170. For each company, calculate the missing amount.
171. Beasley, Inc. reports the following amounts in its December 31, 2012, income statement.
Prepare a multiple-step income statement.
172. What is a multiple-step income statement? What information does it provide beyond
“bottom-line” net income?
173. Listed below are five terms followed by a list of phrases that describe or characterize the
terms. Match each phrase with the best term placing the letter designating the term in the
space provided.
Terms:
a. Gross profit
b. Net income
c. Inventory turnover ratio
d. Operating income
e. Income before income taxes
_____ Equals operating income plus nonoperating revenues less nonoperating expenses.
174. Listed below are five terms followed by a list of phrases that describe or characterize the
terms. Match each phrase with the best term placing the letter designating the term in the
space provided.
Terms:
a. Gross profit
b. Net income
c. Inventory turnover ratio
d. Operating income
e. Income before income taxes
_____ Equals income before income taxes less income taxes.
175. Listed below are five terms followed by a list of phrases that describe or characterize the
terms. Match each phrase with the best term placing the letter designating the term in the
space provided.
Terms:
a. Gross profit
b. Net income
c. Inventory turnover ratio
d. Operating income
e. Income before income taxes
_____ Equals sales revenue minus cost of goods sold.
176. Listed below are five terms followed by a list of phrases that describe or characterize the
terms. Match each phrase with the best term placing the letter designating the term in the
space provided.
Terms:
a. Gross profit
b. Net income
c. Inventory turnover ratio
d. Operating income
e. Income before income taxes
_____ Equals gross profit less operating expenses.
177. A company reports inventory using lower-of-cost-or-market. Below is information
related to its year-end inventory. Calculate the amount to be reported for ending inventory.
178. A company reports inventory using the lower-of-cost-or-market method. Below is
information related to its year-end inventory:
Calculate ending inventory under lower-of-cost-or-market and record any necessary
adjustment to inventory.
179. A company reports inventory using lower-of-cost-or-market. Below is information
related to its year-end inventory:
Calculate ending inventory under lower-of-cost-or-market and record any necessary
adjustment to inventory.
180. What is meant by the assertion that the lower-of-cost-or-market method is an example of
conservatism in accounting?
181. _____ Equals cost of goods sold divided by average inventory.
182. A company reports the following amounts for 2012:
Calculate cost of goods sold, the inventory turnover ratio, and the average days in inventory
for 2012.
183. A company reports the following amounts at the end of the year:
Compute the company’s gross profit ratio.
184. A company begins the year with inventory of $50,000 and ends the year with inventory
of $55,000. During the year, the following amounts are recorded:
Calculate cost of goods sold for the year.
185. A company uses a periodic system to record inventory transactions. The company
purchases inventory on account on February 9, 2012, for $50,000 and then sells this inventory
on account on March 7, 2012, for $70,000. Record the transactions for the purchase and sale
of the inventory.
186. A company has the following transactions during March:
Record all transactions, including the month-end adjustment to cost of goods sold, assuming
the company uses a periodic inventory system and has no beginning inventory.
187. When inventory costs are rising, __________ generally results in a higher amount of
reported net income.
188. When inventory costs are declining, __________ generally results in a lower amount of
reported cost of goods sold.
189. When inventory costs are declining, __________ generally results in a lower amount of
reported inventory.
190. When inventory costs are rising, __________ generally results in a lower amount of
reported cost of goods sold.
191. When inventory costs are declining, __________ generally results in a higher amount of
reported net income.
192. __________ is commonly referred to as the balance sheet approach.
193. __________ is commonly referred to as the income statement approach.
194. When inventory costs are rising, __________ generally results in a lower income tax
obligation.
1.#