Reference no: EM132240407

Questions -

Q1. Given below are account balances for Charlie Company:

Gross sales, $108,000

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?

Q2. 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 $1,960

(b) Sales Discounts for $40

(c) Accounts Receivable for $2,000

(d) Cash for $1,960

Q3. 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 Purchases.

(b) Debit Accounts Payable, and Credit Purchase Discounts.

(c) Debit Accounts Payable, and Credit Purchase Returns and Allowances.

(d) Debit Accounts Payable, and Credit Inventory.

Q4. Alpha Company provided the following data concerning its income statement: sales, $955,000; purchases, $500,000; beginning inventory, $235,000; ending inventory, $242,000; operating expenses, $114,000; freight-in, $5,000; sales discounts, $27,000; purchases discounts, $15,000; sales returns & allowances, $131,000; and purchases returns & allowances, $44,000. The data are provide the basis for preparation of an income statement. How much is net income?

Q5. 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 $2,500 of merchandise to Bravo Company on May 2, 2016. Selling price was $4,000. Freight charges related to this transaction of $150 were paid by Alpha Company.

Bravo Company returned, to Alpha Company, $250 of this merchandise on May 3, 2016. Merchandise was sold for $400.

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

Q6. 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 Petty Cash for $2.

(b) credit to Cash for $318.

(c) credit to Cash or $180.

(d) debit to Cash Short for $2.