The following information is available for an entity for the quarter ended March 31. of the current year:The gross profit margin is normally 200 of sales. What is the estimated cost of the merchandise inventory at March 31. of the current year?
Answer(s): C
The gross profit margin percentage is given as 20% of sales. Hence, cost of goods sold must have been US $160, 000 [$:4110, 000 sales x1_0 - 2)]. The estimated cost of the inventory at March 31 is computed as follows:The following transactions and events occurred during the current year:US $300, 000 of raw materials were purchased, of which US $20, 000 were returned because of defects. US $600, 000 of direct labor costs were incurred. US $750, 000 of production overhead costs were incurred.
The cost of go is sold for the current year ended December 31 would be
Answer(s): A
An entity had the following opening and closing inventory balances during the current year:The following transactions and events occurred during the current year US $300, 000 of raw materials were purchased, of which US $20, 000 were returned because of defects. US $600, 000 of direct labor costs were incurred. US $750, 000 of production overhead costs were incurred.
If the entity's raw materials inventory as of r.~. 'ITiber 31 of the current yearending inventory) was miscounted and the true figure was higher than US $ one effect on the year-end financial statements would be that
Answer(s): B
If the ending inventory of raw materials is understated, r materials used is overstated, cost of goods produced is overstated, and cost of goods sold is overstated.
On January 1. a company has no opening inventory balance_ The following purchases are made during the year:There are 10.000 units in invo ntory on December 31. If the company uses the first in. first outFIFO) method of inventory valuation, the ending inventory balance will be
Under first-in, first-outFIFO) inventory valuation, the 10, 000 units in ending inventory are assumed to have been the most recent items purchased. The cost of the most recent 10, 000 units purchased is:5, 000 units x US $7.50) +5, 000 units x $8) e US $77, 500.
An entity is depreciating an asset with a 5-year useful life. It cost US $100, 000 and has no residual value. If the -List A - method is used, depreciation in the second year will be - List B>
Answer(s): D
Post your Comments and Discuss IIA CIA exam prep with other Community members:
Our website is free, but we have to fight against AI bots and content theft. We're sorry for the inconvenience caused by these security measures. You can access the rest of the CIA content, but please register or login to continue.