Reference no: EM13509062

Question 1

Lee Industries had the following inventory transactions occur during 2010:
Units Cost/unit
2/1/10 Purchase 18 $45
3/14/10 Purchase 31 $47
5/1/10 Purchase 22 $49

The company sold 51 units at $63 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, what is the company's gross profit using FIFO? (rounded to whole dollars)

$772

$2,441

$848

$2,365

Question 2

On March 1, 2010, Joe Miles purchased a suit at Calvin's Fine Apparel Store. The suit cost $250 and Joe used his Calvin credit card. Calvin charges 2% per month interest if payment on credit charges is not made within 30 days. On April 30, 2010, Joe had not yet made his payment. What entry should Calvin make on April 30th?

Bad Debts Expense 245
Interest Expense 5
Accounts Receivable 250

Accounts Receivable 255
Interest Revenue 5
Sales 250

Accounts Receivable 5
Interest Revenue 5

Uncollectible Account 250
Accounts Receivable 250

Question 3

A company just starting business made the following four inventory purchases in June:
June 1 150 units $390
June 10 200 units 585
June 15 200 units 630
June 28 150 units 495
$2,100

A physical count of merchandise inventory on June 30 reveals that there are 200 units on hand. Using the average-cost method, the amount allocated to the ending inventory on June 30 is

$600.

$2,100.

$1,500.

$575.

Question 4

A sales journal is used to record

only cash sales of merchandise.

sales of all assets on credit and for cash.

credit sales of merchandise, sales returns and allowances, and sales discounts.

only credit sales of merchandise.

Question 5

Assume the following sales data for a company:
2011 $945,000
2010 845,000
2009 650,000

If 2009 is the base year, what is the percentage increase in sales from 2009 to 2010?

23%

30%

77%

130%

Question 6

Rodgers Company lends Lanier Company $30,000 on April 1, accepting a four-month, 9% interest note. Rodgers Company prepares financial statements on April 30. What adjusting entry should be made before the financial statements can be prepared?

Notes Receivable 30,000
Cash 30,000

Interest Receivable 900
Interest Revenue 900

Interest Receivable 225
Interest Revenue 225

Cash 225
Interest Revenue 225

Question 7

Walker Clothing Store had a balance in the Accounts Receivable account of $390,000 at the beginning of the year and a balance of $410,000 at the end of the year. Net credit sales during the year amounted to $2,000,000. The average collection period of the receivables in terms of days was

146 days.

365 days.

30 days.

73 days.

Question 8

The current assets of Kile Company are $150,000. The current liabilities are $100,000. The current ratio expressed as a proportion is

1.5 : 1

.67 : 1

150%.

$150,000 ÷ $100,000.

Question 9

Accounts Receivable and Accounts Payable are examples of

controlling accounts.

both nominal accounts and controlling accounts.

subsidiary ledger accounts.

nominal accounts.

Question 10

Hahn Company uses the percentage of sales method for recording bad debts expense. For the year, cash sales are $500,000 and credit sales are $2,000,000. Management estimates that 1% is the sales percentage to use. What adjusting entry will Hahn Company make to record the bad debts expense?

Bad Debts Expense 20,000
Allowance for Doubtful Accounts 20,000

Bad Debts Expense 20,000
Accounts Receivable 20,000

Bad Debts Expense 25,000
Accounts Receivable 25,000

Bad Debts Expense 25,000
Allowance for Doubtful Accounts 25,000

Question 11

In the month of November, Coler Company Inc. wrote checks in the amount of $9,250. In December, checks in the amount of $12,658 were written. In November, $8,468 of these checks were presented to the bank for payment, and $10,883 were presented in December. What is the amount of outstanding checks at the end of November?

$2,557

$782

$3,550

$1,775

Question 12

On February 1, Platt Company received a $9,000, 10%, four-month note receivable. The cash to be received by Platt Company when the note becomes due is

$9,000.

$9,900.

$300.

$9,300.

Question 13

Gold Clothing Store had a balance in the Accounts Receivable account of $820,000 at the beginning of the year and a balance of $880,000 at the end of the year. Net credit sales during the year amounted to $7,650,000. The receivables turnover ratio was

8.7 times.

9.3 times.

9.0 times.

4.5 times.

Question 14

Using the following data from the comparative balance sheet of Rodenbeck Company, illustrate vertical analysis. (Round percentages to 1 decimal place, e.g. 10.5.)

December 31, 2011 December 31, 2010
Accounts receivable $ 502,650 $ 391,780
Inventory $ 833,130 $ 610,380
Total assets $ 3,108,000 $2,495,800
Vertical Analysis
Dec. 31, 2011 Dec. 31, 2010
Amount Percentage Amount Percentage
Accounts receivable $
%
$
%

Inventory $
%
$
%

Total assets $
%
$
%

AE6-5

Catlet Co. uses a periodic inventory system. Its records show the following for the month of May in which 65 units were sold.
Date Explanation Units Unit Cost Total Cost
May 1 Inventory 30 $10.47 $314.10
May 15 Purchases 25 13.47 336.75
May 24 Purchases 35 14.47 506.45
Totals 90 $1,157.30
Compute the ending inventory at May 31 and cost of goods sold using the FIFO and LIFO methods. (Round answers to 2 decimal places, e.g. 10.50.)
FIFO LIFO
Ending Inventory $
$

Cost of goods sold $
$

The following information pertains to Family Video Company.

1. Cash balance per bank, July 31, $9,906.73.
2. July bank service charge not recorded by the depositor $38.19.
3. Cash balance per books, July 31, $9,935.38.
4. Deposits in transit, July 31, $2,046.00.
5. Bank collected $1,227.60 note for Family in July, plus interest $49.10, less fee $27.28. The collection has not been recorded by Family, and no interest has been accrued.
6. Outstanding checks, July 31, $806.12.

Prepare a bank reconciliation at July 31. (Round answers to 2 decimal places, e.g. 10.50.)
$

Add:

Less:

Adjusted cash balance per bank $

$

Add:

Less:

Adjusted cash balance per books $

Journalize the adjusting entries at July 31 on the books of Family Video Company. (For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.Round answers to 2 decimal places, e.g. 10.50.)