11 better buy inc has six cd players in inventory on december 31 the players were pu 4306711

11 better buy inc has six cd players in inventory on december 31 the players were pu 4306711

11) Better Buy Inc. has six CD players in inventory on December 31. The players were purchased in November for $150. The price lists from the company's supplier indicate that the same CD player would now cost the company $155. What would be the amount reported as Ending Merchandise Inventory on the balance sheet?

A) $1,740

B) $1,680

C) $900

D) $930

12) Best Deals Inc. has six CD players in ending merchandise inventory on December 31. The players were purchased in November for $165. The price lists from suppliers indicate the current replacement cost of a CD player to be $162. What would be the amount reported as Inventory on the balance sheet?

A) $972

B) $990

C) $1,800

D) $1,890

13) Best Deals Inc. has six CD players in ending merchandise inventory on December 31. The players were purchased in November for $170. The price lists from suppliers indicate the current replacement cost of a CD player to be $168. Which of the following statements is true of the effects of the adjustments to ending merchandise inventory on the cost of goods sold?

A) The cost of goods sold would increase by $2.

B) The cost of goods sold would not be affected.

C) The cost of goods sold would decrease by $12.

D) The cost of goods sold would increase by $12.

14) Better Buy Inc. has six CD players in inventory on December 31. The players were purchased in November for $170. The price lists from suppliers indicate the current replacement cost of a CD player to be $168. What is the effect on gross profit if Better Buy values its ending merchandise inventory using the lower-of-cost-or-market rule?

A) The gross profit would increase by $2.

B) The gross profit would not be affected.

C) The gross profit would decrease by $12.

D) The gross profit would increase by $12.

15) When a company uses the perpetual inventory method, which of the following would be the entry to adjust inventory to lower-of-cost-or-market?

A) debit Purchases and credit Merchandise Inventory

B) debit Inventory and credit Purchases

C) debit Cost of Goods Sold and credit Merchandise Inventory

D) debit Inventory and credit Cost of Goods Sold

16) Williams Inc. had the following balances and transactions during 2014:

Beginning Inventory

20 units at $70

June 10

Purchased 30 units at $80

December 30

Sold 15 units

December 31

Replacement cost $60

The company maintains its records of inventory on a perpetual basis using the first-in, first-out method. Calculate the amount of ending Merchandise Inventory on December 31, 2014 using the lower-of-cost-or-market rule.

A) $1,800

B) $2,100

C) $2,450

D) $1,400

17) Williams Inc. had the following balances and transactions during 2014.

Beginning Inventory

10 units at $70

June 10

Purchased 20 units at $80

December 30

Sold 15 units

December 31

Replacement cost $68

The company maintains its records of inventory on a perpetual basis using the last-in, first-out method. Calculate the amount of ending Merchandise Inventory at December 31, 2014 using the lower-of-cost-or-market rule.

A) $1,200

B) $1,360

C) $1,020

D) $2,040

18) Williams Inc. had the following balances and transactions during 2014.

Beginning Inventory

10 units at $70

June 10

Purchased 20 units at $80

December 30

Sold 15 units

December 31

Replacement cost $90

The company maintains its records of inventory on a perpetual basis using the FIFO method. Calculate the amount of ending Merchandise Inventory at December 31, 2014 using the lower-of-cost-or-market rule.

A) $1,200

B) $1,360

C) $2,040

D) $1,020

19) Williams Inc. had the following balances and transactions during 2014.

Beginning inventory

10 units at $75

June 10

Purchased 20 units at $78

December 30

Sold 15 units

December 31

Replacement cost $80

The company maintains its records of inventory on a perpetual basis using the last-in, first-out method. Calculate the amount of ending Merchandise Inventory at December 31, 2014 using the lower-of-cost-or-market rule.

A) $750

B) $1,140

C) $1,200

D) $1,950

20) Sandra Inc. had 200 units of inventory on hand at the end of the year. These were recorded at a cost of $12 each using the last-in, first-out (LIFO) method. The current replacement cost is $10 per unit. The selling price charged by Sandra Inc. for each finished product is $15. In order to record the adjusting entry needed under the lower-of-cost-or-market rule, the Cost of Goods Sold will be ________.

A) debited by $2,000

B) credited by $2,000

C) debited by $400

D) credited by $400

21) Sandra Inc. had 200 units of inventory on hand at the end of the year. These were recorded at a cost of $12 each using the last-in, first-out (LIFO) method. The current replacement cost is $10 per unit. The selling price charged by Sandra Inc. for each finished product is $15. In order to record the adjusting entry needed under the lower-of-cost-or-market rule, the Merchandise Inventory will be ________.

A) debited by $2,000

B) credited by $2,000

C) debited by $400

D) credited by $400

22) Sandra Inc. had two hundred units of inventory on hand at the end of the year. These were recorded at a cost of $12 each using the last-in, first-out (LIFO) method. The current replacement cost is $10 per unit. The selling price charged by Sandra Inc. for each finished product is $15. As a result of recording the adjusting entry as per the lower-of-cost-or-market rule, the gross profit will ________.

A) increase by $2,000

B) decrease by $2,000

C) increase by $400

D) decrease by $400

23) The ending inventory of a company was $450,000 as per the perpetual inventory records. The current replacement cost for the ending inventory is $410,000. Prepare the journal entry to adjust inventory.

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