Question : 81. Carrie Company sold merchandise with an invoice price of $1,000 : 1228526

81. Carrie Company sold merchandise with an invoice price of $1,000 to Underwood, Inc., with terms of 2/10, n/30. Which of the following is the correct entry to record the payment by Underwood Inc., within the 10 days if the company uses the periodic inventory system and the gross method to record purchases?
   
A. Option A
B. Option B
C. Option C
D. Option D

82. Iris Company has provided the following information regarding two of its items of inventory at year-end:
? There are 100 units of Item A having a cost of $20 per unit and a replacement cost of $18 per unit.
? There are 50 units of Item B having a cost of $50 per unit and a replacement cost of $55 per unit.
How much is the ending inventory using lower of cost or market on an item-by-item basis? 
A. $4,300
B. $4,500
C. $4,750
D. $4,550

83. Carr Corporation has provided the following information for its most recent month of operation: sales $8,000; beginning inventory $1,000; ending inventory $2,000 and gross profit $5,000. How much were Carr’s inventory purchases during the period? 
A. $9,000
B. $5,000
C. $6,000
D. $4,000

84. Carp Corporation has provided the following information for its most recent month of operation: sales $16,000; ending inventory $4,000, purchases $8,000 and gross profit $10,000. How much was Carp’s beginning inventory? 
A. $2,000
B. $18,000
C. $6,000
D. $12,000

85. Cassie Corporation has provided the following information for its most recent month of operation: sales $32,000, beginning inventory $8,000, purchases $16,000 and gross profit $20,000. How much was Cassie’s ending inventory? 
A. $4,000
B. $8,000
C. $6,000
D. $12,000

86. Which of the following would not be included in Latimer Company’s ending inventory? 
A. Goods shipped from a supplier with terms of FOB shipping point.
B. Goods shipped to customers with terms of FOB destination.
C. Samples provided to a customer with the understanding that they would be returned to Latimer at the beginning of the next year.
D. Goods shipped to customers with terms of FOB shipping point.

87. Atomic Company incorrectly recorded a December 2009 credit purchase of inventory during January 2010. Assuming that the December 31, 2009 ending inventory was correctly determined, what is the effect of this error on the financial statements for the year ended December 31, 2009? 
A. Net income is not affected.
B. Stockholders’ equity is not affected.
C. Net income is overstated.
D. Current assets are understated.

88. Atomic Company incorrectly recorded a December 2009 credit purchase of inventory during January 2010. Assuming that the December 31, 2009 ending inventory was correctly determined, what is the effect of this error on the financial statements for the year ended December 31, 2010? 
A. Net income is not affected.
B. Stockholders’ equity is not affected.
C. Net income is overstated.
D. Stockholders’ equity is overstated

89. Which of the following statements is incorrect? 
A. An increase in raw materials inventory means that raw materials purchases exceed raw materials used.
B. An increase in work in process inventory means that costs put into work in process exceed cost of goods manufactured.
C. A decrease in work in process inventory means that cost of goods sold exceed cost of goods manufactured.
D. An increase in finished goods inventory means that cost of goods manufactured exceeds cost of goods sold.

90. Which of the following costs does not become a part of cost of goods manufactured? 
A. The cost of raw materials used.
B. The cost of factory overhead.
C. The cost of rent on the factory building.
D. The salary of the company president.