11) One difference between U.S. GAAP and IFRS is ________.
A) U.S. GAAP allows LIFO and IFRS does not
B) IFRS allows LIFO and U.S. GAAP does not
C) U.S. GAAP allows FIFO and IFRS does not
D) IFRS allows FIFO and U.S. GAAP does not
12) Grand Forks Enterprises sells toy airplanes to retailers such as K-Mart and Wal-Mart. Information about inventory is contained in the table below. The company uses a FIFO perpetual inventory system.
Number of Units
Unit Cost
Total Cost
Beginning inventory
2,000
$2.00
$4,000
Sale
(1,200)
Purchase
4,000
$2.25
$9,000
Sale
(2,500)
Purchase
5,000
$2.40
$12,000
Sale
(6,000)
Determine the cost of goods sold.
A) $20,800
B) $21,200
C) $21,880
D) $19,400
13) Grand Forks Enterprises sells toy airplanes to retailers such as K-Mart and Wal-Mart. Information about inventory is contained in the table below. The company uses a LIFO perpetual inventory system and sells inventory for $5.00 per unit.
Date
Number of Units
Unit Cost
Total Cost
January 01
Beginning inventory
2,000
$2.00
$4,000
January 10
Sale
1,200
January 15
Purchase
4,000
$2.25
$9,000
January 20
Sale
2,500
January 25
Purchase
5,000
$2.40
$12,000
January 30
Sale
6,000
Determine the cost of goods sold for the January 10th sale.
A) $6,000
B) $3,600
C) $2,400
D) $2,600
14) Grand Forks Enterprises sells toy airplanes to retailers such as K-Mart and Wal-Mart. Information about inventory is contained in the table below. The company uses a LIFO perpetual inventory system and sells inventory for $5.00 per unit.
Date
Number of Units
Unit Cost
Total Cost
January 01
Beginning inventory
2,000
$2.00
$4,000
January 10
Sale
1,200
January 15
Purchase
4,000
$2.25
$9,000
January 20
Sale
2,500
January 25
Purchase
5,000
$2.40
$12,000
January 30
Sale
6,000
Determine the cost of goods sold for the January 20th sale.
A) $5,425
B) $5,850
C) $5,625
D) $5,725
15) Grand Forks Enterprises sells toy airplanes to retailers such as K-Mart and Wal-Mart. Information about inventory is contained in the table below. The company uses a LIFO perpetual inventory system and sells inventory for $5.00 per unit.
Date
Number of Units
Unit Cost
Total Cost
January 01
Beginning inventory
2,000
$2.00
$4,000
January 10
Sale
1,200
January 15
Purchase
4,000
$2.25
$9,000
January 20
Sale
2,500
January 25
Purchase
5,000
$2.40
$12,000
January 30
Sale
6,000
Determine the ending inventory for the period.
A) $2,925
B) $2,600
C) $2,725
D) $3,120
16) Philipsburg Corporation sells mugs to fine retailers across the world. Data from its periodic inventory system is presented in the table below. Inventory is sold for $170 per unit. Operating expenses, excluding cost of goods sold, totaled $40,000.
Date
Number of Units
Unit Cost
Total Cost
January 1
Beginning inventory
300
$100
$30,000
January 13
Purchase
400
$110
$44,000
January 22
Purchase
500
$120
$60,000
Which cost flow method would result in the HIGHEST taxable income for the period?
A) FIFO
B) LIFO
C) Weighted average method
D) Each of the methods would have equal net income for the period.
17) Philipsburg Corporation sells mugs to fine retailers across the world. Data from its periodic inventory system is presented in the table below. Inventory is sold for $170 per unit. Operating expenses excluding cost of goods sold totaled $40,000.
Date
Number of Units
Unit Cost
Total Cost
January 1
Beginning inventory
300
$100
$30,000
January 13
Purchase
400
$110
$44,000
January 22
Purchase
500
$120
$60,000
Which cost flow method would result in the LOWEST taxable income for the period?
A) FIFO
B) LIFO
C) Weighted average method
D) Only the LIFO cost flow method can be used for tax returns.
18) Inventory information for Great Falls Merchandising, Inc. is provided below. Sales for the period were 2,800 units for $8 each. The company uses a FIFO periodic inventory system.
Date
Number of Units
Unit Cost
Total Cost
January 1
Beginning inventory
1,000
$3.00
$3,000
January
Purchase
600
$3.50
$2,100
February
Purchase
800
$4.00
$3,200
March
Purchase
1,200
$4.25
$5,100
Totals
3,600
$13,400
Determine the ending inventory at March 31.
A) $3,400
B) $3,800
C) $9,200
D) $10,000
19) Tarheel Company purchases inventory from McGardy Wholesalers. The per unit cost of the items purchased during the current accounting period was $5.50, $5.70, $5.90 and $6.23. Which statement below regarding Tarheel’s choice of inventory cost flow methods is TRUE?
A) Net income will be the same regardless of the cost flow assumption adopted. The choice of an accounting method can’t affect net income.
B) Net income will be greater than taxable income regardless of the inventory method chosen by Tarheel Company.
C) If Tarheel Company uses the LIFO method for financial reporting, then it must also use the LIFO method for tax reporting.
D) If Tarheel Company selects the FIFO method, it will result in a lower net income than the LIFO method would have produced.
20) Inventory information for Great Falls Merchandising, Inc. is provided below. Sales for the period were 2,800 units for $8 each. The company uses a LIFO periodic inventory system.
Date
Number of Units
Unit Cost
Total Cost
January 1
Beginning inventory
1,000
$3.00
$3,000
January
Purchase
600
$3.50
$2,100
February
Purchase
800
$4.00
$3,200
March
Purchase
1,200
$4.25
$5,100
Totals
3,600
$13,400
Determine the ending inventory at March 31.
A) $3,400
B) $2,400
C) $10,200
D) $800
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more