1)

Dallas Tools Inc. counted its inventory on December 31 and arrived at a total inventory amount of $54,500. This count did not include the following: Goods purchased in transit, shipping FOB shipping point, $3,500 Goods sold in transit, shipped FOB destination, $1,000 Goods at a customers location on approval, $300 The correct amount of inventory at December 31 is

$55,800.

$58,300.

$54,500.

$59,300.

2)Two companies report the same cost of goods available for sale but each employs a different inventory cost formula. If the price of goods has increased during the period, then the company using

FIFO will report higher cost of goods sold.

average cost will report lower ending inventory.

FIFO will report lower ending inventory.

average cost will report lower cost of goods sold.

3) In a period of inflation (prices are rising), which inventory cost formula will result in higher net income?

FIFO.

There would be no effect on net income.

Cost of goods sold for the period will be the same under both formulas.

Average cost.

Save for Later

4) Joe & Co. purchased a used tractor for hauling materials in the business. The tractor had a purchase price of $25,000. Before starting to use the tractor, Joe & Co. paid $3,300 to overhaul the engine, $1,100 for shipping of the tractor, and $4,200 for the next years insurance. What was the recorded cost of purchasing the tractor?

$28,300

5) Which of the following combinations reflects intangible assets with a finite life?

trademarks and brands

copyrights and patents

brands and trade names

copyrights and trademarks

$29,400

$25,000

$33,600