Question

22. Pink Co. purchases 40 units of inventory at $50 per unit. After having the inventory on hand for a period of time, they find the Net Realizable value of each unit to be $65 . What will Pink Co. record for the total value of the inventory?

1. $600

2. $ 2,000

3. $ 3,250

4. $2,600

Question 2

24. Barnes & Noble begins 2019 with $45,000 of inventory, they have purchases of $350,000, and COGS of $325,000. What is their inventory turnover ratio?

1. $ 5.65

2. $6.09

3. $7.22

4. $5.00

Question 3

Target has $250,000 in net sales and a gross profit percentage of 15%. What was Target’s COGS?

1. $37,500

2. $ 294,117.65

3. $ 55,000

4. $212,500

Answer 1

22. Inventory will record at cost or NRV which ever is lower. Here cost is the lowest. so it will record at cost of purchase. $50*40 = $2,000

Answer is B. $2,000

24.

Beginning inventory	$      45,000
Add: Purchases	$   3,50,000
Less: COGS	$ -3,25,000
Ending inventory	$      70,000
Average inventory ($70,000+$45,000)/2)	$      57,500

Inventory turnover ratio = Cost of goods sold / Average inventory

Inventory turnover ratio = $325,000 / $57,500

Inventory turnover ratio = 5.65

Answer is A. $5.65

Q3.

Target Cost of goods sold = $250,000*85%

Target Cost of goods sold = $212,500

Answer is D. $212,500

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