Question : 136. A company purchased $10,000 of merchandise June 15 with terms : 1257879

 

 

136. A company purchased $10,000 of merchandise on June 15 with terms of 3/10, n/45. On June 20, it returned $800 of that merchandise. On June 24, it paid the balance owed for the merchandise taking any discount it was entitled to. The cash paid on June 24 equals:A. $8,924.B. $9,700.C. $10,000.D. $9,800.E. $8,724.

 

137. A company purchased $10,000 of merchandise on June 15 with terms of 3/10, n/45, and FOB shipping point. The freight charge was $500. On June 20, it returned $800 of that merchandise. On June 24, it paid the balance owed for the merchandise taking any discount it is entitled to. The cash paid on June 24 equals:A. $9,224.B. $10,200.C. $10,500.D. $10,300.E. $9,424.

 

138. A company’s current assets are $23,420, its quick assets are $13,890 and its current liabilities are $12,220. Its acid-test ratio equals: A. 0.88.B. 1.91.C. 1.14.D. .52.E. 1.41.

 

 

139. Using the following year-end information for Bauman, LLC, calculate the current ratio and acid-test ratio:

Cash……………………….

$  48,000

 

Short-term investments……………

12,000

 

Accounts receivable………………

45,000

 

Inventory…………………….

225,000

 

Prepaid expenses……………….

12,500

 

Accounts payable……………….

86,500

 

Other current payables……………

22,000

 

 

 

 

A. 3.01 and 1.21B. 3.16 and .97C. 3.04 and 1.21D. 1.09 and 4.77E. 3.16 and 1.21. 

 

140. A company’s net sales are $775,420, its costs of goods sold are $413,890, and its net income is $117,220. Its gross margin ratio equals: A. 46.6%.B. 53.4%.C. 28.3%.D. 31.5%.E. 40.5%.

 

141. All of the following statements related to U.S. GAAP and IFRS are true : A. Accounting for basic inventory transactions is the same under the two systems.B. The closing process for merchandisers is the same under both systems.C. U.S. GAAP offers little guidance about the presentation order of expenses.D. Neither system requires separate disclosure of items when their size, nature, or frequency are important.E. Neither system defines operating income.

142. A company purchases merchandise with a catalog price of $20,000. The company receives a 35% trade discount from the seller. The seller also offers credit terms of 2/10, n/30. Assuming no returns were made and that payment was made within the discount period, what is the net cost of the merchandise? A. $13,720.B. $19,600.C. $6,860.D. $13,000.E. $12,740.

 

143. A company has net sales of $825,000 and cost of goods sold of $547,000. Its net income is $98,500. The company’s gross margin and operating expenses, respectively, are: A. $209,000 and $191,470B. $278,000 and $179,500C. $278,000 and $98,500D. $179,500 and $98,500E. $645,500 and $179,500

 

144. On March 12, Klein Company, Inc. sold merchandise in the amount of $7,800 to Babson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,500. Klein uses the perpetual inventory system. The journal entry or entries that Klein will make on March 12 is:  

A.

Sales……………………….

7,800

 

 

Accounts receivable…………..

 

7,800

 

B.

Sales……………………….

7,800

 

 

Accounts receivable…………..

 

7,800

 

Cost of goods sold……………….

4,500

 

 

Merchandise Inventory…………

 

4,500

 

C. 

Accounts receivable………………

7,800

 

 

Sales……………………

 

7,800

 

D.

Accounts receivable………………

7,800

 

 

Sales……………………

 

7,800

 

Cost of goods sold……………….

4,500

 

 

Merchandise inventory…………

 

4,500

 

E.

Accounts receivable………………

4,500

 

 

Sales……………………

 

4,500

 

145. On March 12, Klein Company, Inc. sold merchandise in the amount of $7,800 to Babson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,500. Klein uses the perpetual inventory system. Babson pays the invoice on March 17, and takes the appropriate discount. The journal entry that Klein makes on March 17 is: 

A.

Cash

7,800

 

 

Accounts receivable…………..

 

7,800

 

B.

Cash…………………….

4,500

 

 

Accounts receivable…………..

 

4,500

 

C.

Cash

7,644

 

 

Sales discounts…………………

156

 

 

Accounts receivable…………..

 

7,800

 

D.

Cash

7,644

 

 

Accounts receivable…………..

 

7,644

 

E. 

Cash

4,410

 

 

Sales discounts…………………

90

 

 

Accounts receivable…………..

 

4,500

 

146. On March 12, Klein Company, Inc. sold merchandise in the amount of $7,800 to Babson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,500. Klein uses the inventory system. On March 15, Babson returns some of the merchandise. The selling price of the returned merchandise is $600 and the cost of the merchandise returned is $350. The entry or entries that Klein must make on March 15 is: 

 

A.

Sales returns and allowances………

600

 

 

Accounts receivable…………..

 

600

 

Merchandise inventory………….

350

 

 

Cost of goods sold……………

 

350

 

B. 

Sales returns and allowances…………

600

 

 

Accounts receivable…………..

 

600

 

C.

Accounts receivable………………

600

 

 

Sales returns and allowances……..

 

600

 

D.

Accounts receivable………………

600

 

 

Sales returns and allowances……..

 

600

 

Cost of goods sold……………….

350

 

 

Merchandise inventory…………

 

350

 

E.

Sales returns and allowances…………

350

 

 

Accounts receivable…………..

 

350

 

147. On March 12, Klein Company, Inc. sold merchandise in the amount of $7,800 to Babson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,500. Klein uses the  inventory system. On March 15, Babson returns some of the merchandise. The selling price of the merchandise is $600 and the cost of the merchandise returned is $350. Babson pays the invoice on March 20, and takes the appropriate discount. The amount that Klein receives from Babson on March 20 is: 

A. $7,800.B. $7,644.C. $7,044.D. $7,056.E. $7,200.

 

148. On March 12, Klein Company, Inc. sold merchandise in the amount of $7,800 to Babson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,500. Klein uses the  inventory system. On March 15, Babson returns some of the merchandise. The selling price of the merchandise is $600 and the cost of the merchandise returned is $350. Babson pays the invoice on March20, and takes the appropriate discount. The journal entry that Klein makes on March20 is: 

A.

Cash

7,800

 

 

Accounts receivable…………..

 

7,800

 

B.

Cash…………………….

4,500

 

 

Accounts receivable…………..

 

4,500

 

C. 

Cash

7,056

 

 

Sales discounts…………………

144

 

 

Accounts receivable…………..

 

7,200

 

D.

Cash

7,056

 

 

Accounts receivable…………..

 

7,056

 

E.

Cash

7,644

 

 

Sales discounts…………………

   156

 

 

Accounts receivable…………..

 

7,800

 

149. Zenith Company Inc.’s Merchandise Inventory account at the end of year 2015 has a balance of $91,820, but a physical count reveals that only $90,450 of inventory exists. The adjusting entry to record this $1,370 of inventory shrinkage is:  

A. 

Merchandise Inventory…………….

1,370

 

 

Inventory shrinkage expense……..

 

1,370

 

B.

Purchases discounts……………..

1,370

 

 

Cost of goods sold……………

 

1,370

 

C.

Cost of goods sold……………….

1,370

 

 

Merchandise Inventory…………

 

1,370

 

D.

Inventory shrinkage expense…………

1,370

 

 

Cost of goods sold……………

 

1,370

 

E.

Cost of Goods Sold………………

90,450

 

 

Merchandise Inventory…………

 

91,820