Reference no: EM132489294

Question 1: Given below are account balances for Charlie Company:

Gross sales, $102,000

Sales returns and allowances, $5,000

Selling expenses, $12,000

Cost of goods sold, $48,000

Interest expense, $3,000

How much is the gross profit margin? (enter your percentage as a decimal rounded to two decimal places. Example - enter 46% as .46)

Question 2: Merchandise is sold on account on January 16, terms 2/10, n/30, and recorded by debiting Accounts Receivable and crediting Sales for $2,000. If payment occurs on January 21, the journal entry would include a credit to:

A Accounts Receivable for $1960

B Cash for $1960

C Sales Discounts for $40

D Accounts Receivalbe for $2000

Question 3: Merchandise was returned to a supplier. The goods were previously purchased on account. The goods had not been paid for and there were no discounts. Assuming a periodic system, what journal entry is needed by the purchaser to record the return?

A Debit Accounts Payable, and Credit Purchase Returns and Allowances

B Debit Accounts payable, and credit purchase

C Debit Accounts Payable, and Credit Inventory

D Debit Accounts Payable, and Credit Purchase Discounts.

Question 4: Alpha Company provided the following data concerning its income statement: sales, $970,000; purchases, $386,000; beginning inventory, $230,000; ending inventory, $282,000; operating expenses, $99,000; freight-in, $5,000; sales discounts, $17,000; purchases discounts, $15,000; sales returns & allowances, $137,000; and purchases returns & allowances, $44,000. The data are complete and provide the basis for preparation of an income statement. How much is net income?

Question 5: Alpha Company used the periodic inventory system for purchase & sales of merchandise. Discount terms for both purchase & sales are, FOB Destination, 2/10, n30 and the gross method is used.

> Alpha Company sold on account merchandise costing $3,000 to Bravo Company on May 2, 2016. Selling price was $4,500. Freight charges related to this transaction of $200 were paid by Alpha Company.

> Bravo Company returned, to Alpha Company, merchandise with an original cost to Alpha of $300 on May 3, 2016. Merchandise was sold to Bravo for $450

Use this information to Alpha Company's General Journal entries (without explanation) for May 2 & May 3 entries. If no entry is required then write "No Entry Required."

Question 6: Alpha Company replenished a $500 petty cash fund. The petty cash box contained vouchers of $87 for postage, $173 for supplies, $58 for gasoline, and cash on hand of $180. The journal entry to reflect replenishment would include a:

A Credit to Cash for $318

B Credit to cash for $180

C Credit to Cash Short for $2

D Credit to petty cash for $2

Question 7: Annapolis Company's bank statement indicated an ending cash balance of $9,640. Alpha's accountant discovered that outstanding checks amounted to $865 and deposits in transit were $1,160. Additionally, the bank statement showed service charges of $40. What is the correct adjusted ending cash balance

Question 8: Dorchester Company had the following balances at the end of 2018 and 2019 respectively:

Net Credit Sales - $890,000 for 2018 and $1,082,000 for 2019.

Accounts Receivable - $84,000 for 2018 and $115,000 for 2019.

Allowance for Doubtful Accounts - $5,000 for 2018 and 5,500 for 2019

Calculate the accounts receivable turnover ratio to one decimal place.

Question 9: Easton Company had average inventory for the year of $640,000 and an inventory turnover ratio of 9.2. What was the company's Days Outstanding in Inventory. Assume a 365 day year. Round to one decimal place.