6.2 Compute inventory costs using specific-identification; first-in, first-out (FIFO); and average cost methods and journalize inventory transactions
1) Beginning inventory plus net purchases equals cost of goods sold.
2) A piece of artwork would probably be inventoried using the specific-identification method.
3) The objective of inventory tracking is to allocate the cost of goods available for sale between the cost of units sold and the cost of unsold inventory.
4) Cost of goods sold is shown on the:
A) balance sheet as an asset.
B) income statement before gross profit.
C) statement of retained earnings.
D) income statement after gross profit.
E) balance sheet as a liability.
5) Inventory is shown on the:
A) balance sheet as an asset.
B) income statement before gross profit.
C) statement of retained earnings.
D) income statement after gross profit.
E) balance sheet as a long-term asset.
6) The amount of cost of goods sold is MOST influenced by the:
A) cost of the items sold.
B) cost of the unsold items.
C) inventory method used.
D) number of items sold.
E) the physical flow of inventory.
7) The LEAST widely used of the inventory valuation methods is:
A) FIFO.
B) perpetual system.
C) average cost.
D) specific-identification.
E) periodic system.
8) Brandon Company has the following list of inventory:
Item
|
Unit Cost
|
Selling Price
|
DKW
|
$13,257
|
$20,322
|
EOR
|
$6,790
|
$7,192
|
CKS
|
$18,302
|
$19,773
|
XCC
|
$9,394
|
$11,274
|
CIS
|
$27,434
|
$33,409
|
Under specific-identification, what is Brandon's ending inventory if EOR and CIS are not sold during the current period?
9) Isaiah Sporting Goods uses the perpetual average cost method of determining inventory costs.
Below is the inventory record for Product C124.
Date
|
Received
|
Sold
|
Cost/Unit
|
Total Cost
|
April 22
|
534
|
|
$6.58
|
$3,513.72
|
May 17
|
433
|
|
$6.70
|
$2,901.10
|
June 21
|
389
|
|
$6.76
|
$2,629.64
|
August 2
|
436
|
|
$6.44
|
$2,807.84
|
What is the average cost per unit after the receipt of the June 21 inventory?
10) Brandon Company has the following list of inventory:
Item
|
Unit Cost
|
Selling Price
|
DKW
|
$13,257
|
$20,322
|
EOR
|
$6,790
|
$7,192
|
CKS
|
$18,302
|
$19,773
|
XCC
|
$9,394
|
$11,274
|
CIS
|
$27,434
|
$33,409
|
Under specific-identification, what is Brandon's cost of goods sold if EOR and CIS were not sold during the current period?