ACCT 101

Based on the following information: what is the company's (1) inventory turnover; (2) average daily cost of goods sold; and (3) number of days' sales in inventory for the current year? Use a 365-day year. Item Prior Year Current Year Cost of goods sold $172,900 $215,000 Inventory 18,000 12,000

. (1) 14.33 times(2) $589.04(3) 24.5 days

4. A bank reconciliation should be prepared periodically because

. any differences between the company's records and the bank's records should be determined, and any errors made by either party should be discovered and corrected

26. The following journal entries would be used in one of the two methods of accounting for uncollectible receivables. Identify each.(a)Bad Debt Expense 900 Accounts Receivable—Billings 900(b)Allowance for Doubtful Accounts 900 Accounts Receivable—Grover 900

A) direct write-off method b) allowance method

6. Selected financial statement data for two years ended December 31 for Carey Co. follow. Assets are reported at their year-end value.Year 2 Year 1Cash $32,500 $30,100Short-term investments 9,400 10,200Operating expenses 72,800 70,400Depreciation expense 12,000 11,200What is the days' cash on hand for each year?

a. Year 2: 251.5; Year 1: 248.5

8. All of the following are documents used for inventory control except

a. a petty cash voucher

9. The debit balance in Cash Short and Over at the end of an accounting period is reported as

a. an expense on the income statement

7. How is the Internal Control—Integrated Framework used by companies?

a. as a standard for designing, analyzing, and evaluating internal controls

10. When an account receivable is written off under the direct write-off method, the accounting equation is kept in balance because

a. assets and equity both decrease by the same amount.

11. The arrangements between buyer and seller as to when payments for merchandise are to be made are called

a. credit terms

6. Allowance for Doubtful Accounts has a debit balance of $1,100 at the end of the year (before adjustment), and an analysis of customers' accounts indicates uncollectible receivables of $12,900. Which of the following entries records the proper adjustment for bad debt expense? a.

a. debit Bad Debt Expense, $14,000; credit Allowance for Doubtful Accounts, $14,000

9. Miles uses the allowance method and wrote off the account of James. Miles then received $559 as partial payment on the account of James. The journal entry to record the initial write-off includes a

a. debit to Allowance for Doubtful Accounts

11. An aging of a company's accounts receivable indicates that the estimate of uncollectible accounts totals $6,400. If Allowance for Doubtful Accounts has a $1,300 debit balance, the adjustment to record the bad debt expense for the period will require a

a. debit to Bad Debt Expense for $7,700

12. A check drawn by a company in payment of a voucher for $965 was recorded in the journal as $695. This item would be included in the bank reconciliation as a(n)

a. deduction from the balance per the company's records

25. Selling receivables is called

a. factoring

17. The term "receivables" includes all

a. money claims against other entities

7. The primary difference between the periodic and perpetual inventory systems is that a

a. periodic system determines the inventory on hand only at the end of the accounting period

24. FIFO reports higher gross profit and net income than the LIFO method when

a. prices are increasing

11. Sarbanes-Oxley applies to

a. publicly held companies

10. The portion of an invoice that is returned with payment is a

a. remittance advice

19. An element of internal control is

a. risk assessment

23. Which of the following would be deducted from the balance per books on a bank reconciliation?

a. service charges

11. The number of days' sales in inventory measures

a. the length of time it takes to acquire, sell, and replace the inventory

5. Which document authorizes the purchase of the inventory from an approved vendor?

a. the purchase order

20. If the revenues are correctly reported and the gross profit of a company is understated, what is the effect on stockholders' e

a. understated

The following units of an inventory item were available for sale during the year. Use this information to answer the following questions.Beginning inventory 10 units at $55First purchase 25 units at $60Second purchase 30 units at $65Third purchase 15 units at $70The firm uses the periodic inventory system. During the year, 60 units of the item were sold.27. The ending inventory cost using FIFO is

b. $1,350 c. $1,375

The following lots of Commodity D were available for sale during the year. Use this information to answer the questions that follow.Beginning inventory 10 units at $60First purchase 25 units at $65 Second purchase 30 units at $68Third purchase 15 units at $75The firm uses the periodic system, and there are 25 units of the commodity on hand at the end of the year.19. What is the ending inventory balance at the end of the year using the LIFO method?

b. $1,575

16. A 60-day, 9% note for $10,000, dated May 1, is received from a customer on account. The maturity value of the note is

b. $10,150

Harding Company Accounts payable $ 40,000 Accounts receivable 65,000 Accrued liabilities 7,000 Cash 30,000 Intangible assets 40,000 Inventory 72,000 Long-term investments 110,000 Long-term liabilities 75,000 Marketable securities 36,000 Notes payable (short-term) 30,000 Property, plant, and equipment 625,000 Prepaid expenses 2,000

b. $128,000

14. After the accounts are adjusted and closed at the end of the fiscal year, Accounts Receivable has a balance of $340,000 and Allowance for Doubtful Accounts has a balance of $51,000. What is the net realizable value of the accounts receivable?

b. $289,000

3. Merchandise subject to terms 2/10, n/30, FOB shipping point, is sold on account to a customer for $25,000. What is the amount of sales discount allowable?

b. $500

the following lots of Commodity Z were available for sale during the year. Use this information to answer the questions that follow.Beginning inventory 10 units at $30First purchase 25 units at $32Second purchase 30 units at $34Third purchase 10 units at $3517. The firm uses the periodic system, and there are 20 units of the commodity on hand at the end of the year. What is the ending inventory balance at the end of the year according to the LIFO method?

b. $620

5. The relationship of $325,000 to $125,000, expressed as a ratio, is

b. 2.6

11. Assume the following sales data for a company: Current year $1,025,000 Preceding year 820,000What is the percentage increase in sales from the preceding year to the current year?

b. 25%

19. Bountiful Company had sales of $650,000 and cost of goods sold of $200,000 during a year. The total assets balance at the beginning of the year was $175,000 and at the end of the year was $167,000. Calculate the asset turnover ratio.

b. 3.80

20. Pierce Company sold to Stanton Company merchandise on account FOB shipping point, 2/10, net 30, for $20,000. Pierce prepaid the $500 shipping charge. Which of the following entries does Pierce make to record this sale?

b. Accounts Receivable—Stanton, debit $19,600; Sales, credit $19,600, andAccounts Receivable—Stanton, debit $500; Cash, credit $500

24. If the allowance method of accounting for uncollectible receivables is used, what general ledger account is debited to write off a customer's account as uncollectible?

b. Allowance for Doubtful Accounts

3. When a company uses the allowance method of accounting for uncollectible receivables, which entry would not be found in the general journal?

b. Bad Debt Expense 500 Accounts Receivable, Bob Smith 500

26. The Corbit Corp. sold merchandise for $10,000 cash. The cost of the goods sold was $7,590. The journal entries to record this transaction under the perpetual inventory system would be

b. Cash 10,000 Sales 10,000Cost of Goods Sold 7,590 Inventory 7,590

18. When the perpetual inventory system is used, the inventory sold is debited to

b. Cost of Goods Sold

18. During a period of consistently rising prices, the method of inventory that will result in reporting the greatest cost of goods sold is

b. LIFO

9. The inventory method that assigns the most recent costs to cost of goods sold is

b. LIFO

6. The adjusting entry to account for normal inventory shrinkage involves

b. a debit to Cost of Goods Sold and a credit to Inventory

23. The following entry was recorded in the books of Brighty Company. Jan. 12 Inventory 8,000 Accounts Payable—HST, Inc. 8,000 Purchased inventory on account. What is the impact of this entry on the accounting equation?

b. an increase in Assets and an increase in Liabilities

8. When a company accepts a note in settlement of a past due account, what is the effect on the accounting equation?

b. an increase in an asset and a decrease in an asset

7. Which of the following is not an unusual item?

b. corporate income tax being paid

15. Which of the following would appear as an unusual item on the income statement?

b. gain resulting from the disposal of a segment of the business

16. The independent auditor's report

b. gives the auditor's opinion regarding the fairness of the financial statements

10. What type of analysis is indicated by the following? Increase (Decrease) Current Year Preceding Year Amount PercentCurrent assets $ 430,000 $ 500,000 $(70,000) (14%)Fixed assets 1,740,000 1,500,000 240,000 16%

b. horizontal analysis

24. The bank reconciliation

b. is part of the internal control system

13. The numerator of the return on common stockholders' equity is

b. net income minus preferred dividends

13. If a company mistakenly counts more items during a physical inventory than actually exist, how will the error affect the

b. net income will be overstated

12. If a company mistakenly counts less items during a physical inventory than actually exist, how will the error affect the

b. overstated

8. In a vertical analysis, the base for cost of goods sold is

b. sales

The following lots of a Commodity P were available for sale during the year. Use this information to answer the questions that follow.Beginning inventory 5 units at $61 First purchase 15 units at $63Second purchase 10 units at $74Third purchase 10 units at $77The firm uses the periodic system, and there are 20 units of the commodity on hand at the end of the year.15. What is the year-end inventory balance using the FIFO method? Use the information provided in the table to answer this

c. $1,510

23. At the beginning of the year, the balance in Allowance for Doubtful Accounts is a credit of $760. During the year, $120 of previously written off accounts are reinstated and accounts totaling $740 are written off as uncollectible. The end-of-year balance (before adjustment) in Allowance for Doubtful Accounts should be

c. $140

9. Calculate income from operations for Jonas Company based on the following data: Sales $764,000 Operating expenses 52,500Cost of goods sold 538,000

c. $173,500

13. Dollar Co. sold merchandise to Pound Co. on account, $25,500, terms 2/15, net 45. Pound Co. paid the invoice within the discount period. What is the sales amount to be recorded in the above transactions?

c. $24,990

17. Using the following information, what is the cost of goods sold?Purchases $32,000 Selling expense $ 960Inventory,September 15,700 Inventory,September 306,370Administrative expense 910 Sales 63,000Rent revenue 1,200 Interest expense 1,040

c. $31,330

19. Allowance for Doubtful Accounts has a debit balance of $2,500 at the end of the year (before adjustment), and bad debt expense is estimated at 4% of credit sales. If net credit sales are $800,000, the amount of the adjusting entry to record the estimate of the uncollectible accounts is

c. $32,000

Use the information below to answer the following questions.The Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1.Date Blankets Units Cost May 3 Purchase 5 $20 10 Sale 3 17 Purchase 10 $24 20 Sale 6 23 Sale 3 30 Purchase 10 $3025. Assuming that the company uses the perpetual inventory system, determine the gross profit for the month of May using the LIFO cost method.

c. $444

Addison, Inc. uses a perpetual inventory system. Below is information about one inventory item for the month of September. Sep. 1 Inventory 20 units at $20 4 Sold 10 units10 Purchased 30 units at $2517 Sold 20 units30 Purchased 10 units at $30 2. Use the information in the table to answer this question. If Addison uses LIFO, the September 17 cost of goods sold would

c. $500

1. Abbey Co. sold merchandise to Gomez Co. on account, $35,000, terms 2/15, net 45. The cost of the goods sold was $24,500. Abbey Co. issued a credit memo for $3,600 for merchandise returned that originally cost $1,700. Gomez Co. paid the invoice within the discount period. What is the amount of gross profit earned by Abbey Co. on the above transactions? The following selected accounts and their current balances appear in the ledger of Fernandez Co. at the end of its fiscal year.Cash $250,000 Retained Earnings 2,850,000Accounts Receivable 1,197,000 Dividends 50,000Inventory 1,790,000 Sales 9,350,000Estimated Returns Inventory 23,500 Cost of Goods Sold 5,840,000Office Supplies 14,000 Sales Salaries Expense 820,000Prepaid Insurance 8,500 Advertising Expense 350,000Office Equipment 870,000 Depr. Exp.—Store Equip. 120,000Accum. Depr.—Office Equip. 580,000 Miscellaneous Selling Expense 58,000Store Equipment 2,600,000 Office Salaries Expense 550,000Accum. Depr.—Store Equip. 820,000 Rent Expense 104,000Accounts Payable 336,000 Depr. Exp.—Office Equip. 60,000Customer Refunds Payable 39,000 Insurance Expense 50,000Salaries Payable 43,000 Office Supplies Expense 26,000Notes Payable (long-term) 200,000 Miscellaneous Admin. Exp. 12,000Common Stock 600,000 Interest Expense

c. $7,972

Addison, Inc. uses a perpetual inventory system. Below is information about one inventory item for the month of September. Sep. 1 Inventory 20 units at $204 Sold 10 units10 Purchased 30 units at $2517 Sold 20 units30 Purchased 10 units at $3021. Use the information in the table to answer this question. If Addison uses the moving average cost method, what is the inventory balance at the end of September?

c. $775.00

Harding Company Accounts payable $ 40,000Accounts receivable 65,000Accrued liabilities 7,000Cash 30,000Intangible assets 40,000Inventory 72,000Long-term investments 110,000Long-term liabilities 75,000Marketable securities 36,000Notes payable (short-term) 30,000Property, plant, and equipment 625,000Prepaid expenses 2,000 6. Based on the data for Harding Company, what is the quick ratio, rounded to one decimal point?

c. 1.7

4. Balance sheet and income statement data indicate the following:Bonds payable, 10% (due in two years) $1,000,000Preferred 5% stock, $100 par (no change during year) 300,000Common stock, $50 par (no change during year) 2,000,000Income before income tax for year 550,000Income tax for year 80,000Common dividends paid 50,000Preferred dividends paid 15,000 Based on the data presented, what is the times interest earned ratio? (Round to one decimal point.)

c. 6.5

4. When merchandise purchased on account is returned under the perpetual inventory system, the buyer would debit

c. Accounts Payable

22. If inventory is being valued at cost and the price level is steadily rising, the method of costing that will yield the highest n

c. FIFO

13. A minimum cash balance required by a bank is called

c. a compensating balance

15. The following entry was recorded in the books of Brighty Company.Nov. 3 Customer Refund Payable 120 Accounts Receivable—Tillet Inc. 120 Granted customer an allowance. What is the impact of this entry on the accounting equation?

c. a decrease in Assets and a decrease in Liabilitie

12. President's salaries, depreciation of office furniture, and office supplies are

c. administrative expenses

9. A loss due to a discontinued operation should be reported on the income statement

c. below income from continuing operations

3. Which of the following is used to analyze the efficiency and effectiveness of inventory management?

c. both inventory turnover and number of days' sales in inventory

10. Sales to customers who use bank credit cards, such as MasterCard and Visa, are generally treated as

c. cash sales

25. Using a perpetual inventory system, the entry to record the sale of merchandise on account includes a

c. credit to Inventory

12. Which of the following measures a company's ability to pay its current liabilities?

c. current ratio

20. A check drawn by a company for $340 in payment of a liability was recorded in the journal as $430. What entry is required in the company's accounts?

c. debit Cash; credit Accounts Payable

8. Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the customer. What entry is required in the company's accounts?

c. debit Cash; credit Notes Receivable and Interest Revenue

13. An aging of a company's accounts receivable indicates the estimate of uncollectible receivables totals $7,900. If Allowance for Doubtful Accounts has a $700 credit balance, the adjustment to record the bad debt expense for the period will require a

c. debit to Bad Debt Expense for $7,200

16. A $150 petty cash fund has cash of $54 and receipts of $83. The journal entry to replenish the account would include a

c. debit to Cash Short and Over for $13

3. The amount of the outstanding checks is included on the bank reconciliation as a(n)

c. deduction from the balance per bank statement

21. Internal control does not consist of policies and procedures that

c. guarantee the company will earn a profit

7. If a manufacturer ships merchandise to a retailer on consignment, the unsold merchandise should be included in the invent

c. manufacturer

15. Cash equivalents

c. will be converted to cash within three months

2. What is Fernandez Company's income from operations for the year?

d. $1,360,000

10. Basic inventory data for April 30 are presented below for a business that employs the lower-of-cost-or-market basis of inventory valuation to each category. Commodity InventoryQuantity Cost per Unit Market Value per Unit A 35 $ 52 $ 55 B 20 155 150 C 25 82 85 D 40 58 55

d. $220

2. A 60-day, 12% note for $7,000, dated April 15, is received from a customer on account. The face value of the note is

d. $7,000

27. What amount will be paid in full settlement of Invoice 22392, assuming that credit for returns and allowances was received prior to payment and that the invoice was paid within the discount period. Inv. No. Merchandise Freight Paid by Seller Freight Terms Returns and Allowances 22392 $7,650 $120 FOB Shipping Point,1/10, net 45 $450

d. $7,128

16. For the year ended December 31, Depot Max's cost of goods sold was $56,900. Inventory at the beginning of the year was $6,540. Ending inventory was $7,250. Depot Max's number of days' sales in inventory is closest to

d. 44

5. If the direct write-off method of accounting for uncollectible receivables is used, what general ledger account is debited to write off a customer's account as uncollectible?

d. Bad Debt Expense

22. If title to merchandise purchases passes to the buyer when the goods are delivered to the buyer, the terms are a. consigned

d. FOB destination

4. During times of rising prices, which of the following is not an accurate statement?

d. LIFO will result in higher income taxes than FIFO.

23. Which of the following is not an example for safeguarding inventory?

d. Returning inventory that is defective or broken.

21. Which of the lists below shows accounts that would be closed at the end of the fiscal period?

d. Sales, Cost of Goods Sold, Supplies Expense, and Wages Expense

Brutus Corporation, a newly formed corporation, has the following transactions during May, its first month of operations.May 1 Purchased 500 units @ $25.00 each4 Purchased 300 units @ $24.00 each6 Sold 400 units @ $38.00 each8 Purchased 700 units @ $23.00 each13 Sold 450 units @ $37.50 each20 Purchased 250 units @ $25.25 each22 Sold 275 units @ $36.00 each27 Sold 300 units @ $37.00 each28 Purchased 550 units @ $26.00 each30 Sold 100 units @ $39.00 each14. Using the table provided, calculate total sales, cost of goods sold, gross profit, and ending inventory using each of the average cost periodic inventory method. Round the average to the nearest cent.

d. Total sales: $56,975.00 Cost of goods sold: $37,401.75 Gross profit: $19,573.25 Ending inventory: $19,010.75

18. Under the direct write-off method of uncollectible accounts, the effect on the accounting equation of writing off a customer's account is

d. a decrease in assets and a decrease in stockholders' equity (expense)

17. Which one of the following reflects a weak internal control system?

d. a single employee is responsible for collecting and recording of cash

8. Where are selling and administrative expenses found on the multiple-step income statement?

d. after gross profit

2. A voucher is usually supported by

d. all of these

16. The statement of stockholders' equity shows

d. beginning and ending balance of common stock, retained earnings and all the changes that result from issuing stock, net income (loss), dividends

14. Accompanying the bank statement was a debit memo for an NSF check received from a customer. What entry is required in the company's accounts?

d. debit Accounts Receivable; credit Cash

15. Allowance for Doubtful Accounts has a credit balance of $1,300 at the end of the year (before adjustment). The company prepares an analysis of customers' accounts to estimate the amount of uncollectible accounts of $41,900. Which of the following adjusting entries would be made to record the Bad Debt Expense for the year?

d. debit Bad Debt Expense, $40,600; credit Allowance for Doubtful Accounts, $40,600

7. The Lowery Co. uses the direct write-off method of accounting for uncollectible accounts receivable. Lowery has a customer whose accounts receivable balance has been determined to likely be uncollectible. The entry to write off this account would be which of the following?

d. debit Bad Debt Expense; credit Accounts Receivable

14. Dividend yield on common stock is calculated as:

d. dividends per share of common stock, divided by market price per share of common stock.

5. Net income plus operating expenses is equal to

d. gross profit

2. One reason that a common-sized statement is a useful tool in financial analysis is that it enables the user to

d. make a better comparison of two companies of different sizes in the same industry

22. What entry is required in the company's accounts to record outstanding checks?

d. no entry is required

22. If collection of an other receivable is expected beyond one year, it is classified as a

d. noncurrent asset and reported under Investments

21. Current assets are usually listed in order

d. of liquidity

4. Under the allowance method, when a year-end adjustment is made for estimated uncollectible accounts

d. total assets decrease

1. The debit recorded in the journal to reimburse the petty cash fund is to

d. various accounts for which the petty cash was disbursed

5. In the normal operation of business, you receive a check from a customer and deposit it into your checking account. With your bank statement you are advised that this check for $775 is "NSF." The bank also informs you that due to the amount of activity on your business account the monthly service charge is $75. During a bank reconciliation, you will a. subtract both values from balance according to bank

d. subtract both values from balance according to books

25. Using the following information, prepare a bank reconciliation for Miller Co. for August 31:(a) The bank statement balance is $4,690(b) The cash account balance is $5,080.(c) Outstanding checks amounted to $715.(d) Deposits in transit are $1,020.(e) The bank service charge is $40.(f) A check for $72 for supplies was recorded as $27 in the ledger.

prepare

26. Journalize the entries to record the following:Sept. 1 Established a petty cash fund of $350.30 The amount of cash in the petty cash fund is now $130. The fund is replenished based on the following receipts: office supplies, $116; postage, $100.Record any missing funds in the cash short and over account.

prepare

30. On the basis of the following data for Sanford Industries as of December 31, determine the value of the inventory at the lower of cost or market. Also, show how the inventory would appear on the balance sheet (assume that the cost was determined by the FIFO method). Apply lower of cost or market to each inventory item.Commodity Inventory Quantity Cost per Unit Market Value per UnitSize 4 9 $17 $19Size 5 10 17 14Size 6 14 20 22

prepare

29. The following data for the current year ended June 30 are from the accounting records of Zanadu Co.:Administrative expenses $ 28,750Cost of goods sold 181,440Interest expense 3,600Rent revenue 1,500Sales 534,440Selling expenses 65,000Prepare a multiple-step income statement for the year ended June 30.

prepare income statement

28. Beginning inventory, purchases, and sales for an inventory item are as follows: Sep. 1 Beginning inventory 24 units @ $15 5 Sale 17 units 17 Purchase 10 units @ $20 30 Sale 8 units Assuming a perpetual inventory system and the first-in, first-out method, determine (a) the cost of the goods sold for the September 30 sale and (b) the inventory on September 30.

prepare statements

29. The units of Product Green-2 available for sale during the year were as follows:April 1 Inventory 15 units @ $30June 16 Purchase 29 units @ $33Sep. 28 Purchase 45 units @ $35There are 17 units of the product in the physical inventory at September 30. The periodic inventory system is used. Determine the cost of goods sold by (a) FIFO, (b) LIFO, and (c) average cost methods.

prepare statements

30. Journalize the following transactions assuming the perpetual inventory system: July 3 Sold merchandise on account for $3,750 including terms.The cost of the merchandise sold was $2,000. 5 Issued credit memo for $1,050 for merchandise returned from sale on July 3.The cost of the merchandise returned was $610. 12 Received check for the amount due for sale on July 3 less return on July 5. 17 Sold merchandise for $7,000 plus 6% sales tax to cash customers.The cost of the merchandise sold was $3,830.

Prepare journal

28. For each of the following, calculate the cost of inventory reported on the balance sheet.(a) The total inventory on hand at the end of the year as determined by taking a physical inventory is $62,000. Of the $62,000, $8,000 has been sold FOB destination and is awaiting pickup by the carrier.(b) The total inventory counted at the end of the year was $63,000. Excluded from the count were purchases of $6,000 in transit under FOB shipping point terms.(c) The total inventory counted at the end of the year was $75,000. Excluded from the count were purchases of $5,000 in transit under FOB destination terms.

a)62000 b)69000 c)75000

Use the information below to answer the following questions.The Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1. Date Blankets Units Cost May 3 Purchase 5 $20 10 Sale 3 17 Purchase 10 $24 20 Sale 6 23 Sale 3 30 Purchase 10 $30 6. Assuming that the company uses the perpetual inventory system, determine the gross profit for the sale of May 23 using the FIFO inventory cost method.

a. $108

18. Thompson Corporation gathered the following reconciling information in preparing its October bank reconciliation:Cash balance per bank, 10/31 $17,000Note receivable collected by bank 4,800Outstanding checks 6,500Deposits in transit 3,000Bank service charge 50NSF check 2,300Using the above information, determine the cash balance per books (before adjustments) for Thompson Corporation.

a. $11,050

14. A sales invoice included the following information: merchandise price, $12,000; terms 1/10, n/eom; FOB shipping point with prepaid freight of $900 added to the invoice. Assuming that a credit for merchandise returned of $500 is granted prior to payment and that the invoice is paid within the discount period, what is the amount of cash that should be received by the seller?

a. $12,285

6. If a company values inventory at the lower of cost or market, which of the following is the value of inventory on the balance sheet? Apply the lower-of-cost-or-market method to inventory as a whole. Item Inventory Quantity Unit Cost Price Unit Market Price Product C 420 $ 6 $ 5 Product D 370 12 14

a. $6,960

1. The following information was taken from the financial records of Sodigaz, Inc.Year 2 Year 1Sales $285,000 $278,500Accounts receivable: Beginning of year 29,600 18,900 End of year 41,000 29,600The number of days' sales in receivable for Year 2 is

a. 45.2

12. Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $390,000 and credit sales are $1,300,000. An aging of accounts receivable shows that approximately 5% of the outstanding receivables will be uncollectible. What adjusting entry will Tanning Company make if the Allowance for Doubtful Accounts has a credit balance of $2,500 before adjustment?

a. Bad Debt Expense 17,000 Allowance for Doubtful Accounts 17,000

24. If the buyer is to pay the freight costs of delivering merchandise, delivery terms are stated as

a. FOB shipping point

20. Paper Company receives a $6,000, 3-month, 6% promissory note from Dame Company in settlement of an open accounts receivable. What entry will Paper Company make upon receiving the note?

a. Notes Receivable—Dame Company 6,000 Accounts Receivable—Dame Company 6,000

1. The following information is available for Jase Company:Market price per share of common stock $25.00Earnings per share on common stock $1.25Which of the following statements is correct?

a. The price-earnings ratio is 20 and a share of common stock was selling for 20 times the amount of earnings per share at the end of the year.