Contabilidad Intermedia 201-Which of the following is not an advantage
Nombre:______________________________Asignación#6Contabilidad Intermedia 201Fecha:_____________Inventories: Cost Measurement and Flow AssumptionsMULTIPLE CHOICE1. Which of the following is not an advantage of a perpetual inventory system?a. assists in the prevention of stockoutsb. requires less data processing effort than periodic systemsc. maintains up-to-date inventory and cost of goods sold balancesd. provides evidence of inventory shrinkage2. The cost of goods sold can be determined only after a physical count of inventory on hand under thea. perpetual inventory systemb. variable costing systemc. moving average systemd. periodic system3. Using the following letters to represent items:P = Purchases (net)C = Cost of goods soldB = Beginning inventoryE = Ending inventoryWhich equation is correct?a. B – C + P = Eb. B – E = C + Pc. P – E = B + Cd. B = C – E + P4.Which one of the following statements is not true?a. A company using the periodic system does not maintain a continuous record of thephysical quantities (or costs) of inventory on hand.b. In the periodic system, the costs of acquisition of inventory are not debited directly to aninventory account.c. In the perpetual inventory system, recording in detailed subsidiary records can be in unitsonly-not in dollar costs.d. When the perpetual system is used, a physical count does not need to be madeperiodically.Asignación #6 (ACCO 201 – Prof. Carlos Ãlvarez)6-15.Jorgensen Jelly Bean Co. purchased raw materials with a catalog price of $70,000. Credit terms of5/15, n/60 apply. If Jorgensen uses the net price method, the purchase should be recorded ata. $70,000b. $66,500c. $59,500d. $42,0006.Near the end of 2015, Wilson Co. made the following purchases. The months involved in all cases areDecember 2015 and January 2016.Amount$1,5752,4301,8902,700FOBDestinationShipping PointShipping PointDestinationDateGoodsShipped12/291/212/2812/29DateInvoiceMailed1/212/291/212/27DateGoodsRec’d1/51/41/31/2DateInvoiceRec’d1/412/301/412/28What amount of the above purchases should be included in inventory at December 31, 2015?a. $1,575b. $1,890c. $4,320d. $4,5757.Sylvia’s Designs Co. had the following inventory activity during April:UnitsBeginning inventoryPurchase (April 3)Sale (April 10)Purchase (April 18)Purchase (April 23)Sale (April 28)10050804060120UnitCost$10121415Assuming Sylvia’s uses a perpetual LIFO cost flow assumption, ending inventory for April would bea. $ 500b. $ 750c. $2,560d. $2,3106-28. Which of the following inventory cost flow assumptions produces the same ending inventory valuesunder both the periodic and perpetual systems?a. FIFOb. LIFOc. Averaged. Dollar-Value LIFO9.Sylvia’s Designs Co. had the following inventory activity during April:UnitsBeginning inventoryPurchase (April 3)Sale (April 10)Purchase (April 18)Purchase (April 23)Sale (April 28)10050804060120UnitCost$10121415Assuming Sylvia’s uses a periodic LIFO cost flow assumption, ending inventory for April would bea. $2,560b. $ 750c. $2,310d. $ 50010. Mama’s Mexican Meals, Inc., had the following activity for an inventory item during June:UnitsBeginning inventoryPurchase (June 5).Purchase (June 15)Sale (June 20).Sale (June 25).Purchase (June 30)501030402010UnitCost$10161420Assuming Mama’s uses a periodic weighted average cost flow assumption, cost of goods sold forJune would bea. $512b. $560c. $768d. $720Asignación #6 (ACCO 201 – Prof. Carlos Ãlvarez)6-311. Which one of the following is not a disadvantage of the specific identification method of inventorycosting?a. it allows manipulation of profitsb. it does not match expenses against revenuesc. it is too expensive to use in complex manufacturing situationsd. it is only practical where units are costly and easily distinguishable12. Which one of the following is not a disadvantage of the LIFO inventory cost flow assumption?a. the impact of LIFO liquidation profitsb. it does not match the most recent costs with revenuec. the possibility of income manipulation by managementd. it impairs comparability between companies using LIFO13. Which one of the following sets of inventory cost flow assumptions is not susceptible to profitmanipulation by management?a. FIFO and specific identificationb. LIFO and average costc. FIFO and average costd. LIFO and specific identification14. Which one of the following statements is true?a. Under conditions of rising prices, the LIFO method results in lower income than the FIFOmethod.b. In most cases, the LIFO method approximates the physical flow of items in inventory.c. The LIFO method produces a higher ending inventory value than the FIFO method.d. The FIFO method excludes holding gains from income.15. Astro company changed its inventory cost flow assumption from FIFO to LIFO in a period of risingprices. What was the result of the change on ending inventory in the year of the change?a.b.c.d.Increased ending inventoryDecreased ending inventoryNo change in ending inventoryCan’t determine from the information given6-416. Which one of the following is an advantage of LIFO?a.b.c.d.in periods of rising prices, less income taxes are paidin periods of rising prices, more holding gains are reported in net incomerecordkeeping and financial statement preparation are easierconservative income statements and balance sheet disclosures result from falling pricesBONOs17. Astro Company changed its inventory cost flow assumption from FIFO to LIFO in a period of risingprices. What was the result of the change on net income in the year of the change?a.b.c.d.Increased net incomeDecreased net incomeNo change in net incomeCannot determine from the information provided18. Which one of the following types of costs is most likely to be included in determining the cost ofinventory?a.b.c.d.freight-in costsfreight-out costsinterest cost for amounts borrowed to finance the purchase of inventorymarketing costs19. Which one of the following statements is false?a. FOB shipping point means the buyer has legal title to the goods while they are in-transitb. FOB shipping point means the buyer has legal title to the goods when they are shippedc. FOB destination means the seller has legal title to the goods until they reach the buyer’splace of businessd. FOB shipping point means the buyer acquires legal title to the goods when they reach thebuyer’s place of businessAsignación #6 (ACCO 201 – Prof. Carlos Ãlvarez)6-5PROBLEM1. On January 1, the Abrams Company began business with the purchase of 250 units of inventory for$21,625. During the month, Abrams had the following inventory transactions:DateJan. 61117242830Purchased 100 units @ $75 per unitSold 200 unitsSold 85 unitsPurchased 100 units @ $125 per unitPurchased 50 units @ $110 per unitSold 100 unitsRequired:Compute the cost of the inventory at the end of January under the following alternatives:a.b.c.d.e.f.FIFO periodicFIFO perpetualLIFO periodicLIFO perpetualWeighted average (round unit costs to 2 decimal places)Moving average (round unit costs to 2 decimal places)6-6
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