Question :
81.Refer to the information above. Assume that the replacement cost : 1237663
81.Refer to the information above. Assume that the replacement cost of this monitor at year-end is $210 per unit. Using LIFO flow assumption and the lower-of-cost-or-market rule, the ending inventory amounts to:
A. $46,000.
B. $42,000.
C. $37,000.
D. $83,000.
200 × $185 = $37,000
Venus Wholesale Co. started carrying a new product in December. Purchases and sales of this product during the month were:
82.Refer to the information above. Assuming the LIFO flow assumption is in use, the perpetual inventory records will indicate an ending inventory of this product of:
A. $9,800.
B. $10,600.
C. $10,800.
D. $8,000.
(20 × $80) + (100 × $90) = $10,600
83.Refer to the information above. At year-end, Venus restates the carrying value of its inventory using periodic LIFO costing procedures. Under periodic costing procedures, the LIFO cost of the inventory is:
A. $9,800.
B. $10,600.
C. $10,800.
D. $8,000.
(100 × $80) + (20 × $90) = $9,800
84.The primary reason a physical inventory is taken is to:
A. Adjust the perpetual inventory record for unrecorded shrinkage losses.
B. Ensure the periodic inventory record is valued correctly.
C. Both ensure the periodic inventory record is being stored securely and that it is valued correctly.
D. Ensure the perpetual inventory record is being stored in a secure manner.
85.As a result of taking an annual physical inventory, it usually is necessary in a perpetual inventory system to make an entry:
A. Reducing assets and increasing the cost of goods sold.
B. Reducing assets and increasing liabilities.
C. Reducing the cost of goods sold.
D. Increasing assets and increasing the cost of goods sold.
86.The write-down of inventory:
A. Only affects the balance sheet and not the income statement.
B. Only affects the income statement and not the balance sheet.
C. Affects both the income statement and the balance sheet.
D. Affects neither the income statement nor the balance sheet.
87.Green Leaf Company had the following information available on December 31: Management applies the LCM rule on the basis of inventory category and includes wheelbarrows and hoses in the large implement category and shovels and gloves in the small implement category. What is the write-down required?
A. $864.
B. $556.
C. $576.
D. $710.
($3,210 + $1,540) = total cost of large implement = $4,750($3,300 + $1,470) = total MV of large implement = $4,770($4,480 + $688) = total cost of small implement = $5,168($3,840 + $752) = total MV of small implement = $4,592$9,918 – ($4,750 + $4,592) = $576
88.Green Leaf Company had the following information available on December 31: Management applies the LCM rule on the basis of individual inventory items. What is the write-down required?
A. $864.
B. $556.
C. $576.
D. $710.
($4,480 – $3,840) + ($1,540 – $1,470) = $710
89.Green Leaf Company had the following information available on December 31: Management applies the LCM rule on the basis of the total inventory. What is the write-down required?
A. $864.
B. $556.
C. $576.
D. $710.
$9,918 – $9,362 = $556
90.The lower-of-cost-or-market rule may be applied by comparing the market value of the inventory to the cost of the inventory based on:
A. Individual inventory items.
B. Major inventory categories.
C. The entire inventory.
D. Any of the three: individual inventory items, major inventory categories, or the entire inventory.
