Question : 21) Inventory information for Missoula Merchandising, Inc. provided below. Sales : 1253239

 

 

21) Inventory information for Missoula Merchandising, Inc. is provided below. Sales for the period were 2,800 units for $8 each. The company uses a weighted average periodic inventory system.

 

Date

 

Number of Units

Unit Cost

Total Cost

January 1

Beginning inventory

1,000

$2.20

$2,200

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

 

$12,600

 

Determine the ending inventory at March 31.

A) $2,300

B) $3,300

C) $9,800

D) $2,800

 

22) A company would choose to use LIFO so that it can ________.

A) report inventory that best reflects current costs on its balance sheet

B) report lower cost of goods sold and higher income

C) pay less income tax

D) pay less for its purchases of inventory

23) On June 1, beginning inventory consists of ten items that cost $100 each. On June 8, ten more items are purchased at $120 each. On June 12, fifteen items are sold for $200 each. On June 28, ten items are purchased at $130 each. Using perpetual FIFO, cost of goods sold for the month ended June 30 equals ________.

A) $1,500

B) $1,600

C) $1,800

D) $3,000

 

24) On June 1, beginning inventory consists of ten items that cost $100 each. On June 8, ten more items are purchased at $120 each. On June 12, fifteen items are sold for $200 each. On June 28, ten items are purchased at $130 each. Using periodic FIFO, cost of goods sold for the month ended June 30 equals ________.

A) $1,500

B) $1,600

C) $1,800

D) $3,000

 

25) On June 1, beginning inventory consists of ten items that cost $100 each. On June 8, ten more items are purchased at $120 each. On June 12, fifteen items are sold for $200 each. On June 28, ten items are purchased at $130 each. Using periodic LIFO, cost of goods sold for the month ended June 30 equals ________.

A) $1,600

B) $1,800

C) $1,900

D) $1,950

 

26) On June 1, beginning inventory consists of ten items that cost $100 each. On June 8, ten more items are purchased at $120 each. On June 12, fifteen items are sold for $200 each. On June 28, ten items are purchased at $130 each. Using perpetual LIFO, cost of goods sold for the month ended June 30 equals ________.

A) $1,700

B) $1,800

C) $1,900

D) $1,950

27) Mighty Ducks, Inc.’s inventory activity in October 2011 was as follows:

 

Inventory, October 1

11 units @ $8 each

Purchase, October 12

22 units @ $11 each

Sale, October 25

23 units @ $24 each

 

Which of the following shows the correct effect on the accounting equation of the October 25 sale on account using the perpetual FIFO method of accounting for inventory?

 

A)

Assets

Liabilities

Shareholders’ equity

 

(220) Inventory

552 Accounts payable

552  Sales

(220) Cost of goods sold

 

B)

Assets

Liabilities

Shareholders’ equity

 

552  Accounts receivable

(250) Inventory

No effect

552  Sales

(250) Cost of goods sold

 

C)

Assets

Liabilities

Shareholders’ equity

 

552  Accounts receivable

(220) Inventory

No effect

552  Sales

(220) Cost of goods sold

 

D)

Assets

Liabilities

Shareholders’ equity

 

(230) Inventory

552 Accounts payable

552  Sales

(230) Cost of goods sold

 

28) Mighty Ducks, Inc.’s inventory activity in October 2011 was as follows:

 

Inventory, October 1

11 units @ $8 each

Purchase, October 12

22 units @ $11 each

Sale, October 25

23 units @ $24 each

 

Which of the following shows the correct effect on the accounting equation of the October 25 sale on account using the perpetual WEIGHTED AVERAGE COST method of accounting for inventory?

 

A)

Assets

Liabilities

Shareholders’ equity

 

(230) Inventory

552 Accounts payable

552  Sales

(230) Cost of goods sold

 

B)

Assets

Liabilities

Shareholders’ equity

 

552  Accounts receivable

(250) Inventory

No effect

552  Sales

(250) Cost of goods sold

 

C)

Assets

Liabilities

Shareholders’ equity

 

552  Accounts receivable

(230) Inventory

No effect

552  Sales

(230) Cost of goods sold

 

D)

Assets

Liabilities

Shareholders’ equity

 

(230) Inventory

552 Accounts payable

552  Sales

(230) Cost of goods sold

 

 

29) IFRS require publicly-traded corporations to use ________.

A) the periodic inventory system

B) the perpetual inventory system

C) either the periodic or perpetual inventory system

D) the last-in, first-out system

 

30) A company that uses the first-in, first-out method of valuing cost of goods sold must sell its older inventory before selling any of its newer inventory, even though some of the newer items may be more accessible.