The 2020 inventory data for Wood Corporation's is presented below. Assume that Wood uses periodic inventory tracking Beginning Inventory (purchased in 2019) 200 units @ $32 per unit Purchases: Purchase 1 on 2/4/20 Purchase 2 on 6/8/20 200 units @ $34 per unit 400 units @ $36 per unit Sales: Sale 1 on 3/28/20 Sale 2 on 10/15/20 300 units @ $70 per unit 340 units @ $70 per unit When Wood examines the actual units in ending inventory, they see that 20 of the units are from beginning inventory, 60 units are from the 2/4/20 purchase, and 80 units are from the 6/8/20 purchase. a. 1. What is Inventory on the 12/31/20 Balance Sheet if Wood uses FIFO? $22,480 b. $21,840 c. $5,760 d. $5,120 2. What is Cost of Goods Sold on the 2020 Income Statement if Wood uses LIFO? a. $22,480 b. $21,840 c. $5,760 d. $5,120 3. What is Inventory on the 12/31/20 Balance Sheet if Wood uses Specific Identification? a. $22,040 b. $21,840 c. $5,560 d. $5,120 4. What is Gross Profit on the 2020 Income Statement if Wood uses Weighted Average Cost? a. $22,080 b. $22,720 c. $22,760 d. $22,960 a. 5. In the period of declining prices, which of the following inventory methods generally results in the lowest income statement amount of Cost of goods sold? FIFO b. LIFO c. Weighted Average Cost d. Specific Identification 6. Bright Eyes uses a periodic inventory system. When employees count the inventory on December 31, 2019, they accidentally count one box of eyeglasses twice, resulting in 2019 ending inventory being overstated by $10,000. The employees count the December 31, 2020 inventory correctly. Which of the following statements is true related to Bright Eyes' 2020 and 2019 financial statements? 2019 Cost of Goods Sold will be overstated by $10,000. b. 2019 Beginning Inventory will be understated by $10,000. c. 2020 Cost of Goods Sold will be overstated by $10,000. d. 2020 Beginning Inventory will be understated by $10,000. None of the above are true. a. e. Use PVH Corp.'s most recent financial statements to answer the following three questions. 7. Which inventory cost flow assumption does PVH use to value inventories in North America? a. FIFO b. LIFO Weighted Average Cost d. Specific Identification c. a. 8. What is the most likely reason that PVH chose this inventory cost flow assumption (given rising price trend)? To report higher Net Income on its Income Statement. b. To report higher Total Assets on its Balance Sheet. c. To pay less taxes. d. Both a and b are true. 9. Which of the following statements is TRUE regarding PVHs Income Statement? a. Fiscal year 2019 COGS > Fiscal year 2018 COGS. b. Fiscal year 2018 Gross Profit Fiscal year 2018 Gross Profit. d. Fiscal year 2019 Operating Income > Fiscal year 2018 Operating Income. Both a and care true. c. e
