22-Using the following information, what is the amount of merchandise avaible fo

ID: 2380999 • Letter: 2

Question

22-Using the following information, what is the amount of merchandise avaible for sale?

Purchases $32,000

Purchases discounts $960

Merchandise inventory September 1 5,700

Merchandise inventory September 30 6,370

Sales returns and allowances 910

Sales 63,000

Purchases returns and allowances 1,200

Freight In 1,040

A. 36,580

B. 35,540

C. 34,500

D. 37,700

23-The following units of an inventory item were available for sale during the year:

Beginning Inventory 10 units at $55

First Purchase 25 units at 60

Second Purchase 30 units at 65

Third Purchase 15 units at 70

The firm uses the periodic inventory system. During the year, 60 units of the item were sold.

The value of ending inventory using FIFO is:

a. $1,375

b. $1,250

c. $1,350

d. $1,150

25- A $135 petty cash fund has cash of $28 and receipts of $110. The journal entry to replenish the account would include a

a. debit to Cash for $110.

b. credit to Cash Over and Short for $3.

c. credit to Cash for $82.

d. credit to Petty Cash for $110.

26- Stevens Company started the year with an inventory cost of $145,000. During the month of January they purchased inventory that cost of $53,000. January sales totaled $140,000. Estimated gross profit is 35%. The estimated ending inventory as of January 31 is

a. $58,000

b. $107,000

c. $69,300

d. $91,000

27- If the direct write-off method of accounting for uncollectible receivables is used, what general ledger account is debited to write off a customer's account as uncollectible?

a. Uncollectible Accounts Receivable

b. Bad Debts Expense

c. Allowance for Doubtful Accounts

d. Accounts Receivable

28- An aging of a company's accounts receivable indicates the estimate of uncollectible receivables totals $7,900. If Allowance for Doubtful Accounts has a $700 credit balance, the adjustment to record the bad debt expense for the period will require a

a. credit to Allowance for Doubtful Accounts for $700.

b. debit to Bad Debt Expense for $7,200.

c. debit to Bad Debt Expense for $7,900.

d. debit to Bad Debt Expense for $8,600.

29-A retailer purchases merchandise with a catalog list price of $25,000. The retailer receives a 30% trade discount and credit terms of 2/10, n/30. What amount should the retailer debit to the Merchandise Inventory account?

a. $17,500

b. $17,250

c. $25,000

d. $7,500

30- On June 1, 2014, Aaron Company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of 3 years and 30,000 hours.

Using straight line depreciation, calculate depreciation expense for the first year.

a. $12,500

b. $40,000

c. $30,000

d. $17,500

32- During 2010, Tempo Inc has monthly cash expenses of $115,000. On December 31, 2010, their cash balance is $1,437,500. The ratio of cash to monthly cash expenses is

a. 12.5

b. 8.0

c. 11.5

d. 87.5

33- When using the allowance method to estimate uncollectible accounts receivable based on an analysis of receivables shows that $640 of accounts receivables are uncollectible. The Allowance for Doubtful Accounts has a debit balance of $110. The adjusting entry at the end of the year will include a credit to Allowance for Doubtful Accounts in the amount of:

a. $110

b. $530

c. $750

d. $640

Explanation / Answer