11) One difference between U.S. GAAP and IFRS is ________. A) U.S. GAAP allows LIFO and IFRS does not B) IFRS allows LIFO and U.S. GAAP does not C) U.S. GAAP allows FIFO and IFRS does not D)...

11) One difference between U.S. GAAP and IFRS is ________.

A) U.S. GAAP allows LIFO and IFRS does not

B) IFRS allows LIFO and U.S. GAAP does not

C) U.S. GAAP allows FIFO and IFRS does not

D) IFRS allows FIFO and U.S. GAAP does not

12) Grand Forks Enterprises sells toy airplanes to retailers such as K-Mart and Wal-Mart. Information about inventory is contained in the table below. The company uses a FIFO perpetual inventory system.

Determine the cost of goods sold.

A) $20,800

B) $21,200

C) $21,880

D) $19,400

13) Grand Forks Enterprises sells toy airplanes to retailers such as K-Mart and Wal-Mart. Information about inventory is contained in the table below. The company uses a LIFO perpetual inventory system and sells inventory for $5.00 per unit.

Determine the cost of goods sold for the January 10th sale.

A) $6,000

B) $3,600

C) $2,400

D) $2,600

14) Grand Forks Enterprises sells toy airplanes to retailers such as K-Mart and Wal-Mart. Information about inventory is contained in the table below. The company uses a LIFO perpetual inventory system and sells inventory for $5.00 per unit.

Determine the cost of goods sold for the January 20th sale.

A) $5,425

B) $5,850

C) $5,625

D) $5,725

15) Grand Forks Enterprises sells toy airplanes to retailers such as K-Mart and Wal-Mart. Information about inventory is contained in the table below. The company uses a LIFO perpetual inventory system and sells inventory for $5.00 per unit.

Determine the ending inventory for the period.

A) $2,925

B) $2,600

C) $2,725

D) $3,120

16) Philipsburg Corporation sells mugs to fine retailers across the world. Data from its periodic inventory system is presented in the table below. Inventory is sold for $170 per unit. Operating expenses, excluding cost of goods sold, totaled $40,000.

Which cost flow method would result in the
HIGHEST
taxable income for the period?

A) FIFO

B) LIFO

C) Weighted average method

D) Each of the methods would have equal net income for the period.

17) Philipsburg Corporation sells mugs to fine retailers across the world. Data from its periodic inventory system is presented in the table below. Inventory is sold for $170 per unit. Operating expenses excluding cost of goods sold totaled $40,000.

Which cost flow method would result in the
LOWEST
taxable income for the period?

A) FIFO

B) LIFO

C) Weighted average method

D) Only the LIFO cost flow method can be used for tax returns.

18) Inventory information for Great Falls Merchandising, Inc. is provided below. Sales for the period were 2,800 units for $8 each. The company uses a FIFO periodic inventory system.

Determine the ending inventory at March 31.

A) $3,400

B) $3,800

C) $9,200

D) $10,000

19) Tarheel Company purchases inventory from McGardy Wholesalers. The per unit cost of the items purchased during the current accounting period was $5.50, $5.70, $5.90 and $6.23. Which statement below regarding Tarheel’s choice of inventory cost flow methods is TRUE?

A) Net income will be the same regardless of the cost flow assumption adopted. The choice of an accounting method can’t affect net income.

B) Net income will be greater than taxable income regardless of the inventory method chosen by Tarheel Company.

C) If Tarheel Company uses the LIFO method for financial reporting, then it must also use the LIFO method for tax reporting.

D) If Tarheel Company selects the FIFO method, it will result in a lower net income than the LIFO method would have produced.

20) Inventory information for Great Falls Merchandising, Inc. is provided below. Sales for the period were 2,800 units for $8 each. The company uses a LIFO periodic inventory system.

Determine the ending inventory at March 31.

A) $3,400

B) $2,400

C) $10,200

D) $800