Q15. he Mountain Bike Supply Company had 500 units in its beginning inventory. Each of these units cost $5. During the period, Mountain Bike Supply first purchased 400 units at $6 each and then 200 units at $7 each. At the end of the period, Mountain Bike Supply had 600 units. What is the cost of goods sold and inventory for Mountain Bike Supply if it uses FIFO inventory valuation?
COGS Inventory
A) $2,500 $3,100
B) $2,500 $3,800
C) $3,200 $3,100
Q16. A company's beginning inventory was overstated by $3,000, now ending inventory is understated by $2,000. If purchases were properly reported, then earnings before taxes will be:
A) overstated by $1,000.
B) understated by $5,000.
C) overstated by $5,000.
Q17. Which of the following is least likely part of the basic inventory equation?
A) Beginning inventory + purchases = ending inventory + cost of goods sold.
B) Beginning inventory − ending inventory − cost of goods sold = purchases.
C) Purchases − ending inventory + beginning inventory = cost of goods sold.
Q18. In 2004, Torrence Co. had a beginning inventory of $19,924 and made purchases of $15,923. If the ending inventory level was $19,204, what was the cost of goods sold (COGS) for year 2004?
A) $16,643.
B) $15,203.
C) $15,923.
Q19. Given the following inventory data about a firm:
What is the inventory value at the end of the period using LIFO?
A) $1,225.
B) $1,575.
C) $3,450.
答案和详解如下：
Q15. he Mountain Bike Supply Company had 500 units in its beginning inventory. Each of these units cost $5. During the period, Mountain Bike Supply first purchased 400 units at $6 each and then 200 units at $7 each. At the end of the period, Mountain Bike Supply had 600 units. What is the cost of goods sold and inventory for Mountain Bike Supply if it uses FIFO inventory valuation?
COGS Inventory
A) $2,500 $3,100
B) $2,500 $3,800
C) $3,200 $3,100
Correct answer is B)
Under FIFO:
COGS | = 500 @ $5 = $2,500 |
Inventory | = 200 @ $7 + 400 @ $6 = $3,800 |
Q16. A company's beginning inventory was overstated by $3,000, now ending inventory is understated by $2,000. If purchases were properly reported, then earnings before taxes will be:
A) overstated by $1,000.
B) understated by $5,000.
C) overstated by $5,000.
Correct answer is B)
Cost of goods sold (COGS) will be overstated by 5,000 so earnings before taxes (EBT) will be understated by 5,000.
Q17. Which of the following is least likely part of the basic inventory equation?
A) Beginning inventory + purchases = ending inventory + cost of goods sold.
B) Beginning inventory − ending inventory − cost of goods sold = purchases.
C) Purchases − ending inventory + beginning inventory = cost of goods sold.
Correct answer is B)
To solve for purchases the basic inventory equation would then be: ending inventory + COGS − beginning inventory = purchases.
Q18. In 2004, Torrence Co. had a beginning inventory of $19,924 and made purchases of $15,923. If the ending inventory level was $19,204, what was the cost of goods sold (COGS) for year 2004?
A) $16,643.
B) $15,203.
C) $15,923.
Correct answer is B)
Beginning Inventory + Purchases − Ending Inventory = COGS
$19,924 + $15,923 − $19,204 = $16,643
Q19. Given the following inventory data about a firm:
What is the inventory value at the end of the period using LIFO?
A) $1,225.
B) $1,575.
C) $3,450.
Correct answer is A)
Ending inventory equals 20 + 10 + 35 + 20 − 60 = 25 of the first units purchased equals:
(20 units)($50/unit) + (5 units)($45/unit) =
$1,000 + $225 = $1,225
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