Question

1. Beacon Food Stores purchased canned goods at an invoice price of $3,000 and terms of 2/10, n/60. Half of the goods had been mislabeled and were returned immediately to the supplier. If Beacon Food pays the remaining amount of the invoice within the discount period, the amount paid should be:

Multiple Choice

• $2,940.

• $1,440.

• $3,000.

• $1,470.

2. If Bounder Dog Supplies, Incorporated purchased inventory at $1,600 list price and the terms were 2/10 n/30, what would be the value associated with the inventory if payment was made within 10 days?

Multiple Choice

• $1,600.

• $1,632.

• $1,579.

• $1,568.

3. A bank statement shows a balance of $6,825 at June 30. The bank reconciliation is prepared and includes outstanding checks of $2,850, deposits in transit of $1,250, and a bank service charge of $40. Among the paid checks returned by the bank was check number 900 in the amount of $450, which the company had erroneously recorded in the accounting records as $60. The "adjusted cash balance" at June 30 is:

Multiple Choice

• $5,985.

• $5,225.

• $3,525.

• $4,425.

4. The Cash account in the records of Hensley, Incorporated showed a balance of $4,300 at June 30. The bank statement, however, showed a balance of $6,700 at the same date. The only reconciling items consisted of a $750 deposit in transit, a bank service charge of $11, and a large number of outstanding checks.

What is the total amount of the outstanding checks at June 30?

Multiple Choice

• $3,550.

• $3,150.

• $2,778

• $3,161.

Answer 1

Solution to the QUESTION-1
Total amount to be paid
Invoice price	3,000
Less: Goods returned ($3,000 x 1/2)	1,500
Net price	1,500
Less: Discount received at 2.00% ($1,500 x 2.00%)	30
Total amount to be paid	1,470
Therefore, the amount to be paid should be $1,470