Review Problems Ch6-9

Review Problems Ch6-9 - CHAPTER 6 1. The Freight-in account...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
CHAPTER 6 1. The Freight-in account a. increases the cost of merchandise purchased. b. is contra to the Purchases account. c. is a permanent account. d. has a normal credit balance 2. When is a physical inventory usually taken? a. When goods are not being sold or received. b. When the company has its greatest amount of inventory. c. At the end of the company’s fiscal year. d. Both (b) and (c). 3.Westcoe Company's goods in transit at December 31 include sales made (1) FOB destination (2) FOB shipping point and purchases made (3) FOB destination (4) FOB shipping point. Which items should be included in Westcoe's inventory at December 31? a. (2) and (3) b. (1) and (4) c. (1) and (3) d. (2) and (4) 4. Which statement is false? a. Taking a physical inventory involves actually counting, weighing, or measuring each kind of inventory on hand. b. No matter whether a periodic or perpetual inventory system is used, all companies need to determine inventory quantities at the end of each accounting period. c. An inventory count is generally more accurate when goods are not being sold or received during the counting. d. Companies that use a perpetual inventory system must take a physical inventory to determine inventory on hand on the balance sheet date and to determine cost of goods sold for the accounting period. 5. At December 31, 2007 Renfro Company’s inventory records indicated a balance of $1,128,000. Upon further investigation it was determined that this amount included the following: $168,000 in inventory purchases made by Renfro shipped from the seller 12/27/07 terms FOB destination, but not due to be received until January 2nd $111,000 in goods sold by Renfro with terms FOB destination on December 27 th . The goods are not expected to reach their destination until January 6 th . $9,000 of goods received on consignment from Dollywood Company
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
What is Renfro’s correct ending inventory balance at December 31, 2007? a. $960,000 b. $1,119,000 c. $840,000 d. $951,000 Use the following for problems 6-9: A company just starting business made the following four inventory purchases in June: June 1 150 units $ 780 June 10 200 units 1,170 June 15 200 units 1,260 June 28 150 units 990 $4,200 A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand. 6. Using the LIFO inventory method, the value of the ending inventory on June 30 is a. $1,040.00 b. $1,072.50 c. $1,305.00 d. $1,320.00 7. Using the FIFO inventory method, the amount allocated to ending inventory for June is a. $1,040.00 b. $1,072.50 c. $1,305.00 d. $1,320.00 8. Using the average cost method, the amount allocated to the ending inventory on June 30 is a. $1,170. b.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 18

Review Problems Ch6-9 - CHAPTER 6 1. The Freight-in account...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online