ACG 1Chapter 5 Practice

# D cost of goods sold to be overstated and net income

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D. Cost of goods sold to be overstated and net income to be understated. E. Cost of goods sold to be overstated and net income to be correct. 18. A company had the following purchases during the current year: January: 10 units at \$120 February: 20 units at \$125 May: 15 units at \$130 September: 12 units at \$135 November: 10 units at \$140 On December 31, there were 26 units remaining in ending inventory. Using the FIFO inventory valuation method, what is the cost of the ending inventory? A. \$3,280. 2

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B. \$3,200. C. \$3,445. D. \$3,540. E. \$3,640. 19. A company had the following purchases during the current year: January: 10 units at \$120 February: 20 units at \$125 May: 15 units at \$130 September: 12 units at \$135 November: 10 units at \$140 On December 31, there were 26 units remaining in ending inventory. Using the LIFO inventory valuation method, what is the cost of the ending inventory? A. \$3,280. B. \$3,200. C. \$3,445. D. \$3,540. E. \$3,640. 20. A company had inventory on November 1 of 5 units at a cost of \$20 each. On November 2, they purchased 10 units at \$22 each. On November 6 they purchased 6 units at \$25 each. On November 8, 8 units were sold for \$55 each. Using the LIFO perpetual inventory method, what was the value of the inventory on November 8 after the sale? A. \$304 B. \$296 C. \$288 D. \$280 E. \$276 21. Grays Company has inventory of 10 units at a cost of \$10 each on August 1. On August 3, it purchased 20 units at \$12 each. 12 units are sold on August 6. Using the FIFO perpetual inventory method, what amount will be reported in cost of goods sold for the 12 units that were sold? A. \$120. B. \$124. C. \$128. D. \$130. E. \$140. 22. McCarthy Company has inventory of 8 units at a cost of \$200 each on October 1. On October 2, it purchased 20 units at \$205 each. 11 units are sold on October 4. Using the FIFO perpetual inventory method, what amount will be reported in cost of goods sold for the 11 units that were sold? 3
A. \$2,239. B. \$2,255. C. \$2,200. D. \$2,228. E. \$2,215. 23. McCarthy Company has inventory of 8 units at a cost of \$200 each on October 1. On October 2, it purchased 20 units at \$205 each. 11 units are sold on October 4. Using the FIFO perpetual inventory method, what is the value of inventory after the October 4 sale?

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• Spring '15
• WILLIAMT.URQUHART
• Accounting, FIFO and LIFO accounting, Starlight Company, McCarthy Company

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