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     73.     On April 15 of the current year, a fire destroyed the entire uninsured inventory of a retail store. The following data are available:
Sales, January 1 through April 15     $300,000
Inventory, January 1     50,000
Purchases, January 1 through April 15     250,000
Markup on cost     25%
          The amount of the inventory loss is estimated to be
a.     $60,000.
b.     $30,000.
c.     $75,000.
d.     $50,000.

     74.     The inventory account of Lance Company at December 31, 2007, included the following items:
          Inventory Amount
Merchandise out on consignment at sales price
     (including markup of 40% on selling price)     $15,000
Goods purchased, in transit (shipped f.o.b. shipping point)     12,000
Goods held on consignment by Lance     13,000
Goods out on approval (sales price $7,600, cost $6,400)     7,600
Based on the above information, the inventory account at December 31, 2007, should be reduced by
a.     $20,200.
b.     $22,600.
c.     $32,200.
d.     $32,000.

     75.     Flynn Sales Company uses the retail inventory method to value its merchandise inventory. The following information is available for the current year:
                Cost           Retail     
Beginning inventory     $ 30,000     $ 50,000
Purchases     145,000     200,000
Freight-in     2,500     —     
Net markups     —     8,500
Net markdowns     —     10,000
Employee discounts     —     1,000
Sales     —     205,000
If the ending inventory is to be valued at the lower-of-cost-or-market, what is the cost to retail ratio?
a.     $177,500 ÷ $250,000
b.     $177,500 ÷ $258,500
c.     $175,000 ÷ $260,000
d.     $177,500 ÷ $248,500

Use the following information for questions 76 through 80.

The following data concerning the retail inventory method are taken from the financial records of Stone Company.
                Cost           Retail     
     Beginning inventory     $ 49,000     $ 70,000
     Purchases     224,000     320,000
     Freight-in     6,000     —
     Net markups     —     20,000
     Net markdowns     —     14,000
     Sales          —     336,000

     76.     The ending inventory at retail should be
a.     $74,000.
b.     $60,000.
c.     $64,000.
d.     $42,000.

     77.     If the ending inventory is to be valued at approximately the lower of cost or market, the calculation of the cost to retail ratio should be based on goods available for sale at (1) cost and (2) retail, respectively of
a.     $279,000 and $410,000.
b.     $279,000 and $396,000.
c.     $279,000 and $390,000.
d.     $273,000 and $390,000.

     78.     If the foregoing figures are verified and a count of the ending inventory reveals that merchandise actually on hand amounts to $54,000 at retail, the business has
a.     realized a windfall gain.
b.     sustained a loss.
c.     no gain or loss as there is close coincidence of the inventories.
d.     none of these.

     *79.     Assuming no change in the price level if the LIFO inventory method were used in conjunction with the data, the ending inventory at cost would be
a.     $42,600.
b.     $42,000.
c.     $40,800.
d.     $43,200.

     *80.     Assuming that the LIFO inventory method were used in conjunction with the data and that the inventory at retail had increased during the period, then the computation of retail in the cost to retail ratio would
a.     exclude both markups and markdowns and include beginning inventory.
b.     include markups and exclude both markdowns and beginning inventory.
c.     include both markups and markdowns and exclude beginning inventory.
d.     exclude markups and include both markdowns and beginning inventory.

     81.     Gooch Corporation had the following amounts, all at retail:
Beginning inventory     $ 3,600     Purchases     $120,000
Purchase returns     6,000     Net markups     18,000
Abnormal shortage     4,000     Net markdowns     2,800
Sales     72,000     Sales returns     1,800
Employee discounts     1,600     Normal shortage     2,600
What is Gooch’s ending inventory at retail?
a.     $54,400.
b.     $56,000.
c.     $57,600.
d.     $58,400


     82.     Dryer Corporation had the following amounts, all at retail:
Beginning inventory     $ 3,600     Purchases     $100,000
Purchase returns     6,000     Net markups     18,000
Abnormal shortage     4,000     Net markdowns     2,800
Sales     72,000     Sales returns     1,800
Employee discounts     1,600     Normal shortage     2,600
     What is Dryer’s ending inventory at retail?
a.     $34,400.
b.     $36,000.
c.     $37,600.
d.     $38,400

     83.     Dye Corporation’s computation of cost of goods sold is:
Beginning inventory     $ 60,000
Add: Cost of goods purchased      405,000
Cost of goods available for sale      465,000
Ending inventory      90,000
Cost of goods sold     $375,000
The average days to sell inventory for Dye are
a.     58.4 days.
b.     67.6 days.
c.     73.0 days.
d.     87.6 days.

     84.     Ace Corporation’s computation of cost of goods sold is:
Beginning inventory     $ 60,000
Add: Cost of goods purchased      405,000
Cost of goods available for sale     465,000
Ending inventory      80,000
Cost of goods sold     $385,000
The average days to sell inventory for Ace are
a.     56.9 days.
b.     63.1 days.
c.     66.4 days.
d.     75.8 days.

     85.     The 2007 financial statements of Wert Company reported a beginning inventory of $80,000, an ending inventory of $120,000, and cost of goods sold of $600,000 for the year. Wert’s inventory turnover ratio for 2007 is
a.     7.5 times.
b.     6.0 times.
c.     5.0 times.
d.     4.3 times.


Use the following information for questions 86 through 90.

Trent Co. uses the retail inventory method. The following information is available for the current year.
                Cost           Retail     
     Beginning inventory     $ 78,000     $122,000
     Purchases     295,000     415,000
     Freight-in     5,000     —
     Employee discounts     —     2,000
     Net markups     —     15,000
     Net Markdowns     —     20,000
     Sales          —     390,000

     86.     If the ending inventory is to be valued at approximately lower of average cost or market, the calculation of the cost ratio should be based on cost and retail of
a.     $300,000 and $430,000.
b.     $300,000 and $428,000.
c.     $373,000 and $550,000.
d.     $378,000 and $552,000.

     87.     The ending inventory at retail should be
a.     $160,000.
b.     $150,000.
c.     $144,000.
d.     $140,000.

     88.     The approximate cost of the ending inventory by the conventional retail method is
a.     $95,900.
b.     $94,920.
c.     $98,000.
d.     $102,480.

     *89.     If the ending inventory is to be valued at approximately LIFO cost, the calculation of the cost ratio should be based on cost and retail of
a.     $378,000 and $552,000.
b.     $378,000 and $532,000.
c.     $300,000 and $410,000.
d.     $300,000 and $430,000.

     *90.     Assuming that the LIFO inventory method is used, that the beginning inventory is the base inventory when the index was 100, and that the index at year end is 112, the ending inventory at dollar-value LIFO retail cost is
a.     $80,460.
b.     $92,757.
c.     $95,900.
d.     $102,480.


Use the following information for questions 91 and 92.

Baker Company, which uses the retail LIFO method to determine inventory cost, has provided the following information for 2007:
                Cost           Retail     
     Inventory, 1/1/07     $ 94,000     $140,000
     Net purchases     378,000     562,000
     Net markups          68,000
     Net markdowns          30,000
     Net sales               530,000

     *91.     Assuming stable prices (no change in the price index during 2007), what is the cost of Baker's inventory at December 31, 2007?
a.     $128,100.
b.     $138,100.
c.     $136,000.
d.     $132,300.

     *92.     Assuming that the price index was 105 at December 31, 2007 and 100 at January 1, 2007, what is the cost of Baker's inventory at December 31, 2007 under the dollar-value-LIFO retail method?
a.     $133,690.
b.     $138,915.
c.     $140,305.
d.     $131,800.

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