Tony’s Market recorded the following events involving a recent purchase of merchandise: a. Received goods for $20,000, terms 2/10, n/30. b. Returned $400 of the shipment for credit.Paid $100 freight on the shipment. c. Paid the invoice within the discount period. As a result of these events, the company’s merchandise inventory A. increased by $19,208. B. increased by $19,300. C. increased by $19,306. D. increased by $19,308. 2. Kendall Company recorded the following transactions during 2014: a.On January 1, they sold $8,000 worth of merchandise to a customer on account with the terms 2/10, n/30. b.On January 5, the customer returned $400 worth of damaged goods, which were thrown
Tony’s Market recorded the following events involving a recent purchase of
merchandise:
a. Received goods for $20,000, terms 2/10, n/30.
b. Returned $400 of the shipment for credit.Paid $100 freight on the shipment.
c. Paid the invoice within the discount period.
As a result of these events, the company’s merchandise inventory
A. increased by $19,208.
B. increased by $19,300.
C. increased by $19,306.
D. increased by $19,308.
2. Kendall Company recorded the following transactions during 2014:
a.On January 1, they sold $8,000 worth of merchandise to a customer on account with the terms 2/10, n/30.
b.On January 5, the customer returned $400 worth of damaged goods, which were thrownaway.
c.On January 8, the customer paid for the goods.
Based on the transactions provided by Kendall Company, what are the net sales for this period?
A. $7,440
B. $7,448
C. $8,000
D. $8,348
3. Chloe Company reported the following for the year 2014:
Cost of beginning inventory $53,500
Net cost of purchases 75,500
Net sales revenue 93,700
The company’s income statement reported a gross profit percent of 30%. What is the company’s cost of
ending inventory for 2014?
A. $100,890
B. $28,110
C. $63,410
D. $65,590
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4. Selected account information from Ropelewski Company is presented below:
Cost of Goods Sold $77,000
Net Sales 131,000
Operating Expenses 45,000
Net Income 5,000
Based on the information presented above, determine the Other Expenses and Losses.
A. $3,000
B. $4,000
C. $2,000
D. $5,000
5. In its first year of operations, Dulany Company, a clothing store, purchased $18,000 of merchandise
from a supplier on account, terms 2/10, n 30. Dulany Company returned $3,000 of defective
merchandise, and then paid the amount due within the discount period. During the year, the company
sold merchandise inventory costing $12,000 to its customers. What would be the balance in Dulany’s
Company’s Merchandise Inventory account at the end of the year?
A. $2,700
B. $3,200
C. $3,300
D. $2,640
6. Checkers uses the periodic inventory system. For the current month, the beginning inventory consisted
of 7,200 units that cost $12 each. During the month, the company made two purchases: 3,000 units at
$13 each and 12,000 units at $13.50 each. Checkers also sold 12,900 units during the month. Using the
FIFO method, what is the ending inventory?
A. $120,438.
B. $111,600.
C. $125,550.
D. $113,700.
7. Chess Top uses the periodic inventory system. For the current month, the beginning inventory
consisted of 480 units that cost $65 each. During the month, the company made two purchases: 720
units at $68 each and 360 units at $70 each. Chess Top also sold 1,200 units during the month. Using
the average cost method, what is the amount of ending inventory?
A. $25,200.
B. $81,048.
C. $80,160.
D. $24,314.
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8. Chess Top uses the periodic inventory system. For the current month, the beginning inventory consisted
of 480 units that cost $65 each. During the month, the company made two purchases: 720 units at $68
each and 360 units at $70 each. Chess Top also sold 1,200 units during the month. Using the LIFO
method, what is the amount of cost of goods sold for the month?
A. $81,048.
B. $78,000.
C. $81,960.
D. $80,160.
9. During periods of declining prices, when comparing LIFO and FIFO inventory methods:
A. LIFO inventory and cost of goods sold would be higher than FIFO
B. LIFO inventory and cost of goods sold would be lower than FIFO.
C. LIFO inventory would be lower and cost of goods sold would be higher than FIFO.
D. LIFO inventory would be higher and cost of goods sold would be lower than FIFO.
10. The following data refer to Chavis Company’s ending inventory:
Item code Quantity Unit Cost Unit Market
Small Shirts 45 $32 $38
Medium Shirts 60 46 44
Large Shirts 65 42 40
Extra-Large Shirts 35 54 53
Determine the cost of ending inventory if the lower of cost or market rule is applied on an
individual item basis.
A. $8,535
B. $8,805
C. $8,812
D. $8,814
11. If the beginning inventory for 2012 is overstated, the effects of this error on cost of goods sold for
2012, net income for 2012, and assets on December 31, 2013, respectively, are
A. overstatement, understatement, overstatement.
B. overstatement, understatement, no effect.
C. understatement, overstatement, overstatement.
D. understatement, overstatement, no effect.
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