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Question(s) / Instruction(s):

A company just starting in business purchased three merchandise inventory items at the following prices. First purchase $80; Second purchase $95; Third purchase $85. If the company sold two units for a total of $240 and used FIFO costing, the gross profit for the period would be?

 

2.            Ace Company is a retailer operating in an industry that experiences inflation (rising prices). Ace wants to maintain a high current ratio. Which inventory costing method should Ace consider using?

 

3.            If goods in transit are shipped FOB destination?

 

4.            In a period of increasing prices, which inventory flow assumption will result in the lowest amount of income tax expense?

 

5.            Which of the following should not be included in the physical inventory of a company?

 

6.            Which of these would cause the inventory turnover ratio to increase the most?

 

7.            An error in the physical count of goods on hand at the end of a period resulted in a $10,000 overstatement of the ending inventory. The effect of this error in the current period is

 

8.            Inventory costing methods place primary reliance on assumptions about the flow of

 

9.            Reeves Company is taking a physical inventory on March 31, the last day of its fiscal year. Which of the following must be included in this inventory count?

 

10.          The following information was available for Bowyer Company at December 31, 2010: beginning inventory $90,000; ending inventory $70,000; cost of goods sold $660,000; and sales $900,000. Bowyer’s inventory turnover ratio in 2010 was

 

11.          In periods of rising prices, the inventory method which results in the inventory value on the balance sheet that is closest to current cost is the

 

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