40. Goods in transit which are shipped f.o.b. shipping point should be A. includ
ID: 2510424 • Letter: 4
Question
40. Goods in transit which are shipped f.o.b. shipping point should be
A.
included in the inventory of the seller
B.
included in the inventory of the buyer
C.
included in the inventory of the shipping company
D.
none of these answer choices are correct
41. If the ending inventory for 2017 is overstated, the effects of this error on cost of goods sold for
2017, net income for 2017, and assets at December 31, 2018, respectively, are
A.
understatement, overstatement, no effect
B.
understatement, overstatement, overstatement
C.
overstatement, understatement, overstatement
D.
overstatement, understatement, no effect
42. In a period of rising prices, the inventory method which tends to give the highest reported net
income is
A. LIFO
B. Weighted-average
C. FIFO
D. Base stock
43. The following information was available from the inventory records of Crane Company for January:
Units
Unit Cost
Total Cost
Balance at January 1
5000
$9.10
$45,500
Purchases:
January 6
5000
10.37
51,850
January 26
5000
10.74
53,700
Sales
January 7
(2000
)
January 31
(9000
)
Balance at January 31
4000
Assuming that Crane uses the
periodic
inventory system, what should be the inventory at January
31, using the weighted-average inventory method, rounded to the nearest dollar?
A. $40,372
B. $42,298
C. $40,280
D. $40,486
44. The following information was available from the inventory records of Swifty Corporation for
January:
Units
Unit Cost
Total Cost
Balance at January 1
9000
$9.10
$81900
Purchases:
January 6
6000
10.30
61800
January 26
7000
10.70
74900
Sales
January 7
(6000
)
January 31
(12000
)
Balance at January 31
4000
Assuming that Swifty maintains
perpetual
inventory records, what should be the inventory at
January 31, using the moving-average inventory method, rounded to the nearest dollar?
A. $39,836
B. $42,018
C. $39,744
D. $40,280
45. Swifty Corporation has the following data related to an item of inventory:
Inventory, March 1
370 units
@ $2.20
Purchase, March 7
1430 units
@ $2.30
Purchase, March 16
260 units
@ $2.60
Sale, March 21
1,540 units
The value assigned to ending inventory if Swifty uses LIFO is
A. $1,220
B. $1,159
C. $1,144
D. $1,212
46. Marigold Corp. has the following data related to an item of inventory:
Inventory, March 1
410 units
@ $1.80
Purchase, March 7
1400 units
@ $1.90
Purchase, March 16
310 units
@ $2.20
Sale, March 21
1,540 units
The value assigned to cost of goods sold if Marigold uses FIFO is
A. $1,061
B. $2,941
C. $2,885
D. $1,119
47. Transactions for the month of June were:
Purchases
Sales
June 1
(balance) 3150 @
$3.30
June 2
2480
3
8730 @
3.20
6
6390
7
4820 @
3.40
9
4000
15
7130 @
3.50
10
1520
22
2080 @
3.60
18
5590
25
830
Assuming that
perpetual
inventory records are kept in dollars, the COGS on a LIFO basis is
A. $69,813
B. $68,058
C. $67,349
D. $67,251
48. Sheffield Corp. uses the periodic inventory system. For the current month, the beginning inventory
consisted of 800 units that cost $70 each. During the month, the company made two
purchases: 400 units at $73 each and 300 units at $75 each. Sheffield Corp. also sold 1300 units
during the month. Using the FIFO method, what is the amount of cost of goods sold for the
month?
A. $93,340
B. $92,500
C. $93,700
D. $91,000
49. Sheffield Corp. adopted the dollar-value LIFO method of inventory valuation on December 31,
2016. Its inventory at that date was $1,120,000 and the relevant price index was 100.
Information regarding inventory for subsequent years is as follows:
Date
Inventory at
Current Prices
Current
Price Index
December 31, 2017
$1,293,630
107
December 31, 2018
1,413,350
115
December 31, 2019
1,590,000
125
What is the cost of the ending inventory at December 31, 2017 under dollar-value LIFO?
A. $1,209,000
B. $1,293,630
C. $1,291,980
D. $1,215,230
Explanation / Answer
40 Goods in transit which are shipped f.o.b. shipping point should be
b.included in the inventory of the buyer
41. If the ending inventory for 2017 is overstated, the effects of this error on cost of goods sold for
2017, net income for 2017, and assets at December 31, 2018, respectively, are:-
A.understatement, overstatement, no effect
42. In a period of rising prices, the inventory method which tends to give the highest reported net
income is:-
C) FIFO
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