Question : 101. In applying the lower of cost or market method to : 1225843

101. In applying the lower of cost or market method to inventory valuation, market is defined as: 

A. Historical cost.

B. Current replacement cost.

C. Current sales price.

D. FIFO.

E. LIFO.

102. Generally accepted accounting principles require that the inventory of a company be reported at: 

A. Market value.

B. Historical cost.

C. Lower of cost or market.

D. Replacement cost.

E. Retail value.

103. The conservatism constraint: 

A. Prescribes that when multiple estimates of amounts to be received or paid in the future are equally likely, then the least optimistic amount should be used.

B. Prescribes that a company use the same accounting methods period after period.

C. Prescribes that revenues and expenses be reported in the period in which they are earned or incurred.

D. Prescribes that all items of a material nature be included in financial statements.

E. Prescribes that all inventory items be reported at full cost.

104. A company normally sells its product for $20 per unit. However, the selling price has fallen to $15 per unit. This company’s current inventory consists of 200 units purchased at $16 per unit. Replacement cost has now fallen to $13 per unit. Calculate the value of this company’s inventory at the lower of cost or market. 

A. $2,550.

B. $2,600.

C. $2,700.

D. $3,000.

E. $3,200.

105. A company has the following per unit original costs and replacement costs for its inventory:

Part A: 50 units with a cost of $5, and replacement cost of $4.50

Part B: 75 units with a cost of $6, and replacement cost of $6.50

Part C: 160 units with a cost of $3, and replacement cost of $2.50

Under 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. $1,075.00 or $1,112.50, depending upon whether LCM is applied to individual items or the inventory as a whole.

D. $1,112.50.

E. $1,180.00 or $1,075.00, depending upon whether LCM is applied to individual items or to the inventory as a whole.

106. A company has inventory of 10 units at a cost of $10 each on June 1. On June 3, it purchased 20 units at $12 each. 12 units are sold on June 5. Using the FIFO periodic inventory method, what is the cost of the 12 units that were sold? 

A. $120.

B. $124.

C. $128.

D. $130.

E. $140.

107. A company has inventory of 15 units at a cost of $12 each on August 1. On August 5, it purchased 10 units at $13 per unit. On August 12 it purchased 20 units at $14 per unit. On August 15, it sold 30 units. Using the FIFO periodic inventory method, what is the value of the inventory at August 15 after the sale? 

A. $140.

B. $160.

C. $210.

D. $380.

E. $590.

108. A company had inventory of 10 units at a cost of $20 each on November 1. On November 2, it purchased 10 units at $22 each. On November 6 it purchased 6 units at $25 each. On November 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.

109. A company uses the periodic inventory system and had the following activity during the current monthly period.

In a periodic inventory system, 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.

F. Weighted average cost per unit: $6,600/300 units = $22

G. Ending inventory: (300 units – 200 units) x $22 = $2,200

110. A company sells a climbing kit 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:

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.