ACCT201 ColoradoTech Financial Accounting MCQ Quiz 2 Help Questions are focus on ch4-ch6. Due on 03/18/2019 15:00 pm Quiz Name TRUE/FALSE. Write ‘T’ if the

ACCT201 ColoradoTech Financial Accounting MCQ Quiz 2 Help Questions are focus on ch4-ch6. Due on 03/18/2019 15:00 pm Quiz
Name
TRUE/FALSE. Write ‘T’ if the statement is true and ‘F’ if the statement is false.
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1) A company uses the perpetual inventory method. Which of the following entries would be made
to record a sale of inventory on account?
A) The accounting entry would be a debit to Accounts payable and a credit to Purchases.
B) The accounting entry would be a credit to sales and debit to A/R; and a corresponding
debit to inventory and credit to COGS
C) The accounting entry would be a debit to Inventory and a credit to COGS.
D) The accounting entry would be a credit to sales and debit to AR and a debit to COGS
and credit to Inventory.
SHORT ANSWER.
2) A company h a s b e g i n n i n g inventory of 2 units at 10/each. In order: A purchase of 3 units at 13.00/each
and a purchase of 10 units at $15.00 each. The company sold 11 units at $25.00/each. Book all entries assuming
FIFO. The terms were 2/10, N30. The customer paid within 5 days.
.
3) Sales revenues were $20,000, Sales returns and allowances were $300, Sales discounts were $700,
Cost of goods sold were $12,000, and all other expenses totaled $4,500. What are net sales?
1
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
4) Under which of the following inventory costing methods is the cost of goods sold based on the cost of
the oldest purchases?
A) Average-cost
B) Specific-unit-cost
C) First-In, First-Out
D) Last-In, First-Out
5) Under which of the following inventory costing methods is ending inventory based on the cost of
the oldest purchases?
A) First-In, First-Out
B) Average-cost
C) Specific-unit-cost
D) Last-In, First-Out
SHORT ANSWER.
6) Santa Fe Tile Company had the following inventory purchases and sales during the month
of May. The company uses the periodic inventory method.
Purchases
Date
Units
May 1
100
5
200
10
15
100
20
150
25
30
160
710
Totals
Unit Cost
$4
5
Total
$400
1,000
6
7
600
1,050
8
1,280
$4,330
Sales
Units
Unit Price
Total
100
$10
$1,000
200
11
$2,200
300
$3,200
If Santa Fe uses FIFO costing, how much was the Cost of goods sold for the month?
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
7) Which of the following amounts would be reported for Inventory on the balance sheet if the cost of
an item is $80, the current selling price is $100, and the current replacement cost (NRV) is $75?
A) $100
B) $75
C) $80
D) The average of $75 and $80
2
Long Answer (prepare income statement and balance sheet)
8. ABC Co. Sales were 210,000 before a 10,000 return. COGS were 150,000. Other operating
expenses Were 20,000. Retained earnings had a beginning of the year balance of 25,000.
Dividends paid were 5,000. The end of year balances are as follows: Cash 50,000; Accounts
Receivable had an ending 80,000 balance; Accumulated depreciation had a 60,000 balance;
allowance for doubtful accounts had a 20,000 ending balance. Inventory had a 40,000 balance;
Equipment a 160,000 balance. . Accounts Payable 25,000; Salary Payable 20,000 Unearned revenue
a 5,000 balance; common stock a $150,000 balance. Prepare a balance sheet and Income Statement
for 12/31/XX.
3
SHORT ANSWER.
9) Santa Fe Tile Company had the following inventory purchases and sales during the month
of May. The company uses the periodic inventory method.
Purchases
Date
Units
May 1
100
5
200
10
15
100
20
150
25
30
160
710
Totals
Unit Cost
$4
5
Total
$400
1,000
6
7
600
1,050
8
1,280
$4,330
Sales
Units
Unit Price
Total
100
$10
$1,000
200
11
$2,200
300
If Santa Fe uses FIFO costing, how much was the Ending inventory balance?
4
$3,200
10) Santa Fe Tile Company had the following inventory purchases and sales during the month
of May. The company uses the periodic inventory method.
Purchases
Date
Units
May 1
100
5
200
10
15
100
20
150
25
30
160
710
Totals
Unit Cost
$4
5
Total
$400
1,000
6
7
600
1,050
8
1,280
$4,330
Sales
Units
Unit Price
Total
100
$10
$1,000
200
11
$2,200
300
$3,200
If Santa Fe uses LIFO costing, how much was the Cost of goods sold for the month?
11) Santa Fe Tile Company had the following inventory purchases and sales during the month
of May. The company uses the periodic inventory method.
Date
May 1
5
10
15
20
25
30
Totals
Purchases
Units
100
200
Unit Cost
$4
5
Total
$400
1,000
100
150
6
7
600
1,050
160
710
8
1,280
$4,330
Sales
Units
Unit Price
Total
100
$10
$1,000
200
11
$2,200
300
$3,200
If Santa Fe uses LIFO costing, how much was the Ending inventory balance?
5
12) Samson Company had the following balances and transactions during 2014.
Beginning inventory
March 10
June 10
October 30
10 units at $70
Sold 8 units
Purchased 20 units at $80
Sold 15 units
What would the company’s inventory amount be on the December 31, 2014 balance sheet if
the average-costing method is used if inventory is updated continuously? (Answer s h o u l d
b e rounded to the nearest dollar.)
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
13) A company uses periodic inventory in connection with FIFO costing. The company began the year
with zero inventory balance. They had the following transactions during the year:
Purchased 50 units at $4.00 per unit
Purchased 100 units at $4.10 per unit
Sold 80 units at a price of $12.00 per unit
Purchased 60 units at $3.20 per unit
Sold 75 units at a price of $12.75 per unit
At the end of the year, they counted the inventory and found 55 units remaining. How much was
the Cost of goods sold for the year? (Please round to the nearest whole dollar.)
A) $626
B) $541
C) $680
D) $582
SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question.
14) The following information is available for Matt’s Unlimited Company for the current
month. What is the adjusted book balance on the bank reconciliation?
Book balance end of the month
Outstanding checks
Deposits in transit
Service charges
Interest revenue
$5,575
584
2,500
75
25
6
15) A company received a bank statement showing a balance of $62,300. Reconciling items were
outstanding checks of $1,450 and a deposit in transit of $8,500. What is the company’s adjusted
bank balance?
A) $60,850
B) $69,350
C) $72,250
D) $70,850
16. Ace Co. prepared an aging of its accounts receivable at December 31, 2018 and determined that the
net realizable value of the receivables was $600,000. Additional information is available as follows:
Allowance for uncollectible accounts at 1/1/18—credit balance
Accounts written off as uncollectible during 2018
Accounts receivable at 12/31/18
$ 68,000
46,000
650,000
For the year ended December 31, 2018, Ace’s bad debt expense (journal entry) would be
Nenn Co.’s allowance for uncollectible accounts was $190,000 at the end of 2017 and
$180,000 at the end of 2016. For the year ended December 31, 2017, Nenn reported bad debt
expense of $26,000 in its income statement. What amount did Nenn debit in 2017 to write off
actual bad debts?
17.
a.
b.
c.
d.
e.
$10,000
$16,000
$26,000
$36,000
None of the above
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18. The following accounts were abstracted from Starr Co.’s unadjusted trial balance at
December 31, 2018:
Accounts receivable
$750,000
Allowance for uncollectible accounts
$8,000
Net credit sales
$3,000,000
Starr estimates that 4% of the gross accounts receivable will become uncollectible. After adjustment at
December 31, 2018, the allowance for uncollectible accounts should have a credit balance of
a.
b.
c.
d.
e.
$120,000.
$112,000.
$38,000.
$30,000.
None of the above
19. AR unadjusted ending balance was $210,000. A4DA beginning balance was $5,000.
Adjusting entries included a write off for a $10,000. After adjusting entries an examination
of Accounts receivable suggested that 20% of the adjusted balance is current with an
expected uncollectible rate of 1%. 40% of the adjusted balance is past due with an expected
uncollectible rate of 5%. The remaining adjusted balance is severely past due and has an
uncollectible rate of 10%. Prepare adjusting entries for bad debt and write-offs.
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20.
On 1/1 ABC issued 100,000 shares of stock for $2,000,000 in cash.
On 3/1 ABC Prepaid a year’s worth of rent. The rent is $3,000 per month.
During the year – ABC purchased the following inventory items in the following order: 20,000 units at
$1.00/per unit. 30,000 units at $1.50/unit. 50,000 units at $1.75/unit; and 30,000 units at $2.00/unit.
These purchases were made on account.
ABC purchased equipment for $100,000 signing a 5% note. Interest only is due each January 1 and the
loan face is due in 3 years. ABC purchased $30,000 supplies with cash.
ABC sold inventory over the year. ABC uses the periodic LIFO method. ABC sold 72,000 units at a price of
$20.00/unit. All of these sales are on credit.
On December 15, we received $50,000 and signed an order to deliver inventory in January.
By year-end 60% of the accounts payable was paid down. $840,000 of the receivable has been received.
At year-end the appropriate depreciation is $10,000. Supplies count revealed that there is only $2,000 of
supplies still on hand. Salaries paid during the year is $30 000. Salaries incurred but not yet paid equals
$5,000. We use a percent of receivable method for estimating bad debt. We estimate that 1% of the
receivable is non-collectible and we wrote off $1,000 at year-end. The tax rate is 21%. We will not
immediately pay the tax but accrue it as a current liability
Prepare all JEs (closing entries), income statement and balance sheet (classified) in good form.
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