Question : 61.Morton Company uses the perpetual inventory method. The company purchased : 1254406

61.Morton Company uses the perpetual inventory method. The company purchased an item of inventory for $65 and sold the item to a customer for $100. What effect will the sale have on the company’s inventory account?   

A. The account will decrease by $100

B. The account will decrease by $65

C. The account will decrease by $35

D. No effect

62.Folger Company uses the perpetual inventory method. Folger sold goods that cost $4,600 for $7,200. If the sale was made on account, the sale will:   

A. increase total assets by $2,600.

B. increase total equity by $7,200.

C. decrease total assets by $4,600.

D. increase total assets by $7,200.

Sanford Company engaged in the following transactions during 2013:1) Started the business by issuing $10,500 of common stock for cash.2) The company paid cash to purchase $6,600 of inventory.3) The company sold inventory that cost $4,000 for $7,650 cash.4) Operating expenses incurred and paid during the year, $3,500.Sanford Company engaged in the following transactions during 2014:1) The company paid cash to purchase $8,800 of inventory.2) The company sold inventory that cost $8,200 for $14,250 cash.3) Operating expenses incurred and paid during the year, $4,500.Note: Sanford uses the perpetual inventory system.

63.Sanford’s gross margin for the year 2014 is:   

A. $1,550.

B. $5,450.

C. $6,050.

D. $8,200.

64.The balance in the inventory account shown at December 31, 2014 is:   

A. $3,200.

B. $600.

C. $15,600.

D. none of the above.

65.The amount of retained earnings at December 31, 2014 is:   

A. $1,550.

B. $1,700.

C. $6,500.

D. none of the above.

66.The Warren Company purchased $22,000 of merchandise from the Garden Wholesale Company. Warren also paid $1,500 for freight costs to have the goods shipped to its location. Which of the following statements regarding the necessary entries for the transactions is true? Warren uses the perpetual inventory system.   

A. Total debits to the inventory account would be $22,000.

B. Total debits to the inventory account would be $23,500.

C. Transportation-in would be debited for $1,500.

D. Answers A and C are both true.

67.Fox Company recorded a purchase discount of $200 on merchandise the company had purchased a few days ago. Fox uses the perpetual inventory system. Which of the following answers reflects the effects of this event on the financial statements?     

A. Option A

B. Option B

C. Option C

D. Option D

68.Yancey Company granted a sales discount of $360 to a customer when it collected the amount due on account. Yancey uses the perpetual inventory system. Which of the following answers reflects the effects of the discount only on the financial statements?     

A. Option A

B. Option B

C. Option C

D. Option D

69.Ryland Company returns merchandise previously purchased on account. It had not yet been paid for. Ryland uses the perpetual inventory system. Which of the following answers reflects the effects of the purchase return on the financial statements?     

A. Option A

B. Option B

C. Option C

D. Option D

70.The term “FOB Shipping Point” means   

A. The buyer records transportation expense.

B. The seller pays the shipping cost.

C. The buyer pays the shipping cost.

D. The buyer does not assume ownership until the goods are received.