1.At a time of declining prices, which cost flow assumption will result in the highest endinginventory?A. FIFOB. LIFOC. Weighted averageD. Either A or C2. When the cost of inventory is rising, which inventory cost flow method will produce the lowestamount of cost of goods sold?A. FIFOB. Weighted Average.C. All methods will produce the same amount of cost of goods sold.D. LIFO200The inventory records for Raymond Co. reflected the followingBeginning Inventory @ May 1 200 units @ $1.00First Purchase @ May 7Second Purchase @ May 17Third Purchase @ May 23Sales @ May 31B. $1.15C. $1.14D. $1.31B. $130C. $324D. $340300 units @ $1.10 =400 units @ $1.20100 units @ $1.30 = 120900 units @ $1.50 135030go3. Determine the weighted average cost per unit for May.A. $1.22.4.Determine the amount of cost of goods sold assuming the LIFO cost flow method.A. $1,140B. $1,040C. $1,000D. $9405. Determine the amount of gross margin assuming the FIFO cost flow method.A. $114

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1.At a time of declining prices, which cost flow assumption will result in inventory? A. FIFO B. LIFO C. Weighted average D. Either A or C

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

1.At a time of declining prices, which cost flow assumption will result in the highest ending
inventory?
A. FIFO
B. LIFO
C. Weighted average
D. Either A or C
2. When the cost of inventory is rising, which inventory cost flow method will produce the lowest
amount of cost of goods sold?
A. FIFO
B. Weighted Average.
C. All methods will produce the same amount of cost of goods sold.
D. LIFO
200
The inventory records for Raymond Co. reflected the following
Beginning Inventory @ May 1 200 units @ $1.00
First Purchase @ May 7
Second Purchase @ May 17
Third Purchase @ May 23
Sales @ May 31
B. $1.15
C. $1.14
D. $1.31
B. $130
C. $324
D. $340
300 units @ $1.10 =
400 units @ $1.20
100 units @ $1.30 = 120
900 units @ $1.50 1350
30
go
3. Determine the weighted average cost per unit for May.
A. $1.22
.4.Determine the amount of cost of goods sold assuming the LIFO cost flow method.
A. $1,140
B. $1,040
C. $1,000
D. $940
5. Determine the amount of gross margin assuming the FIFO cost flow method.
A. $114

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H7. For the same transactions, why does the weighted-average cost method provide different value for ending inventory and COGS depending on whether the periodic or perpetual inventory system is used? Select one: a. Perpetual inventory calculates and assigns costs as items are sold, while periodic inventory calculates and assigns costs at the end of the period. b. Perpetual inventory calculates and assigns costs at the end of the period, while periodic inventory calculates and assigns costs as items are sold. c. Perpetual inventory counts all the purchases for the month first before calculating the average cost, while periodic calculates the average cost after every transaction. d. Perpetual inventory and periodic inventory will not provide different values using Explain also wrong options and explain with details
QUESTION 11 Match the term on the left to the appropriate description on the right. v Cost of goods available for sale (COGAS) A. A valuation rule applied to ending inventory. v LIFO reserve B. The maximum value that cost of goods sold (COGS) can be in a period. C. The amount by which inventory measured under FIFO would exceed inventory measured under LIFO v Lower-of-cost-or-market v Inventory turnover ratio. D. An inventory cost flow assumption. E. A measure for evaluating a company's inventory management. v FIFO (first-in, first out) v Periodic inventory F. A system for calculating COGS based on ending inventory value.
imcomplete i still need Inventory turnoverCurrent ratio Quick ratio Fixed charge coverage
When inventory costs rise and inventory quantities are not decreasing, what does the LIFO produces?
During periods when costs are rising and inventory quantities are stable, cost of goods sold will be: Multiple Choice Lower under average cost than LIFO. Higher under FIFO than average cost. Lower under LIFO than FIFO. Higher under FIFO than LIFO.
Which of the following regarding the lower of cost ormarket rule for inventory are true?(i) The lower of cost or market rule is an example of thehistorical cost principle.(ii) When the market value of inventory drops belowthe original cost of inventory shown in the financialrecords, net income is reduced.(iii) When the market value of inventory drops belowthe original cost of inventory shown in the financialrecords, total assets are reduced.a. (i) only c. (ii) and (iii)b. (ii) only d. All of the above
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