Question :
51) On February 12, Horseshoe Bend Company purchases $25,000 of : 1253269
51) On February 12, Horseshoe Bend Company purchases $25,000 of merchandise from a vendor with credit terms of 2/10, n/30. On February 15, Horseshoe Bend Company returns $5,000 of the goods because they are defective. If Horseshoe Bend pays the vendor the full amount due on February 20, the amount of the payment is ________.
A) $25,000
B) $20,000
C) $19,600
D) $18,000
52) On February 12, Horseshoe Bend Company purchases $25,000 of merchandise from a vendor with credit terms of 2/10, n/30. If Horseshoe Bend pays the vendor on February 21, the amount of the payment should be ________.
A) $25,000
B) $24,500
C) $22,500
D) $27,500
53) Horse Creek Company had beginning inventory of $900,000, purchases of $2,000,000, purchase returns of $50,000, ending inventory of $800,000, beginning accounts payable of $200,000 and ending accounts payable of $100,000. What was the cost of goods sold?
A) $2,050,000
B) $1,950,000
C) $2,150,000
D) $1,900,000
54) Which of the following costs are included in the inventory account when inventory is purchased FOB shipping point?
A) purchase returns
B) warranty costs
C) freight costs
D) allowance for uncollectible accounts
55) If the shipping terms are FOB shipping point than the shipping costs are paid by the ________.
A) seller and included as part of the cost of the seller’s inventory
B) buyer and included as part of selling expenses at the time of the purchase
C) seller and included as part of the selling expenses at the time of the sale
D) buyer and included as part of the cost of the buyer’s inventory at the time of the purchase
56) The Ribbon Company began operations on May 1. The following transactions took place in May:
Purchased $400,000 of merchandise on account.
Purchased an additional $200,000 of merchandise for cash.
Paid $3,000 cash for freight to deliver the merchandise purchased.
Paid $25,000 for the store managers’ monthly salaries.
The cost of the inventory purchased for the month of May equals ________.
A) $400,000
B) $600,000
C) $603,000
D) $628,000
57) Perch X, Inc. purchased goods with an invoice price of $3,000. Purchase terms are 1/10, n/30 and the invoice is paid one week after it was received. The shipping terms are FOB shipping point and the shipping costs are $300. The cost of the inventory purchased equals _______.
A) $3,000
B) $3,300
C) $2,700
D) $3,270
58) On December 29, Perch X, Inc. purchased $2,000 of merchandise from a supplier. The shipping terms were FOB shipping point. The merchandise did not arrive until after yearend. Perch X should ______.
A) exclude the merchandise from its inventory but should record the related accounts payable as of yearend.
B) include the merchandise in its inventory and record the related accounts payable.
C) exclude the merchandise from its inventory and the related accounts payable as of yearend.
D) expense the merchandise as cost of goods sold at yearend.
59) On December 29, Perch X, Inc. purchased $2,000 of merchandise from a supplier. The shipping terms were FOB destination. The merchandise did not arrive until after yearend. Perch X should ______.
A) exclude the merchandise from its inventory but should record the related accounts payable as of yearend.
B) include the merchandise in its inventory and record the related accounts payable.
C) exclude both the merchandise from its inventory and the related accounts payable as of yearend.
D) expense the merchandise as cost of goods sold at yearend.
60) Net sales equals ________.
A) sales minus cost of goods sold
B) sales minus sales returns and allowances minus sales discounts
C) sales divided by net income
D) net income divided by sales
