Question

1.Baker Company sells merchandise on account for $5,000 to Helix Company with credit terms of 1/10, 1/30. Helix Company returns $600 of merchandise that was damaged, along with a check to settle the account within the discount period. What entry does Baker Company make upon receipt of the check? 4,400 4,400 4,356 644 5,000 a. Cash ......... Accounts Receivable........... b. Cash ........... Sales Returns and Allowances............. Accounts Receivable.......... c. Cash.. Sales Returns and Allowances........... Sales Discounts. Accounts Receivable....... d. Cash........... Sales Discounts......... Sales Returns and Allowances... Accounts Receivable....... 4,356 600 20 5,000 4,950 600 4.400 12. The journal entry to record a return of merchandise purchased on account under a perpetual inventory system would credit a Accounts Payable b. Purchase Returns and Allowances. c. Sales Revenue. d. Inventory. 13. The following information was available for Paul Company at December 31, 2020: beginning inventory $90,000, ending inventory $70,000, cost of goods sold $968,000; and sales $1,360,000. Paul's inventory turnover in 2020 was a. b. c. d. 10.8 times. 12.1 times. 13.8 times. 17.0 times. 14. P. Didee has the following inventory information. July 1 Beginning Inventory 20 units at $90 Purchases 120 units at $92 Sale 90 units 21 Purchases 60 units at $95 30 Sale 58 units Assuming that a perpetual inventory system is used, what is the ending inventory on a FIFO basis? a $4,744 b. $5,860 c. $4,940 d. $6,346

Answer 1

Question -14 Answer: FIFO Method - Perpetual inventory Closing inventory = 52 * $ 95 = $ 4940 Question -11 Answer: Entry Debit Credit Cash 4356 Sales return 600 Sales discount 44 Account receivable 5000 Discount = ( 5000 - 600) * 1% = 44 Question -15 Answer: B If price rising in FIFO methof Closing inventory cost is high. So net income will be higher than LIFO COGS will be lower than LIFO Income tax expenses will higher than LIFO Question -12 Entry Inventory Account receivable Answer: Debit XXX D Credit Question -16 Answer: Inventory Turnover = [COGS / Avg Inventory XXX Question -13 Answer: B Average inventory = ( Opening inventory - Closing inventory)/2 Average inventory = ( 90000 + 70000)/2 = 80000 Inventory Turnover = COGS / Avg Inventory Inventory turnover = 968000 / 80000 = 12.1 times Question -17 Answer: А Inventory value at cost or NRV whiche ever is lower Closing inventory = 115000 + 73000 + 158000 = 346000