The specific identification method would probably be most appropriate for which of the following

goods?

A. Boxes of brass 4-inch drywall screws at Home Depot

B. Bottles of suntan lotion in Wal-Mart's central warehouse

C. Sets of tires at the Goodyear plant

D. Diamond necklaces at a Tiffany & Co. jewelry store

Mansfield Company has a periodic inventory system and uses the LIFO method to assign costs to

inventory and cost of goods sold. Consider the following information:

Date

Description

# of units

Cost per unit

January 1

Beginning inventory

100

$5

October 2

Purchase

75

$4

December 5

Sales

125

What amounts would be reported as the cost of goods sold and ending inventory balances for the

period?

A. Cost of goods sold $625; Ending inventory $175

B. Cost of goods sold $755; Ending inventory $225

C. Cost of goods sold $550; Ending inventory $250

D. Cost of goods sold $600; Ending inventory $200

Which of the following will occur when inventory costs are decreasing?

A. FIFO will result in a lower net income but a higher ending inventory than will LIFO.

B. FIFO will result in a higher net income but a lower ending inventory than will LIFO.

C. FIFO will result in a lower net income and a lower ending inventory than will LIFO.

D. FIFO will result in a higher net income and a higher ending inventory than will LIFO.

Inventory shipped FOB destination and in transit on the last day of the year should be included in:

A.

The inventory balance of the seller

B.

The inventory balance of the buyer

C.

Neither the inventory balance of the buyer or the seller

D.

Both, the inventory balance of the buyer and the seller