7 QUESTIONS TOTAL  **(Pay close attention to the wording of the 3 "UpCo" Questions)**   When units are sold from LIFO inventory layers, it is referred to as a(n):     effect     liquidation     reserve     allowance   What is the journal entry to record a difference between a total inventory cost of $25,000 that, under LCM costing, is valued at $15,000?     Cost of Goods Sold 10,000                                Inventory 10,000     Inventory 10,000                     Cost of Goods Sold 10,000     Loss in Inventory Write-Down to Market 10,000                                                                          Inventory 10,000 ?     Inventory 10,000                         Loss in Inventory Write-Down to Market 10,000   UpCo signs a purchase commitment for $15,000

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7 QUESTIONS TOTAL 

**(Pay close attention to the wording of the 3 "UpCo" Questions)**

 

1. When units are sold from LIFO inventory layers, it is referred to as a(n):

		effect
		liquidation
		reserve
		allowance

 

1. What is the journal entry to record a difference between a total inventory cost of $25,000 that, under LCM costing, is valued at $15,000?

		Cost of Goods Sold 10,000                                Inventory 10,000
		Inventory 10,000                     Cost of Goods Sold 10,000
		Loss in Inventory Write-Down to Market 10,000                                                                          Inventory 10,000 ?
		Inventory 10,000                         Loss in Inventory Write-Down to Market 10,000

 

1. UpCo signs a purchase commitment for $15,000. At year end, market value is $10,000, so UpCo records the appropriate journal entries. If, when the goods are delivered the following year the market value has recovered to $12,000, what journal entry should UpCo record?

		Estimated Liability on Purchase Commitment 5,000 Inventory 12,000                        Recovery of Loss on Purchase Commitment 2,000                        Cash 15,000
		Inventory 15,000                      Recovery of Loss on Purchase Commitment 3,000                      Cash 12,000
		Estimated Liability on Purchase Commitment 3,000 Inventory 12,000                                                                                            Cash 15,000
		None of the above

 

1. UpCo signs a purchase commitment for $15,000. At year end, market value is $10,000, so UpCo records the appropriate journal entries. If, when the goods are delivered the following year the market value has recovered to $17,000, what journal entry should UpCo record?

		Estimated Liability on Purchase Commitment 5,000 Inventory 15,000                                  Recovery of Loss on Purchase Commitment 5,000                                  Cash 15,000
		Inventory 20,000                    Recovery of Loss on Purchase Commitment 5,000                    Cash 15,000
		Inventory 15,000                        Cash 15,000
		None of the above

 

 

1. UpCo signs a purchase commitment for $15,000. At year end, market value is $10,000, so UpCo records the appropriate journal entries. If, when the goods are delivered the following year, the market value remains at $10,000, what journal entry should UpCo record?

		No additional journal entry is necessary
		Estimated Liability of Purchase Commitment 5,000 Inventory 10,000                                                                                          Cash 15,000
		Estimated Loss of Purchase Commitment 5,000 Inventory 10,000                                                                                  Cash 15,000
		None of the above.

 

1. MobilCo, which uses the periodic method, has beginning inventory of $100,000. During the fiscal year, it purchases $200,000 of inventory, FOB shipping point with the seller paying the $8,000 shipping costs. What is the balance in MobilCo's Purchases account at year end?

		$308,000
		$300,000
		$208,000
		$200,000

 

 

 

1. Copy of

UpCo's inventory data is as follows:

	Cases on hand	Cost per case	Market per case
1 . Garden Supplies
a. Snail Bait	35	$80	$75
b. Isotox	12	20	23
c. Shovels	20	100	99
2. Hardware
a. Screws	20	$80	$96
b. Brackets	2	35	31
c. Nails	8	12	12
3. Paint
a. Enamel -1 gal.	22	$120	$118
b. Spray Cans	15	45	54
c. Misc. Brushes	4	30	38

What is UpCo's ending inventory, applying LCNRV by total item?

		$10,082
		$10,241
		$10,517
		$9,994