51. Data related to the inventories of Alpine Ski Equipment and Supplies is presented below:
In applying the LCM rule, the inventory of boots would be valued at:
A. $135,000
B. $133,000
C. $130,000
D. $105,000
RC = 130,000
NRV = 150,000 - (150,000 x .10) = 135,000
NRV - NP = 135,000 - (150,000 x 20%) = $105,000
=> $130,000 designated market value is less than $133,000 cost.
52. Data related to the inventories of Alpine Ski Equipment and Supplies is presented above 51:
In applying the LCM rule, the inventory of apparel would be valued at:
A. $108,000
B. $90,000
C. $110,000
D. $115,000
RC = 110,000
NRV = 120,000 - (120,000 x .10) = 108,000
NRV - NP = 108,000 - (120,000 x .15) = $90,000
=> $90,000 cost is less than the designated market value of $108,000 cost.
53. Data related to the inventories of Alpine Ski Equipment and Supplies is presented above 51:
In applying the LCM rule, the inventory of supplies would be valued at:
A. $45,000
B. $54,000
C. $41,000
D. $42,000
RC = 41,000
NRV = 60,000 - (60,000 x .10) = 54,000
NRV - NP = 54,000 - (60,000 x .15) = $45,000
=> $45,000 cost is equal to the designated market value.
54. Under the conventional retail method, the denominator in the cost-to-retail percentage includes:
a. Net markups and net markdowns
b. Neither net markups nor net markdowns
c. Net markups, but not net markdowns
d. Net markdowns, but not net markups
55. Under the LIFO retail method, the denominator in the cost-to-retail percentage includes:
a. Net markups and net markdowns
b. Neither net markups nor net markdowns
c. Net markups, but not net markdowns
d. Net markdowns, but not net markups
56. Under the retail method, the denominator in the cost-to-retail percentage does not include:
a. Purchases
b. Purchase returns
c. Abnormal shortages
d. Freight-in
57. Under the conventional retail method, which of the following are not included in the denominator of the current period cost-to-retail conversion percentage?
a. Purchase returns
b. Net markups
c. Purchases
d. Net markdowns
58. Under the LIFO retail method, which of the following are not included in the denominator of the cost-to-retail conversion percentage?
a. Freight-in
b. Purchase returns
c. Purchases
d. Net markdowns
59. Under the retail method, in determining the cost-to-retail percentage for the current year:
a. Net markups are included
b. Net markdowns are excluded
c. Net sales are included
d. All of the above are correct
60. Fad City sells novel clothes that are subject to a great deal of price volatility. A recent item that cost $20 was marked up $12, marked down for a sale by $6 and then had a markdown cancellation of $3. The latest selling price is:
a. $23
b. $26
c. $29
d. $35
20 + 12 - 6 +3 =29
| Skis | Boots | Apparel | Supplies | |
| Selling price | $180.000 | $150.000 | $120.000 | $60.000 |
| Cost | 128.000 | 133.000 | 90.000 | 45.000 |
| Replacement cost | 120.000 | 130.000 | 110.000 | 41.000 |
| Disposal cost | 10% | 10% | 10% | 10% |
| Normal gross profit ratio | 20% | 20% | 15% | 15% |
In applying the LCM rule, the inventory of boots would be valued at:
A. $135,000
B. $133,000
C. $130,000
D. $105,000
RC = 130,000
NRV = 150,000 - (150,000 x .10) = 135,000
NRV - NP = 135,000 - (150,000 x 20%) = $105,000
=> $130,000 designated market value is less than $133,000 cost.
52. Data related to the inventories of Alpine Ski Equipment and Supplies is presented above 51:
In applying the LCM rule, the inventory of apparel would be valued at:
A. $108,000
B. $90,000
C. $110,000
D. $115,000
RC = 110,000
NRV = 120,000 - (120,000 x .10) = 108,000
NRV - NP = 108,000 - (120,000 x .15) = $90,000
=> $90,000 cost is less than the designated market value of $108,000 cost.
53. Data related to the inventories of Alpine Ski Equipment and Supplies is presented above 51:
In applying the LCM rule, the inventory of supplies would be valued at:
A. $45,000
B. $54,000
C. $41,000
D. $42,000
RC = 41,000
NRV = 60,000 - (60,000 x .10) = 54,000
NRV - NP = 54,000 - (60,000 x .15) = $45,000
=> $45,000 cost is equal to the designated market value.
54. Under the conventional retail method, the denominator in the cost-to-retail percentage includes:
a. Net markups and net markdowns
b. Neither net markups nor net markdowns
c. Net markups, but not net markdowns
d. Net markdowns, but not net markups
55. Under the LIFO retail method, the denominator in the cost-to-retail percentage includes:
a. Net markups and net markdowns
b. Neither net markups nor net markdowns
c. Net markups, but not net markdowns
d. Net markdowns, but not net markups
56. Under the retail method, the denominator in the cost-to-retail percentage does not include:
a. Purchases
b. Purchase returns
c. Abnormal shortages
d. Freight-in
57. Under the conventional retail method, which of the following are not included in the denominator of the current period cost-to-retail conversion percentage?
a. Purchase returns
b. Net markups
c. Purchases
d. Net markdowns
58. Under the LIFO retail method, which of the following are not included in the denominator of the cost-to-retail conversion percentage?
a. Freight-in
b. Purchase returns
c. Purchases
d. Net markdowns
59. Under the retail method, in determining the cost-to-retail percentage for the current year:
a. Net markups are included
b. Net markdowns are excluded
c. Net sales are included
d. All of the above are correct
60. Fad City sells novel clothes that are subject to a great deal of price volatility. A recent item that cost $20 was marked up $12, marked down for a sale by $6 and then had a markdown cancellation of $3. The latest selling price is:
a. $23
b. $26
c. $29
d. $35
20 + 12 - 6 +3 =29
