Ch. 18 Quiz

Instructions
Ch.18 Quiz

This assessment is worth 100 points.

  1. A perpetual inventory system continually updates inventory records.
       (5 points)

      
      

  2. In the specific identification method the flow of goods and flow of cost are not the same.
       (5 points)

      
      

  3. Weighted average unit cost is total cost of goods available for sale divided by beginning number of units available for sale.
       (5 points)

      
      

  4. Under certain circumstances ending inventory could be valued at less than cost.
       (5 points)

      
      

  5. To use the retail method of estimating ending inventory the figure for net sales at retail must be known.
       (5 points)

      
      

  6. Inventory turnover at cost is net sales divided by average inventory at retail.
       (5 points)

      
      

  7. During inflation the best method to use in inventory valuation that produces the least amount of profit is:
       (5 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  8. Inventory turnover at retail is equal to net sales divided by:
       (5 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  9. Given: Net sales $35,000, beginning inventory at retail $12,000, ending inventory at retail $16,000, cost of goods sold $18,500. The inventory turnover at retail is:
       (5 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  10. Overhead expenses are:
       (5 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  11. Jones Co. uses the retail inventory method. Given the following the ending inventory at cost is: Sales at retail $70,000, Net purchases at cost $39,500, Net purchases at retail $65,500, Beginning inventory at cost $20,500, beginning inventory at retail $34,500.
       (5 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  12. Melissa's Dress Shop inventory at cost on January 1 was $19,400. Its retail value was $36,000. During the year additional net purchases at a cost of $42,600 was brought in. Its retail value was $64,000. The net sales for the year was $70,000. Melissa's inventory at cost by the retail method is:
       (5 points)

    a.  
    b.  
    c.  
    d.  
    e.  

  13. Calculate Cost of Ending Inventory using the Retail Method


    Cost

    Retail Price

    Beginning Inventory

    $ 60,000

    $ 102,000

    Purchases during the year

    $ 25,000

    40,000

    Sales for Year

    $ 60,000

    (Round cost ratio to nearest hundredth percent)


       (4 points)

    (* 4000 character limit)

  14. Calculate Inventory Turnover at cost (to nearest tenth)

    Ending Inventory

    $ 35,000

    Beginning Inventory

    $ 25,000

    Cost of goods sold

    $ 42,000

    Net Sales

    $ 5,800


       (4 points)

    (* 4000 character limit)

  15. Bob's Clothing Shop inventory at cost on January 1 was $30,000. Its retail value is $42,000. During the year, Bob's Clothing Shop purchased additional merchandise at a cost of $196,000 with a retail value of $368,000. The net sales at retail for the year was $310,000. Calculate Bob's inventory at cost by the retail method. Round cost ratio to the nearest whole percent.
       (4 points)

    (* 4000 character limit)

  16. Blue Company on January 1 had inventory costing $65,000 and during January had net purchases of
    $119,000. Over recent years, Blue's gross profit has averaged 40% on sales. Given that the company
    has net sales of $190,000, calculate the estimated cost of ending inventory using the gross profit method.
       (4 points)

    (* 4000 character limit)




  17. Units

    Unit Cost

    Dollar Cost

    Beg. Inventory

    Jan. 1

    10

    $ 7.00

    A


    Apr. 11

    30

    $12.00

    B


    May 17

    40

    $13.00

    C


    Dec. 5

    20

    $15.00

    D

    A. ______________
    B. ______________
    C. ______________
    D. ______________
    20 units not sold


    Calculate:


    LIFO

    FIFO

    Weighted-Average

    Cost of ending inventory

    A

    C

    E

    Cost of goods sold

    B

    D

    F


       (4 points)

    (* 4000 character limit)


  18. Cost

    Retail Price

    Beginning inventory

    $80,000

    $120,000

    Purchases during the year

    42,000

    57,000

    Sales for year

    73,000

    (Round cost ratio to nearest thousandth)


       (4 points)

    (* 4000 character limit)

  19. Calculate Inventory turnover at cost (to nearest hundredth).

    Ending inventory

    $25,000

    Beginning inventory

    $15,000

    Cost of goods sold

    $43,000

    Net sales

    $55,800


       (4 points)

    (* 4000 character limit)

  20. Calculate estimated cost of ending inventory using the gross profit method.

    Gross profit on sales

    35%

    Beg. inventory June 1, 2001

    $22,000

    Net purchases

    6,600

    Net sales at retail for June

    12,000


       (4 points)

    (* 4000 character limit)

  21. Jane and Bill Co. started with a beginning inventory of $90,000. ending inventory was $110,000. Cost of goods was $260,000. Complete the inventory turnover at cost for Jane and Bill Co. (to nearest tenth).
       (4 points)

    (* 4000 character limit)

  22. Moore Co. has a beginning inventory at a cost of $50,000 and en ending inventory at a cost of $90,000. Sales were $150,000. Assume Moore's markup rate is 40%. Based on the selling price, what is the inventory turnover at cost? (Round to nearest hundredth.)
       (4 points)

    (* 4000 character limit)



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