7.Albany Addictive Apples counted and valued its inventory using FIFO on December 31, 2013 and on December 31, 2014 and reported the calculated values on each respective balance sheet. Albany Additive Apples had zero consignment inventory on hand at December 31, 2014 and had some consignment on hand at December 31, 2013. If consignment inventory had erroneously been counted and included in inventory in the December 31, 2013 count, which of the following is true?
The company should not have used FIFO and should restate both years balance sheets and income statements
Inventory was understated at December 31, 2013
Net income was understated in 2014
Net income was understated in 2013
Inventory was understated at December 31, 2014
9.Alex’s Tea House uses a perpetual inventory system. When Alex’s Tea House purchases inventory on account, which of the following journal entries does it record?
None of the other alternatives are correct
Dr. Inventory and Cr. Accounts Payable
Dr. Inventory and Cr. Cash
Dr. Purchases and Cr. Cash
Dr. Purchases and Cr. Accounts Payable
The Toy Emporium Inc. has compiled the following information for the year ended December 31, 2015.
ItemCostMarketPuzzles$27,500$28,500Gameboys$16,200$17,000Dolls$57,600$65,200
The Toy Emporium Inc. reviews inventory on an item-by-item basis. What is the total write down of inventory for the year ended December 31, 2015?
$2,200
We need to know the cost flow assumption to calculate if there is a write down
$8,600
$6,400
There is no write down of inventory required
ScholarMatic: Explanation & Answer
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