Reference no: EM133090597

Questions -

Q1. Merchandise is purchased for $4,900 on September 2 subject to terms of 2/10, n/30, FOB destination. Freight costs paid by the seller totaled $100. What is the cost of the merchandise if paid on September 12, assuming the discount is taken?

a. $4,802

b. $4,704

c. $5,098

d. $5,000

Q2. Beginning inventory, purchases, and sales for an inventory item are as follows:

Sept. 1 Beginning Inventory 33 units $13

Sept. 5 Sale 19 units

Sept. 17 Purchase 35 units $15

Sept. 30 Sale 35 units

Assuming a perpetual inventory system and the first-in, first-out method, determine (a) the cost of the merchandise sold for the September 30 sale and (b) the inventory on September 30.

Q3. At the end of the fiscal year, the following adjusting entries were omitted:

(a) No adjusting entry was made to transfer the $1,750 of prepaid insurance from the asset account to the expense account.

(b) No adjusting entry was made to record accrued fees of $525 for services provided to customers.

Assuming that financial statements are prepared before the errors are discovered, indicate the effect of each error, considered individually, by inserting the dollar amount in the appropriate spaces. Insert "0" if the error does not affect the item.