Question Details

Business A 654 CHAPTER 5 PART 9

CHAPTER 5 ACCOUNTING FOR MERCHANDISING OPERATIONS

141.	Dawson- Fashions sold merchandise for $40,000 cash during the month of July.  Returns that month totaled $1,000.  If the company- gross profit rate is 40%, Murray- will report monthly net sales revenue and cost of goods sold of
a.	$39,000 and $23,400.
b.	$39,000 and $24,000.
c.	$40,000 and $23,400.
d.	$40,000 and $24,000.


142.	During August, 2014, Baxter- Supply Store generated revenues of $60,000. The company- expenses were as follows: cost of goods sold of $36,000 and operating expenses of $4,000. The company also had rent revenue of $1,000 and a gain on the sale of a delivery truck of $2,000.

Baxter- gross profit for August, 2014 is
a.	$20,000.
b.	$21,000.
c.	$23,000.
d.	$24,000.


	143.	During August, 2014, Baxter- Supply Store generated revenues of $60,000. The company- expenses were as follows: cost of goods sold of $36,000 and operating expenses of $4,000. The company also had rent revenue of $1,000 and a gain on the sale of a delivery truck of $2,000.

Baxter- nonoperating income (loss) for the month of August, 2014 is
a.	$0.
b.	$1,000.
c.	$2,000.
d.	$3,000.


144.	During August, 2014, Baxter- Supply Store generated revenues of $60,000. The company- expenses were as follows: cost of goods sold of $36,000 and operating expenses of $4,000. The company also had rent revenue of $1,000 and a gain on the sale of a delivery truck of $2,000.

Baxter- operating income for the month of August, 2014 is
a.	$20,000.
b.	$21,000.
c.	$23,000.
d.	$24,000.


145.	During August, 2014, Baxter- Supply Store generated revenues of $60,000. The company- expenses were as follows: cost of goods sold of $36,000 and operating expenses of $4,000. The company also had rent revenue of $1,000 and a gain on the sale of a delivery truck of $2,000.

Baxter- net income for August, 2014 is
a.	$20,000.
b.	$21,000.
c.	$23,000.
d.	$24,000.


a146.	In a worksheet for a merchandising company, Inventory would appear in the
a.	trial balance and adjusted trial balance columns only.
b.	trial balance and balance sheet columns only.
c.	trial balance, adjusted trial balance, and balance sheet columns.
d.	trial balance, adjusted trial balance, and income statement columns.


	a147.	The Inventory account balance appearing in a perpetual inventory worksheet represents the
a.	ending inventory.
b.	beginning inventory.
c.	cost of merchandise purchased.
d.	cost of merchandise sold.


a148.	The following information is available for Dennehy Company:
	Sales Revenue	$390,000	Freight-In	$30,000
	Ending Inventory	37,500	Purchase Returns and Allowances	15,000
	Purchases	270,000	Beginning Inventory			45,000

Dennehy's cost of goods sold is
a.	$262,500.
b.	$285,000.

MC. 148	(Cont.)
c.	$292,500.
d.	$345,000.

,
a149.	At the beginning of September, 2014, Stella Company reported Inventory of $8,000. During the month, the company made purchases of $35,600. At September 30, 2014, a physical count of inventory reported $8,400 on hand. Cost of goods sold for the month is
a.	$35,200.
b.	$35,600.
c.	$36,000.
d.	$43,600.

,
a150.	At the beginning of the year, Hunt Company had an inventory of $750,000. During the year, the company purchased goods costing $2,400,000. If Hunt Company reported ending inventory of $900,000 and sales of $3,750,000, the company- cost of goods sold and gross profit rate must be
a.	$1,500,000 and 66.7%.
b.	$2,250,000 and 40%.
c.	$1,500,000 and 40%.
d.	$2,250,000 and 60%.


a151.	During the year, Slick- Pet Shop- inventory decreased by $25,000. If the company- cost of goods sold for the year was $500,000, purchases must have been
a.	$475,000.
b.	$500,000.
c.	$525,000.
d.	Unable to determine.


	a152.	Cost of goods available for sale is computed by adding
a.	beginning inventory to net purchases.
b.	beginning inventory to the cost of goods purchased.
c.	net purchases and freight-in.
d.	purchases to beginning inventory.


a	153.	The Freight-In account
a.	increases the cost of merchandise purchased.
b.	is contra to the Purchases account.
c.	is a permanent account.
d.	has a normal credit balance.


a	154.	Net purchases plus freight-in determines
a.	cost of goods sold.
b.	cost of goods available for sale.
c.	cost of goods purchased.
d.	total goods available for sale.


	a155.	Goldblum Company has the following account balances:
Purchases	$96,000
Sales Returns and Allowances	12,800
Purchase Discounts	8,000
Freight-In	6,000
Delivery Expense	10,000
The cost of goods purchased for the period is
a.	$80,800.
b.	$88,000.
c.	$94,000.
d.	$104,000.

,
a156.	McKendrick Shoe Store has a beginning inventory of $45,000. During the period, purchases were $195,000; purchase returns, $6,000; and freight-in $15,000. A physical count of inventory at the end of the period revealed that $30,000 was still on hand. The cost of goods available for sale was
a.	$189,000.
b.	$204,000.
c.	$219,000.
d.	$249,000.


	a157.	In a periodic inventory system, a return of defective merchandise to a supplier is recorded by crediting
a.	Accounts Payable.
b.	Inventory.
c.	Purchases.
d.	Purchase Returns and Allowances.

a158.	Which one of the following transactions is recorded with the same entry in a perpetual and a periodic inventory system?
a.	Cash received on account with a discount
b.	Payment of freight costs on a purchase
c.	Return of merchandise sold
d.	Sale of merchandise on credit


a159.	The journal entry to record a return of merchandise purchased on account under a periodic inventory system would be
a.	Accounts Payable
		Purchase Returns and Allowances
b.	Purchase Returns and Allowances
		Accounts Payable
c.	Accounts Payable
		Inventory
d.	Inventory
		Accounts Payable


a160.	Under a periodic inventory system, acquisition of merchandise is debited to the
a.	Inventory account.
b.	Cost of Goods Sold account.
c.	Purchases account.
d.	Accounts Payable account.