Accounting 350: Quiz
Accounting 350 Name
Quiz #5, Winter 2010, Chpts 9 & 10
1.
Oslo Corporation has two products in its ending inventory, each accounted for at the lower of cost or market. A profit margin of 30% on selling price is considered normal for each product. Specific data with respect to each product follows:
Product #1
Product #2
Historical cost
$40.00
$ 70.00
Replacement cost
45.00
54.00
Estimated cost to dispose
10.00
26.00
Estimated selling price
80.00
130.00
In pricing its ending inventory using the lower-of-cost-or-market, what unit values should Oslo use for products #1 and #2, respectively?
A)
$40.00 and $65.00.
B)
$46.00 and $65.00.
C)
$46.00 and $60.00.
D)
$45.00 and $54.00.
2.
Muckenthaler Company sells product 2005WSC for $20 per unit. The cost of one unit of 2005WSC is $18, and the replacement cost is $17. The estimated cost to dispose of a unit is $4, and the normal profit is 40%. At what amount per unit should product 2005WSC be reported, applying lower-of-cost-or-market?
A)
$8.
B)
$16.
C)
$17.
D)
$18.
3.
The following information is available for October for Barton Company.
Beginning inventory
$ 50,000
Net purchases
150,000
Net sales
300,000
Percentage markup on cost 66.67%
A fire destroyed Barton's October 31 inventory, leaving undamaged inventory with a cost of $3,000. Using the gross profit method, the estimated ending inventory destroyed by fire is
A)
$17,000.
B)
$77,000.
C)
$80,000.
D)
$100,000.
4.
Reyes Company had a gross profit of $360,000, total purchases of $420,000, and an ending inventory of $240,000 in its first year of operations as a retailer. Reyes's sales in its first year must have been
A)
$540,000.
B)
$660,000.
C)
$180,000.
D)
$600,000.
Use the following to answer questions 5-6:
Plank Co. uses the retail inventory method. The following information is available for the current year.
Cost Retail
Beginning inventory
$ 78,000
$122,000
Purchases
295,000
415,000 Freight-in
5,000
— Employee
Quiz #5, Winter 2010, Chpts 9 & 10
1.
Oslo Corporation has two products in its ending inventory, each accounted for at the lower of cost or market. A profit margin of 30% on selling price is considered normal for each product. Specific data with respect to each product follows:
Product #1
Product #2
Historical cost
$40.00
$ 70.00
Replacement cost
45.00
54.00
Estimated cost to dispose
10.00
26.00
Estimated selling price
80.00
130.00
In pricing its ending inventory using the lower-of-cost-or-market, what unit values should Oslo use for products #1 and #2, respectively?
A)
$40.00 and $65.00.
B)
$46.00 and $65.00.
C)
$46.00 and $60.00.
D)
$45.00 and $54.00.
2.
Muckenthaler Company sells product 2005WSC for $20 per unit. The cost of one unit of 2005WSC is $18, and the replacement cost is $17. The estimated cost to dispose of a unit is $4, and the normal profit is 40%. At what amount per unit should product 2005WSC be reported, applying lower-of-cost-or-market?
A)
$8.
B)
$16.
C)
$17.
D)
$18.
3.
The following information is available for October for Barton Company.
Beginning inventory
$ 50,000
Net purchases
150,000
Net sales
300,000
Percentage markup on cost 66.67%
A fire destroyed Barton's October 31 inventory, leaving undamaged inventory with a cost of $3,000. Using the gross profit method, the estimated ending inventory destroyed by fire is
A)
$17,000.
B)
$77,000.
C)
$80,000.
D)
$100,000.
4.
Reyes Company had a gross profit of $360,000, total purchases of $420,000, and an ending inventory of $240,000 in its first year of operations as a retailer. Reyes's sales in its first year must have been
A)
$540,000.
B)
$660,000.
C)
$180,000.
D)
$600,000.
Use the following to answer questions 5-6:
Plank Co. uses the retail inventory method. The following information is available for the current year.
Cost Retail
Beginning inventory
$ 78,000
$122,000
Purchases
295,000
415,000 Freight-in
5,000
— Employee