Reference no: EM132488807

Question 1. On June 1, 20X6, Windows, Screens & Blinds Ltd. exchanged an $18,500 account receivable from Two-Tone Painters for a $20,000, 18-month, interest-free note receivable. The market rate of interest on similar notes is 7%. The full amount of the note is due at maturity on November 30, 20X7.

What is the present value of the note receivable at June 1, 20X6?

a) $18,070

b) $18,500

c) $18,692

d) $20,000

Question 2. Rajinder's Kitchen Boutique Ltd. (RKB) uses the retail method of estimating its inventory. The company's cost and retail information is as follows:

Cost information:

1. Beginning inventory $36,500
2. Purchases $245,000
3. Purchase returns $4,500

Retail information:

1. Beginning inventory $81,500
2. Purchases $492,500
3. Purchase returns $8,150
4. Additional markups $11,150
5. Markup cancellations $3,500
6. Markdowns $6,500
7. Markdown cancellations $3,000

What is RKB's cost ratio?

a) 48.30%

b) 48.60%

c) 48.95%

d) 49.04%

Question 3. Burnstyn's Appliances sells home furnishings and appliances. The salespeople are compensated with a salary plus 5% commission on the sale price of any goods they sell. At February 28, 20X6, the company's inventory records contained the following information:

Units in inventory Cost per unit Sales price per unit REFRIGERATORS 22 cubic feet - white 3 $ 928 $1,341 22 cubic feet - black 2 963 675 22 cubic feet - stainless steel 6 1,149 1,499 22 cubic feet - slate 5 1,189 999 RANGES 5 burner - gas - white 2 1,150 1,449 5 burner - gas - black 1 1,189 989 5 burner - gas - stainless steel 4 1,354 1,625 5 burner - gas - slate 4 1,397 1,099

Burnstyn's Appliances reports inventory using the lower of cost and net realizable value (LCNRV). At what amount would the company report inventory in the statement of financial position at February 28, 20X6?

a) $28,538

b) $29,124

c) $32,042

d) $34,145

Question 4. When Belle's Beauty Boutique (BBB) was performing its bank reconciliation for the month ending February 28, 20X5, it observed that the bank correctly deducted $230 for cheque #3562. However, that cheque was incorrectly recorded in the general ledger as $320. What action must BBB take to ensure that its bank reconciliation balances?

a) Add $90 to the bank balance on the bank statement.

b) Add $90 to the cash balance in the general ledger.

c) Subtract $90 from the bank balance on the bank statement.

d) Subtract $90 from the cash balance in the general ledger.