Snug-As-A-Bug Blankets has the following inventory data: July 1 Beginning Inventory 15 units at $8.00 July 5 Purchases 90 units at $84 July 14 Sale 60 units July 21 Purchases 45 units $87 July 30 Sale 42 units Assuming that a perpetual inventory system is used, what is the cost of goods sold on a LIFO basis for July? Answer $8,703 $8,658 $8,694. $8,874 At May 1, 2012, Heineken Company had beginning inventory consisting of 100 units with a unit cost of $7. During May, the company purchased inventory as follows:200 units at $7300 units at $8The company sold 500 units during the month for $12 per unit. Heineken uses the average cost method. Heineken's gross profit for the month of May is Answer $2,250 $3,750 $4,500 $6,000 To adjust a company's LIFO cost of goods sold to FIFO cost of goods sold Answer the ending LIFO reserve is added to LIFO cost of goods sold. the ending LIFO reserve is subtracted from LIFO cost of goods sold. an increase in the LIFO reserve is subtracted from LIFO cost of goods sold. a decrease in the LIFO reserve is subtracted from LIFO cost of goods sold. Many companies use just-in-time inventory methods. Which of the following is not an advantage of this method? Answer It limits the risk of having obsolete items in inventory. Companies may not have quantities to meet customer demand. It lowers inventory levels and costs. Companies can respond to individual customer requests. Atom Company just began business and made the following four inventory purchases in June: June 1 150 units $825 June 10 200 units $1,120 June 15 200 units $1,140 June 28 150 units $885 Total: $3970 A physical count of merchandise inventory on June 30 reveals that there are 250 units on hand. Using the LIFO inventory method, the value of the ending inventory on June 30 is Answer $1,385. $1,425. $1,455. $1,475. Hogan Industries had the following inventory transactions occur during 2012: Units Cost/Unit Feb.1, 2012 Purchase 18 $45 Mar. 14, 2012 Purchase 31 $47 May 1, 2012 Purchase 22 $49 The company sold 51 units at $63 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, what is the company's gross profit using LIFO? (rounded to whole dollars) Answer $2,441 $2,365 $848 $772 Laser Listening has the following inventory data: Nov. 1 Inventory 30 units @ $8.00 each Nov. 8 Purchase 120 units @ $8.60 each Nov. 17 Purchase 60 units @ $8.40 each Nov. 25 Purchase 90 units @ $8.80 each A physical count of merchandise inventory on November 30 reveals that there are 100 units on hand. Assuming that the specific identification method is used and that ending inventory consists of 30 units from each of the three purchases and 10 units from the November 1 inventory, cost of goods sold is Answer $854. $1,714. $1,708. $1,672 Given equal circumstances and generally rising costs, which inventory method will increase the tax expense the most? Answer FIFO LIFO Average Cost Income tax expense for the period will be the same under all assumptions. Redeker Company had the following records: 2012 2011 2010 Ending inventory $34,580 $27,650 $30,490 Cost of goods sold $182,000 $163,500 $174,200 What is Redeker's average days in inventory for 2012? (rounded) Answer 62.39 days 64.95 days 61.76 days 2,147 days Dole Industries had the following inventory transactions occur during 2012 Units Cost/Unit Feb.1, 2012 Purchase 54 $90 Mar. 14, 2012 Purchase 93 $94 May 1, 2012 Purchase 66 $98 The company sold 153 units at $126 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, and operating expenses of $2,000, what is the company's after-tax income using LIFO? (rounded to whole dollars) Answer $2,632 $3,242 $2,162 $1,842