceeds beginning inventory.C. are created in years in which inventory purchases exceed sales.D. must be disclosed in the annual report.E. none of the above
114. In a time of rising prices, unrealized holding gains on ending inventory are A. higher under LIFO than FIFO.B. higher under FIFO than LIFO.C. reported on the income statement.D. required to be reported in notes to the financial statements.E. none of the above
115. The U.S. GAAP requires firms using LIFO to disclose in notes to the financial statements A. the amounts by which inventories based on FIFO or current cost exceed their amounts as reported on a LIFO basis.B. the amounts by which inventories based on LIFO exceed their amounts as reported on a FIFO or current cost basis.C. the amounts by which inventories based on LIFO exceed their amounts as reported on a specific identification or current cost basis.D. the amounts by which inventories based on specific identification or current cost exceed their amounts as reported on a LIFO basis.E. none of the above
116. Fix-It HardwareFix-It Hardware began the month of November with 150 large brass switchplates on hand at a cost of $4.00 each. These switchplates sell for $7.00 each. The following schedule presents the sales and purchases of this item during the month of November.
Purchases
Date of Transaction
Quantity Received
Unit Cost
Units Sold
November 5
100
November 7
200
$4.20
November 9
150
November 11
200
4.40
November 17
220
November 22
250
4.80
November 29
100
(CMA adapted, Dec 92 #25) Refer to the Fix-It Hardware example. If Fix-It uses FIFO inventory pricing, the value of the inventory on November 30 would be A. $936B. $1,046C. $1,076D. $1,104E. $1,204
117. Fix-It HardwareFix-It Hardware began the month of November with 150 large brass switchplates on hand at a cost of $4.00 each. These switchplates sell for $7.00 each. The following schedule presents the sales and purchases of this item during the month of November.
Purchases
Date of Transaction
Quantity Received
Unit Cost
Units Sold
November 5
100
November 7
200
$4.20
November 9
150
November 11
200
4.40
November 17
220
November 22
250
4.80
November 29
100
(CMA adapted, Dec 92 #27) Refer to the Fix-It Hardware example. If Fix-It uses weighted average inventory pricing, the gross profit for November would be A. $1,046B. $1,482 C. $1,516D. $1,574E. $1,146
118. Fix-It HardwareFix-It Hardware began the month of November with 150 large brass switchplates on hand at a cost of $4.00 each. These switchplates sell for $7.00 each. The following schedule presents the sales and purchases of this item during the month of November.
Purchases
Date of Transaction
Quantity Received
Unit Cost
Units Sold
November 5
100
November 7
200
$4.20
November 9
150
November 11
200
4.40
November 17
220
November 22
250
4.80
November 29
100
Refer to the Fix-It Hardware example. A growing firm is contemplating switching from a FIFO to a LIFO cost flow assumption for inventories and cost of goods sold because it has recently experienced increasing manufacturing costs for its products and anticipates a prolonged period of increasing quantities and manufacturing costs in the future. The firm wishes to know which of the following statements about the effect of the switch to LIFO is/are correct, relative to remaining on FIFO (ignore income tax effects): A. the current ratio will be higher.B. the inventory turnover will be lower.C. the cost of goods sold to sales percentage will be lower.D. all of the above.E. none of the above.
119. Fix-It HardwareFix-It Hardware began the month of November with 150 large brass switchplates on hand at a cost of $4.00 each. These switchplates sell for $7.00 each. The following schedule presents the sales and purchases of this item during the month of November.
Purchases
Date of Transaction
Quantity Received
Unit Cost
Units Sold
November 5
100
November 7
200
$4.20
November 9
150
November 11
200
4.40
November 17
220
November 22
250
4.80
November 29
100
(CMA adapted, Dec 92 #28) Refer to the Fix-It Hardware example. If Fix-It uses (periodic) LIFO inventory pricing, the cost of goods sold for November would be A. $2,416B. $2,474C. $2,508D. $2,584E. $2,684
120. Inventory RecordThe inventory record for a particular item for Year 2 appears below.
Inventory, January 1, Year 2
20,000
$0.20
$4,000
Purchases:
March 2
4,000
.24
$ 960
April 30
3,000
.28
840
June 15
6,000
.32
1,920
September 30
2,000
.26
520
December 15
1,000
.20
200
Total purchases
16,000
$4,440
Total available for sale
36,000
$8,440
Units sold
28,000
Refer to the Inventory Record example. The cost of goods sold for year 2 under FIFO is: A. $6,040B. $6,120 C. $6,320D. $6,520E. $6,840
