MBA 5100 Chapters 5,6,7 With Complete Solution

When goods are sold under the perpetual inventory system, the cost of good sold is transferred from the _____ account to the _____ account Inventory cost of goods sold The specific identification cost flow method is most likely to be used when sales volume is low and cost per unit of inventory is high Ted's sports Center purchased two basketballs for resale. One was purchased in June at a cost of $30 and the other was purchased in July at a cost of $34. The two inventory items are identical in all respects except the price paid to acquire them. Assume Ted's uses the FIFO cost flow method. If Ted's sells one of the balls in August, the amount charged to cost of goods sold Will be $30 When inventory is sold, inventory cost methods (FIFO, LIFO, weighted average) are used to determine how much cost to assign to cost of goods sold Which method do companies most often use to physically flow inventory items through a store? FIFO Inventory item 101 cost $100. Inventory item 102 cost $110. If the business uses the specific identification cost flow method and Item 102 is sold to a customer, the amount assigned to cost of goods sold is ______. $110 Fred's Fans purchased two identical fans for resale. Fan 1 was purchased in April and cost $76. Fan 2 was purchased in May and cost $80. One of the fans was sold in June for $100. Which inventory cost flow method would result in a $20 gross margin? Last-in, first out Fred's Fans purchased two identical fans for resale. Fan 1 was purchased in April and cost $76. Fan 2 was purchased in May and cost $80. One of the fans was sold in June for $100. Which inventory cost flow method would result in a $22 gross margin? Weighted average Inventory item 101 purchased in October cost $100. Inventory item 102 purchased in November cost $110. The two inventory items are identical in all respects, except the price paid to acquire them. The business uses the Last-in, first-out (LIFO) cost flow method. If item 101 is sold to a customer, the amount assigned to cost of goods sold is ______. $100 Reason: Regardless of which item is sold, LIFO requires the cost of the last item to be charged to cost of goods sold. Benson Company purchased two identical inventory items. The item purchased first cost $40. The second item cost $42. If one of the items were sold, which cost flow method would produce the highest amount of cost of goods sold? last in first out cost of goods available for sale is the amount of the _____. beginning inventory + purchases made during the accounting period Benson Company had beginning inventory of 150 units that cost $200 each. During the year, Benson made two inventory purchases: Purchase 1 for 500 units that cost $210 each and Purchase 2 for 350 units that cost $220 each. During the year, Benson sold 700 units. If Benson uses LIFO, reported ending inventory equals ______. $61,500. Reason: Purchase 2 (350 units × $220) + purchase 1 (350 units × $210 each) = $150,500 cost of goods sold; $212,000 cost of goods available for sale - $150,500 cost of goods sold =$61,500. Benson Company had beginning inventory of 150 units that cost $200 each. During the year, Benson made two inventory purchases: Purchase 1 for 500 units that cost $210 each and Purchase 2 for 350 units that cost $220 each. During the year, Benson sold 700 units. If Benson uses LIFO, cost of goods sold equals ______. $150,500 Benson Company had beginning inventory of 150 units that cost $200 each. During the year, Benson made two inventory purchases: Purchase 1 for 500 units that cost $210 each and Purchase 2 for 350 units that cost $220 each. During the year, Benson sold 700 units. If Benson uses Weighted-average cost flow method, cost of goods sold equals ______. $148,400 Benson Company had beginning inventory of 150 units that cost $200 each. During the year, Benson made two inventory purchases: Purchase 1 for 500 units that cost $210 each and Purchase 2 for 350 units that cost $220 each. During the year, Benson sold 700 units. If Benson uses The weighted-average cost flow method, reported ending inventory equals ______. $63,600 Inventory of batch 101 consists of 50 units and is purchased in October at a total cost of $100. Inventory of batch 102 consists of 50 units and is purchased in November at a total cost of $110. The two inventory items are identical in all respects, except the price paid to acquire them. The business uses the first-in, first-out (FIFO) cost flow method. If 50 items of inventory are used in manufacturing 50 units of finished product, the ending balance in the Inventory account is $110. Reason: Regardless of which item is used in manufacturing, FIFO requires the cost of items in batch 101 to be charged to the cost of goods sold. Therefore, the cost of batch 102 of $110 is the ending inventory. Benson Company had beginning inventory of 150 units that cost $200 each. During the year, Benson made two inventory purchases: Purchase 1 for 500 units that cost $210 each and Purchase 2 for 350 units that cost $220 each. During the year, Benson sold 700 units. If Benson uses FIFO, cost of goods sold equals ______. $146,000 Benson Company had beginning inventory of 150 units that cost $200 each. During the year, Benson made two inventory purchases: Purchase 1 for 500 units that cost $210 each and Purchase 2 for 350 units that cost $220 each. During the year, Benson sold 700 units. If Benson uses FIFO, the reported inventory equals ______. 66000 Benson Company had beginning inventory of 150 units that cost $200 each. During the year, Benson made two inventory purchases: Purchase 1 for 500 units that cost $210 each and Purchase 2 for 350 units that cost $220 each. During the year, Benson sold 700 units. If Benson uses LIFO, reported ending inventory equals ______. $61,500. Reason: Purchase 2 (350 units × $220) + purchase 1 (350 units × $210 each) = $150,500 cost of goods sold; $212,000 cost of goods available for sale - $150,500 cost of goods sold =$61,500. Property, plant, and equipment includes _____ land Buildings Computers