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Quiz 6 Fall 2010 - B Gross margin will be higher than under...

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Quiz 6 – ACC 311 NAME_________________________ 8 points each unless marked (Questions 1 and 2) Sam Corporation provides the following information about their inventory of calculators: Date Transaction Number of Units Cost per Unit Total Cost 1/1 Beginning Inventory 10 $ 8.00 $ 80 5/5 Purchase 20 $ 9.00 $ 180 8/10 Purchase 30 $10.00 $ 300 10/15 Purchase 20 $11.00 $ 220 During the year, 40 calculators were sold. What was their ending inventory and cost of goods sold on 12/31 under the FIFO cost flow assumption ( in dollars NOT units )? 1. ENDING INVENTORY $____ 420 _______________ ([email protected] [email protected]) 2. COGS $ __ _360 ____________________ ( [email protected], [email protected], [email protected]) 3. Under the FIFO cost flow assumption during a period of rising prices, which of the following is false ? A. Income tax expense will be higher than under LIFO.
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Unformatted text preview: B. Gross margin will be higher than under LIFO. C. Ending inventory will be lower than under LIFO. D. Cost of goods sold will be lower than under LIFO. E. Both B and D 4. TRUE OR FALSE An overstatement of 2011 ending inventory results in an understatement of 2011 net income. 5: Complete the 4 missing data points below: (2 points each) Net Sales Revenue Beginning Inventory Purchases Total Available Ending Invento ry Cost of Goods Sold Gross Profit Expenses Pretax Income or (Loss) $ 1,100 $200 $900 1,100 300 800 300 $150 $150 Bonus: (4 points only) TRUE OR FALSE : Under the perpetual inventory system ending inventory and cost of goods sold are determined at the end of the accounting period based on a physical count....
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