Class 10_27 &amp; 28_10 - Ch 8

# Class 10_27 &amp; 28_10 - Ch 8 - Agenda Questions Page...

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Page 2 Which inventory method results in the lowest net income during a period of declining inventory costs? a. FIFO b. LIFO c. Periodic System d. Perpetual System Suppose Ironman, Inc lost all of its inventory in a flood. Beginning inventory was \$43,000, purchases totaled \$524,000 and sales came to \$875,000. Ironman’s gross profit % was 44%. How much inventory did Ironman lose in the flood? a. \$308,000 b. \$182,000 c. \$77,000 d. \$34,000 At December 31, 2010, CarPool Inc understated ending inventory by \$2,800. How does this error affect cost of goods sold and net income for 2010? a. Overstates cost of goods sold and understates net income b. Understates cost of goods sold and overstates net income c. Overstates both cost of goods sold and net income d. Leaves both cost of goods sold and net income correct Practice Problems
Page 3 Assume Kmac Inc began December with 60 units of inventory that cost a total of \$720. During December, Kmac purchased and sold goods as follows:

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Class 10_27 &amp; 28_10 - Ch 8 - Agenda Questions Page...

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