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1. When reporting inventory using the lower of cost or market, market should not be less than: a. Replacement cost. b. Net reliable value c.

1. When reporting inventory using the lower of cost or market, market should not be less than:

a. Replacement cost.

b. Net reliable value

c. selling price

d. net realizable value less normal profit margin

2. The records of California Marine Products, Inc., revealed the following information related to inventory destroyed in an earthquake:

Inventory, beginning of period $ 300,000
Purchases to date of earthquake 160,000
Net sales to date of earthquake 450,000
Gross profit ratio 30 %

The estimated amount of inventory destroyed by the earthquake is:

a. $325,000

b. $145,000

c. $10,000

d. All of these answer choice are incorrect

3. The Toso Company uses the retail inventory method. The following information is available for the year ended December 31, 2018:

Cost Retail
Inventory 1/1/2018 $ 390,000 $ 650,000
Net purchases for the year 1,402,000 1,835,000
Net markups 75,000
Net markdowns 45,000
Net sales 1,845,000

Applying the average cost retail inventory method, Toso's inventory at December 31, 2018, is estimated at:

a. $477,392

b. $469,000

c. 395,159

d. $405,035

4. Montana Co. has determined its year-end inventory on a FIFO basis to be $634,000. Information pertaining to that inventory is as follows:

Selling price $ 610,000
Costs to sell 30,000
Replacement cost 550,000

What should be the reported value of Montanas inventory?

a. $550,00

b. $580,000

c. 593,000

d. $ 610,000

5. Data related to the inventories of Costco Medical Supply are presented below:

Surgical Surgical Rehab Rehab
Equipment Supplies Equipment Supplies
Selling price $ 260 $ 100 $ 340 $ 165
Cost 170 90 250 162
Costs to sell 30 15 25 10

In applying the lower of cost or net realizable value rule, the inventory of surgical equipment would be valued at:

a. $230

b.$240

c. $170

d. $152

6. Data related to the inventories of Costco Medical Supply are presented below:

Surgical Equipment Surgical Supplies Rehab Equipment Rehab Supplies
Selling price $ 268 $ 126 $ 335 $ 150
Cost 165 100 285 147
Costs to sell 11 11 33 10

In applying the lower of cost or net realizable value rule, the inventory of rehab equipment would be valued at:

a. $285

b. $270

c. $302

d. $225

7. Data related to the inventories of Alpine Ski Equipment and Supplies is presented below:

Skis Boots Apparel Supplies
Selling price $ 177,000 $ 161,000 $ 113,000 $ 64,000
Cost 137,000 137,000 73,450 44,800
Replacement cost 135,000 112,000 93,450 40,800
Sales commission 10 % 10 % 10 % 10 %

In applying the lower of cost or net realizable value rule, the inventory of skis would be valued at:

a. $115,050

b. $137,000

c. 159,300

d. $135,000

8. Data related to the inventories of Alpine Ski Equipment and Supplies is presented below:

Skis Boots Apparel Supplies
Selling price $ 180,000 $ 140,000 $ 120,000 $ 60,000
Cost 128,000 133,000 90,000 45,000
Replacement cost 120,000 130,000 110,000 41,000
Sales commission 10 % 10 % 10 % 10 %

In applying the lower of cost or net realizable value rule, the inventory of boots would be valued at:

a. $140,000

b. $133,000

c. $126,000

d. $130,000

9. Data below for the year ended December 31, 2018, relates to Houdini Inc. Houdini started business January 1, 2018, and uses the LIFO retail method to estimate ending inventory.

Cost Retail
Beginning inventory $ 80,000 $ 117,000
Net purchases 377,890 550,000
Net markups 33,000
Net markdowns 53,000
Net sales 492,000

Estimated ending inventory at retail is:

a. $155,000

b. $38,000

c. $91,000

d. $204,910

10. Willie Nelson's Boots uses the conventional retail method to estimate ending inventory. Cost data for the most recent quarter is shown below:

Cost Retail
Beginning inventory $ 49,000 $ 66,000
Net purchases 157,000 221,000
Net markups 25,000
Net markdowns 38,000
Net sales 223,000

The conventional cost-to-retail percentage (rounded) is:

a. 83.1%

b. 66.0%

c. 71.8%

d. 75.2%

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