Question :
51. Moore Company purchased an item for inventory that cost $20 : 1228532
51. Moore Company purchased an item for inventory that cost $20 per unit and was priced to sell at $30. It was determined that the replacement cost is $18 per unit. Using the lower-of-cost-or- market rule, what amount should be reported on the balance sheet for inventory?
A. $18
B. $20
C. $12
D. $30
52. On December 31, 2010, Cruise Company has 10,000 units of an inventory item which cost $40 per unit when purchased on June 15, 2010. The selling price was $70 per unit. On December 30, 2010, the replacement cost was $38 per unit. At what amount should the 10,000 units of inventory be reported at on the December 31, 2010 balance sheet?
A. $100,000
B. $120,000
C. $350,000
D. $380,000
53. Which of the following statements does not accurately describe the lower of cost or market (LCM) valuation method?
A. The journal entry to write-down inventory decreases gross profit.
B. The journal entry to write-down inventory decreases current assets.
C. The journal entry to write-down inventory does not affect income from operations.
D. The journal entry to write-down inventory increases cost of goods sold.
54. Which of the following statements does not accurately describe the effects of a write-down of inventory on December 31, 2010 using the lower of cost or market (LCM) valuation method?
A. The 2010 gross profit decreases.
B. The 2011 cost of goods sold is effectively decreased if the inventory was sold during 2011.
C. The 2010 ending inventory is decreased.
D. The 2011 gross profit is not affected when the inventory was sold during 2011.
55. Tinker’s 2011 cost of goods sold was $750,000 and 2010 cost of goods sold was $770,000. The inventory at the end of 2011 was $188,000 and $208,000 at the end of 2010. What was Tinker’s inventory turnover during 2011?
A. 3.79
B. 3.99
C. 3.84
D. 3.89
56. Tinker’s 2011 cost of goods sold was $750,000 and 2010 cost of goods sold was $770,000. The inventory at the end of 2011 was $188,000 and $208,000 at the end of 2010. What is Tinker’s average number of days to sell their inventory during 2011?
A. 96.3
B. 91.5
C. 95.1
D. 93.8
57. QV-TV, Inc. provided the following items in their footnotes for the year-end 2010: Cost of goods sold was $22 billion under FIFO costing and their inventory value under FIFO costing was $2.1 billion. The LIFO Reserve for year-end 2009 was a $0.6 billion credit balance and at year-end 2010 it had increased to a credit balance of $0.8 billion. How much is LIFO inventory value at year-end 2010?
A. $1.9 billion
B. $2.9 billion
C. $2.3 billion
D. $1.3 billion
58. QV-TV, Inc. provided the following items in their footnotes for the year-end 2010: Cost of goods sold was $22 billion under FIFO costing and their inventory value under FIFO costing was $2.1 billion. The LIFO Reserve for year-end 2009 was a $0.6 billion credit balance and at year-end 2010 it had increased to a credit balance of $0.8 billion. How much is the 2010 LIFO cost of goods sold?
A. $22.2 billion
B. $19.8 billion
C. $22.8 billion
D. $19.2 billion
59. A $25,000 overstatement of the 2010 ending inventory was discovered after the financial statements for 2010 were prepared. Which of the following describes the effect of the inventory error on the 2010 financial statements?
A. Current assets were overstated and net income was understated.
B. Current assets were understated and net income was understated.
C. Current assets were overstated and net income was overstated.
D. Current assets were understated and net income was overstated.
60. A $25,000 overstatement of the 2010 ending inventory was discovered after the financial statements for 2010 were prepared. Which of the following describes the effect of the inventory error on the 2011 financial statements?
A. Net income and stockholders’ equity are both understated.
B. Net income is understated and stockholders’ equity is not affected.
C. Net income and stockholders’ equity are both overstated.
D. Net income and stockholders’ equity are both unaffected.
