ACCT 5121 Final Exam Practice Questions_IncludesHW.docx -...

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Page 1 of 35 ACCT 5121 Final Exam Practice Questions Chapters 7 – 11 Chapter 7 Q7-4 If inventory cost are rising, which inventory costing method – FIFO, LIFO, or AC – yields the: a)
b)
c)
d)
e) Greatest cash flow assuming that method is used
M7-16 Calculating Gross Profit Margin (LO5) Johnson & Johnson reported the following revenue and COGS information in its 10-K report for 2014, 2013, 2012 ($ millions) 2014 2013 2012 Sales to customers $74,331 $71, 312 $67, 224 Cost of products sold 22,746 22,342 21,658 Compute Johnson & Johnson’s gross profit margin for each year.
Page 2 of 35 M7-21 Computing COGS and Ending Inventory (LO2) Bartov Corporation reports the following beginning inventory and purchases for 2017: Beginning Inventory, 2017 400 units @ $10 each $4,000 Inventory purchased in 2017 700 units @ $12 each $8,400 Cost of goods available for sale in 2017 1,100 units $12,400 Bartov sells 600 of these units in 2017. Compute its COGS for 2017 and the ending inventory reported on its 2017 BS under each of the following inventory costing methods: a) FIFO
b) LIFO
c) Average Cost
E7-26 Applying and Analyzing Inventory Costing Methods (LO2, 4) At the beginning of the current period, Chen carried 1,000 units of its product with a unit cost of $20. summary of purchases during the current period follows: Units Unit Cost Cost Beginning Inventory 1,000 $20 $20,000 Purchases: #1 1,800 22 39,600 #2 800 26 20,800 #3 1,200 29 34,800 A
Page 3 of 35 During the current period, Chen sold 2,800 units a) Assume that Chen uses FIFO method. Compute its COGS for the current period and the ending inventory balance.
b) Assume that Chen uses the LIFO method. Compute its COGS for the current period and ending inventory balance.
Page 4 of 35 800 units @ $22 unit $17,600 COGS $73,200 Ending Inventory (Cost of last 2,000 units) 1,000 units @ $20 unit $20,000 1,000 units @ $22 unit $22,000 Ending Inv. $42,000

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