Reference no: EM133122080
Questions -
Q1) Marigold's Used Cars uses the specific identification method of costing inventory. During March, Marigold purchased three cars for $11200, $15000, and $19000, respectively. During March, two cars are sold for a total of $35200. Marigold determines that at March 31, the $15000 car is still on hand. What is Marigold's gross profit for March?
a) $9000.
b) $1200.
c) $5000.
d) $4000
Q2) Bonita Company understated its inventory by $20900 at December 31, 2020. It did not correct the error in 2020 or 2021. As a result, Bonita's owner's equity was:
a) understated at December 31, 2020, and properly stated at December 31, 2021.
b) understated at December 31, 2020, and understated at December 31, 2021.
c) overstated at December 31, 2020, and overstated at December 31, 2021.
d) understated at December 31, 2020, and overstated at December 31, 2021.
Q3) In a period of rising costs, the costs allocated to ending inventory may be understated in the
a) LIFO method.
b) FIFO method.
c) gross profit method.
d) average-cost method.
Q4) The lower-of-cost-or-net-realizable-value basis of valuing inventories is an example of
a) the historical cost principle.
b) consistency.
c) comparability.
d) conservatism.
Q5) Bonita Industries had the following inventory transactions occur during 2020:
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Units
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Cost/unit
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2/1/20
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Purchase
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54
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$48
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3/14/20
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Purchase
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97
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$45
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5/1/20
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Purchase
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62
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$49
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The company sold 160 units at $80 each and has a tax rate of 30%. There is no beginning inventory, and no expenses other than Cost of Goods Sold and Income Tax Expense. Assuming that a periodic inventory system is used, what is the company's after-tax income using LIFO? (rounded to whole dollars)
a) $3746
b) $5352
c) $3914
d) $5592
Q6) Inventories are estimated
a) more frequently under a periodic inventory system than a perpetual inventory system.
b) using the wholesale inventory method.
c) more frequently under a perpetual inventory system than the periodic inventory system.
d) using the net method.
Q7) Bramble Company's inventory records show the following data:
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Units
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Unit Cost
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Inventory:
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January 1
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10300
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$9.40
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Purchases:
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June 18
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8600
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9.00
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November 8
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6500
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6.00
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A physical inventory on December 31 shows 4300 units on hand. Bramble sells the units for $15 each. The company has an effective tax rate of 18%. Bramble uses the periodic inventory method. What is the cost of goods available for sale?
a) $213220.
b) $313820.
c) $185200.
d) $174400.
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