Question 1

Given the following data, what is gross margin? $\begin{array} { | l | r | } 
\hline \text { Sales revenue } & \$ 950,000 \
\hline \text { Beginning inventory } & 150,000 \
\hline \text { Ending inventory } & 230,000 \
\hline \text { Purchases } & 720,000 \
\hline
\end{array}$

Accepted Answer

A) $150,000 
B) $640,000 
C) $570,000 
D) $310,000 
A) $150,000 
B) $640,000 
C) $570,000 
D) $310,000

Question 2

Table 6-4
Assume the following data for Burnette Sales for 2019: $$\begin{array} { | c | l | } 
\hline \text { Beginning inventory } & 10 \text { units at } \$ 7 \text { each } \
\hline \text { March } 18 \text { purchase } & 15 \text { units at } \$ 9 \text { each } \
\hline \text { Sale } & 20 \text { units at } \$ 15 \text { each } \
\hline \text { June } 10 \text { purchase } & 20 \text { units at } \$ 10 \text { each } \
\hline \text { Sale } & 12 \text { units at } \$ 15 \text { each } \
\hline \text { October } 30 \text { purchase } & 12 \text { units at } \$ 11 \text { each } \
\hline \text { Sale } & 10 \text { units at } \$ 16 \text { each } \
\hline
\end{array}$$ On December 31, a physical count reveals 15 units on hand.
-Refer to Table 6-4. Assume a perpetual system. Under the moving-weighted-average-cost method, the cost of goods sold for the first sale (20 units)would be valued at:

Accepted Answer

A) $164. 
B) $105. 
C) $115. 
D) $135. 
A) $164. 
B) $105. 
C) $115. 
D) $135.

Question 3

Sam's Corner Store has the following purchase and sales information for one of their inventory items: $\begin{array}{|l|l|c|c|c|}
\hline \text {Date}&& \text {Units} & \text {\$Unit}& \text { Total}\ 
\hline \text { Feb 1 } & \text { Opening inventory } & 10 & \$ 8 & \$ 80 \
\hline \text { Feb 9 } & \text { Purchase } & 25 & \$ 9 & \$ 225 \
\hline \text { Feb 15 } & \text { Sale } & 15 & \$ 15 & \$ 225 \
\hline \text { Feb 17 } & \text { Purchase } & 20 & \$ 11 & \$ 220 \
\hline \text { Feb 25 } & \text { Sale } & 10 & \$ 16 & \$ 160 \
\hline
\end{array}$
 Required:
For (a)and (b)assume the company uses the periodic inventory system.
(a)Calculate the gross profit if the company uses first-in, first-out (FIFO)
(b)Calculate the value of the ending inventory if the company uses weighted average.
For (c)and (d)assume the company uses the perpetual inventory system.
(c)What is the cost of goods sold for the Feb 25 sale if the company uses weighted average to cost the inventory?
(d)What is the value of the ending inventory if the company uses FIFO?

Accepted Answer

For (a)and (b)assume the company uses th

Question 4

Jan-Con Company provides the following information for the month of August. $\begin{array} { | l | l | c | c | c | } 
\hline \text { Date } & & \text { Units } & \$ \text { Unit } & \text { Total } \
\hline \text { Aug 1 } & \text { Opening inventory } & 40 & \$ 30 & \$ 1,200 \
\hline \text { Aug 3 } & \text { Purchase } & 60 & \$ 35 & \$ 2,100 \
\hline \text { Aug 10 } & \text { Sale } & 100 & \$ 60 & \$ 6,000 \
\hline \text { Aug 22 } & \text { Purchase } & 90 & \$ 40 & \$ 3,600 \
\hline \text { Aug 24 } & \text { Sale } & 70 & \$ 70 & \$ 4,900 \
\hline
\end{array}$ Required:
(a)What is the value of the ending inventory assuming the company uses a periodic inventory system and the weighted-average method?
(b)What is the cost of goods sold if the company uses a perpetual inventory system and the FIFO method of valuing inventory?
(c)What is the cost of goods sold if the company uses a perpetual inventory system and the weighted average method of valuing inventory?

Accepted Answer

(a)What is the value of the ending inven

Question 5

Two separate errors affected Satellite City in 2018. The beginning inventory was understated by $28,000 and the ending inventory was understated by $43,000. Net income in 2019 will be:

Accepted Answer

A) overstated by $15,000. 
B) overstated by $43,000. 
C) understated by $43,000. 
D) understated by $71,000. 
A) overstated by $15,000. 
B) overstated by $43,000. 
C) understated by $43,000. 
D) understated by $71,000.

Question 6

If a company uses a perpetual inventory system, it will maintain all the following accounts except:

Accepted Answer

A) cost of goods sold. 
B) inventory. 
C) sales. 
D) purchases. 
A) cost of goods sold. 
B) inventory. 
C) sales. 
D) purchases.

Question 7

Table 6-6 Sam's Wholesale Bikes $\begin{array} { | l | l | } 
\hline  \text { January } 1 \text { inventory balance } & 15 \text { units at } \$ 350 \text { per unit } \
\hline \text { January } 4 \text { purchase } & 50 \text { units at } \$ 375 \text { per unit } \
\hline \text { January } 15 \text { sale } & 40 \text { units at } \$ 550 \text { per unit } \
\hline \text { February } 8 \text { purchase } & 80 \text { units at } \$ 405 \text { per unit } \
\hline \text { February } 15 \text { sale } & 70 \text { units at } \$ 550 \text { per unit } \
\hline
\end{array}$
-Refer to Table 6-6. What is the value of the February ending inventory assuming that Sam's uses the periodic FIFO inventory method?

Accepted Answer

A) $7,500 
B) $17,500 
C) $14,175 
D) $15,875 
A) $7,500 
B) $17,500 
C) $14,175 
D) $15,875

Question 8

Given the following data, what is the gross margin if cost of goods sold is determined using the weighted-average method? $\begin{array} { | l | l | } 
\hline \text { Sales revenue } & 200 \text { units at } \$ 20 \text { per unit } \
\hline \text { Beginning inventory } & 60 \text { units at } \$ 12 \text { per unit } \
\hline \text { Purchases } & 210 \text { units at } \$ 13 \text { per unit } \
\hline
\end{array}$

Accepted Answer

A) $2,556 
B) $1,444 
C) $2,500 
D) $1,500 
A) $2,556 
B) $1,444 
C) $2,500 
D) $1,500

Question 9

Table 6-1
Assume the following data for Burnette Merchandising for 2019: $\begin{array} { | l | l | } 
\hline\text { Beginning inventory } & 10 \text { units at } \$ 7 \text { each } \
\hline \text { March } 18 \text { purchase } & 15 \text { units at } \$ 9 \text { each } \
\hline \text { June } 10 \text { purchase } & 20 \text { units at } \$ 10 \text { each } \
\hline \text { October } 30 \text { purchase } & 12 \text { units at } \$ 11 \text { each } \
\hline
\end{array}$ On December 31, a physical count reveals 15 units in ending inventory.
-Refer to Table 6-1. Assume a periodic inventory system. Under the FIFO method, ending inventory would be valued at:

Accepted Answer

A) $165. 
B) $105. 
C) $162. 
D) $135. 
A) $165. 
B) $105. 
C) $162. 
D) $135.

Question 10

Table 6-4
Assume the following data for Burnette Sales for 2019: $$\begin{array} { | c | l | } 
\hline \text { Beginning inventory } & 10 \text { units at } \$ 7 \text { each } \
\hline \text { March } 18 \text { purchase } & 15 \text { units at } \$ 9 \text { each } \
\hline \text { Sale } & 20 \text { units at } \$ 15 \text { each } \
\hline \text { June } 10 \text { purchase } & 20 \text { units at } \$ 10 \text { each } \
\hline \text { Sale } & 12 \text { units at } \$ 15 \text { each } \
\hline \text { October } 30 \text { purchase } & 12 \text { units at } \$ 11 \text { each } \
\hline \text { Sale } & 10 \text { units at } \$ 16 \text { each } \
\hline
\end{array}$$ On December 31, a physical count reveals 15 units on hand.
-Refer to Table 6-4. Under the FIFO method (assuming a perpetual inventory system), ending inventory would be valued at:

Accepted Answer

A) $162. 
B) $105. 
C) $115. 
D) $135. 
A) $162. 
B) $105. 
C) $115. 
D) $135.

Question 11

Table 6-5
Assume the following data for Kruger Sales for November 2019: $\begin{array}{llcc}
  \text {Beginning inventory Nov. 1   } & 5 \text { units at } \$ 90 \text { each }  \
 \text {Sale Nov. 3  } &3 \text { units at } \$ 120 \text { each } \
 \text {Nov. 6 purchase  } &11 \text { units at } \$ 95 \text { each }\
 \text {  Sale Nov. 8} &4 \text { units at } \$ 120 \text { each }\
 \text { Sale Nov. 9 } & 3 \text { units at } \$ 120 \text { each }\
\end{array}$
 On November 30, a physical count reveals 6 units on hand.
-Refer to Table 6-5. Calculate ending inventory for Kruger Sales assuming the perpetual FIFO cost method is being used.

Accepted Answer

The answer of Table 6-5
Assume the following data for Kruger...

Question 12

Table 6-6 Sam's Wholesale Bikes $\begin{array} { | l | l | } 
\hline  \text { January } 1 \text { inventory balance } & 15 \text { units at } \$ 350 \text { per unit } \
\hline \text { January } 4 \text { purchase } & 50 \text { units at } \$ 375 \text { per unit } \
\hline \text { January } 15 \text { sale } & 40 \text { units at } \$ 550 \text { per unit } \
\hline \text { February } 8 \text { purchase } & 80 \text { units at } \$ 405 \text { per unit } \
\hline \text { February } 15 \text { sale } & 70 \text { units at } \$ 550 \text { per unit } \
\hline
\end{array}$
-Refer to Table 6-6. What is the gross margin for the two months assuming that Sam's uses the periodic inventory FIFO inventory method?

Accepted Answer

A) $4,100 
B) $21,600 
C) $11,600 
D) $18,275 
A) $4,100 
B) $21,600 
C) $11,600 
D) $18,275

Question 13

Table 6-5
Assume the following data for Kruger Sales for November 2019: $\begin{array}{llcc}
  \text {Beginning inventory Nov. 1   } & 5 \text { units at } \$ 90 \text { each }  \
 \text {Sale Nov. 3  } &3 \text { units at } \$ 120 \text { each } \
 \text {Nov. 6 purchase  } &11 \text { units at } \$ 95 \text { each }\
 \text {  Sale Nov. 8} &4 \text { units at } \$ 120 \text { each }\
 \text { Sale Nov. 9 } & 3 \text { units at } \$ 120 \text { each }\
\end{array}$
 On November 30, a physical count reveals 6 units on hand.
-Refer to Table 6-5. Calculate ending inventory for Kruger Sales assuming the perpetual moving-weighted-average-cost method is being used.

Accepted Answer

The answer of Table 6-5
Assume the following data for Kruger...

Question 14

The following data pertain to Stratus Company for the year ended December 31, 2019: $\begin{array}{lr}
\text { Beginning inventory balance } & \$ 245,500 \
\text { Purchases of inventory on credit during year }& 570,000 \
\text { Sales (40\% on credit) during year } & 780,000 \
\text { Cost of goods sold during year } & 550,000
\end{array}$  Required:
1. Calculate the value of ending inventory on December 31, 2019.
2. Determine the gross margin

Accepted Answer

The answer of The following data pertain to Stratus Company...

Question 15

If a company uses a periodic inventory system, which of the following entries is required to record the sale of merchandise on credit?

Accepted Answer

A)  $\begin{array} { | c | } 
\hline \text { Accounts Receivable } \
\hline \text { Sales Revenue } \
\hline
\end{array}$ 
B)  $\begin{array} { | c | } 
\hline \text {Purchases } \
\hline \text { Cost of Goods Sold } \
\hline
\end{array}$ 
C)  $\begin{array} { | r | } 
\hline \text { Cost of Goods Sold } \
\hline \text { Purchases } \
\hline
\end{array}$ 
D)  $\begin{array} { | c | } 
\hline \text { Accounts Payable } \
\hline \text { Sales Revenue } \
\hline
\end{array}$ 
A)  $\begin{array} { | c | } 
\hline \text { Accounts Receivable } \
\hline \text { Sales Revenue } \
\hline
\end{array}$ 
B)  $\begin{array} { | c | } 
\hline \text {Purchases } \
\hline \text { Cost of Goods Sold } \
\hline
\end{array}$ 
C)  $\begin{array} { | r | } 
\hline \text { Cost of Goods Sold } \
\hline \text { Purchases } \
\hline
\end{array}$ 
D)  $\begin{array} { | c | } 
\hline \text { Accounts Payable } \
\hline \text { Sales Revenue } \
\hline
\end{array}$

Question 16

Table 6-6 Sam's Wholesale Bikes $\begin{array} { | l | l | } 
\hline  \text { January } 1 \text { inventory balance } & 15 \text { units at } \$ 350 \text { per unit } \
\hline \text { January } 4 \text { purchase } & 50 \text { units at } \$ 375 \text { per unit } \
\hline \text { January } 15 \text { sale } & 40 \text { units at } \$ 550 \text { per unit } \
\hline \text { February } 8 \text { purchase } & 80 \text { units at } \$ 405 \text { per unit } \
\hline \text { February } 15 \text { sale } & 70 \text { units at } \$ 550 \text { per unit } \
\hline
\end{array}$
-Refer to Table 6-6. What is the cost of goods sold for the two months assuming that Sam's uses the periodic FIFO inventory method?

Accepted Answer

A) $42,225 
B) $56,400 
C) $48,900 
D) $38,900 
A) $42,225 
B) $56,400 
C) $48,900 
D) $38,900

Given the following data, what is gross margin? Sales revenue \ 950,000 Beginning inventory 150,000 Ending inventory 230,000 Purchases 720,000

Two separate errors affected Satellite City in 2018. The beginning inventory was understated by $28,000 and the ending inventory was understated by $43,000. Net income in 2019 will be:

If a company uses a perpetual inventory system, it will maintain all the following accounts except:

Given the following data, what is the gross margin if cost of goods sold is determined using the weighted-average method? Sales revenue 200 units at \ 20 per unit Beginning inventory 60 units at \ 12 per unit Purchases 210 units at \ 13 per unit

If a company uses a periodic inventory system, which of the following entries is required to record the sale of merchandise on credit?

Accounting and the Business Environment

Recording Business Transactions

Measuring Business Income: The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations and the Accounting Cycle

Accounting Information Systems

Internal Control and Cash

Receivables

Property, Plant, and Equipment; Goodwill; and Intangibles

Current Liabilities and Payroll

Filters

Exam 6: Accounting for Merchandise Inventory

Given the following data, what is gross margin? Sales revenue \ 950,000 Beginning inventory 150,000 Ending inventory 230,000 Purchases 720,000

Two separate errors affected Satellite City in 2018. The beginning inventory was understated by $28,000 and the ending inventory was understated by $43,000. Net income in 2019 will be:

If a company uses a perpetual inventory system, it will maintain all the following accounts except:

Given the following data, what is the gross margin if cost of goods sold is determined using the weighted-average method? Sales revenue 200 units at \ 20 per unit Beginning inventory 60 units at \ 12 per unit Purchases 210 units at \ 13 per unit

If a company uses a periodic inventory system, which of the following entries is required to record the sale of merchandise on credit?

Accounting and the Business Environment

Recording Business Transactions

Measuring Business Income: The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations and the Accounting Cycle

Accounting Information Systems

Internal Control and Cash

Receivables

Property, Plant, and Equipment; Goodwill; and Intangibles

Current Liabilities and Payroll

Filters