Reading 35: Analysis of Inventories - LOS a ～ Q11-15 black, class

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11.What is the Cost of Goods Sold using the Weighted Average Method?

A)   $3,604.02.

B)   $2,918.00.

C)   $4,142.00.

D)   $3,423.82.

 

12.What is the Cost of Goods Sold using the First in First Out (FIFO) Method?

A)   $2,772.10.

B)   $8,325.00.

C)   $2,918.00.

D)   $3,604.02.

 

13.What is the ending inventory level in dollars using the FIFO Method?

A)   $1,744.20.

B)   $1,836.00.

C)   $3,604.02.

D)   $4,142.00.

 

14.An analyst notes the following about a company:

 Beginning inventory was reported as $5,000.

 Costs of goods sold were reported as $8,000.

 Ending inventory is $7,000 (the analyst has physically verified this amount).

Which of the following statements are most accurate?

A)   If the analyst discovered that beginning inventory was overstated by $1,000, then cost of goods sold must have been understated by $1,000.

B)   If the analyst discovered that beginning inventory was understated by $2,000, then earnings before taxes must have been overstated by $2,000.

C)   Purchases must have been $6,000.

D)   Assuming a tax rate of 35%, the firm's net income would be $700.

 

15.Given the following data what is the ending inventory using the average cost method?

Purchases	Sales
40 units at $60/unit	25 units at $65/unit
50 units at $55/unit	30 units at $60/unit
60 units at $45/unit	40 units at $50/unit

A)   $2,933.

B)   $3,141.

C)   $2,878.

D)   $3,208.

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答案和详解如下：

11.What is the Cost of Goods Sold using the Weighted Average Method?

A)   $3,604.02.

B)   $2,918.00.

C)   $4,142.00.

D)   $3,423.82.

The correct answer was A)

Weighted average = cost of goods available/total units available. COGS = Units sold x wt. ave. = 959 X 3.7381 = $3,604.02.

 

12.What is the Cost of Goods Sold using the First in First Out (FIFO) Method?

A)   $2,772.10.

B)   $8,325.00.

C)   $2,918.00.

D)   $3,604.02.

The correct answer was C)

COGS = (709 x 2) + (250 x 6) = $2,918.00.

 

13.What is the ending inventory level in dollars using the FIFO Method?

A)   $1,744.20.

B)   $1,836.00.

C)   $3,604.02.

D)   $4,142.00.

The correct answer was B)   

Ending Inventory = 306 x 6 = $1,836.00.

 

14.An analyst notes the following about a company:

 Beginning inventory was reported as $5,000.

 Costs of goods sold were reported as $8,000.

 Ending inventory is $7,000 (the analyst has physically verified this amount).

Which of the following statements are most accurate?

A)   If the analyst discovered that beginning inventory was overstated by $1,000, then cost of goods sold must have been understated by $1,000.

B)   If the analyst discovered that beginning inventory was understated by $2,000, then earnings before taxes must have been overstated by $2,000.

C)   Purchases must have been $6,000.

D)   Assuming a tax rate of 35%, the firm's net income would be $700.

The correct answer was B)

If inventory is overstated then COGS must also be overstated or purchases were understated, since you are told that ending inventory is ok.

 

15.Given the following data what is the ending inventory using the average cost method?

Purchases	Sales
40 units at $60/unit	25 units at $65/unit
50 units at $55/unit	30 units at $60/unit
60 units at $45/unit	40 units at $50/unit

A)   $2,933.

B)   $3,141.

C)   $2,878.

D)   $3,208.

The correct answer was C)

Average cost per unit purchased:

40 units at $60 /per unit = $2,400
50 units at $55 /per unit = $2,750
60 units at $45 /per unit = $2,700

Total = 150 units = $7,850

Average cost per unit = $7,850 /150 units = $52.33 /unit

Purchased 40 + 50 + 60 = 150 units. Sold 25 + 30 + 40 = 95

Ending inventory = 150 - 95 = 55 units x $52.33 /unit = $2,878