AIS100_Practice_Exam_2_Solutions-1

AIS100_Practice_Exam - AIS 100 Practice Exam 2 Answer Key I Multiple Choice 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 D N/A

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AIS 100 Practice Exam 2 – Answer Key I. Multiple Choice 1 D 2 N/A 3 D 4 C 5 N/A 6 D 7 N/A 8 D 9 A 10 C 11 A 12 B 13 B 14 D 15 D 16 B 17 C 18 A 19 A 20 A 21 A 22 A 23 C 24 B 25 C II. Periodic Inventory A. (a) Using FIFO - the earliest units purchased were the first sold. 3/1 100 @ $40 = $ 4,000 3/3 60 @ 50 = 3,000 3/10 110 @ 55 = 6,050 270 units $13,050 = the cost of goods sold (b) Calculate the weighted average unit cost: $20,400 ÷ 400 = $51 $51 x units in ending inventory (400 available less 270 sold = 130) $51 x 130 = $6,630 (c) There are 130 units in ending inventory. They are comprised of the first units purchased when LIFO is assumed. 3/1 100 @ $40 = $4,000 3/3 30 @ $50 = 1,500 130 units $5,500 = Ending inventory
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B. (a) Inventory turnover ratio = $5,720,000 ÷ [($600,000 + $700,000) ÷ 2] = $5,720,000 ÷ $650,000 = 8.8 times Days in inventory = 365 days ÷ 8.8 = 41.5 days (b) Beginning Ending LIFO inventory $600,000 $ 700,000 LIFO reserve 200,000 300,000 FIFO inventory $800,000 $1,000,000 LIFO cost of goods sold $5,720,000 Less: increase in LIFO reserve ($300,000 – $200,000)
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This note was uploaded on 04/01/2008 for the course ACCT 100 taught by Professor Punke during the Fall '08 term at Wisconsin.

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AIS100_Practice_Exam - AIS 100 Practice Exam 2 Answer Key I Multiple Choice 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 D N/A

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