Question : 68.The company’s gross profit ratio 40%. With beginning inventory of : 1169024

 

 

68.The company’s gross profit ratio is 40%. With beginning inventory of $54,000, additional purchases of $21,000 and net sales for the quarter of $85,000, the controller estimated ending inventory values at:   

A. $51,000.

 

B. $41,000.

 

C. $34,000.

 

D. $24,000.

 

 

 

69.The merchandise available for sale cost a company $90,000 and was marked to sell at a retail price of $125,000. Sales during the period totaled $80,000. If the retail method is used, the estimated cost of the ending inventory is   

A. $32,400.

 

B. $12,600.

 

C. $22,400.

 

D. $45,000.

 

 

 

70.The weighted average cost of an inventory item is calculated by   

A. dividing the sum of the unit cost on the purchase invoices by the number of units purchased.

 

B. dividing the cost of goods available for sale by the number of units on the ending inventory.

 

C. dividing the cost of goods available for sale by the number of units available during the period.

 

D. dividing the cost of goods sold by the number of units available during the period.

 

 

 

 

71.The modifying convention of conservatism requires that inventory be presented on the balance sheet at   

A. cost.

 

B. market value.

 

C. either cost or market value, whichever is lower.

 

D. average cost during the period.

 

 

 

 

72.The cost of the earliest merchandise purchased is assigned to ending inventory when a company uses   

A. the LIFO method.

 

B. the FIFO method.

 

C. the average cost method.

 

D. the lower of cost or market method.

 

 

 

 

73.A matching of the most recent costs to revenue results from the use of   

A. the LIFO method.

 

B. the FIFO method.

 

C. the average cost method.

 

D. the lower of cost or market method.

 

 

 

 

74.The use of the FIFO method of inventory valuation   

A. results in a matching of current inventory costs against sales revenue.

 

B. results in the most current costs in ending inventory.

 

C. results in a lowest reported net income in a time of rising prices.

 

D. results in a highest reported net income in a time of falling prices.

 

 

 

 

75.The use of the LIFO method of inventory valuation   

A. assigns the cost of the most recent purchases to the ending inventory.

 

B. results in the same valuation as the specific identification method in a time of rising prices.

 

C. results in the lowest reported net income in a time of rising prices.

 

D. results in the highest reported net income in a time of rising prices.

 

 

 

 

76.The firm had a beginning inventory of 50 units with a unit cost of $10. Purchases during the year were as follows: March—50 units with a unit cost of $12; July—60 units with a unit cost of $15. If the average cost method is used, the value of the ending inventory of 45 units is   

A. $675.

 

B. $563.

 

C. $450.

 

D. $555.

 

 

 

77.Which of the following is NOT a way to apply the lower of cost or market rule?   

A. by item

 

B. by size

 

C. in total

 

D. by group