Barker Company paid cash to purchase two identical inventory items. The first purchase cost $18.00 cash and the second cost $20.00 cash. Barker sold one inventory item for $30.00 cash. Based on this information alone, without considering the effect of income taxes, which of the following statements is correct? Multiple Choice The amount of cash flow from operating activities is not affected by the inventory cost flow method chosen. Cash flow from operating activities is $11.00 assuming the weighted-average inventory cost flow method is used. Cash flow from operating activities is $12.00 assuming the FIFO inventory cost flow method is used. Cash flow from operating activities is $10.00 assuming the LIFO inventory cost flow method is used.

Barker Company paid cash to purchase two identical inventory items. The first purchase cost $18.00 cash and the second cost $20.00 cash. Barker sold one inventory item for $30.00 cash. Based on this information alone, without considering the effect of income taxes, which of the following statements is correct? Multiple Choice The amount of cash flow from operating activities is not affected by the inventory cost flow method chosen. Cash flow from operating activities is $11.00 assuming the weighted-average inventory cost flow method is used. Cash flow from operating activities is $12.00 assuming the FIFO inventory cost flow method is used. Cash flow from operating activities is $10.00 assuming the LIFO inventory cost flow method is used.

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter8: Operating Assets: Property, Plant, And Equipment, And Intangibles

Section: Chapter Questions

Problem 8.7IP

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Assume the perpetual inventory method is used. • The company purchased $13,700 of merchandise on account under terms 3/10, n/30. • The company returned $3,200 of merchandise to the supplier before payment was made. • The liability was paid within the discount period. . All of the merchandise purchased was sold for $21,400 cash. What effect will the return of merchandise to the supplier have on the accounting equation? Multiple Choice O Assets and liabilities are decreased by $3,104. Assets and liabilities are decreased by $3,200. None. It is an asset exchange transaction. Assets and stockholders' equity are decreased by $3,200. Help
Ashton Company uses the perpetual inventory system. The company's inventory account had a $6,600 balance as of December 31, Year 1. A physical count of inventory shows only $5,900 of merchandise in stock at December 31, Year 1. How will recognizing the missing inventory affect the company's financial statements? Multiple Choice Increase assets. Increase expense. All of these answer choices are correct. Decrease cash flow from operating activities.
Kelton Inc. purchases inventory for $2,000 and incurs shipping costs of $100. To record this transaction, the company debits Inventory for $2,000, debits Selling Expenses for $100, and credits Cash for $2,100. Which of the following statements is correct? O Revenues are understated. O Assets are understated. O Expenses are understated. O Net income is overstated. All accounts are accurately stated.
Enter the missing dollar amounts for the income statement for each of the following independent cases. (Hint: In Case B, work from the bottom up.) Net sales revenue Beginning inventory Purchases Goods available for sale Ending inventory Cost of goods sold Gross profit Expenses Pretax income (loss) $ Case A 11,000 4,880 10,210 $ 7,630 200 $ 1,760 $ Case B 6,560 15,200 11,030 $ 1,330 (530) $ Case C $ 3,910 9,430 13,340 $ 6,090 4,420 700 970
Moore Company purchased an item for inventory that cost $26 per unit and was priced to sell at $42. It was determined that the disposal cost is $24 per unit. Using the lower of cost or net realizable value (LCM) rule, what amount should be reported on the balance sheet for inventory? a. $18. b. $42. c. $24. d. $26.
At the end of the Year 2 accounting period, DeYoung Company determined that the market value of its inventory was $79,800. The historical cost of this inventory was $81,400. DeFazio uses the perpetual inventory method. Assuming the amount is immaterial, how will the necessary write-down to reduce the inventory to the lower-of-cost-or-market affect the company's financial statements? Multiple Choice O O Decrease total assets, gross margin, and net income Increase total assets and net income Decrease total assets and gross margin Decrease total assets and net income
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