ACC 304 ACC304 Chapter 8 Quiz
ACC 304 Chapter 8 Quiz
1. During 2012 Carne Corporation transferred inventory to Nolan Corporation and agreed to repurchase the merchandise early in 2013. Nolan then used the inventory as collateral to borrow from Norwalk Bank, remitting the proceeds to Carne. In 2013 when Carne repurchased the inventory, Nolan used the proceeds to repay its bank loan. This transaction is known as a(n)
2. Chess Top uses the periodic inventory system. For the current month, the beginning inventory consisted of 300 units that cost $65 each. During the month, the company made two purchases: 450 units at $68 each and 225 units at $70 each. Chess Top also sold 750 units during the month. Using the average cost method, what is the amount of ending inventory?
3. During 2012, which was the first year of operations, Oswald Company had merchandise purchases of $985,000 before cash discounts. All purchases were made on terms of 2/10, n/30. Three-fourths of the items purchased were paid for within 10 days of purchase. All of the goods available had been sold at year end. Which of the following recording procedures would result in the highest net income for 2012?
4. Risers Inc. reported total assets of $3,200,000 and net income of $170,000 for the current year. Risers determined that inventory was understated by $46,000 at the beginning of the year and $20,000 at the end of the year. What is the corrected amount for total assets and net income for the year?
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Perez 's Central Warehouse |
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Perez 's Goods |
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Beginning inventory |
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$ |
130,000 |
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$ |
14,000 |
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Purchases |
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475,000 |
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70,000 |
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Freight-in |
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10,000 |
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Transportation to consignees |
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5,000 |
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Freight-out |
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30,000 |
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8,000 |
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Ending inventory |
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145,000 |
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20,000 |
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5. Perez's 2012 cost of sales was
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The following information applied to Howe, Inc. for 2012:
6. Howe's 2012 inventoriable cost was 7. June Corp. sells one product and uses a perpetual inventory system. The beginning inventory consisted of 20 units that cost $20 per unit. During the current month, the company purchased 120 units at $20 each. Sales during the month totaled 90 units for $43 each. What is the cost of goods sold using the LIFO method? 8. An inventory pricing procedure in which the oldest costs incurred rarely have an effect on the ending inventory valuation is 9. Tanner Corporation's inventory cost on its balance sheet was lower using first-in, first-out than it would have been using last-in, first-out. Assuming no beginning inventory, in what direction did the cost of purchases move during the period? 10. Which of the following is not considered an advantage of LIFO when prices are rising? 11. What happens when inventory in base year dollars decreases? 12. Dole Corp.'s accounts payable at December 31, 2012, totaled $650,000 before any necessary year-end adjustments relating to the following transactions: 1. On December 27, 2012, Dole wrote and recorded checks to creditors totaling $350,000 causing an overdraft of $100,000 in Dole's bank account at December 31, 2012. The checks were mailed out on January 10, 2013. 2. On December 28, 2012, Dole purchased and received goods for $150,000, terms 2/10, n/30. Dole records purchases and accounts payable at net amounts. The invoice was recorded and paid January 3, 2013. 3. Goods shipped f.o.b. destination on December 20, 2012 from a vendor to Dole were received January 2, 2013. The invoice cost was $65,000. 13. At December 31, 2012, what amount should Dole report as total accounts payable? 2011. Its inventory at that date was $440,000 and the relevant price index was 100. Information regarding inventory for subsequent years is as follows:
14. What is the cost of the ending inventory at December 31, 2012 under dollar-value LIFO? 15. Niles Co. has the following data related to an item of inventory:
17. The value assigned to cost of goods sold if Niles uses FIFO is 18. Groh Co. recorded the following data pertaining to raw material X during January 2012:
The moving-average unit cost of X inventory at January 31, 2012 is |
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