1.What Journal entry should be made if book inventory is $101,000 and market value is 97,000

Debit Inventory 4,000, Credit Cost of Goods sold 4,000

Debit Loss on Inventory Devaluation 4,000, Credit Inventory 4,000

Debit Cost of Goods sold 4,000, Credit Inventory 4,000

No entry is needed as inventory is recorded at cost

2.Which statement is false

When Prices are rising LIFO Cost of Goods Sold will be higher than FIFO

When Prices are rising Net Income will be Lower for LIFO than FIFO

When Prices are rising LIFO ending inventory will be higher than FIFO

You must calculate the weighted average cost per unit after every purchase made

3.If Beginning inventory is $10,000, purchases are $220,000 and Cost of Goods sold is $190,000,ending inventory would be

$40,000

$20,000

$30,000

Cant determine because we dont know if they are using FIFO, LIFO or weighted average costing

4.Using the same information from #3, Sales Revenues are $427,000, Sales Discounts Forfeitedare $11,000, and Freight Out is $7,000.What is Gross Profit?

$237,000

$226,000

$223,000

$216,000

5.Using the same information in questions 3 and 4 what is Inventory turnover

9.5

7.6

6.3

4.8

6.Using the same Information in questions 3-5, What is Days sales in inventory

76

58

48

38

7.Which is generally not a characteristic for the specific Identification method for inventory costing

Inventory has a high cost per item

Inventory is usually many items of a like kind nature

The number of Inventory Items are few and the items are unique

There is no such inventory costing method known as specific identification

Use the following information for questions 8-10

Date Units Cost/Unit Total Sales Price/Unit

6/1/15 Beginning Inventory 23 $10.00 $230

6/5/15 Purchase 15 $11.00 $165

6/7/15 Sale 20 $25.00

6/9/15 Purchase 10 $12.00 $120

6/20/15 Sale 25 $27.00

8.Using FIFO Compute Sales, Cost of Goods Sold, Gross Profit and ending inventory for June 2015

Sales $1,175, Cost of Goods Sold $479, Gross Profit $696, ending inventory $36

Sales $1,175, Cost of Goods Sold $467, Gross Profit $708, ending inventory $36

Sales $1,125, Cost of Goods Sold $479, Gross Profit $646, ending inventory $36

Sales $1,175, Cost of Goods Sold $479, Gross Profit $696, ending inventory $46

9.Using LIFO Compute Sales, Cost of Goods Sold, Gross Profit and ending inventory for June 2015

Sales $1,125, Cost of Goods Sold $485, Gross Profit $640, ending inventory $30

Sales $1,125, Cost of Goods Sold $500, Gross Profit $625, ending inventory $30

Sales $1,175, Cost of Goods Sold $485, Gross Profit $690, ending inventory $36

Sales $1,175, Cost of Goods Sold $485, Gross Profit $690, ending inventory $30

10. Using Weight Average, Compute Sales, Cost of Goods Sold, Gross Profit and ending inventory for June 2015 round to nearest $1

Sales $1,125, Cost of Goods Sold $473, Gross Profit $652, ending inventory $33

Sales $1,175, Cost of Goods Sold $473, Gross Profit $702, ending inventory $33

Sales $1,175, Cost of Goods Sold $497, Gross Profit $678, ending inventory $33

Sales $1,175, Cost of Goods Sold $482, Gross Profit $693, ending inventory $33