5.

Both __________-__________, __________-__________ and __________-__________, __________-__________ methods of inventory valuation are assumptions as to the flow of costs.

6.

Following is a summary of beginning inventory, purchases, and sales. At what amount would the inventory be priced assuming, the first-in, first-out method is used under perpetual invventory procedure?

Beg. Inv., Jan. 1

2,400 units @ $8.80

Purchases:

Jan. 8

5,600 units @ $9.00

Mar. 15

2,000 units @ $9.10

Jul. 28

2,800 units @ $9.50

Nov. 30

400 units @ $9.70

Sales:

Feb. 13

3,000 units

Jun. 9

2,800 units

Sep. 22

1,400 units

7.

At what amount would the inventory in the preceding question be priced if the last-in, first-out method were used under perpetual inventory procedure?

8.

Under FIFO, net income exists if revenues are sufficient to cover the __________ cost of the units of inventory sold.

9.

Under LIFO, net income exists if revenues are sufficient to cover the __________ cost of the units of inventory sold, provided new units are acquired before the end of the accounting period.

10.

The principle argument for __________ is that this method more precisely matches costs and revenues in current terms.

Fill in the blank options questions 5-11:

0.66:1

cost of goods available for sale

estimated cost of goods sold

FIFO

first-in, first-out

gross margin method

higher

historical

last-in, first-out

less

LIFO

Lower

Merchandise Inventory

net sales

replacement

retail inventory method