XYZ Company uses the periodic inventory system to account for its merchandise purchases. A physical count of inventory at year-end revealed that $6,000 of Inventory was on hand. Given the partial list of accounts below, show your understanding of the entry to close the temporary debit balance accounts and update the Merchandise Inventory account by selecting all of the correct answers below. (Check all that apply.)
- Debit Merchandise Inventory for the beginning balance of $5,000.
- Credit Sales Discounts $500.
- Debit Purchases $36,000.
- Debit Sales Discounts $500.
- Credit Merchandise Inventory for the beginning balance of $5,000.
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?
