4-Chapter 4 Review Questions - BB

4-Chapter 4 Review Questions - BB - Chapter 4 Review...

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Chapter 4 Review Questions The following data apply to the next three questions. Units Price Beginning Inventory 200 $1.20 First Purchase 400 $1.30 Second Purchase 250 $1.40 Sales 550 $2.00 1. Assuming a FIFO cost flow, the amount of gross margin reported on the income statement would be a. $405. b. $695. c. $415. d. None of the above. 2. Assuming a LIFO cost flow, the amount of ending inventory reported on the balance sheet would be a. $240. b. $415. c. $130. d. $370. 3. Assuming a weighted average cost flow, the amount of ending inventory reported on the balance sheet would be (round the final answer to the nearest dollar) a. $415. b. $392. c. $370. d. $417. 4. Barry Company purchased two identical inventory items. The item purchased first cost $7.00 and the item purchased second cost $9.00. Barney sold one of the items for $12.00. Which of the following statements is true? A) Ending inventory will be lower if Barney uses weighted average than it would be if FIFO were used. B)
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This note was uploaded on 02/10/2011 for the course ACC 201 taught by Professor Cromartie during the Spring '11 term at UNC Greensboro.

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4-Chapter 4 Review Questions - BB - Chapter 4 Review...

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