Question :
120.A company has the following per unit original costs and : 1258833
120.A company has the following per unit original costs and replacement costs for its inventory. LCM is applied to individual items.Part A: 50 units with a cost of $5, and replacement cost of $4.50Part B: 75 units with a cost of $6, and replacement cost of $6.50Part C: 160 units with a cost of $3, and replacement cost of $2.50Under the lower of cost or market method, the total value of this company’s ending inventory is:
A.$1,180.00.
B.$1,075.00.
C.$1,112.50.
D.$1,217.50.
E.$1,137.50.
UnitsPer unitMarketTotalMarketLCM applied to
CostCostItemsWhole
A50$5$4.50$250$225.00$225
B75$6$6.50450487.50
C160$3$2.50480400.00400
Total$1,180$1,112.50$1,075$1,112.50
121.A company has beginning inventory of 10 units at a cost of $10 each on February 1. On February 3, it purchases 20 units at $12 each. 12 units are sold on February 5. Using the FIFO periodic inventory method, what is the cost of the 12 units that are sold?
A.$120
B.$124
C.$128
D.$130
E.$140
(10 units * $10) + (2 * $12) = $124
122.A company has beginning inventory of 15 units at a cost of $12 each on October 1. On October 5, it purchases 10 units at $13 per unit. On October 12 it purchases 20 units at $14 per unit. On October 15, it sells 30 units. Using the FIFO periodic inventory method, what is the value of the inventory at October 15 after the sale?
A.$140
B.$160
C.$210
D.$380
E.$590
Units available for sale = 15 + 10 + 20 = 45 unitsUnits in inventory = 45 – 30 = 15 unitsCost of inventory = 15 * $14 each = $210
123.A company had beginning inventory of 10 units at a cost of $20 each on March 1. On March 2, it purchased 10 units at $22 each. On March 6 it purchased 6 units at $25 each. On March 8, it sold 22 units for $54 each. Using the FIFO perpetual inventory method, what was the cost of the 22 units sold?
A.$470
B.$490
C.$450
D.$570
E.$520
(10 * $20) + (10 * $22) + (2 * $25) = $470
124.A company uses the periodic inventory system and had the following activity during the current monthly period.
November 1:Beginning inventory of100 units @ $20
November 5:Purchased100 units @ $22
November 8:Purchased50 units @ $23
November 16:Sold200 units @ $45
November 19:Purchased50 units @ $25
Using the weighted-average inventory method, the company’s ending inventory would be:
A.$2,000
B.$2,200
C.$2,250
D.$2,400
E.$4,400
BI100@ $20$2,000
11/5100@ $222,200
11/850@ $231,150
11/1950@ $251,250
Total300$6,600
Weighted average cost per unit: $6,600/300 units = $22 Ending inventory: (300 units – 200 units) * $22 = $2,200
125.Health Defense sells first aid kits and uses the periodic inventory system to account for its merchandise. The beginning balance of the inventory and its transactions during January were as follows:
January 1:Beginning balance of 18 units at $13 each
January 12:Purchased 30 units at $14 each
January 19:Sold 24 units at a selling price of $30 each
January 20:Purchased 24 units at $17 each
January 27:Sold 27 units at a selling price of $30 each
If the ending inventory is reported at $357, what inventory method was used?
A.LIFO.
B.FIFO.
C.Weighted average.
D.Specific identification.
E.Retail inventory method.
Beginning Inventory18 @ $13$234
January 1230 @$14420
January 2024 @ $17408
Total72 units$1,062
Sold51 units
Ending Inventory21 @ $17$357
126.A company’s warehouse contents were destroyed by a flood on September 12. The following information was the only information that was salvaged:1. Inventory, beginning: $28,0002. Purchases for the period: $17,0003. Sales for the period: $55,0004. Sales returns for the period: $700The company’s average gross profit ratio is 35%. What is the estimated cost of the lost inventory?
A.$9,705.
B.$25,995.
C.$29,250.
D.$44,000.
E.$45,000.
COGS = ($55,000 – $700) * 65% = $35,295Goods available for sale = $28,000 + $17,000 = $45,000EI = $45,000 – $35,295 = $9,705
127.A company reports the following information regarding its inventory.Beginning inventory: cost is $80,000; retail is $130,000Net purchases: cost is $65,000; retail is $120,000Sales at retail: $145,000The year-end inventory shows $135,000 worth of merchandise available at retail prices. What is the cost of the ending inventory calculated using the retail inventory method?
A.$135,000.
B.$73,125.
C.$78,300.
D.$72,900.
E.$105,000.
At costAt retail
Beginning inventory$80,000$130,000
Purchases65,000120,000
Goods available$145,000$250,000
Cost/retail ratio$145,000/$250,000 =58%
Ending inventory at cost$135,000 * 58% =$78,300
128.On March 31 a company needed to estimate its ending inventory to prepare its first quarter financial statements. The following information is available:Beginning inventory, January 1: $4,000Net sales: $80,000Net purchases: $78,000The company’s gross margin ratio is 25%. Using the gross profit method, the cost of goods sold would be:
A.$60,000.
B.$20,000.
C.$58,500.
D.$63,000.
E.$19,500.
75% * $80,000 = $60,000
129.Big Box Store has operated with a 30% average gross profit ratio for a number of years. It had $100,000 in sales during the second quarter of this year. If it began the quarter with $18,000 of inventory at cost and purchased $72,000 of inventory during the quarter, its estimated ending inventory by the gross profit method is:
A.$30,000.
B.$21,000.
C.$20,000.
D.$18,000.
E.$27,000.
COGS = $100,000 * 70% = $70,000Costs available for sale = $18,000 + $72,000 = $90,000End. Inv. = $90,000 – $70,000 = $20,000
