Chapter 7 2 Refer The Selected Data Provided For Maxs

Document Type
Test Prep
Book Title
Financial ACCT2 (with CengageNOWTM-- 1 term Printed Access Card) 2nd Edition
Authors
C. Wayne Alderman, Norman H. Godwin
Refer to the selected data provided for Maxs Tire Center. Which of the following would result from a horizontal analysis of Max's income
statement?
53. Maxs Tire Center Company
Selected data from the financial statements of Maxs Tire Center are provided below.
2012
2011
Inventory
$ 55,000
$ 46,000
Cost of sales
120,000
110,000
Total assets
500,000
490,000
Cash flow from operations
320,000
289,000
Net sales
390,000
360,000
Capital expenditures
15,000
13,000
Refer to the selected data provided for Maxs Tire Center. Which of the following would result from a vertical analysis of Max's balance sheet in
2012?
54. Maxs Tire Center Company
Selected data from the financial statements of Maxs Tire Center are provided below.
2012
2011
Inventory
$ 55,000
$ 46,000
Cost of sales
120,000
110,000
Total assets
500,000
490,000
Cash flow from operations
320,000
289,000
Net sales
390,000
360,000
Capital expenditures
15,000
13,000
Refer to the selected data provided for Maxs Tire Center. Which of the following would result from a vertical analysis of Max's income statement
in 2012?
55. Maxs Tire Center Company
Selected data from the financial statements of Maxs Tire Center are provided below.
2012
2011
Inventory
$ 55,000
$ 46,000
Cost of sales
120,000
110,000
Total assets
500,000
490,000
Cash flow from operations
320,000
289,000
Net sales
390,000
360,000
Capital expenditures
15,000
13,000
Refer to the selected data provided for Maxs Tire Center. What is Maxs inventory turnover in 2012?
56. Maxs Tire Center Company
Selected data from the financial statements of Maxs Tire Center are provided below.
2012
2011
Inventory
$ 55,000
$ 46,000
Cost of sales
120,000
110,000
Total assets
500,000
490,000
Cash flow from operations
320,000
289,000
Net sales
390,000
360,000
Capital expenditures
15,000
13,000
Refer to the selected data provided for Maxs Tire Center. What is Maxs days-in-inventory ratio in 2012?
57. Inventory turnover:
58. The days-in-inventory ratio:
59. Augustus, Inc. buys designer clothing to sell in its retail stores. Since much of the merchandise comes from
New York and Europe, Augustus must pay freight charges to get the merchandise shipped in. Which of the
following statements must be true?
60. How are purchase returns and purchase discounts recorded by a company using the periodic inventory
system?
61. Ahi Corporation purchased merchandise on account from Yudder Inc. on December 12, 2012. On December
13, 2012, Ahi returned damaged merchandise to Yudder and was granted an adjustment on its account. Ahi uses
the periodic inventory system. What effect does the merchandise return have on Ahi's accounting equation?
62. Shelton Brothers, Inc.
Shelton Brothers uses a periodic inventory system. It purchased merchandise from BXP on account Inc. on July
7, 2012, for $15,000. The credit terms were 1/10, n/30. Shelton paid the amount due on July 15.
Refer to the information provided for Shelton Brothers, Inc. What effect does recording the purchase of
merchandise on July 7, 2012, have on Shelton's accounting equation?
63. Refer to the information provided for Shelton Brothers, Inc. The effect of recording the payment on July
15th will include:
64. Entee Corporation
Entee Corporation uses a periodic inventory system. The following information is available for the month of
November.
Nov.
1
On hand, 50 units at $15 each
$ 750.00
5
Purchased, 115 units at $15.10 each
1,736.50
16
Purchased, 75 units at $15.20 each
1,140.00
Total cost of goods available for sale
$3,626.50
30
On hand, 90 units
Refer to the information provided for Entee Corporation. How many units did Entee sell during November?
65. Entee Corporation
Entee Corporation uses a periodic inventory system. The following information is available for the month of
November.
Nov.
1
On hand, 50 units at $15 each
$ 750.00
5
Purchased, 115 units at $15.10 each
1,736.50
16
Purchased, 75 units at $15.20 each
1,140.00
Total cost of goods available for sale
$3,626.50
30
On hand, 90 units
Refer to the information provided for Entee Corporation. If Entee uses the FIFO inventory costing method, the amount assigned to the November
30th inventory would be:
66. Entee Corporation
Entee Corporation uses a periodic inventory system. The following information is available for the month of
November.
Nov.
1
On hand, 50 units at $15 each
$ 750.00
5
Purchased, 115 units at $15.10 each
1,736.50
16
Purchased, 75 units at $15.20 each
1,140.00
Total cost of goods available for sale
$3,626.50
30
On hand, 90 units
Refer to the information provided for Entee Corporation. If Entee uses the LIFO inventory costing method, the cost of goods sold for November
would be:
67. Entee Corporation
Entee Corporation uses a periodic inventory system. The following information is available for the month of
November.
Nov.
1
On hand, 50 units at $15 each
$ 750.00
5
Purchased, 115 units at $15.10 each
1,736.50
16
Purchased, 75 units at $15.20 each
1,140.00
Total cost of goods available for sale
$3,626.50
30
On hand, 90 units
Refer to the information provided for Entee Corporation. If Entee uses the weighted average cost method, the amount assigned to the November
30th ending inventory would be:
68. Shirey Co.
Shirey uses a periodic inventory system. At the end of January, 20 units were on hand. The following additional
information is available for the month of January.
1
Beginning
inventory: 10
units at $2
each
$ 20
20
Purchased 90
units for $3
each
270
Cost of goods available for sale
290
Refer to the information provided for Shirey. If Shirey uses FIFO inventory costing method, how much is cost of goods sold for January?
69. Shirey Co.
Shirey uses a periodic inventory system. At the end of January, 20 units were on hand. The following additional
information is available for the month of January.
1
Beginning
inventory: 10
units at $2
each
$ 20
20
Purchased 90
units for $3
each
270
Cost of goods available for sale
290
Refer to the information provided for Shirey. If Shirey uses the LIFO inventory costing method, how much is inventory on the balance sheet at the
end of January?
70. Shirey Co.
Shirey uses a periodic inventory system. At the end of January, 20 units were on hand. The following additional
information is available for the month of January.
1
Beginning
inventory: 10
units at $2
each
$ 20
20
Purchased 90
units for $3
each
270
Cost of goods available for sale
290
Refer to the information provided for Shirey. If Shirey uses the weighted average method of inventory costing, how much is cost of goods sold for
January?
71. Billit Corporation
Billit Corporation is a merchandising company. Selected account balances are listed below.
Sales
$500,000
Purchases
225,000
Beginning inventory
16,000
Ending inventory
30,000
Operating expenses
148,000
Income tax expense
10,000
Beginning retained earnings
53,000
Dividends
15,000
Calculate the cost of goods sold for Billit Corporation.
72. Croggins Cane Company has a beginning balance in its inventory account of $15,000 and the ending
balance is $10,000. Cost of goods sold is $80,000. According to the cost of goods sold model, what was the
amount of inventory purchased during the year?
73. Silvermark Enterprises
The following information is from Silvermark's 2012 accounting records.
Gross purchases
$201,000
Transportation-in
8,000
Inventory, January 1, 2012
26,500
Inventory, December 31, 2012
28,100
Purchase returns and allowances
9,000
Refer to the information provided for Silvermark Enterprises. How much will Silvermark report as net purchases for 2012?
74. Silvermark Enterprises
The following information is from Silvermark's 2012 accounting records.
Gross purchases
$201,000
Transportation-in
8,000
Inventory, January 1, 2012
26,500
Inventory, December 31, 2012
28,100
Purchase returns and allowances
9,000
Refer to the information provided for Silvermark Enterprises. Using the cost of goods sold model, how much will Silvermark report as its cost of
goods sold in its 2012 income statement?
75. If a company does not update the inventory and cost of goods sold accounts during the period, it means
company is using:
76. Delry Appliances
On August 1, 2012, Delry Appliances purchased 75 refrigerators for $45,000 cash and also paid $1,500
transportation costs related to this purchase. On the same date, Delry purchased 100 dishwashers for $20,000 on
credit; however, the seller paid the $1,200 freight. The credit terms for the dishwashers were 2/10, n/30. On
August 3rd, Delry determined that 5 of the refrigerators were defective, so they were returned to the seller.
Delry paid for the dishwashers on August 9th. On August 10th, Delry purchased 90 microwave ovens for
$9,000 on credit with terms 1/10, n/30. The seller paid the freight. Delry paid for the microwave ovens on
August 21st. Delry uses a perpetual inventory system.
Refer to the information presented for Delry Appliances. Prepare all of Delry's journal entries for August.
77. Delry Appliances
On August 1, 2012, Delry Appliances purchased 75 refrigerators for $45,000 cash and also paid $1,500
transportation costs related to this purchase. On the same date, Delry purchased 100 dishwashers for $20,000 on
credit; however, the seller paid the $1,200 freight. The credit terms for the dishwashers were 2/10, n/30. On
August 3rd, Delry determined that 5 of the refrigerators were defective, so they were returned to the seller.
Delry paid for the dishwashers on August 9th. On August 10th, Delry purchased 90 microwave ovens for
$9,000 on credit with terms 1/10, n/30. The seller paid the freight. Delry paid for the microwave ovens on
August 21st. Delry uses a perpetual inventory system.
Refer to the information presented for Delry Appliances. On August 12th, Delry sold 10 dishwashers to
customers for $550 each. Delry paid $200 for these dishwashers when it purchased them from the supplier on
August 1st.
Record the journal entries for this sale.
78. The following inventory transactions occurred at Erill, Inc. Erill uses a perpetual inventory system.
October 2
Purchased 50 units of inventory from a supplier on credit. The goods cost $30 each and the credit terms were 2/10, n/15.
October 4
Returned 5 units of inventory to the supplier for credit on account.
October 6
Sold 15 units for $50 each to customers for cash.
October 11
Paid the supplier for one-half of the inventory purchased on October 2nd.
October 17
Paid the remaining balance owed to the supplier.
Record the appropriate journal entry for each of these transactions for Erill.
79. Trenton Sports Novelties has the following information related to purchases and sales of one of its popular
products, autographed photographs of the local soccer star, Burt Hanx. Each photograph is unique, so the
inventory is accounted for under the specific identification method.
December
1
Beginning inventory, 4 units at $50 each
3
Purchase, 6 units at $52 each
11
Sale, 8 units for $77 each
20
Purchase, 5 units for $54 each
27
Purchase, 5 units for $55 each
29
Sale, 8 units for $77 each
A review of purchase and sale information reveals that the following units remain in ending inventory at the end of the month:
80. Geoffry Hesse Exports
The following data are available for one of the products sold by Geoffry Hesse Exports, which uses a perpetual
inventory system.
July
1
Beginning inventory, 1,000 units at $2 each
$2,000
5
Purchased 2,000 units at $2.75 each
5,500
10
Sold 2,500 units for $16 each
15
Purchased 2,000 units at $4 each
8,000
25
Sold 1,500 units for $12 each
31
Ending inventory, 1,000 units
Refer to the information provided for Geoffry Hesse Exports. If the FIFO method of inventory costing is used, determine the following amounts:
A)
Cost of goods sold for the units sold on July 10th?
B)
Ending inventory on July 31st?

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