Inventories
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Question 1 of 10
1. Question
The following transactions were recorded in April.
Apr 1 – Beginning inventory 10 units @ $30
Apr 12 – Purchased 12 units @ $33
Apr 14 – Sold 15 units @ $50
Apr 22 – Purchased 4 units @ $35
Apr 30 – Sold 8 units @ $60
Based on FIFO, what is the gross profit for April?
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Question 2 of 10
2. Question
The following transactions were recorded in April.
Apr 1 – Beginning inventory 10 units @ $30
Apr 12 – Purchased 12 units @ $33
Apr 14 – Sold 15 units @ $50
Apr 22 – Purchased 4 units @ $35
Apr 30 – Sold 8 units @ $60
The firm uses a perpetual inventory system, and the cost method used is average cost.
What is the ending inventory at the end of April?
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Question 3 of 10
3. Question
Peris Ltd is studying the impact on its financial statements if it changes its cost flow methods from LIFO to FIFO. Which of the following is most likely in an inflationary environment?
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Question 4 of 10
4. Question
In an inflationary environment, a LIFO liquidation will most likely result in:
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Question 5 of 10
5. Question
A firm that reports under LIFO has a COGS of $100,000 for the year.
Over the same period, the beginning LIFO reserve was $2,000, and ending LIFO reserve was $1,500.
If the firm reported under FIFO, the gross profit would be:
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Question 6 of 10
6. Question
A company that reports using LIFO has the following assets in its balance sheet.
Cash $100,000
Inventory $30,000
Other Assets $60,000
Given the the LIFO reserve is $2,000 and a tax rate of 30%, what is the change in total assets of the company if it reports using FIFO?
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Question 7 of 10
7. Question
Which of the following is least likely to be found under the footnotes of the financial statements of a firm that reports under US GAAP.
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Question 8 of 10
8. Question
A PC dealer in Australia recently imported 1000 computers from China to be sold in the local market. Which of the following costs would least likely end up in the company’s inventory account?
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Question 9 of 10
9. Question
A shipbuilder has an uncompleted oil tanker sitting in its inventory at its cost of $8,000,000. Due to poor business outlook in the oil industry and a spate of cancelled orders, a reasonable price that the oil tanker can fetch is only about $9,000,000. The cost of completing the oil tanker is expected to be another $2,000,000, and the cost of selling it is estimated to be $250,000.
If the shipbuilder reports under IFRS, what should be the appropriate treatment of this oil tanker in its balance sheet and income statement?
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Question 10 of 10
10. Question
A shipbuilder has an uncompleted oil tanker sitting in its inventory at its cost of $8,000,000. Due to poor business outlook in the oil industry and a spate of cancelled orders, a reasonable price that the oil tanker can fetch is only about $9,000,000. The cost of completing the oil tanker is expected to be another $2,000,000, and the cost of selling it is estimated to be $250,000. The replacement cost of the oil tanker is estimated at $6,500,000, and normal profit margin is $1,000,000.
If the shipbuilder reports under US GAAP, what should be the appropriate treatment of this oil tanker in its balance sheet and income statement?
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