Exam 3 Practice Problems PDF

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Accounting chapters 8, 9 and 10 practice questions...

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ACC 3313 Exam 3 Practice Questions Calculation: 1. Based on the information in the table: Dates Units purchased Unit cost Units sold Dec. 1 120 @ $6.00 Dec. 5 600 @ $6.20 Dec.11 500 Dec. 18 200 @ $6.30 Dec. 28 300 Assuming a periodic inventory system determine the value of Ending Inventory and COGS using: (1) FIFO, (2) LIFO, and (3) Weighted Average. And assuming a perpetual method COGS and Ending Inventory FIFO and LIFO. 2. On December 31, 2015, James adopted the dollar-value LIFO inventory method. The inventory on that date was $70,000. Inventory data are as follows Ending Inventory Price Date

(End of Year Prices=FIFO)

Index

Dec. 31, 2016 Dec. 31, 2017 Dec. 31, 2018

96,768 105,656 111,448

104 114 118

Use the dollar value LIFO method to computer the ending inventory for James Company for 2016 through 2018. Ending inventory 2016 Ending inventory 2017 Ending inventory 2018

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3 An improvement made to the Building (e.g. adding extra rooms) increased its fair value and its production capacity by 28% without extending the Buildings’s useful life. The cost of the improvement should be a) debited to Repairs Expense. b) debited to Building c) debited to Building-Accumulated Depreciation d) Other 4 Inventory count as of Dec.31 was 100,000 in the BoCat warehouse; all goods on hand at that time were counted as part of inventory. Additional information on inventory on Dec. 31:  BobCat had shipped $7,000 of inventory to a customer f.o.b. destination at 5:30 PM on 12/31/16. The customer received the goods on January 3, 2017.  JJCo. shipped $2000 of goods to Bobcat. f.o.b. destination on 12/29/16; these goods have not been received yet  $20,000 of inventory in the warehouse is on consignment from ZB Co. What is the proper amount of inventory for balance sheet purposes on December 3 5 BobCat. determined its toy inventory on a LIFO basis at $40,000 with a replacement cost of $30,000. BobCat estimated that, after further processing costs of $8,000, the toys could be sold as finished dolls for $75,000. BobCat’s normal profit margin is 15% of sales. Under the lower-of-cost-or-market rule, what amount should toy inventory be reported on the balance sheet at December 31 a) 30,000 b) 40,000 c) 55,750 d) 67,000 6.Plank Co. uses the retail inventory method. The following information is available for the current year. Cost Retail Beginning inventory $ 312,000 $488,000 Purchases 1,180,000 1,660,000 Freight-in 20,000 — Employee discounts — 8,000 Net markups — 60,000 Net markdowns — 80,000 Sales revenue — 1,560,000 The approximate cost of the ending inventory by the conventional retail method is a. $383,600. b. $379,680. c. $392,000. d. $409,920. 7. A company with high rate of return on sales should consider its inventory sold ONLY when the payment is received TRUE/FALSE

8. BobCat acquired two inventory items at a lump-sum cost of $100,000. The acquisition included 2,000 units of product A and 5,000 units of product B. BobCat normally sells A for $30 per unit and B for $15 per unit. If BobCat sells 500 units of A, what amount of gross profit should it recognize? a. $3,000 b. $ 4,000 2

c. d.

$5,000 None of the above

9. BobCat reported total assets of $30,000 at the end of 2018 and net income of $12,000 for 2018. BobCat’s Beginning inventory (1/1/18) was understated by $1,000. Ignore tax effect. What is the correct amount of total assets at the end of 2018?___________ correct. What is the correct amount of net income for 2018?__ 10. Purchase discounts not taken makes Purchases/Inventory account bigger TRUE/FALSE

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