Fall 2010 BMGT 220 Exam 2

Fall 2010 BMGT 220 Exam 2 - BMGT 220 Midterm Exam 2...

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Thursday, November 4, 2010 ____ 1. When inventory prices are falling, using the LIFO costing method will generally result in a: A. lower ending inventory value than under FIFO B. lower income tax expense than under FIFO C. lower cost of goods sold than under FIFO D. lower net income than under FIFO ____ 2. A company discovered in 2010 that it had overstated the inventory balance for Dec 31, 2008 by $10,000. The company had (incorrectly) reported Net Income to be $300,000 for 2008, and $400,000 for 2009. What should be the corrected Net Incomes for 2008 and 2009? Corrected 2008 Net Income Corrected 2009 Net Income A. $310,000 $390,000 B. $290,000 $390,000 C. $290,000 $410,000 D. $310,000 $410,000 Use the following information for Sue's Soups for the next three questions: On September 1, 2010, the beginning inventory was 110 units at $50 each. Purchases and sales during September 2010 were: Purchases During Sept 2010 Sales During Sept 2010 Sept 7 120 units @ $56 Sept 12 70 units Sept 17 70 units @ $44 Sept 22 110 units Sept 25 100 units @$42 Sept 29 9 0 units ____ 3. What is the cost of ending inventory for September if the PERIODIC AVERAGE costing alternative is used? (round your answer to the nearest penny) A. $965.52 B. $6,337.50 C. $5,362.50 D. $6.275.86 ____ 4. What is the cost of inventory on September 30 if the PERIODIC LIFO costing alternative is used? A. $7,160 B. $5,520 C. $6,620 D. $6,500 ____ 5. What is the cost of goods sold for September if the PERIODIC FIFO costing alternative is used? A. $13,920 B. $12,880 C. $13,980 D. $13,900 ____ 6. Nelson Corporation sells three different products. The following information is available on December 31: Inventory Item Units Cost per unit Market value per unit X 100 $4.00 $3.50 Y 200 $2.00 $1.50 Z 500 $3.00 $4.00 When applying the lower of cost or market rule to each item, what will Nelson report as its cost of ending inventory on December 31? A.
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This note was uploaded on 01/26/2012 for the course BMGT 220 taught by Professor Bulmash during the Fall '08 term at Maryland.

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Fall 2010 BMGT 220 Exam 2 - BMGT 220 Midterm Exam 2...

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