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Exam 9: Property, Plant, and Equipment and Intangible Assets: Acquisition and Disposition

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Question 61

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In applying the LCM rule, the inventory of boots would be valued at:

A) $135,000.
B) $133,000.
C) $130,000.
D) $105,000.

E) None of the above
F) All of the above

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Question 62

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Required: Determine the balance sheet inventory carrying value assuming the LCM rule is applied to classes of feeds.

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LCM Classe...

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Question 63

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The cost-to-retail percentage used in the retail method to approximate average cost incorporates both markdowns and markups.

Fad City sells novel clothes that are subject to a great deal of price volatility. A recent item that cost $20 was marked up $12, marked down for a sale by $6 and then had a markdown cancellation of $3. The latest selling price is:

What should be the carrying value of Sullivan's inventory?

Under the retail method, the denominator in the cost-to-retail percentage does not include:

Montana Co. has determined its year-end inventory on a FIFO basis to be $600,000. Information pertaining to that inventory is as follows: What should be the carrying value of Montana's inventory?

In 2013, the internal auditors of Blooper Inc. discovered that goods costing $12 million that were shipped f.o.b. shipping point in December of 2012 were in transit on December 31. The goods were recorded as a purchase in December of 2012 but were not included in the 2012 year-end inventory. Required: Prepare the journal entry needed in 2013 to correct the error. Also, briefly describe any other measures Blooper would take in connection with correcting the error. (Ignore income taxes.)

Required: Determine the balance sheet inventory carrying value assuming the LCM rule is applied to individual trees.

In applying the LCM rule, the inventory of surgical supplies would be valued at:

Lacy's Linen Mart uses the retail method to estimate inventories. Data for the first six months of 2013 include: beginning inventory at cost and retail were $60,000 and $120,000, net purchases at cost and retail were $312,000 and $480,000, and sales during the first six months totaled $490,000. The estimated inventory at June 30, 2013, would be:

Estimated ending inventory at retail is:

In determining lower of cost or market, market is the expected selling price under normal operations.

DK Super Stores Inc. uses the average cost retail method to estimate its ending inventory. Information at June 30, 2013, is as follows: Required: Compute the cost-to-retail percentage used by DK.

Coastal Shores Inc. (CSI) was destroyed by Hurricane Fred on August 5, 2013. At January 1, CSI reported an inventory of $170,000. Sales from January 1, 2013, to August 5, 2013, totaled $480,000 and purchases totaled $195,000 during that time. CSI consistently marks up its products 60% over cost to arrive at a selling price. The estimated inventory loss due to Hurricane Fred would be:

Littleton Company uses a periodic inventory system and the LIFO retail method to estimate its ending inventories. The following partial data has been summarized for December 31, 2013: Required: Determine the cost-to-retail percentage used by Littleton. Assume stable retail prices during the period.

At what amount will Johnson record the inventory purchased on February 1, 2014?

The conventional retail inventory method is based on:

The numerator for the current period's cost-to-retail percentage is:

In applying LCM, market cannot be: