ACCT 201 M6

Phyllo, Inc.'s inventory activity in May was as follows: Inventory, May 1 10 units @ $8 each Purchase, May 7 30 units @ $6 each Sale, May 18 25 units @ $15 each

-Assets= 375 Accounts Receivable, (162.50) Inventory -Shareholders Equity= 375 Sales, (162.50) Cost of Goods Sold

Florist Gump, Inc., purchased $10,000 of merchandise on account with discount terms of 2/10, n/30 on June 12. It used the net method when the purchase was recorded. Florist Gump paid the invoice on June 30. Record the payment of this invoice. -Credit Cash for $9,800 -Debit Discounts Lost for $200 -Debit Accounts Payable for $10,000 -Credit Accounts Payable for $10,000 -Credit Cash for $10,000 -Credit Cash for $9,800 -Credit Discounts Lost for $200 -Debit Discounts Lost for $200 -Debit Accounts Payable for $10,000 -Debit Accounts Payable for $9,800

-Credit Cash for $10,000 -Debit Discounts Lost for $200 -Debit Accounts Payable for $9,800

Planet of the Crepes, Inc.'s inventory activity in May was as follows: Inventory, May 1 10 units @ $8 each Purchase, May 7 30 units @ $6 each Sale, May 18 25 units @ $15 each Record the entry for the May 18 sale on account and the cost of the sale on the accounting equation assuming first-in, first-out (FIFO) is used. (what you debit and credit)

-Debit Cost of Goods Sold $170 -Debit Accounts Receivable $375 -Credit Sales $375 -Credit Inventory $170

Florist Gump, Inc., purchased $10,000 of merchandise on account with discount terms of 2/10, n/30, FOB destination. Using the net method, what is the entry to record the purchase? (what you debit and credit)

-Debit Inventory 9800 -Credit accounts payable 9800

Which of the following is not an advantage of an internal control system? -It guarantees the management will behave ethically. -It promotes efficient and effective operations. -It enhances the reliability of accounting information. -It helps protect against the theft of assets.

-It guarantees the management will behave ethically.

Which statement below best explains credit terms of 2/10, n/30? -The buyer will receive a 2 percent discount if it pays within 30 days. -The buyer will receive a 10 percent discount if it pays within 30 days. -The buyer will receive a 10 percent discount if it pays within 2 days. -The buyer will receive a 2 percent discount if it pays within 10 days.

-The buyer will receive a 2 percent discount if it pays within 10 days.

Which statement below best describes how to account for the costs of purchasing inventory on account? -The costs are initially recorded as assets and expensed when the inventory is sold. -The costs are initially recorded as assets and expensed when the inventory has an increase in market value. -Inventory costs are initially reported as assets and then maintained in the asset account for the life of the business. -The costs are initially recorded as expenses and then depreciated over the estimated life of the inventory.

-The costs are initially recorded as assets and expensed when the inventory is sold.

Accounts Receivable are ______. long-term assets current liabilities long-term liabilities current assets

-current assets

Luna Seafood, Inc.'s inventory activity in September was as follows: Inventory, September 1 15 units @ $100 each Purchase, September 12 10 units @ $120 each Sale, September 25 12 units @ $150 each

1,404.000 ± 0.5

The invoice price of goods purchased is $10,000 with purchase terms of 2/7, n/30 and FOB shipping point. The invoice is paid within the week of receipt and shipping costs are $200. By what amount should the purchaser's Inventory be increased?

10,000

The invoice price of goods purchased is $10,000 with purchase terms of 1/7, n/30 and FOB shipping point. The invoice is paid within the week of receipt and shipping costs are $200. By what amount should the purchaser's Inventory be increased?

10,100

The following data was extracted from the records of Pans on Fire, Inc.: Sales Revenue 400 units at $35 per unit Purchases 300 units at $20 per unit Beginning Inventory 150 units at $16 per unit What is the ending Inventory balance using the FIFO method?

1000

LILLO, Inc.'s inventory activity in May was as follows: Inventory, May 1 10 units @ $8 each Purchase, May 7 30 units @ $6 each Sale, May 18 25 units @ $15 each Determine the ending inventory balance using last-in, first-out (LIFO).

110

Sew Warm, Inc.'s inventory activity in September was as follows: Inventory, September 1 13 units @ $6 each Purchase, September 12 19 units @ $11 each Sale, September 25 20 units @ $16 each Calculate the Inventory at the end of the month using FIFO perpetual.

132

Sweet Dairy Air, Inc.'s inventory activity in September was as follows: Inventory, September 1 17 units @ $6 each Purchase, September 12 10 units @ $9 each Sale, September 25 21 units @ $18 each Calculate the Cost of Goods Sold using LIFO perpetual.

156

Tequila Mockingbird, Inc.'s inventory activity in September was as follows: Inventory, September 1 10 units @ $7 each Purchase, September 12 18 units @ $10 each Sale, September 25 21 units @ $16 each Calculate the Cost of Goods Sold using FIFO perpetual.

180

Sweet Dairy Air, Inc.'s inventory activity in September was as follows: Inventory, September 1 15 units @ $7 each Purchase, September 12 11 units @ $11 each Sale, September 25 20 units @ $17 each Calculate the Cost of Goods Sold using LIFO perpetual.

184

Sew Warm, Inc.'s inventory activity in September was as follows: Inventory, September 1 13 units @ $6 each Purchase, September 12 12 units @ $9 each Sale, September 25 18 units @ $18 each Calculate the Inventory at the end of the month using FIFO perpetual.

63

Mad Men, Inc.'s inventory activity in September was as follows: Inventory, September 1 17 units @ $7 each Purchase, September 12 12 units @ $10 each Sale, September 25 19 units @ $17 each Calculate the Inventory at the end of the month using LIFO.

70

Mad Men, Inc.'s inventory activity in September was as follows: Inventory, September 1 15 units @ $7 each Purchase, September 12 12 units @ $9 each Sale, September 25 15 units @ $17 each Calculate the Inventory at the end of the month using LIFO.

84

Jello, Inc.'s inventory activity in May was as follows: Inventory, May 1 10 units @ $8 each Purchase, May 7 30 units @ $6 each Sale, May 18 25 units @ $15 each Jello uses the average cost method. Jello's Inventory balance at May 30 equals ____.

97.50

FILLO, Inc.'s inventory activity in May was as follows: Inventory, May 1 20 units @ $12 each Purchase, May 7 10 units @ $15 each Sale, May 18 24 units @ $18 each Record the effect of the May 7 inventory activity on the accounting equation assuming the first-in, first-out method is used. All purchases are made on account. Assets= Liabilities=

Assets= 150 Inventory Liabilities= 150 Accounts Payable

FILLO, Inc.'s inventory activity in May was as follows: Inventory, May 1 10 units @ $8 each Purchase, May 7 30 units @ $6 each Sale, May 18 25 units @ $15 each Assets= Liabilities=

Assets= 180 inventory Liabilities= 180 Accounts Payable

Thistle Do Nicely, Inc., uses the average cost method and had the following inventory activity for June: Beginning Inventory, June 1 3,000 units @ $10 each Purchase, June 15 7,000 units @ $12 each Sale, June 25 8,000 units @ $25 each Show the effect of the entry for the sale of Inventory on account and the cost of the sale on June 25. Assets= Shareholders Equity=

Assets= 200,000 Accounts Receivable; (91,200) Inventory Shareholders Equity= 200,000 Sales; (91,200) Cost of Goods Sold

Phyllo, Inc.'s inventory activity in May was as follows: Inventory, May 1 10 units @ $8 each Purchase, May 7 30 units @ $6 each Sale, May 18 25 units @ $15 each Record the effect of the May 18 sale and cost of sale on the accounting equation using the average cost method. Assets= Shareholders Equity=

Assets= 375 Accounts Receivable, (162.50) Inventory Shareholders Equity= 375 Sales, (162.50) Cost of Goods Sold

FILLO, Inc.'s inventory activity in May was as follows: Inventory, May 1 20 units @ $12 each Purchase, May 7 10 units @ $15 each Sale, May 18 24 units @ $18 each Record the journal entry for the May 7th purchase assuming the first-in, first-out method is used and all purchases are on account. (what you debit and credit)

Debit Inventory 150 Credit Accounts Payable 150

FILLO, Inc.'s inventory activity in May was as follows: Inventory, May 1 20 units @ $12 each Purchase, May 7 10 units @ $15 each Sale, May 18 24 units @ $18 each Record the journal entry for the May 7th purchase assuming the first-in, first-out method is used and all purchases are on account. (what do you debit and credit)

Debit Inventory 150 Credit Accounts Payable 150

Which of the following is the entry to record the purchase of merchandise on credit? Debit Inventory; Credit Accounts Payable Debit Purchases; Credit Accounts Payable Debit Sales; Credit Accounts Receivable Debit Purchases; Credit Cost of Goods Sold

Debit Inventory; Credit Accounts Payable

Match the normal balance and on which financial statement each account is found. Doubtful Accounts Expense- Allowance for Doubtful Accounts- Deferred Revenue- Accounts Receivable, Net- A. Credit; Income Statement B. Debit; Income Statement C. Debit; Balance Sheet D. Credit; Balance Sheet

Doubtful Accounts Expense- B Allowance for Doubtful Accounts- D Deferred Revenue- D Accounts Receivable, Net- C

Botit, Inc., purchased $10,000 of merchandise that was shipped on December 30, FOB destination. The goods arrived on January 5. Given Botit's yearend is December 31, should Botit include or exclude this purchase from its inventory?

Exclude

Botit, Inc., purchased $4,000 of merchandise that was shipped on December 29, FOB destination. The goods arrived on January 4. Given Botit's yearend is December 31, should Botit include or exclude this purchase from its inventory?

Exclude

The seller sold $3,500 of merchandise to a customer on account, shipped FOB shipping point on December 30. The goods are still in transit at year-end. Indicate whether the goods should be included or excluded from the seller's inventory at December 31, its yearend.

Exclude

Botit, Inc., purchased $5,000 of merchandise on account that was shipped on December 29, FOB shipping point. The goods arrived on January 3. Should Botit include or exclude this inventory from its balance sheet at its year end, December 31?

Include

Cellit, Inc., sold $4,000 of merchandise that was shipped on December 29, FOB destination. The goods arrived on January 4. Given Cellit's yearend is December 31, should Cellit include or exclude this merchandise from its inventory?

Include

The cost of merchandise that is still on hand and has not yet been sold to customers is called ______. -Inventory, a current asset that appears on the balance sheet -Cost of goods sold, and it appears on the balance sheet -Inventory, a current asset that appears on the income statement -Cost of goods sold, and it appears on the income statement

Inventory, a current asset that appears on the balance sheet

On November 27, Beyer, Inc., ordered merchandise from Cellar Company. Cellar shipped the merchandise to Beyer on November 29, FOB shipping point. The merchandise arrived at Beyer's warehouse on December 1. Beyer paid for the merchandise on January 2. When should Cellar recognize revenue? -November 27 -November 29 -December 1 -January 2

November 29

A physical count of inventory is performed by the person who has access to the inventory. A different person, who does not have access to the inventory, must adjust the accounting records downward if any of the inventory is missing. Is this an internal control strength or weakness?

Strength

The accountant must be the person to order the inventory, count the inventory when it arrives, record the purchase in the accounting records and write the check to the vendor so as to ensure that the company gets what it pays for. Is this an internal control strength or weakness?

Weakness

The monthly bank reconciliation is prepared by the accountant who is responsible for recording the reconciling items. Is this an internal control strength or weakness?

Weakness