Week 4 Questions

1) A company just starting business made the following inventory transactions in August:

Using the LIFO inventory method, how much is cost of goods sold for August using a perpetual inventory system?

2) A company just starting business made the following purchases in August:

A physical count of the inventory on August 31 reveals that there are 500 units on hand. Using the FIFO inventory method in a perpetual inventory system, how much is the value of the ending inventory on August 31?

3) Which statement is true in a perpetual inventory system?

4) Inventory turnover is calculated by dividing cost of goods sold by

5) Net sales are $2,000,000, cost of goods sold is $960,000, and average inventory is $30,000. How many days sales are in inventory

6)The following information came from the income statement of the Wilkens Company at December 31, 2017: sales revenue $1,800,000; beginning inventory $160,000; ending inventory $240,000; and gross profit $600,000. What is Wilkens' inventory turnover ratio for 2017?

7) Carlos Company had beginning inventory of $80,000, ending inventory of $110,000, cost of goods sold of $285,000, and sales revenue of $475,000. What is Carlos’ days in inventory?

8) In a period of falling prices, which of the following methods will give the largest net income?

9) In a period of rising prices which inventory method will result in the greatest amount of income tax expense?

10) Which of the following is true of the FIFO inventory method?