ACC Week 6 Questions and Answers
8 pages of Homework Screenshots
Smart Company identifies the following items for possible inclusion in the taking of a physical inventory.
Goods shipped on consignment by a. Smart to another company.
b. Goods in transit from a supplier shipped FOB destination.
c. Goods sold but being held for customer pickup.
d. Goods held on consignment from another company.
Indicate whether each item should be included or excluded from the inventory taking
The management of Hoyt Corp. is considering the effects of various inventory-costing methods on its financial
statements and its income tax expense. Assuming that the price the company pays for inventory is increasing, which
Alou Appliance Center accumulates the following cost and market data at December 31
Kale Thompson, an auditor with Sneed CPAs, is performing a review of Strawser Company’s inventory account. Strawser did not have a
good year and top management is under pressure to boost reported income. According to its records, the inventory balance at year-end
was $740,000. However, the following information was not considered when determining that amount.
Catlet Co. uses a periodic inventory system. Its records show the following for the month of May in which 65 units were
Lebo Hardware reported the cost of goods sold as follows:
Beginning Inventory $20,000 $30,000
Cost of goods purchased 150,000 175,000
Cost of goods available for sale 170,000 205,000
Ending inventory 30,000 35,000
Cost of goods sold $140,000 $170,000
Lebo made two errors: (1) 2010 ending inventory was overstated by $3,000 and (2) 2011 ending inventory was
Determine the cost of goods available for sale.
Which cost flow method results in (1) the highest inventory amount for the balance sheet and (2) the highest cost of
goods sold for the income statement?