Question :
61.The following information comes from the annual reports of Devin : 1241876
61.The following information comes from the annual reports of Devin Designs.
2017
2016
2015
Beginning inventory
?
?
2,250
Purchases
12,652
?
?
Goods available for sale
?
?
12,899
Ending inventory
?
2,662
?
Cost of goods sold
12,213
10,908
10,490
What is the beginning inventory amount for 2017?
a.$439
b.$8,246
c.$10,908
d.$2,662
62.The following information comes from the annual reports of Devin Designs.
2017
2016
2015
Beginning inventory
?
?
2,250
Purchases
12,652
?
?
Goods available for sale
?
?
12,899
Ending inventory
?
2,662
?
Cost of goods sold
12,213
10,908
10,490
What is the amount of goods available for sale for 2017?
a.$11,347
b.$15,314
c.$13,957
d.$24,865
63.The following information comes from the annual reports of Devin Designs.
2017
2016
2015
Beginning inventory
?
?
2,250
Purchases
12,652
?
?
Goods available for sale
?
?
12,899
Ending inventory
?
2,662
?
Cost of goods sold
12,213
10,908
10,490
What is the ending inventory amount for 2017?
a.$24,865
b.$3,101
c.$2,223
d.$15,314
64.Forrest’s Crab House purchased Florida stone crab on account on November 10, 2015, for a gross price of $87,000. Forrest also purchased farm-raised catfish on account on November 11, 2015 for a gross price of $25,000. The terms of both sales were 2/15, n/30. Forrest paid for the first purchase on November 19, 2015, and for the second purchase on November 30. If he uses the perpetual inventory method, his journal entry for November 19 would include:
a.a debit to Inventory for $1,740.
b.a debit to Inventory for $85,260.
c.a credit to Inventory for $1,740.
d.a credit to Accounts Payable for $87,000
Solution:
Accounts Payable (–L)…………………………….87,000
Cash (–A)………………………………..85,260
Inventory (–A)………………………………..1,740*
*$1,740 = $87,000?2% discount
65.Forrest’s Crab House purchased Florida stone crab on account on November 10, 2015, for a gross price of $87,000. Forrest also purchased farm-raised catfish on account on November 11, 2015 for a gross price of $25,000. The terms of both sales were 2/15, n/30. Forrest paid for the first purchase on November 19, 2015, and for the second purchase on November 30. If he uses the perpetual inventory method, which of the following journal entries would Forrest make for November 30?
a.Inventory25,000
Accounts Payable25,000
b.Accounts Payable25,000
Cash25,000
c.Accounts Payable25,000
Cash24,500
Inventory 500
d.Accounts Payable24,500
Cash24,500
66.Gump Supplies has the following information:
Beginning inventory$39,000
Inventory purchases 92,000
Transportation-in 11,300
An inventory count taken at year end indicates that inventory with a cost of $56,000 is on hand as of December 31, 2015. Assume that inventory purchases and transportation-in are both reflected in the inventory account, which shows an ending balance of $59,000. What is the amount of the cost of goods sold?
a.$123,300
b.$83,300
c.$60,700
d.$100,700
Solution:With the perpetual method, the balance in the Cost of Goods Sold account is perpetually updated for sales of inventory, as is the balance in the Inventory account for sales and acquisitions of inventory. This implies that the balance in Cost of Goods Sold should correspond to a balance in the Inventory account of $59,000, and that no entry is necessary at the end of the year to record Cost of Goods Sold.
Ending Inventory=Beginning Inventory + Net Purchases – Cost of Goods Sold
$59,000=$39,000 + ($92,000 + $11,300) – COGS
Cost of Goods Sold=$83,300
67.Gump Supplies has the following information:
Beginning inventory$39,000
Inventory purchases 92,000
Transportation-in 11,300
An inventory count taken at year end indicates that inventory with a cost of $56,000 is on hand as of December 31, 2015. Assume that inventory purchases and transportation-in are both reflected in the inventory account, which shows an ending balance of $59,000. Which of the followingwould be the bestadjusting journal entry to make at the end of the period with respect to this information?
a.Inventory Shrinkage3,000
Inventory3,000
b.Inventory3,000
Inventory Overage3,000
c.Inventory3,000
Purchases3,000
d.Cost of Goods Sold3,000
Sales3,000
Solution:Since the physical count indicates that Gump has $3,000 less inventory than is recorded in its Inventory account, the following adjusting entry is necessary at the end of the year.
Inventory Shrinkage (E, –SE)……………………….3,000
Inventory (–A)………………………………..3,000
68.Dakota Industries has two items in inventory as of December 31, 2015. Each item was purchased for $52. Company management chose to write down Item #1 to $39, which at year-end was assessed to be its market value. Management did not write down Item #2 because its market value was estimated to be greater than $52. During 2015, each item was sold for $63 cash.
The journal entry for the write down of Item #1would include which of the following?
a.Loss on Inventory Write-down …………………….24
Inventory ……………………………….24
b.Inventory……………………………….13
Loss on Inventory Write-down……………………….13
c.Loss on Inventory Write-down …………………….13
Inventory ……………………………….13
d.Inventory……………………………….24
Loss on Inventory Write-down……………………….24
69.Dakota Industries has two items in inventory as of December 31, 2015. Each item was purchased for $52. Company management chose to write down Item #1 to $39, which at year-end was assessed to be its market value. Management did not write down Item #2 because its market value was estimated to be greater than $52. During 2015, each item was sold for $63 cash.
If Dakota uses the perpetual inventory method, which of the following would be included in the entry or entries to record the sale of Item #1?
a.A debit to Sales for $63.
b.A credit to Inventory for $52.
c.A debit to Cost of Goods Sold for $39.
d.A credit to Cost of Goods Sold for $52.
70.Grey Manufacturing had the following transaction:
?Grey received an order to sell inventory with a cost of $50,000, and debited Accounts Receivable and credited Sales. The goods were shipped to the customer on December 31, 2015, and received on January 2, 2016.
If the terms of the sale were FOB shipping point and Grey included all these items in its ending inventory of 12/31/15, which of the following is the best statements regarding this treatment?
a.Grey made no mistake and rightfully included the items in its inventory until January 2, 2016.
b.Grey made a mistake and wrongly understated ending inventory.
c.Grey made a mistake and wrongly understated Cost of Goods Sold.
d.Grey made a mistake and wrongly understated Retained Earnings.
71.Grey Manufacturing had the following transaction:
?Greyordered $67,000 of inventory on December 30, 2015. The inventory was shipped on December 31, 2015, with the terms FOB destination. Grey received the inventory on January 3, 2016.
If Grey included all these items in it ending inventory of 12/31/15, which of the following is the best statement regarding this treatment?
a.Grey made no mistake and rightfully included the items in its ending inventory for 12/31/15.
b.Grey made a mistake and wrongly overstated Inventory.
c.Grey made a mistake and wrongly overstated Cost of Goods Sold.
d.Grey made a mistake and wrongly overstated Retained Earnings.
