7.Albany Addictive Apples counted and valued its inventory using FIFO on December 31, 2013 and on December 31, 2014 and reported the calculated values on each respective balance sheet. Albany Additive Apples had zero consignment inventory on hand at December 31, 2014 and had some consignment on hand at December 31, 2013. If consignment inventory had erroneously been counted and included in inventory in the December 31, 2013 count, which of the following is true?

The company should not have used FIFO and should restate both years balance sheets and income statements

Inventory was understated at December 31, 2013

Net income was understated in 2014

Net income was understated in 2013

Inventory was understated at December 31, 2014

9.Alex's Tea House uses a perpetual inventory system. When Alex's Tea House purchases inventory on account, which of the following journal entries does it record?

None of the other alternatives are correct

Dr. Inventory and Cr. Accounts Payable

Dr. Inventory and Cr. Cash

Dr. Purchases and Cr. Cash

Dr. Purchases and Cr. Accounts Payable

The Toy Emporium Inc. has compiled the following information for the year ended December 31, 2015.

ItemCostMarketPuzzles$27,500$28,500Gameboys$16,200$17,000Dolls$57,600$65,200

The Toy Emporium Inc. reviews inventory on an item-by-item basis. What is the total write down of inventory for the year ended December 31, 2015?

$2,200

We need to know the cost flow assumption to calculate if there is a write down

$8,600

$6,400

There is no write down of inventory required