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     82.     Kingman 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”. Kingman 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.

     83.     Brown 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 2007 was $60,000. The balance in the same account at the end of 2008 is $90,000. Brown’s Cost of Goods Sold account has a balance of $450,000 from sales transactions recorded during the year. What amount should Brown report as Cost of Goods Sold in the 2008 income statement?
a.     $420,000.
b.     $450,000.
c.     $480,000.
d.     $540,000.

     84.     Green 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 2007 was $80,000. The balance in the same account at the end of 2008 is $120,000. Green’s Cost of Goods Sold account has a balance of $600,000 from sales transactions recorded during the year. What amount should Green report as Cost of Goods Sold in the 2008 income statement?
a.     $560,000.
b.     $600,000.
c.     $640,000.
d.     $720,000.

     85.     Johnson 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. Johnson 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.

     86.     Kingman 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. Kingman 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 87 and 88

AJ 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.

     87.     What is AJ Company’s ending inventory?
a.     $100,000.
b.     $128,000.
c.     $131,360.
d.     $143,360.

     88.     What is AJ Company’s gross profit?
a.     $428,000.
b.     $431,360.
c.     $443,460.
d.     $868,640.


Use the following information for 89 and 90

Ely 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.

     89.     What is Ely Company’s ending inventory?
a.     $110,000.
b.     $115,000.
c.     $116,500.
d.     $126,500.

     90.     What is Ely Company’s gross profit?
a.     $415,000.
b.     $416,500.
c.     $426,500.
d.     $883,500.

Use the following information for questions 91 through 93.
Dolan Corporation adopted the dollar-value LIFO method of inventory valuation on December 31, 2005. 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, 2006     $256,800     107
December 31, 2007     290,000     125
December 31, 2008     325,000     130

     91.     What is the cost of the ending inventory at December 31, 2006 under dollar-value LIFO?
a.     $240,000.
b.     $256,800.
c.     $241,400.
d.     $235,400.

     92.     What is the cost of the ending inventory at December 31, 2007 under dollar-value LIFO?
a.     $232,000.
b.     $231,400.
c.     $232,840.
d.     $240,000.

     93.     What is the cost of the ending inventory at December 31, 2008 under dollar-value LIFO?
a.     $256,240.
b.     $254,800.
c.     $250,000.
d.     $263,400.

     94.     Tate Company adopted the dollar-value LIFO method on January 1, 2007, 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, 2007 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     12/7/07     2,000     $ 6.00
     A     12/11/07     10,000     5.75
     B     12/15/07     10,000     17.00
          Using the double-extension method, what is the price index for 2007 that should be computed by Tate Company?
a.     108.33%
b.     109.59%
c.     111.05%
d.     220.51%

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