Reference no: EM131338814

Assignment

Fulbright Corp. uses the periodic inventory system. During its first year of operations, Fulbright made the following purchases (listed in chronological order of acquisition):

• 43 units at $97
• 74 units at $71
• 175 units at $61

Sales for the year totaled 268 units, leaving 24 units on hand at the end of the year.

Ending inventory using the average cost method is (Do not round unit cost calculation. Round your final answer to the nearest whole dollar amount):

$1,652.

$2,328.

$1,464.

$1,514.

Nu Company reported the following pretax data for its first year of operations.

Net sales	2,810
Cost of goods available for sale	2,310
Operating expenses	780
Effective tax rate	30%
Ending inventories:
If LIFO is elected	970
If FIFO is elected	1,130

What is Nu's net income if it elects LIFO?

$690.

$850.

$595.

$483.

Nueva Company reported the following pretax data for its first year of operations.

Net sales	7,400
Cost of goods available for sale	5,650
Operating expenses	1,578
Effective tax rate	40%
Ending inventories:
If LIFO is elected	634
If FIFO is elected	809

What is Nueva's net income if it elects FIFO? (Round your intermediate and final answer to the nearest whole dollar amount.)

$806.

$484.

$981.

$589.

Thompson TV and Appliance reported the following in its 2016 financial statements:

	2016
Sales	$437,000
Cost of goods sold:
Inventory, January 1	73,000
Net purchases	333,000
Goods available for sale	406,000
Inventory, December 31	87,000
Cost of goods sold	319,000
Gross profit	$118,000

Thompson's 2016 gross profit ratio is (Round your answer to the nearest whole percentage):

24%.

26%.

27%.

None of these is correct.

Anthony Thomas Candies (ATC) reported the following financial data for 2016 and 2015:

	2016	2015
Sales	$315,000	$295,000
Sales returns and allowances	7,500	5,500
Net sales	$307,500	$289,500
Cost of goods sold:
Inventory, January 1	47,000	31,000
Net purchases	138,000	129,000
Goods available for sale	185,000	160,000
Inventory, December 31	60,000	47,000
Cost of goods sold	125,000	113,000
Gross profit	$182,500	$176,500

ATC's gross profit ratio in 2016 is (Round your answer to one decimal place e.g., .123 as 12.3%):

59.3%.

60.1%.

56.2%.

None of these is correct.

Anthony Thomas Candies (ATC) reported the following financial data for 2016 and 2015:

	2016	2015
Sales	$306,000	$288,000
Sales returns and allowances	8,100	5,000
Net sales	$297,900	$283,000
Cost of goods sold:
Inventory, January 1	62,000	18,000
Net purchases	139,000	142,000
Goods available for sale	201,000	160,000
Inventory, December 31	62,000	62,000
Cost of goods sold	139,000	98,000
Gross profit	$158,900	$185,000

The average days inventory for ATC for 2016 is (Round intermediate calculations to two decimal places. Round your final answer to a whole number):

223 days.

163 days.

Less than 100 days.

213 days.

On January 1, 2016, Badger Inc. adopted the dollar-value LIFO method. The inventory cost on this date was $115,000. The 2016 ending inventory, valued at year-end costs, was $150,800. The relative cost index for this inventory in 2016 was 1.16. Assume that Badger's 2017 ending inventory, valued at year-end costs, was $164,700 and that the relative cost index for this inventory in 2016 was 1.22.

Suppose that Badger's 2018 ending inventory, valued at year-end costs, was $167,500 and that the relative cost index for this inventory in 2018 was 1.25. What inventory balance would Badger report on its 12/31/18 balance sheet?

$134,000

$137,280

$167,500

None of these answer choices is correct.

Linguini Inc. adopted dollar-value LIFO (DVL) as of January 1, 2016, when it had an inventory of $864,000. Its inventory as of December 31, 2016, was $897,000 at year-end costs and the cost index was 1.15. What was DVL inventory on December 31, 2016?

780,000

864,000

897,000

993,600

Data related to the inventories of Costco Medical Supply are presented below:

	Surgical Equipment	Surgical Supplies	Rehab Equipment	Rehab Supplies
Selling price	$268	$134	$351	$158
Cost	153	131	251	155
Costs to sell	26	17	23	10

In applying the lower of cost and net realizable value rule, the inventory of surgical supplies would be valued at:

$99.

$131.

$77.

$117.

Data related to the inventories of Costco Medical Supply are presented below:

	Surgical Equipment	Surgical Supplies	Rehab Equipment	Rehab Supplies
Selling price	$264	$134	$324	$150
Cost	165	106	288	148
Costs to sell	15	9	28	9

In applying the lower of cost and net realizable value rule, the inventory of rehab equipment would be valued at:

$267.

$296.

$288.

$215.

Data related to the inventories of Costco Medical Supply are presented below:

	Surgical Equipment	Surgical Supplies	Rehab Equipment	Rehab Supplies
Selling price	$266	$123	$357	$161
Cost	164	100	251	162
Costs to sell	24	13	25	6

In applying the lower of cost and net realizable value rule, the inventory of rehab supplies would be valued at:

$162.

$107.

$158.

$155.

Data related to the inventories of Alpine Ski Equipment and Supplies is presented below:

	Skis	Boots	Apparel	Supplies
Selling price	$165,000	$142,000	$119,000	$77,000
Cost	139,000	140,000	83,300	50,050
Replacement cost	111,000	115,000	103,300	46,050
Sales commission	10%	10%	10%	10%

In applying the lower of cost and net realizable value rule, the inventory of boots would be valued at:

$127,800.

$92,300.

$115,000.

$140,000.

On July 8, a fire destroyed the entire merchandise inventory on hand of Larrenaga Wholesale Corporation. The following information is available:

Sales, January 1 through July 8	$694,000
Inventory, January 1	136,000
Purchases, January 1 through July 8	644,000
Gross profit ratio	25%

What is the estimated inventory on July 8 immediately prior to the fire?

$161,000.

$260,100.

$520,500.

$259,500.

Fad City sells novel clothes that are subject to a great deal of price volatility. A recent item that cost $20.80 was marked up $13.00, marked down for a sale by $5.40 and then had a markdown cancellation of $3.30. The latest selling price is:

$35.70.

$26.20.

$31.70.

$37.10.

Data below for the year ended December 31, 2016, relates to Houdini Inc. Houdini started business January 1, 2016, and uses the LIFO retail method to estimate ending inventory.

	Cost	Retail
Beginning inventory	$76,000	$115,000
Net purchases	362,610	530,000
Net markups		31,000
Net markdown		51,000
Net sales		474,000

Estimated ending inventory at cost is (Do not round intermediate calculations):

$101,596.

$106,486.

$110,770.

None of these answer choices are correct.

Willie Nelson's Boots uses the conventional retail method to estimate ending inventory. Cost data for the most recent quarter is shown below:

	Cost	Retail
Beginning inventory	$48,000	$65,000
Net purchases	156,000	219,000
Net markups		20,000
Net markdowns		37,000
Net sales		222,000

The conventional cost-to-retail percentage (rounded) is:

76.4%.

67.1%.

84.3%.

71.8%.

Willie Nelson's Boots uses the conventional retail method to estimate ending inventory. Cost data for the most recent quarter is shown below:

	Cost	Retail
Beginning inventory	$32,000	$69,000
Net purchases	151,000	201,000
Net markups		30,000
Net markdowns		35,000
Net sales		220,000

To the nearest thousand, estimated ending inventory using the conventional retail method is (Do not round intermediate calculations):

$40,000.

$28,000.

$27,000.

$12,000.

Poppy Co. uses a periodic inventory system. Beginning inventory on January 1 was understated by $31,000, and its ending inventory on December 31 was understated by $17,000. In addition, a purchase of merchandise costing $21,700 was incorrectly recorded as a $2,170 purchase. None of these errors were discovered until the next year. As a result, Poppy's cost of goods sold for this year was:

Overstated by $33,530.

Overstated by $5,530.

Understated by $50,530.

Understated by $33,530.

On July 10, 2016, Johnson Corporation signed a purchase commitment to purchase inventory for $360,000 on or before February 15, 2017. The company's fiscal year-end is December 31. The contract was exercised on February 1, 2017 and the inventory was purchased for cash at the contract price. On the purchase date of February 1, the market price of the inventory was $368,000. The market price of the inventory on December 31, 2016, was $332,000. The company uses a perpetual inventory system.

How much loss on purchase commitment will Johnson recognize in 2016?

$8,000.

$28,000.

$36,000.

None.

On July 10, 2016, Johnson Corporation signed a purchase commitment to purchase inventory for $214,000 on or before February 15, 2017. The company's fiscal year-end is December 31. The contract was exercised on February 1, 2017, and the inventory was purchased for cash at the contract price. On the purchase date of February 1, the market price of the inventory was $224,000. The market price of the inventory on December 31, 2016, was $187,000. The company uses a perpetual inventory system.

At what amount will Johnson record the inventory purchased on February 1, 2017?

$197,000

$187,000

$224,000

$214,000

Haskell Corporation has determined its year-end inventory on a FIFO basis to be $803,000. Information pertaining to that inventory is as follows:

Selling price	$832,000
Costs to sell	44,000
Replacement cost	774,000

What should be the reported value of Haskell's inventory if the company prepares its financial statements according to International Financial Reporting Standards (IFRS)?

$709,000.

$774,000.

$788,000.

$803,000.