1. Effie Company uses a periodic inventory system. Details for the inventory acc
ID: 2341673 • Letter: 1
Question
1.
Effie Company uses a periodic inventory system. Details for the inventory account for the month of January, 2013 are as follows:
Units
Per unit price
Total
Balance, 1/1/13
200
$5.00
$1,000
Purchase, 1/15/13
100
5.30
530
Purchase, 1/28/13
100
5.50
550
An end of the month (1/31/13) inventory showed that 140 units were on hand. If the company uses LIFO, what is the value of the ending inventory?
$742
$728
$762
$700
2.
A company just starting business made the following four inventory purchases in June:
June
1
150 units
$ 390
June
10
200 units
585
June
15
200 units
630
June
28
150 units
510
$2,115
A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand. Using the LIFO inventory method, the value of the ending inventory on June 30 is
$668.
$536.
$1,447.
$1,564.
3.
Romanoff Industries had the following inventory transactions occur during 2013:
Units
Cost/unit
2/1/13
Purchase
18
$45
3/14/13
Purchase
31
$47
5/1/13
Purchase
22
$49
The company sold 50 units at $70 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, what is the company's after-tax income using FIFO? (rounded to whole dollars)
$1,184
$1,106
$774
$829
Units
Per unit price
Total
Explanation / Answer
1 Closing Units 140 LIFO, Last in First Out means closing units will be from Old Purchases Units Rate Amt Opening Inventory 140 5 700 Answer is D 2 Closing Units 200 LIFO, Last in First Out means closing units will be from Old Purchases Units Rate Amt Value Qty Rate PU Jun-01 150 2.60 390 Jun-01 390 150 2.60 Jun-10 50 2.93 146 Jun-10 585 200 2.93 200 536 Answer is B 3 Closing Units 200 Qty Rate PU Value Purc-1 18 45.00 810 Cost of Goods will be: Purc-2 31 47.00 1457 Units Rate Amt Purc-3 22 49.00 1078 Purc-1 18 45 810 71 3345 Purc-2 31 47 1457 Purc-3 1 49 49 50 2316 Income Statement: Sales 3500 (50*70) Less: COGS 2316 Gross 1184 Less : Tax 30% 355 Net Income 829 Answer is D
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