ACCT 350, Fall 2010Quiz #5 Name: ______________________________________1. Bell Inc. took a physical inventory at the end of the year and determined that $650,000 of goods were on hand. In addition, Bell, Inc. determined that $50,000 of goods that were in transit that were shipped f.o.b. shipping were actually received two days after the inventory count and that the company had $75,000 of goods out on consignment. What amount should Bell report as inventory at the end of the year?A) $650,000.B) $700,000.C) $725,000.D) $775,000.2., Risers Inc. reported total assets of $1,600,000 and net income of $85,000 for the current year. Risers determined that inventory was understated by $23,000 at the beginning of the year and $10,000 at the end of the year. What is the corrected amount for total assetsand net income for the year?A) $1,610,000 and $95,000.B) $1,590,000 and $98,000.C) $1,610,000 and $72,000.D) $1,600,000 and $85,000.Use the following to answer questions 3-4:The following information was available from the inventory records of Rich Company for January: Units Unit Cost Total CostBalance at January 1 3,000 $9.77 $29,310 Purchases: January 62,000 10.30 20,600 January 26 2,700 10.71 28,917 Sales: January 7 (2,500) January 31 (4,000) Balance at January 31 1,2003. Assuming that Rich does not maintain perpetual inventory records, what should be the inventory at January 31, using the weighted-average inventory method, rounded to the nearest dollar?A) $12,606.B) $12,284.C) $12,312.Page 1D) $12,432.4. Assuming that Rich maintains perpetual inventory records, what should be the inventoryat January 31, using the moving-average inventory method, rounded to the nearest dollar?A) $12,606.B) $12,284.C) $12,312.D) $12,432.Use the following to answer questions 5-6:Niles Co. has the following data related to an item of inventory:Inventory, March 1 100 units @ $4.20Purchase, March 7 350 units @ $4.40Purchase, March 16 70 units @ $4.50Inventory, March 31 130 units5. The value assigned to ending inventory if Niles uses LIFO isA) $579.B) $552.C) $546.D) $585.6. The value assigned to cost of goods sold if Niles uses FIFO isA) $579.B) $552.C) $1,723.D) $1,696.7. Willy World began using dollar-value LIFO for costing its inventory two years ago. The ending inventory for the past two years in end-of-year dollars was $100,000 and $150,000 and the year-end price indices were 1.0 and 1.2, respectively. Assuming the current inventory at end of year prices equals $215,000 and the index for the current year is 1.25, what is the ending inventory using dollar-value LIFO?A) $177,500.B) $186,400.C) $190,000.D) $188,750.Page 28. Opera Corp. uses the dollar-value LIFO method of computing its inventory cost. Data for the past four years is as follows:Year ended Inventory at PriceDecember 31. End-of-year Prices Index 2009 $ 65,000 1.002010 126,000 1.052011 135,000 1.10What is the 2009 inventory balance using dollar-value LIFO?A) $65,000.B) $61,904.C) $122,727.D) $135,000.9. Oslo Corporation has two products in its ending inventory, each accounted for at the lower of cost or market. A profit margin of 30% on selling price is considered normal for each product. Specific data with respect to each product follows:Product #1 Product #2Historical cost $40.00 $ 70.00Replacement cost 45.00 54.00Estimated cost to dispose 10.00 26.00Estimated selling price 80.00 130.00In pricing its ending inventory using the lower-of-cost-or-market, what unit values should Oslo use for products #1 and #2, respectively?A) $40.00 and $65.00.B) $46.00 and $65.00.C) $46.00 and $60.00.D) $45.00 and $54.00.Page 310. Dicer uses the conventional retail method to determine its ending inventory at cost. Assume the beginning inventory at cost (retail) were $130,000 ($198,000), purchases during the current year at cost (retail) were $685,000 ($1,100,000), freight-in on these purchases totaled $43,000, sales during the current year totaled $1,050,000, and net markups (markdowns) were $24,000 ($36,000). What is the ending inventory value at cost?A) $153,164.B) $156,165.C) $157,412.D) $236,000.11. On October 31, a fire destroyed PH Inc.'s entire retail inventory. The inventory on hand as of January 1 totaled $680,000. From January 1 through the time of the fire, the company made purchases of $165,000 and had sales of $360,000. Assuming the rate of gross profit to selling price is 40%, what is the approximate value of the inventory that was destroyed?A) $680,000.B) $673,000.C) $485,000.D) $629,000.12. The sales price for a product provides a gross profit of 25% of sales price. What is the gross profit as a percentage of cost?A) 25%.B) 20%.C) 33%.D) Not enough information is provided to determine.13. Boxer Inc. reported inventory at the beginning of the current year of $360,000 and at theend of the current year of $411,000. If net sales for the current year are $2,214,600 and the corresponding cost of sales totaled $1,879,400, what is the inventory turnover ratio for the current year?A) 5.74.B) 4.57.C) 5.39.Page 4D) 4.88.14. East Corporation's computation of cost of goods sold is:Beginning inventory $ 60,000Add: Cost of goods purchased 405,000Cost of goods available for sale 465,000Ending inventory 80,000Cost of goods sold $385,000The average days to sell inventory for East areA) 56.9 days.B) 63.1 days.C) 66.4 days.D) 75.8 days.Page 5Answer Key1. D2. C3. B4. D5. B6. D7. D8. A9. A10. A11. D12. C13. D14. CPage