84. Morgan
Manufacturing Company has the following account balances at year end:
Office supplies $ 4,000
Raw materials 27,000
Work-in-process 59,000
Finished goods 72,000
Prepaid insurance 6,000
What amount should Morgan
report as inventories in its balance sheet?
a. $72,000.
b. $76,000.
c. $158,000.
d. $162,000.
85. Lawson Manufacturing Company has the
following account balances at year end:
Office supplies $ 4,000
Raw materials 27,000
Work-in-process 59,000
Finished goods 92,000
Prepaid insurance 6,000
What amount should Lawson
report as inventories in its balance sheet?
a. $92,000.
b. $96,000.
c. $178,000.
d. $182,000.
86. Elkins Corporation uses
the perpetual inventory method. On March 1, it purchased $10,000 of inventory,
terms 2/10, n/30. On March 3, Elkins returned goods that cost $1,000. On March
9, Elkins paid the supplier. On March 9, Elkins should credit
a. purchase
discounts for $200.
b. inventory
for $200.
c. purchase
discounts for $180.
d. inventory
for $180.
87. Malone Corporation uses the perpetual
inventory method. On March 1, it purchased $30,000 of inventory, terms 2/10,
n/30. On March 3, Malone returned goods that cost $3,000. On March 9, Malone
paid the supplier. On March 9, Malone should credit
a. purchase
discounts for $600.
b. inventory
for $600.
c. purchase
discounts for $540.
d. inventory
for $540.
88. Bell Inc. took a physical inventory at the end of the year and
determined that $650,000 of goods were on hand. In addition, Bell, Inc.
determined that $50,000 of goods that were in transit that were shipped f.o.b.
shipping were actually received two days after the inventory count and that the
company had $75,000 of goods out on consignment. What amount should Bell report
as inventory at the end of the year?
a. $650,000.
b. $700,000.
c. $725,000.
d. $775,000.
89. Bell Inc. took a physical inventory at the end of the year and
determined that $475,000 of goods were on hand. In addition, the following
items were not included in the physical count. Bell, Inc. determined that
$60,000 of goods were in transit that were shipped f.o.b. destination (goods
were actually received by the company three days after the inventory count).The
company sold $25,000 worth of inventory f.o.b. destination. What amount should
Bell report as inventory at the end of the year?
a. $475,000.
b. $535,000.
c. $500,000.
d. $560,000.
90. Risers Inc. reported total assets of $1,200,000 and net income
of $135,000 for the current year. Risers determined that inventory was
overstated by $10,000 at the beginning of the year (this was not corrected).
What is the corrected amount for total assets and net income for the year?
a. $1,200,000
and $135,000.
b. $1,200,000
and $145,000.
c. $1,190,000
and $125,000.
d. $1,210,000
and $145,000.
91. Risers
Inc. reported total assets of $1,600,000 and net income of $85,000 for the
current year. Risers determined that inventory was understated by $23,000 at
the beginning of the year and $10,000 at the end of the year. What is the
corrected amount for total assets and net income for the year?
a. $1,610,000
and $95,000.
b. $1,590,000
and $98,000.
c. $1,610,000
and $72,000.
d. $1,600,000
and $85,000.
Use the
following information for questions 92 through 94.
Hudson, Inc. is a calendar-year corporation. Its financial statements for the years 2011
and 2010 contained errors as follows:
2011 2010
Ending inventory $3,000
overstated $8,000
overstated
Depreciation expense $2,000
understated $6,000
overstated
92. Assume that the proper correcting entries were made at December
31, 2010. By how much will 2011 income before taxes be overstated or
understated?
a. $1,000
understated
b. $1,000
overstated
c. $2,000
overstated
d. $5,000
overstated
93. Assume that no
correcting entries were made at December 31, 2010. Ignoring income taxes, by how much will retained earnings at
December 31, 2011 be overstated or understated?
a. $1,000
understated
b. $5,000
overstated
c. $5,000
understated
d. $9,000
understated
94. Assume that no
correcting entries were made at December 31, 2010, or December 31, 2011 and
that no additional errors occurred in
2012. Ignoring income taxes, by how
much will working capital at December 31, 2012 be overstated or understated?
a. $0
b. $2,000
overstated
c. $2,000
understated
d. $5,000
understated
95. The following information is available for Naab Company for 2010:
Freight-in $ 30,000
Purchase returns 75,000
Selling expenses 150,000
Ending inventory 260,000
The cost of goods sold is equal to 400% of selling expenses. What is the cost of goods available for sale?
a. $600,000.
b. $890,000.
c. $815,000.
d. $860,000.
Use the following information for questions 96 and 97.
Winsor Co. records purchases at net
amounts. On May 5 Winsor purchased merchandise on account, $16,000, terms 2/10,
n/30. Winsor returned $1,200 of the May 5 purchase and received credit on
account. At May 31 the balance had not been paid.
96. The amount to be recorded as a purchase return is
a. $1,080.
b. $1,224.
c. $1,200.
d. $1,176.
97. By how much should the account payable be adjusted on May 31?
a. $0.
b. $344.
c. $320.
d. $296.
Use the following information for questions 98 and 99.
The following
information was available from the inventory records of Rich Company for
January:
Units Unit Cost Total
Cost
Balance at January 1 3,000 $9.77 $29,310
Purchases:
January
6 2,000 10.30 20,600
January
26 2,700 10.71 28,917
Sales:
January
7 (2,500)
January
31 (4,000)
Balance at January 31 1,200
98. Assuming that Rich does not
maintain perpetual inventory records, what should be the inventory at January
31, using the weighted-average inventory method, rounded to the nearest dollar?
a. $12,606.
b. $12,284.
c. $12,312.
d. $12,432.
99. Assuming that Rich maintains perpetual inventory records, what
should be the inventory at January 31, using the moving-average inventory
method, rounded to the nearest dollar?
a. $12,606.
b. $12,284.
c. $12,312.
d. $12,432.
Use the following information for questions 100 and 101.
Niles Co. has the following data related to an item of inventory:
Inventory,
March 1 100
units @ $4.20
Purchase, March 7 350
units @ $4.40
Purchase, March 16 70 units @ $4.50
Inventory, March 31 130
units
100. The value assigned to ending inventory if Niles uses LIFO is
a. $579.
b. $552.
c. $546.
d. $585.
101. The value assigned to cost of goods sold if Niles uses FIFO is
a. $579.
b. $552.
c. $1,723.
d. $1,696.
102. Emley Company has been using the LIFO method of inventory
valuation for 10 years, since it began operations. Its 2010 ending inventory
was $40,000, but it would have been $60,000 if FIFO had been used. Thus, if
FIFO had been used, Emley's income before income taxes would have been
a. $20,000
greater over the 10-year period.
b. $20,000
less over the 10-year period.
c. $20,000
greater in 2010.
d. $20,000
less in 2010.
Use the following information for questions 103 through 106.
Transactions for the month of June were:
Purchases Sales
June 1 (balance) 800 @ $3.20 June 2 600
@ $5.50
3 2,200 @ 3.10 6 1,600 @
5.50
7 1,200 @ 3.30 9 1,000 @
5.50
15 1,800 @ 3.40 10 400 @
6.00
22 500 @ 3.50 18 1,400 @
6.00
25 200 @
6.00
103. Assuming that perpetual inventory records are kept in units
only, the ending inventory on a LIFO basis is
a. $4,110.
b. $4,160.
c. $4,290.
d. $4,470.
104. Assuming that perpetual inventory records are kept in dollars,
the ending inventory on a LIFO basis is
a. $4,110.
b. $4,160.
c. $4,290.
d. $4,470.
105. Assuming that perpetual inventory records are kept in dollars,
the ending inventory on a FIFO basis is
a. $4,110.
b. $4,160.
c. $4,290.
d. $4,470.
106. Assuming that perpetual inventory records are kept in units
only, the ending inventory on an average-cost basis, rounded to the nearest
dollar, is
a. $4,096.
b. $4,238.
c. $4,290.
d. $4,322.
107. Milford Company had 500 units of “Tank” in its
inventory at a cost of $4 each. It purchased, for $2,800, 300 more units of
“Tank”. Milford then sold 400 units at a selling price of $10 each, resulting
in a gross profit of $1,600. The cost flow assumption used by Johnson
a. is
FIFO.
b. is
LIFO.
c. is
weighted average.
d. cannot
be determined from the information given.
108. Nichols Company had 500 units of “Dink” in its
inventory at a cost of $5 each. It purchased, for $2,400, 300 more units of
“Dink”. Nichols then sold 600 units at a selling price of $10 each, resulting
in a gross profit of $2,100. The cost flow assumption used by Kingman
a. is
FIFO.
b. is
LIFO.
c. is
weighted average.
d. cannot
be determined from the information given.
109. June Corp. sells one product and uses a perpetual inventory
system. The beginning inventory consisted of 10 units that cost $20 per unit.
During the current month, the company purchased 60 units at $20 each. Sales
during the month totaled 45 units for $43 each. What is the number of units in
the ending inventory?
a. 10
units.
b. 15
units.
c. 25
units.
d. 70
units.
110. June Corp. sells one product and uses a perpetual inventory
system. The beginning inventory consisted of 10 units that cost $20 per unit.
During the current month, the company purchased 60 units at $20 each. Sales
during the month totaled 45 units for $43 each. What is the cost of goods sold
using the LIFO method?
a. $200.
b. $900.
c. $1,200.
d. $1,935.
111. Checkers uses the periodic inventory system. For the current
month, the beginning inventory consisted of 1,200 units that cost $12 each.
During the month, the company made two purchases: 500 units at $13 each and
2,000 units at $13.50 each. Checkers also sold 2,150 units during the month.
Using the average cost method, what is the amount of cost of goods sold for the
month?
a. $27,843.
b. $28,950.
c. $26,975.
d. $27,950.
112. Chess Top uses the periodic inventory system. For the current
month, the beginning inventory consisted of 200 units that cost $65 each.
During the month, the company made two purchases: 300 units at $68 each and 150
units at $70 each. Chess Top also sold 500 units during the month. Using the
average cost method, what is the amount of ending inventory?
a. $10,500.
b. $33,770.
c. $33,400.
d. $10,131.
113. Checkers uses the periodic inventory system. For the current
month, the beginning inventory consisted of 1,200 units that cost $12 each.
During the month, the company made two purchases: 500 units at $13 each and
2,000 units at $13.50 each. Checkers also sold 2,150 units during the month.
Using the FIFO method, what is the ending inventory?
a. $20,073.
b. $18,600.
c. $20,925.
d. $18,950.
114. Chess Top uses the periodic inventory system. For the current
month, the beginning inventory consisted of 200 units that cost $65 each.
During the month, the company made two purchases: 300 units at $68 each and 150
units at $70 each. Chess Top also sold 500 units during the month. Using the FIFO
method, what is the amount of cost of goods sold for the month?
a. $33,770.
b. $32,500.
c. $34,150.
d. $33,400.
115. Checkers uses the periodic inventory system. For the current
month, the beginning inventory consisted of 1,200 units that cost $12 each.
During the month, the company made two purchases: 500 units at $13 each and
2,000 units at $13.50 each. Checkers also sold 2,150 units during the month.
Using the LIFO method, what is the ending inventory?
a. $20,073.
b. $18,600.
c. $20,925.
d. $18,950.
116. Chess Top uses the periodic inventory system. For the current
month, the beginning inventory consisted of 200 units that cost $65 each.
During the month, the company made two purchases: 300 units at $68 each and 150
units at $70 each. Chess Top also sold 500 units during the month. Using the LIFO
method, what is the amount of cost of goods sold for the month?
a. $33,770.
b. $32,500.
c. $34,150.
d. $33,400.
117. Black Corporation uses the FIFO method for
internal reporting purposes and LIFO for external reporting purposes. The
balance in the LIFO Reserve account at the end of 2010 was $60,000. The balance
in the same account at the end of 2011 is $90,000. Black’s Cost of Goods Sold
account has a balance of $450,000 from sales transactions recorded during the
year. What amount should Black report as Cost of Goods Sold in the 2011 income
statement?
a. $420,000.
b. $450,000.
c. $480,000.
d. $540,000.
118. White Corporation uses the FIFO method for
internal reporting purposes and LIFO for external reporting purposes. The balance
in the LIFO Reserve account at the end of 2010 was $80,000. The balance in the
same account at the end of 2011 is $120,000. White’s Cost of Goods Sold account
has a balance of $600,000 from sales transactions recorded during the year.
What amount should White report as Cost of Goods Sold in the 2011 income
statement?
a. $560,000.
b. $600,000.
c. $640,000.
d. $720,000.
119. Milford Company had 400 units of “Tank” in its
inventory at a cost of $4 each. It purchased 600 more units of “Tank” at a cost
of $6 each. Milford then sold 700 units at a selling price of $10 each. The
LIFO liquidation overstated normal gross profit by
a. $ -0-
b. $200.
c. $400.
d. $600.
120. Nichols Company had 400 units of “Dink” in its
inventory at a cost of $6 each. It purchased 600 more units of “Dink” at a cost
of $9 each. Nichols then sold 700 units at a selling price of $15 each. The
LIFO liquidation overstated normal gross profit by
a. $ -0-
b. $300.
c. $600.
d. $900.
Use the following information for 121
and 122
RF Company had January 1 inventory of $100,000 when it adopted
dollar-value LIFO. During the year, purchases were $600,000 and sales were
$1,000,000. December 31 inventory at year-end prices was $143,360, and the
price index was 112.
121. What is RF Company’s ending inventory?
a. $100,000.
b. $128,000.
c. $131,360.
d. $143,360.
122. What is RF Company’s gross profit?
a. $428,000.
b. $431,360.
c. $443,460.
d. $868,640.
Use the following information for 123
and 124
Hay Company had January 1 inventory of $100,000 when it adopted
dollar-value LIFO. During the year, purchases were $600,000 and sales were
$1,000,000. December 31 inventory at year-end prices was $126,500, and the
price index was 110.
123. What is Hay Company’s ending inventory?
a. $110,000.
b. $115,000.
c. $116,500.
d. $126,500.
124. What is Hay Company’s gross profit?
a. $415,000.
b. $416,500.
c. $426,500.
d. $883,500.
Use the following information for questions 125 through 126.
Gross Corporation adopted the
dollar-value LIFO method of inventory valuation on December 31, 2009. Its
inventory at that date was $220,000 and the relevant price index was 100.
Information regarding inventory for subsequent years is as follows:
Inventory at Current
Date Current
Prices Price Index
December 31, 2010 $256,800 107
December 31, 2011 290,000 125
December 31, 2012 325,000 130
125. What is the cost of the ending inventory at December 31, 2010
under dollar-value LIFO?
a. $240,000.
b. $256,800.
c. $241,400.
d. $235,400.
126. What is the cost of the ending inventory at December 31, 2011
under dollar-value LIFO?
a. $232,000.
b. $231,400.
c. $232,840.
d. $240,000.
127. What is the cost of the ending inventory at December 31, 2012
under dollar-value LIFO?
a. $256,240.
b. $254,800.
c. $250,000.
d. $263,400.
128. Wise Company adopted the dollar-value LIFO method on January 1,
2010, at which time its inventory consisted of 6,000 units of Item A @ $5.00
each and 3,000 units of Item B @ $16.00 each. The inventory at December 31, 2010
consisted of 12,000 units of Item A and 7,000 units of Item B. The most recent
actual purchases related to these items were as follows:
Quantity
Items Purchase Date Purchased Cost Per Unit
A 12/7/10 2,000 $ 6.00
A 12/11/10 10,000 5.75
B 12/15/10 7,000 17.00
Using the double-extension method, what is the price
index for 2010 that should be computed by Wise Company?
a. 108.33%
b. 109.59%
c. 111.05%
d. 220.51%
129. Web World began using dollar-value LIFO for costing its
inventory last year. The base year layer consists of $250,000. Assuming the
current inventory at end of year prices equals $345,000 and the index for the
current year is 1.10, what is the ending inventory using dollar-value LIFO?
a. $345,000.
b. $320,000.
c. $313,636.
d. $379,500.
130. Willy World began using dollar-value LIFO for costing its
inventory two years ago. The ending inventory for the past two years in end-of-year
dollars was $100,000 and $150,000 and the year-end price indices were 1.0 and
1.2, respectively. Assuming the current inventory at end of year prices equals
$215,000 and the index for the current year is 1.25, what is the ending
inventory using dollar-value LIFO?
a. $177,500.
b. $186,400.
c. $190,000.
d. $188,750.
131. Opera Corp. uses the dollar-value LIFO method of computing its
inventory cost. Data for the past four years is as follows:
Year
ended Inventory at Price
December
31. End-of-year
Prices Index
2009
$ 65,000 1.00
2010 126,000 1.05
2011 135,000 1.10
What
is the 2009 inventory balance using dollar-value LIFO?
a. $65,000.
b. $61,904.
c. $122,727.
d. $135,000.
132. Opera Corp. uses dollar-value LIFO method of computing its
inventory cost. Data for the past four years is as follows:
Year
ended Inventory at Price
December
31. End-of-year
Prices Index
2009 $ 65,000 1.00
2010 126,000 1.05
2011 135,000 1.10
What
is the 2010 inventory balance using dollar-value LIFO?
a. $126,000.
b. $128,500.
c. $122,750.
d. $125,750.
133. Opera Corp. uses dollar-value LIFO method of computing its
inventory cost. Data for the past four years is as follows:
Year
ended Inventory at Price
December
31. End-of-year
Prices Index
2009 $ 65,000 1.00
2010 126,000 1.05
2011 135,000 1.10
What
is the 2011 inventory balance using dollar-value LIFO?
a. $135,000.
b. $128,500.
c. $122,750.
d. $125,750.
134. How should the following costs affect a retailer's inventory
valuation?
Freight-in Interest on Inventory Loan
a. Increase No
effect
b. Increase Increase
c. No effect Increase
d. No effect No effect
135. The following information applied to Howe, Inc. for 2010:
Merchandise purchased for resale $300,000
Freight-in 8,000
Freight-out 5,000
Purchase returns 2,000
Howe's 2010
inventoriable cost was
a. $300,000.
b. $303,000.
c. $306,000.
d. $311,000.
136. The following information was derived from the 2010 accounting
records of Perez Co.:
Perez
's Goods
Perez 's Central Warehouse Held by Consignees
Beginning inventory $130,000 $ 14,000
Purchases 575,000 70,000
Freight-in 10,000
Transportation to consignees 5,000
Freight-out 30,000 8,000
Ending inventory 145,000 20,000
Perez's 2010 cost of sales was
a. $570,000.
b. $600,000.
c. $634,000.
d. $639,000.
137. Dole Corp.'s accounts payable at December 31, 2010, totaled
$800,000 before any necessary year-end adjustments relating to the following
transactions:
·
On
December 27, 2010, Dole wrote and recorded checks to creditors totaling
$350,000 causing an overdraft of $100,000 in Dole's bank account at December
31, 2010. The checks were mailed out on January 10, 2011.
·
On
December 28, 2010, Dole purchased and received goods for $150,000, terms 2/10,
n/30. Dole records purchases and accounts payable at net amounts. The invoice
was recorded and paid January 3, 2011.
·
Goods
shipped f.o.b. destination on December 20, 2010 from a vendor to Dole were
received January 2, 2011. The invoice cost was $65,000.
At December 31, 2010,
what amount should Dole report as
total accounts payable?
a. $1,362,000.
b. $1,297,000.
c. $1,050,000.
d. $950,000.
138. The balance in Moon Co.'s accounts payable account at December
31, 2010 was $700,000 before any necessary year-end adjustments relating to the
following:
·
Goods
were in transit to Moon from a vendor on December 31, 2010. The invoice cost
was $40,000. The goods were shipped f.o.b. shipping point on December 29, 2010
and were received on January 4, 2011.
·
Goods
shipped f.o.b. destination on December 21, 2010 from a vendor to Moon were
received on January 6, 2011. The invoice cost was $25,000.
·
On
December 27, 2010, Moon wrote and recorded checks to creditors totaling $30,000
that were mailed on January 10, 2011.
In Moon's December 31,
2010 balance sheet, the accounts payable should be
a. $730,000.
b. $740,000.
c. $765,000.
d. $770,000.
139. Kerr Co.'s accounts payable
balance at December 31, 2010 was $1,500,000 before considering the following
transactions:
·
Goods
were in transit from a vendor to Kerr on December 31, 2010. The invoice price
was $70,000, and the goods were shipped f.o.b. shipping point on December 29,
2010. The goods were received on January 4, 2011.
·
Goods
shipped to Kerr, f.o.b. shipping point on December 20, 2010, from a vendor were
lost in transit. The invoice price was $50,000. On January 5, 2011, Kerr filed
a $50,000 claim against the common carrier.
In its December 31, 2010 balance sheet, Kerr
should report accounts payable of
a. $1,620,000.
b. $1,570,000.
c. $1,550,000.
d. $1,500,000.
140. Walsh Retailers purchased merchandise with a list price of $50,000,
subject to trade discounts of 20% and 10%, with no cash discounts allowable. Walsh
should record the cost of this merchandise as
a. $35,000.
b. $36,000.
c. $39,000.
d. $50,000.
141. On June 1, 2010, Penny Corp. sold merchandise with a list price
of $20,000 to Linn on account. Penny allowed trade discounts of 30% and 20%.
Credit terms were 2/15, n/40 and the sale was made f.o.b. shipping point. Penny
prepaid $400 of delivery costs for Ison as an accommodation. On June 12, 2010, Penny
received from Ison a remittance in full payment amounting to
a. $10,976.
b. $11,368.
c. $11,376.
d. $11,196.
142. Groh Co. recorded the following data pertaining to raw material
X during January 2010:
Units
Date Received Cost Issued On Hand
1/1/10 Inventory $8.00 3,200
1/11/10 Issue 1,600 1,600
1/22/10 Purchase 4,000 $9.40 5,600
The moving-average unit cost of X
inventory at January 31, 2010 is
a. $8.70.
b. $8.85.
c. $9.00.
d. $9.40.
143. During periods of rising
prices, a perpetual inventory system would result in the same dollar amount of
ending inventory as a periodic inventory system under which of the following
inventory cost flow methods?
FIFO LIFO
a. Yes No
b. Yes Yes
c. No Yes
d. No No
144. Hite
Co. was formed on January 2, 2010, to sell a single product. Over a two-year
period, Hite's acquisition costs have increased steadily. Physical quantities
held in inventory were equal to three months' sales at December 31, 2010, and
zero at December 31, 2011. Assuming the periodic inventory system, the
inventory cost method which reports the highest amount of each of the following
is
Inventory Cost of Sales
December
31, 2010 2011
a. LIFO FIFO
b. LIFO LIFO
c. FIFO FIFO
d. FIFO LIFO
145. Keck Co. had 450 units of product A on hand at January 1, 2010,
costing $42 each. Purchases of product A during January were as follows:
Date Units Unit Cost
Jan.
10 600 $44
18 750 46
28 300 48
A physical count on
January 31, 2010 shows 600 units of product A on hand. The cost of the
inventory at January 31, 2010 under the LIFO method is
a. $28,200.
b. $26,700.
c. $25,500.
d. $24,600.
146. When the double extension
approach to the dollar-value LIFO inventory cost flow method is used, the
inventory layer added in the current year is multiplied by an index number. How
would the following be used in the calculation of this index number?
Ending inventory Ending inventory
at current year cost at base year cost
a. Numerator Denominator
b. Numerator Not used
c. Denominator Numerator
d. Not
used Denominator
147. Farr Co. adopted the
dollar-value LIFO inventory method on December 31, 2010. Farr's entire
inventory constitutes a single pool. On December 31, 2010, the inventory was $320,000
under the dollar-value LIFO method. Inventory data for 2011 are as follows:
12/31/11 inventory at
year-end prices $440,000
Relevant price index at
year end (base year 2010) 110
Using dollar value LIFO,
Farr's inventory at December 31, 2011 is
a. $352,000.
b. $408,000.
c. $400,000.
d. $440,000.
ANSWERS:
No. Answer Solution
84. c $27,000
+ $59,000 + $72,000 = $158,000.
85. c $27,000
+ $59,000 + $92,000 = $178,000.
86. d [($10,000
– $1,000) × .02] = $180.
87. d [($30,000
– $3,000) × .02] = $540.
88. d $650,000
+ $50,000 + $75,000 = $775,000.
89. c $475,000
+ $25,000 = $500,000.
90. b $1,200,000
and ($135,000 + $10,000) = $145,000.
91. c ($1,600,000
+ $10,000) and ($85,000 – $23,000 + $10,000) = $72,000.
92. d $3,000
+ $2,000 = $5,000.
93. a $6,000
– ($3,000 + $2,000) = $1,000.
94. a The
effect of the errors in ending inventories reverse themselves in the following
year.
95. d $260,000
+ (4 × $150,000) = $860,000.
96. d $1,200
– ($1,200 × .02) = $1,176.
97. d ($16,000
– $1,200) × .02 = $296.
98. b ($29,310
+ $20,600 + $28,917) ÷ (3,000 + 2,000 + 2,700) = $10.237/unit
$10.237
× 1,200 = $12,284.
99. d Avg.
on 1/6 $49,910
÷ 5,000 = $9.982/unit
1/26 $53,872 ÷ 5,200 = $10.36/unit
$10.36
× 1,200 = $12,432.
100. b (100
× $4.20) + (30 × $4.40) = $552.
101. d 100
+ 350 + 70 – 130 = 390 units
(100
× $4.20) + (290 × $4.40) = $1,696.
102. a ($60,000
– $40,000) = $20,000.
103. a Available
(purchases) = 6,500 units
Sales
= 5,200 units
EI
= 6,500 – 5,200 = 1,300 units
(800
× $3.20) + (500 × $3.10) = $4,110.
104. c (200
× $3.2) + (400 × $3.1) + (400 × $3.4) + (300
× $3.5) = $4,290.
Date Purchase Sold Balance
6/1 (800
@ 3.2) 2,560 (800 @
3.2) 2,560
6/2 (600
@ 3.2) 1,920 (200 @ 3.2) 640
6/3 (2,200
@ 3.1) 6,820 (200 @
3.2)
(2,200
@ 3.1) 7,460
6/6 (1,600
@ 3.1) 4,960 (200 @ 3.2)
(600
@ 3.1) 2,500
6/7 (1,200
@ 3.3) 3,960 (200 @
3.2)
(600
@ 3.1)
(1,200
@ 3.3) 6,460
6/9 (1,000
@ 3.3) 3,300 (200 @ 3.2)
(600
@ 3.1)
(200
@ 3.3) 3,160
6/10 (200
@ 3.3) (200
@ 3.2)
(200
@ 3.1) 1,280 (400 @ 3.1) 1,880
6/15 (1,800
@ 3.4) 6,120 (200 @
3.2)
(400
@ 3.1)
(1,800
@ 3.4) 8,000
6/18 (1,400
@ 3.4) 4,760 (200 @ 3.2)
(400
@ 3.1) 3,240
(400
@ 3.4)
6/22 (500
@ 3.5) 1,750 (500 @
3.5) 4,990
6/25 (200
@ 3.5) 700 (200 @ 3.2)
(400
@ 3.1)
(400
@ 3.4)
(300
@ 3.5) 4,290
105. d (500
× $3.5) + (800 × $3.4) = $4,470.
106. b $21,210
÷ 6,500 units = $3.26
$3.26
× 1,300 = $4,238.
107. c (400
× $10) – $1,600 = $2,400 COGS
[(500
× $4) + $2,800] – $2,400 = $2,400 E.I.
($4,800
÷ 800) × 400 units
= $2,400 E.I. under weighted avg.
108. b (600 $10) – $2,100 = $3,900 COGS
[(500 $5) + $2,400] – $3,900 = $1,000 E.I.
200
× $5 = $1,000 E.I. under LIFO.
109. c 10
+ 60 – 45 = 25 units.
110. b 45
× $20/unit = $900.
111. a [(1,200
× $12) + (500 × $13) + (2,000 × $13.50] ¸ (1,200 + 500 + 2,000) = $12.95; $12.95 × 2,150 = $27,843.
112. d [(200
× $65) + (300 × $68) + (150 × $70)] ¸ (200 + 300 + 150) = $67.54; $67.54 × (650 – 500) = $10,131.
113. c (1,200
+ 500 + 2,000) – 2,150 = 1,550; 1,550 × $13.50 = $20,925.
114. d (200
× $65) + [(500 – 200) × $68] = $33,400.
115. d (1,200
+ 500 + 2,000) – 2,150 = 1,550;
(1,200
× $12) + [(1,550 – 1,200) × $13] = $18,950.
116. c (150
× $70) + (300 × $68) + (50 × $65) = $34,150.
117. c $450,000
+ ($90,000 – $60,000) = $480,000.
118. c $600,000
+ ($120,000 – $80,000) = $640,000.
119. b [(700
– 600) × ($6 – $4)] = $200.
120. b [(700
– 600) × ($9 – $6)] = $300.
121. c $143,360
÷ 1.12 = $128,000 –
$100,000 = $28,000.
$100,000
+ ($28,000 × 1.12) = $131,360.
122. b $100,000
+ $600,000 – $131,360 = $568,640 COGS
$1,000,000
– $568,640 = $431,360.
123. c $126,500
÷ 1.10 = $115,000 –
$100,000 = $15,000.
$100,000
+ ($15,000 ÷
1.10) = $116,500.
124. b $100,000
+ $600,000 – $116,500 = $583,500 COGS
$1,000,000
– $583,500 = $416,500.
125. c $256,800
÷ 1.07 = $240,000
$220,000
+ [(240,000 – $220,000) × 1.07] = $241,400.
126. c $290,000
÷ 1.25 = $232,000
($220,000
× 1) + ($12,000 × 1.07) = $232,840.
127. a $325,000
÷ 1.30 = $250,000
($220,000
× 1) + ($12,000 × 1.07) + ($18,000 × 1.3) = $256,240.
128. b [(2,000
× $6) + (10,000 × $5.75) + (7,000 × $17)] ÷ [(12,000 × $5) +
(7,000
× $16)] = 1.0959 = 109.59%.
129. b $345,000
÷ 1.10 = $313,636; $313,636 – $250,000 = $63,636;
$250,000
+ ($63,636 × 1.10) = $320,000.
130. d $215,000
÷ 1.25 = $172,000; $172,000 – ($150,000 ÷ 1.20) = $47,000;
$100,000
+ [($150,000 ÷ 1.20) – $100,000) × 1.2] = $130,000
$130,000 +
($47,000 × 1.25) = $188,750.
131. a $65,000
× 1.00 = $65,000.
132. c $126,000
÷ 1.05 = $120,000; $120,000 – $65,000 = $55,000.
$65,000
+ ($55,000 × 1.05) = $122,750.
133. d $135,000
÷ 1.10 = $122,727; $122,727 – ($126,000 ÷ 1.05) = $2,727;
$126,000
÷ 1.05 = $120,000; $120,000 – $65,000 = $55,000;
$65,000
+ ($55,000 × 1.05) + ($2,727 × 1.10) = $125,750.
134. a Conceptual.
135. c $300,000
+ $8,000 – $2,000 = $306,000.
136. d $130,000
+ $14,000 + $575,000 + $70,000 + $10,000 + $5,000 –
$145,000
– $20,000 = $639,000.
137. b $800,000
+ $350,000 + $147,000 = $1,297,000.
138. d $700,000
+ $40,000 + $30,000 = $770,000.
139. a $1,500,000
+ $70,000 + $50,000 = $1,620,000.
140. b $50,000 × .8 × .9 = $36,000.
141. c $20,000
× .7 × .8 = $11,200
($11,200
× .98) + 400 = $11,376.
142. c [(1,600
× $8.00) + (4,000 × $9.40)] ÷ 5,600 = $9.00.
143. a Conceptual.
144. c Conceptual.
145. c (450
× $42) + (150 × $44) = $25,500.
146. a Conceptual.
147. b $440,000
÷ 1.1 = $400,000
$320,000
+ ($80,000 × 1.1) = $408,000.
