Q4 1-3

Multiple Choice Identify the choice that best completes the statement or answers the question. I. If the estimated rate of gross profit is 30%, what is the estimated cost of the merchandise inventory on September 30, based on the following data? Sep. 1 Merchandise inventory Sep. 1-30 Purchases (net) Sep. 1-30 Sales (net) 125,000 300,000 150,000 a. $192,500 b. $275,000 c. $320,000 d. $105,000 2. During times of rising prices, which of the following is not an accurate statement? a. LIFO will result in a higher cost of goods sold than FIFO. b. Average costing will yield results that are between those of FIFO and LIFO. c. LIFO will result in higher income taxes than FIFO. d. FIFO will result in a higher net income than LIFO. 3. The inventory data for an item for November are: Nov. 1 Inventory 20 units at $19 Sold Purchased Sold Purchased 10 units 30 units at $20 20 units 10 units at $21 4 10 17 30 Using a perpetual system, what is the cost of the merchandise sold for November if the company uses FIFO? a. $580 b. $590 C. $600 d. $610