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Exam 8: Inventories: Measurement

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Question 1

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The average days inventory for ATC (rounded) for 2013 is:

A) Less than 100 days.
B) 114 days
C) 132 days.
D) 151 days.

E) A) and B)
F) B) and D)

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Question 2

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During periods of falling prices, LIFO ending inventory will be less than FIFO ending inventory.

A) True
B) False

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Question 3

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Ending inventory is equal to the cost of items on hand plus:

In a perpetual inventory system, the cost of purchases is debited to:

The use of LIFO during a long inflationary period can result in:

What is Nueva's net income if it elects LIFO?

Buckeye Corporation adopted dollar-value LIFO on January 1, 2013, when the inventory value was $500,000 and the cost index was 1.0. On December 31, 2013, the inventory value at year-end costs was $535,000 and the cost index was 1.06. Buckeye would report a LIFO inventory of:

In a periodic inventory system, the cost of purchases is debited to:

Required: Compute the January 31 ending inventory and cost of goods sold for January, assuming Denver uses LIFO and a periodic inventory system.

Ending inventory using the FIFO method is:

Under the gross method, purchase discounts taken are:

The following information comes from the 2010 Occidental Petroleum Corporation annual report to shareholders: NOTE 4 INVENTORIES Net carrying values of inventories valued under the LIFO method were approximately $177 million and $175 million at December 31, 2010 and 2009, respectively. Inventories in continuing operations consisted of the following: ($ in millions) The LIFO reserve indicates that inventories would have been $72 million and $81 million higher at the end of 2010 and 2009, respectively, if Occidental Petroleum had used FIFO to value its entire inventory. Required: If Occidental Petroleum had used FIFO to value its entire inventory how would its 2010 pre-tax income be affected?

ATC's inventory turnover ratio for 2013 is:

Inventory does not include:

Dollar-value LIFO:

In a perpetual inventory system, the cost of inventory sold is:

Shipping charges on outgoing goods are included in either cost of goods sold or selling expenses.

Company C is identical to Company D in every respect except that Company C uses LIFO and Company D uses average costs. In an extended period of rising inventory costs, Company C's gross profit and inventory turnover ratio, compared to Company D's, would be:

What is cost of goods available for sale, assuming CBC uses the gross method?

On January 1, 2013, the National Furniture Company adopted the dollar-value LIFO method of computing inventory. An internal cost index is used to convert ending inventory to base year. Inventory on January 1 was $200,000. Year-end inventories at year-end costs and cost indexes for its one inventory pool were as follows: Required: Compute inventory amounts at the end of each year.