Which cost flow assumption generally results in the highest reported amount of net income in periods of rising inventory costs?

Multiple Choice

• LIFO.

• FIFO.

• Weighted-average.

• Income will be the same under each assumption.

Which cost flow assumption must be used for financial reporting if it is also used for tax reporting?

Multiple Choice

• LIFO.

• FIFO.

• Weighted-average.

Under a perpetual inventory system:

Multiple Choice

• Cost of good sold is recorded with a period-end adjusting entry.

• Purchase discounts are not recorded.

• Inventory purchases are recorded only at the end of the period.

Inventory records for Dunbar Incorporated revealed the following:

Date		Transaction	Number of Units			Unit Cost
Apr.	1	Beginning inventory		430		$	2.17
Apr.	20	Purchase		330			2.70

Dunbar sold 620 units of inventory during the month. Ending inventory assuming LIFO would be: (Do not round your intermediate calculations. Round your answer to the nearest dollar amount.)

Multiple Choice

• $304.

• $933.

• $378.

• $891.

Inventory records for Dunbar Incorporated revealed the following:

Inventory records for Dunbar Incorporated revealed the following:

Date		Transaction	Number of Units			Unit Cost
Apr.	1	Beginning inventory		550		$	2.34
Apr.	20	Purchase		330			2.64

Dunbar sold 650 units of inventory during the month. Ending inventory assuming weighted-average cost would be: (Round weighted-average unit cost to 4 decimal places and final answer to the nearest dollar amount.)

Multiple Choice

• $564.

• $624.

• $573.

• $532.

The following information pertains to Julia & Company:

March		1		Beginning inventory = 26 units @ $5.80
March		3		Purchased 21 units @ 4.00
March		9		Sold 30 units @ 8.40

What is the cost of goods sold for Julia & Company assuming it uses LIFO? (Do not round your intermediate calculations. Round your answer to the nearest dollar amount.)

Multiple Choice

• $122.

• $136.

• $120.

Inventory records for Marvin Company revealed the following:

Date		Transaction	Number of Units			Unit Cost
Mar.	1	Beginning inventory		980		$	7.19
Mar.	10	Purchase		590			7.62
Mar.	16	Purchase		710			8.12
Mar.	23	Purchase		540			8.52

Marvin sold 1,890 units of inventory during the month. Cost of goods sold assuming FIFO would be: (Do not round your intermediate calculations. Round your answer to the nearest dollar amount.)

Multiple Choice

• $14,590.

• $16,103.

• $15,221.

A company's sales equal $60,000 and cost of goods sold equals $20,000. Its beginning inventory was $1,600 and its ending inventory is $2,400. The company's inventory turnover ratio equals:

Multiple Choice

• 5 times.

• 10 times.

• 20 times.

• 30 times.

Anthony Corporation reported the following amounts for the year:

Net sales	$	296,000
Cost of goods sold		138,000
Average inventory		50,000

Anthony's average days in inventory is: (Round to the nearest whole day.)

Multiple Choice

• 170 days.

• 114 days.

• 132 days.

• 151 days.

Anthony Corporation reported the following amounts for the year:

Net sales	$	296,000
Cost of goods sold		138,000
Average inventory		50,000

Anthony's gross profit ratio is:

Multiple Choice

• 53.4%.

• 51.9%.

• 50.3%