CHƯƠNG 7 – INVENTORIES

Bài tập

7.1

BE8.1 (LO 1) Included in the December 31 trial balance of Rivera A.Ş. are the following assets.

Cash ₺190,000

Work in process ₺200,000

Equipment (net) 1,100,000

Accounts receivable (net) 400,000

Prepaid insurance 41,000

Patents 110,000

Raw materials 335,000

Finished goods 170,000

Prepare the current assets section of the December 31 statement of financial position.

7.2

BE8.2 (LO 1) Matlock SE uses a perpetual inventory system. Its beginning inventory consists of 50 units
that cost €34 each. During June, the company purchased 150 units at €34 each, returned 6 units for
credit, and sold 125 units at €50 each. Journalize the June transactions.
7.3

BE8.3 (LO 2) Obihiro Ltd. has the following information related to its inventory of embroidered baseball
caps: purchase price, ¥45,000,000; import duties, ¥375,000; interest costs on inventory loan, ¥520,000;
and transportation costs, ¥125,000. Determine the cost of the Obihiro inventory.

7.4

BE9.1 (LO 1) Presented below is information related to Rembrandt Inc.’s inventory.

(per unit) Skis Boots Parkas

Historical cost $190.00 $106.00 $53.00
Selling price 212.00 145.00 73.75
Cost to sell 19.00 8.00 2.50
Cost to complete 32.00 29.00 21.25
Determine the following:

(a) The net realizable value for each item

(b) The carrying value of each item under LCNRV
7.5

BE9.2 (LO 1) Floyd SE has the following four items in its ending inventory.

Item Cost Net Realizable Value (NRV)

Jokers €2,000 €2,100
Penguins 5,000 4,950
Riddlers 4,400 4,625
Scarecrows 3,200 3,830
Determine (a) the LCNRV for each item, and (b) the amount of write-down, if any, using (1) an item-by-
item LCNRV evaluation and (2) a total-group LCNRV evaluation.

7.6

BE9.9 (LO 3) Fosbre NV’s April 30 inventory was destroyed by fire. January 1 inventory was €150,000,
and purchases for January through April totaled €500,000. Sales for the same period were €700,000.
Fosbre’s normal gross profit percentage is 35% on sales. Using the gross profit method, estimate
Fosbre’s April 30 inventory that was destroyed by fire.
7.7

BE9.11 (LO 5) Recently, Inditex (ESP) reported ending inventory of €1,581.297 (€1,297.009 the previous
year). Cost of sales were €6,486.825 and net sales were €15,946.143 (all amounts in millions). Compute
Inditex’s inventory turnover and average days to sell inventory

Trắc nghiệm

True-False (T-F)

Câu 1: A manufacturing concern would report the cost of units only partially processed as inventory in
the statement of financial position.TRUE

Câu 2: Goods in transit, shipped f.o.b. shipping point, are included in the buyer’s statement of financial
position at the time of delivery to the common carrier.TRUE

Câu 3: A company should abandon the historical cost principle when the future utility of the inventory
item falls below its original cost.TRUE
Câu 4: A disadvantage of the gross profit method is that it uses past percentages in determining the
markup.TRUE

Câu 5: The inventory turnover is computed by dividing the cost of goods sold by the ending inventory on
hand.FALSE

Multiple Choice

Câu 6

Which of the following accounts is not reported in inventory?

a. Raw materials.
b. Equipment.
c. Finished goods.
d. Supplies.
Câu 7

Tang, Inc. sells collectible jewelry on consignment from various manufacturers. Additionally, Tang sells
its own line of specialty jewelry manufactured in-house. On December 31, 2022, during Tang, Inc 's
annual inventory count, an inexperienced new staff member included in Tang’s ending inventory
€350,000 worth of inventory held on consignment from Metcalf Associates. Which of the following is
correct regarding the impact of this error on Tang’s income statement and statement of financial
position at December 31, 2022?

a. Ending inventory is understated by €350,000.

b. Retained earnings is overstated by €350,000.
c. Cost of goods sold is overstated by €350,000.
d. The financial statements are correctly stated.
Câu 8

LCNRV of inventory

a. is always either the net realizable value or its cost.

b. should always be equal to net realizable value.

c. may sometimes be less than net realizable value.

d. should always be equal to net realizable value less costs to complete.

Câu 9

Which statement is not true about the gross profit method of inventory valuation?

a. It may be used to estimate inventories for interim statements.

b. It may be used to estimate inventories for annual statements.
c. It may be used by auditors.
d. It may be used when fire or other catastrophe destroys the inventory.
Câu 10

Which of the following is not a common disclosure for inventories?

a. Inventory composition.

b. Inventory location.

c. Inventory financing arrangements.

d. Inventory costing methods employed.