Q1. JME had beginning inventory of $200 and ending inventory of $300. JME had COGS of $800. JME must have purchased inventory amounting to: A) $700. B) $1,100. C) $900.
Q2. JME purchased 400 units of inventory that cost $4.00 each. Later the firm purchased an additional 500 units that cost $5.00 each. JME sold 700 units of inventory for $7.00 each. If JME uses a first in, first out (FIFO) cost flow method, the amount of gross profit appearing on the income statement is:
A) $2,400. B) $3,100. C) $1,800.
Q3. Which of the following inventory accounting methods must be used for financial reporting purposes if a U.S. firm uses last in, first out (LIFO) for tax purposes?
A) The firm may use any of the above methods.
B) FIFO.
C) LIFO.
Q4. While attending a local college, music major Anjolie Webster accepts a temporary position with a small manufacturing firm. Currently, the firm uses LIFO to account for inventory, but the owner is “just curious” about how the financial results would look if the company used FIFO. Before the owner leaves for her voice lesson, she hands Webster a photocopy of the inventory data for the current period (summarized below). - Beginning inventory of 1,000 units at $30 cost.
- Ending inventory of 800 units.
- Sales of 1,100 units.
- Three inventory purchases (listed from earliest purchase to latest purchase): 400 units at $27 each, 300 units at $25 each, and an unreadable number of units at $22 each. (Unfortunately, when the owner copied the original document, she left a yellow sticky note covering some of the inventory information.)
- Current assets (less inventory) of $75,000.
- Current liabilities of $65,000.
Using the information provided, determine which of the following statements is least accurate? All else equal, compared to LIFO, using FIFO would result in: A) a lower ending inventory balance. B) a lower gross margin. C) a current ratio of approximately 1.60.
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发表于 2009-1-19 09:19
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