Exam 6: Merchandising Operations and the Multistep Income Statement

The following is a listing of some of the balance sheet accounts and all of the income statement accounts for Northview Company as they appear on the company's adjusted trial balance. Accounts Payable \ 30,000 Accounts Receivable 33,000 Inventory 60,000 Advertising Expense 36,000 Cost of Goods Sold 267,000 Delivery Expense 18,000 Income Tax Expense 6,000 Insurance Expense 3,000 Rent Expense 36,000 Sales Revenue 480,000 Sales Discounts 33,000 Sales Returns \& Allowances 57,000 Net sales would be:

On March 12,Pierson Company sold goods that cost $3,500 to Colonade Company for $6,000 on credit.Terms of the sale were 1/10,n/30.Colonade paid the balance due on March 21.What amount of cash did Pierson receive?

If a company returns an item to a supplier,the supplier will record the return as:

A company reported a gross profit percentage of 20% with net sales of $347,800.What is the amount of cost of goods sold?

Which of the following is inventory?

FOB shipping point means that ownership of goods passes to the buyer when the goods leave the seller's place of business.

Two different companies,Vogel and Hatcher,entered into the following inventory transactions during December.Both companies use a perpetual inventory system. December 3 - Vogel Corporation sold inventory on account to Hatcher Corp.for $240,000,terms 2/10,n/30.This inventory originally cost Vogel $160,000. December 8 - Hatcher Corp.returned inventory to Vogel Corporation for a credit of $15,000.Vogel returned this inventory to inventory at its original cost of $10,000. December 12 - Hatcher Corp.paid Vogel Corporation for the amount owed. Required: a.Prepare the journal entries to record these transactions on the books of Vogel Corporation. b.What is the amount of net sales to be reported on Vogel Corporation's income statement? c.What is the Vogel Corporation's gross profit percentage?

A company has gross profit of $58,300 and a gross profit percentage of 25%.What were the company's net sales?

Sales returns and allowances:

McQueen,Inc.buys premium ice cream at a cost of $3.00 a gallon and sells it for $8 a gallon.Selling,general,and administrative expenses are $1.50 per gallon.Which of the following statements is correct?

On July 1,Ruth Co.sold inventory costing $9,000 to Diana,Inc.for $12,000,terms 2/10,n/30.Both companies use the net method to account for sales discounts.If Diana pays within the discount period,what journal entry will be recorded by Ruth Company when payment is received?

Orbit,Inc.has sales of $28,000,beginning inventory of $3,500,purchases of $17,500,and ending inventory of $4,900.The cost of goods sold is:

Gross profit equals:

The receipt of cash is one of the operating activities of:

Which of the following statements about the multistep income statement is not correct?

Broadmor's beginning inventory was $9,000.During the month,the company purchased an additional $45,000 of inventory and sold goods that cost $36,000.Ending inventory was:

Neakanie Industries sells specialized mountain bikes.Each specialized bike purchased includes free maintenance service for 12 months.The price of the specialized bike is $1,000.When sold separately,a maintenance contract is $200 and a comparable but non-specialized bike is $600.Which of the following is correct?

Beginning inventory plus purchases minus ending inventory equals:

Which of the following statements about gross profit is correct?

Under the periodic inventory system: