Question :
101. The U.S. GAAP requires firms using LIFO to disclose in : 1230647
101. 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 basisB. the amounts by which inventories based on LIFO exceed their amounts as reported on a FIFO or current cost basisC. the amounts by which inventories based on LIFO exceed their amounts as reported on a specific identification or current cost basisD. the amounts by which inventories based on specific identification or current cost exceed their amounts as reported on a LIFO basisE. none of the above
102. Addison HardwareAddison 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 Addison Hardware example. If Addison uses FIFO inventory pricing, the value of the inventory on November 30 would be A. $936B. $1,046C. $1,076D. $1,104E. $1,204
103. Addison HardwareAddison 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 Addison Hardware example. If Addison uses weighted average inventory pricing, the gross profit for November would be A. $1,046B. $1,482 C. $1,516D. $1,574E. $1,146
104. Addison HardwareAddison 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 Addison 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 correct, relative to remaining on FIFO (ignore income tax effects): A. the current ratio will be higherB. the inventory turnover will be lowerC. the cost of goods sold to sales percentage will be lowerD. all of the aboveE. none of the above
105. Addison HardwareAddison 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 Addison Hardware example. If Addison 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
106. 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
107. 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 LIFO is: A. $6,120B. $6,320C. $6,520D. $6,840E. $6,940
108. 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 weighted-average cost-flow assumption is (rounded to the nearest dollar): A. $7,772B. $6,972C. $6,564D. $6,220E. $6,020
109. A firm using FIFO had a beginning inventory of $48,000, an ending inventory of $56,000, and a pretax income of $400,000. If it had used LIFO, its beginning inventory would have been $20,000, its ending inventory would have been $16,000, and its pretax income would have been: A. $374,000B. $388,000C. $396,000D. $404,000E. $412,000
110. A firm using FIFO had a beginning inventory of $48,000, an ending inventory of $56,000, and a pretax income of $400,000. If it had used LIFO, its beginning inventory would have been $20,000, and its ending inventory would have been $16,000. From the information provided, one can conclude that: A. quantities increased and prices decreasedB. quantities decreased and prices increasedC. prices increased but we cannot conclude what happened to quantitiesD. quantities decreased but we cannot conclude what happened to pricesE. not enough information to reach a conclusion
