Question : 41. Lauer Corporation uses the periodic inventory system and has provided : 1228531

41. Lauer Corporation uses the periodic inventory system and has provided the following information about one of their laptop computers:
  
During the year, 750 laptop computers were sold.
What was ending inventory using the LIFO cost flow assumption? 
A. $40,000
B. $52,500
C. $60,000
D. $55,000

42. Under the FIFO cost flow assumption during a period of inflation, which of the following is false? 
A. Income tax expense will be higher than under LIFO.
B. Gross margin will be higher than under LIFO.
C. Ending inventory will be lower than under LIFO.
D. Cost of goods sold will be lower than under LIFO.

43. Under the LIFO cost flow assumption during a period of inflation, which of the following is false? 
A. Cost of goods sold will be lower than under FIFO.
B. Gross margin will be lower than under FIFO.
C. Income tax expense will be lower than under FIFO.
D. Ending inventory will be lower than under FIFO.

44. Which of the following statements is correct when inventory prices are increasing? 
A. LIFO will result in lower net income and a higher inventory valuation than will FIFO.
B. LIFO will result in higher net income and lower inventory valuation than will FIFO.
C. FIFO will result in lower net income and a lower inventory valuation than will LIFO.
D. FIFO will result in higher net income and a higher inventory valuation than will LIFO.

45. Which of the following statements is correct when inventory prices are decreasing? 
A. LIFO will result in lower net income and a higher inventory valuation than will FIFO.
B. LIFO will result in higher net income and a higher inventory valuation than will FIFO.
C. FIFO will result in higher net income and a higher inventory valuation than will LIFO.
D. FIFO will result in higher net income and a lower inventory valuation than will LIFO.

46. Which of the following statements is correct? 
A. FIFO reports lower income amounts than LIFO when prices are increasing.
B. LIFO reports a higher income amount than FIFO when prices are increasing.
C. LIFO reports a higher income amount than FIFO when prices are decreasing.
D. LIFO reports the same amount of income as FIFO when prices are increasing.

47. Which of the following statements is correct? 
A. The choice of an inventory costing method is dependent upon the actual physical flow of the inventory.
B. LIFO should be used during a period of increasing prices when the objective is to maximize the ending inventory value on the balance sheet.
C. FIFO should be used during a period of decreasing prices when the objective is to maximize the gross profit reported on the balance sheet.
D. The average cost method will result in an ending inventory balance which is somewhere between LIFO and FIFO when inventory prices are changing.

48. A corporation has provided the following information about one of their products:
  
During the year, 400 units were sold.
What is ending inventory using the average cost method? 
A. $48,000
B. $64,000
C. $50,000
D. $62,000

49. A corporation has provided the following information about one of their products:
  
During the year, 400 units were sold.
What is cost of goods sold using the average cost method? 
A. $48,000
B. $64,000
C. $50,000
D. $62,000

50. Which of the following statements is false? 
A. Companies do not have to use the same inventory method for all items of inventory.
B. Companies do not have to consistently use the same inventory costing methods.
C. Use of the LIFO inventory method during a period of increasing prices may create a conflict of interest between the owners and managers.
D. A company choosing to maximize stockholders’ equity during a period of increasing prices should use the FIFO inventory method.