The following data were extracted from the accounting records ofHarkins company for the year ended April 30,2014:
merchandise inventory, may 1,2013 380,000
merchandise incentory, april 30,2014 415,000
purchases 3,800,000
purchases returns and allowances 150,000
purchases discounts 80,000
sales 5,850,000
freight in 16,600
a) prepare the cost of merchandise sold section of the yearended April 30,2014, using the periodic inventory system.
b) determine the gross profit to be reported on the incomestatement for the year ended April 30,2014.
c) would gross profit be different if the perpetual inventorysystem was used instead of the periodic inventory system?
The following data were extracted from the accounting records ofHarkins company for the year ended April 30,2014:
merchandise inventory, may 1,2013 380,000
merchandise incentory, april 30,2014 415,000
purchases 3,800,000
purchases returns and allowances 150,000
purchases discounts 80,000
sales 5,850,000
freight in 16,600
a) prepare the cost of merchandise sold section of the yearended April 30,2014, using the periodic inventory system.
b) determine the gross profit to be reported on the incomestatement for the year ended April 30,2014.
c) would gross profit be different if the perpetual inventorysystem was used instead of the periodic inventory system?
Related questions
17 accounting 1 questions! HELP
9. The following amounts and costs of platters were availablefor sale by Corpus Christy Ceramics during 2016:
Beginning inventory | 10 units at $41 |
First purchase | 15 units at $55 |
Second purchase | 30 units at $70 |
Third purchase | 25 units at $65 |
Corpus Christy Ceramics has 35 platters on hand at the end ofthe year.
What is the dollar amount of inventory at the end of the yearaccording to the weighted-average cost method?
Select one:
A. $4,340
B. $9,920
C. $3,465
D. $6,200
32. Santa Fe Corporation uses the perpetual inventory method. OnMarch 1, it purchased $60,000 of merchandise inventory, terms 2/10,n/30. On March 3, Santa Fe returned goods (not damaged) that cost$6,000. On March 9, Santa Fe paid the supplier.
On March 9, Santa Fe should credit:
Select one:
A. Purchase discounts for $1,200
B. Purchase discounts for $1,080
C. Inventory for $1,080
D. Inventory for $1,200
33. Rocky Company has beginning equity of $600,000, net incomeof $100,000, dividends of $60,000 and investments by owners inexchange for stock of $20,000. Its ending equity is:
Select one:
A. $660,000
B. $480,000
C. $536,000
D. $446,000
35. On September 1, 2016, Chopper, Inc. reported RetainedEarnings of $272,000. During the month of September, Choppergenerated revenues of $40,000, incurred expenses of $24,000,purchased equipment for $10,000 and paid dividends of $12,000.
What is the balance in Retained Earnings on September 30,2016?
Select one:
A. $272,000 debit
B. $276,000 credit
C. $ 16,000 credit
D. $274,000 credit
36. Savannah Company purchases $120,000 of inventory during theperiod and sells $36,000 of it for $60,000. Beginning of the periodinventory was $6,000.
What is the companyâs inventory balance to be reported on itsbalance sheet at year end?
Select one:
A. $36,000
B. $90,000
C. $ 4,000
D. $ 6,000
37. Assuming rising prices, which method will give the highestdollar value for cost of goods sold on the income statement?
Select one:
A. FIFO
B. Average Cost
C. LIFO
D. All of these give equal values for cost of goods sold
38. Kali Company began the period with $20,000 in inventory. Thecompany also purchased an additional $20,000 of inventory andreturned $2,000 for a full credit. A physical count of theinventory at yearâend revealed an inventory on hand of $16,000.What was Kaliâs cost of goods sold for the period?
Select one:
a. $50,000
b. $22,000
c. $48,000
d. $16,000
39. The periodic inventory system differs from the perpetualinventory system:
Select one:
because the periodic system is not compatible with moderntechnology.
because the periodic system continually updates inventory, whilethe perpetual inventory system only updates inventory at the end ofthe period.
because the perpetual system continually updates inventory,while the periodic inventory system only updates inventory at theend of the period.
because the periodic system is more complex and costly.
40. Which one of the following is included in currentassets?
Select one:
A. Common stock
B. Accounts receivable
C. Taxes payable
D. Automobiles
41. For the balance sheet to be in balance, the following mustexist:
Select one:
Total assets must be less than total liabilities
Total assets must be greater than total liabilities
Total assets must equal total liabilities plus stockholders'equity
Total liabilities must equal total stockholders' equity
43. Using a perpetual inventory system, the buyerâs journalentry to record the freight costs includes a:
Select one:
A. Debit to Purchases
B. Debit to Inventory
C. Debit to Freight In
D. Debit to Cost of Goods Sold
44. Joshua records purchases at invoice price and uses theperpetual inventory system. On July 5, Joshua returned $6,000 ofgoods purchased on account to the seller.
How would Joshua record this transaction?
Select one:
A.
Accounts Payable | 6,000 | ||
Purchases | 6,000 | ||
B.
Accounts Receivable | 6,000 | ||
Inventory | 6,000 | ||
C.
Accounts Payable | 6,000 | ||
Inventory | 6,000 | ||
D.
Cash | 6,000 | ||
Purchases | 6,000 | ||
45. Smith & Sons purchased $5,000 of merchandise from theClaremont Company with terms of 3/10, n/30. How much discount isSmith & Sons entitled to take if it pays within the alloweddiscount period of 10 days?
Select one:
$100
$50
$300
$150
46. The accounting record for Max III Company reported thefollowing selected information:
Operating Expenses | $180,000 |
Sales Returns and Allowances | 52,000 |
Sales Discounts | 24,000 |
Sales Revenue | 700,000 |
Cost of Goods Sold | 268,000 |
Determine Max III Company's gross profit.
Select one:
A. $332,000
B. $280,000
C. $308,000
D. $356,000
48. Using a a perpetual inventory system, the sellerâs journalentry to record the payment for merchandise, received from thebuyer, within the discount period includes a:
Select one:
A. Debit to Accounts Receivable
B. Debit to Cost of Goods Sold
C. Credit to Sales Discounts
D. Debit to Sales Discounts
49.Geraldoâs Groceries purchased milk cartons at an invoiceprice of $6,000 and terms of 2/10, n/30. On arrival of the goods,Geraldoâs realized that half of the milk was past the expirationdate, and returned them immediately to the supplier.
If Geraldoâs pays the remaining amount of the invoice within thediscount period, the amount paid should be:
Select one:
A. $2,880
B. $5,880
C. $2,940
D. $6,000
50. Which one of the following is not a current liability?
Select one:
A. Wages payable
B. Accounts payable
C. Wage expense
D. Taxes payable
Question 31
Corresponds to CLO 7(c) Rupert Hobby's accounting records showthe following for the year ending December 31, 2014: PurchaseDiscountsâ¦$13,400; Freight-inâ¦$12,000; Purchasesâ¦$450,500;Beginning Inventoryâ¦$35,600; Ending Inventoryâ¦$24,200; PurchaseReturnsâ¦$15,000. Using the periodic inventory system, what is thecost of goods sold?
$445,500 | ||
$469,700 | ||
$433,500 | ||
$461,900 |
3 points
Question 32
Corresponds to CLO 7(d) Bay Company sold $100,000 of merchandisein the month of April, 2013. Returns that month totaled $5,000. BayCompany uses the periodic method to determine ending inventory eachDecember 31. For interim financial statements, cost of goods soldis estimated based on the previous year's gross profit rate. If BayCompany's gross profit rate for 2012 was 60%, what is the cost ofgoods sold for the month of April?
$57,000 | ||
$60,000 | ||
$38,000 | ||
$40,000 |
3 points
Question 33
Corresponds to CLO 8(a) We Love Pets, Inc. has the followinginventory data: January 1, beginning inventory of 50 units at $25;January 10, purchases of 70 units at $27; January 25, purchases of40 units at $28. A physical count of inventory on January 31reveals that there are 45 units on hand. Using the FIFO inventorymethod, cost of goods sold for January is
$3,135 | ||
$3,005 | ||
$2,875 | ||
$1,255 |
3 points
Question 34
Corresponds to CLO 8(b) Party Retailers has the followinginventory data: May 1, beginning inventory of 200 units at $10; May14, purchases of 300 units at $12; May 23, purchases of 250 unitsat $15. A physical count of inventory on May 31 reveals that thereare 300 units on hand. Using the LIFO inventory method, endinginventory for May is
$3,000 | ||
$6,150 | ||
$4,350 | ||
$3,200 |
3 points
Question 35
Corresponds to CLO 8(c) Halting Corporation has the followinginventory data: September 1, beginning inventory of 430 units at$11; September 8, purchases of 350 units at $12; September 21,purchases of 460 units at $14. A physical count of inventory onSeptember 30 reveals that there are 400 units on hand. Using theweighted average inventory method, rounding the unit cost to thenearest penny, what is cost of goods sold for September?
$10,357 | ||
$4,960 | ||
$10,416 | ||
$4,932 |
3 points
Question 36
Corresponds to CLO 8(d) Unleash Corporation is a retaileroperating in an industry currently experiencing high inflation.Unleash wants to show the lowest cost of goods sold on its incomestatement in order to show higher profits. Which inventory costingmethod should Unleash use?
FIFO because cost of goods sold represents the earliestcosts. | ||
Average because cost of goods sold will represent an averageamount. | ||
Specific identification because it involves the actualcosts. | ||
LIFO because cost of goods sold represents the latest costs. |
3 points
Question 37
Corresponds to CLO 9(a) The following balance sheet and incomestatement data is available for Gold River Corporation: Currentassetsâ¦$125,000; Total assetsâ¦$520,000; Net incomeâ¦$345,000;Current liabilitiesâ¦$80,000; Total liabilitiesâ¦$150,000;Stockholders' equityâ¦$370,000; Average common shares outstandingâ¦10,000. What is Gold River's current ratio?
3.47 | ||
1.64 | ||
1.56 | ||
0.83 |
3 points
Question 38
Corresponds to CLO 9(b) The following balance sheet data isavailable for Pinpoint Products: Current assetsâ¦$50,000; Property,plant, and equipment,â¦$70,000â¦Other assetsâ¦$10,000; Currentliabilitiesâ¦$30,000; Long-term liabilitiesâ¦$22,000; Stockholders'equityâ¦$78,000; Average common shares outstanding⦠10,000. What isPinpoint's debt to total assets, shown as a percentage?
60% | ||
45% | ||
67% | ||
40% |
3 points
Question 39
Corresponds to CLO 9(c) The following balance sheet and incomestatement data is available for Frame Manufacturing: Totalassetsâ¦$520,000; Total liabilitiesâ¦$250,000; Stockholders'equityâ¦$270,000; Gross profitâ¦$55,000; Net incomeâ¦$40,000; Averagecommon shares outstanding⦠25,000. What is Frame Manufacturing'searnings per share?
$10.80 | ||
$3.50 | ||
$1.60 | ||
$2.20 |
3 points
Question 40
Corresponds to CLO 9(d) The following financial information isavailable for Maroon Corporation: Sales revenueâ¦$200,000; Cost ofgoods soldâ¦$120,000; Operating expensesâ¦$40,000. What is Maroon'sgross profit rate, shown as a percentage?
20% | ||
80% | ||
60% | ||
40% |
