ACCT201 ColoradoTech Financial Accounting MCQ Quiz 2 Help

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Questions are focus on ch4-ch6. Due on 03/18/2019 15:00 pm

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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 7 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. 8 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. 9
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Explanation & Answer

Attached.

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.
.

Description
Beginning inventory
Purchase
Purchase

Units
2
3
10

Amount
20
39
150

Sale
Sale
Sale

2
3
6

50
75
150

Closing inventory

4

60

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?
Sales revenue
Less Cost of goods sold
Gross sales revenue
Less –Sales returns & allowances 300
-Sales discounts 700
-Other expenses 4,500
Net sales

20,000
(12,000)
8,000
(5,500)
2,500

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.

Date
May 1
5
10
15
20
25
30

Totals

Purchases
Units
100
200

Unit Cost
$4...


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