17. What is consigned inventory? a. Goods that are shipped, but title transfers

Question

17.       What is consigned inventory?

a.   Goods that are shipped, but title transfers to the receiver.

b.   Goods that are sold, but payment is not required until the goods are sold.

c.   Goods that are shipped, but title remains with the shipper.

d.   Goods that have been segregated for shipment to a customer.

18.       Which inventory costing method most closely approximates current cost for each of the following:

       Ending Inventory       Cost of Goods Sold

a.              FIFO                            FIFO

b.              FIFO                            LIFO

c.              LIFO                            FIFO

d.              LIFO                            LIFO

19.       On April 1, Mooney Corporation purchased for $1,710,000 a tract of land on which was located a warehouse and office building. The following data were collected concerning the property:

                              Current Assessed Valuation        Vendor’s Original Cost

Land                                     $600,000                                 $560,000

Warehouse                            400,000                                   360,000

Office building                        800,000                                   680,000

                                          $1,800,000                              $1,600,000

What are the appropriate amounts that Mooney should record for the land, warehouse, and office building, respectively?

a.   Land, $560,000; warehouse, $360,000; office building, $680,000.

b.   Land, $600,000; warehouse, $400,000; office building, $800,000.

c.   Land, $598,500; warehouse, $384,750; office building, $363,375.

d.   Land, $570,000; warehouse, $380,000; office building, $760,000.

20.       Plant assets purchased on long-term credit contracts should be accounted for at

a.   the total value of the future payments.

b.   the future amount of the future payments.

c.   the present value of the future payments.

d.   none of these.

Explanation / Answer

17 c goods that are shipped but the title remains with he shipper is the consigned inventory

18 b for stock LIFO and for COGS FIFO

In either period of rising or lowering prices, LIFO takes into account latest purchases into Cost of Goods Sold and FIFO leaves the current purchases in the ending inventory.

19 a.   Land, $560,000; warehouse, $360,000; office building, $680,000.

20 a.   the total value of the future payments.

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