Question : 61.From an accounting point of view, one implication of an : 1237681

 

 

61.From an accounting point of view, one implication of an effective just-in-time inventory system is that:   

A. Sales transactions must be recorded using on-line point-of-sale terminals.

 

B. Inventories are less material in dollar amount and alternative inventory flow assumptions will produce more similar results.

 

C. The cost of goods sold is significantly reduced.

 

D. Purchases of merchandise are recorded as cash payments are made, and sales transactions are recorded as cash is received.

 

 

 

 

62.If all things are equal, except one company uses LIFO during inflation and the other uses FIFO, then:   

A. The LIFO company will have a higher inventory turnover.

 

B. The FIFO company will have a higher inventory turnover.

 

C. The two companies will have the same inventory turnover.

 

D. Inventory valuation methods do not effect inventory turnover calculations.

 

 

 

 

63.An advocate of just-in-time inventory system would say:   

A. Maintain a large inventory selection for customers.

 

B. Leave extra time in order to make inventory deadlines.

 

C. Maintain a small inventory supply.

 

D. LIFO is preferred over FIFO.

 

 

 

 

64.During periods of rising prices, and being primarily concerned with tax implications, most of the companies would select:   

A. LIFO.

 

B. FIFO.

 

C. Specific identification.

 

D. The inventory valuation does not affect taxation.

 

 

 

 

65.For the purpose of delaying income taxes, during an inflationary period, which method would be best?   

A. LIFO.

 

B. FIFO.

 

C. Average cost.

 

D. Taxes would be the same under each assumption.

 

 

 

 

Beech Soda, Inc. uses a perpetual inventory system. The company’s beginning inventory of a particular product and its purchases during the month of January were as follows:  On January 14, Beech Soda, Inc. sold 25 units of this product. The other 28 units remained in inventory at January 31.

 

66.Refer to the information above. Assuming that Beech Soda uses the FIFO cost flow assumption, the cost of goods sold to be recorded at January 14 is:   

A. $278.

 

B. $268.

 

C. $393.

 

D. $673.

(16 × $10) + (9 × $12) = $268

 

 

 

67.Refer to the information above. Assuming that Beech Soda uses the LIFO cost flow assumption, the cost of goods sold to be recorded at January 14 is:   

A. $393.

 

B. $268.

 

C. $278.

 

D. $673.

(14 × $12) + (11 × $10) = $278

 

 

 

68.Refer to the information above. Assuming that Beech Soda uses the average cost flow assumption, the cost of goods sold to be recorded at January 14 is (round your intermediate calculation to one decimal place and cost per unit to the nearest cent):   

A. $317.50.

 

B. $308.25.

 

C. $272.50.

 

D. $673.00.

(($160 + $168)/(16 + 14)) × 25 = ($328/30) × 25 = $10.9 × 25 = $272.50

 

 

 

69.Refer to the information above. Assuming that Beech Soda uses the FIFO cost flow assumption, the 28 units of this product in inventory at January 31 have a total cost of:   

A. $400.

 

B. $395.

 

C. $405.

 

D. $410.

(5 × $10) + (23 × $15) = $395 or $673 – $268 = $405

 

 

 

70.Refer to the information above. Assuming that Beech Soda uses the LIFO cost flow assumption, the 28 units of this product in inventory at January 31 have a total cost of:   

A. $400.

 

B. $395.

 

C. $405.

 

D. $410.

(5 × $10) + (23 × $15) = $395 or $673 – $278 = $395

 

 

 

At year-end, the perpetual inventory records of Anderson Co. indicate 60 units of a particular product in inventory, acquired at the following dates and unit costs:Purchased in August: 30 units at $750 per unit.Purchased in November: 30 units at $700 per unit.A complete physical inventory taken at year-end indicates only 50 units of this product actually are on hand.