Question

15. On May. . Ace Bonding Company purchased inventory costing $2,000 on account. If credit terms are 2/10 30 and Ace pays for this inventory on May 30 which of the following records the payment using a perpetual inventory system? A Accounts Payable 2.000 2,000 1.900 40 2.000 2,000 B Accounts Payable Inventory Cash Accounts Payable Inventory Cash D. Cash Accounts Payable 1,960 2,000 16. A company has 10 units of inventory with a recorded cost of $60. If the net realizable value is S50 what adjustment is required using the principle of lower of cost and not realizable value of inventory? A. Debit Inventory S100, credit Cost of Goods Sold 5100 B. Debit Inventory S500; credit Cost of Goods Sold 5500 C. Debit Cost of Goods Sold S100; credit Inventory S100 D. Debit Cost of Goods Sold S500; credit Inventory 5500 17. The cost of the goods that a company sold during a period is shown in its financial statements as and the cost of the goods that a company still has on hand at the end of the year is shown in the financial statements as A. Cost of goods sold; inventory B. Goods on hand; inventory expense C. Inventory, cost of goods sold D. Sales revenue; cost of goods sold 18. Given the information in the table below, what is the company's gross profit? Sales revenue $350,000 Sales discounts $20,000 Sales returns 550,000 Cost of goods sold SI 80,000 Accounts receivable $280,000 Ending inventory $230,000 A. $280,000 B. S170,000. C. S50,000 D. $100,000.

Answer 1

15) Payment record

date	account and explanation	Debit	Credit
May 30	Account payable	2000
	Cash		2000

So answer is a)

16) Journal entry

date	account and explanation	Debit	Credit
	Cost of goods sold (60-50)*10	100
	Inventory		100

So answer is c)

17) Cost of goods which is sold is called cost of goods sold and cost of goods which is unsold is inventory

So answer is a) Cost of goods sold, Inventory

18) Calculate gross profit

Sales revenue	350000
Sales discount	-20000
Sales return	-50000
Net sales	280000
Cost of goods sold	180000
Gross profit	100000

So answer is d) $100000