Beginning inventory for Viola Company at January 1, 2012, under the periodic inv

Question

Beginning inventory for Viola Company at January 1, 2012, under the periodic inventory system is $25,000. Other information includes: ending inventory (12/31/12) was $20,000; purchases during 2012 were $40,000; purchases returns and allowances for 2012 were $1,500; purchase discounts for 2012 were $500; and transportation-in was $500. Net sales for 2012 were $80,000, and cash dividends declared and paid on common stock in 2012 were $1,000. The gross margin for Viola Company is $43,500. $36,500. $44,500. $36,000. None of the above.


The CPA firm auditing Denmarrk Company found that net income had been overstated. Which of the following errors could be the cause? Failure to record interest expense accrued on a note payable for the period. Failure to record payment of an account payable on the last day of the year. Failure to make an adjusting entry to record interest accrued on a note receivable. No entry made to record purchase of land for cash on the last day of the year. None of the above. Beginning inventory for Viola Company at January 1, 2012, under the periodic inventory system is $25,000. Other information includes: ending inventory (12/31/12) was $20,000; purchases during 2012 were $40,000; purchases returns and allowances for 2012 were $1,500; purchase discounts for 2012 were $500; and transportation-in was $500. Net sales for 2012 were $80,000, and cash dividends declared and paid on common stock in 2012 were $1,000. The gross margin for Viola Company is $43,500. $36,500. $44,500. $36,000. None of the above.


The CPA firm auditing Denmarrk Company found that net income had been overstated. Which of the following errors could be the cause? Failure to record interest expense accrued on a note payable for the period. Failure to record payment of an account payable on the last day of the year. Failure to make an adjusting entry to record interest accrued on a note receivable. No entry made to record purchase of land for cash on the last day of the year. None of the above. Beginning inventory for Viola Company at January 1, 2012, under the periodic inventory system is $25,000. Other information includes: ending inventory (12/31/12) was $20,000; purchases during 2012 were $40,000; purchases returns and allowances for 2012 were $1,500; purchase discounts for 2012 were $500; and transportation-in was $500. Net sales for 2012 were $80,000, and cash dividends declared and paid on common stock in 2012 were $1,000. The gross margin for Viola Company is $43,500. $36,500. $44,500. $36,000. None of the above.


The CPA firm auditing Denmarrk Company found that net income had been overstated. Which of the following errors could be the cause? Failure to record interest expense accrued on a note payable for the period. Failure to record payment of an account payable on the last day of the year. Failure to make an adjusting entry to record interest accrued on a note receivable. No entry made to record purchase of land for cash on the last day of the year. None of the above. The CPA firm auditing Denmarrk Company found that net income had been overstated. Which of the following errors could be the cause? Failure to record interest expense accrued on a note payable for the period. Failure to record payment of an account payable on the last day of the year. Failure to make an adjusting entry to record interest accrued on a note receivable. No entry made to record purchase of land for cash on the last day of the year. None of the above.

Explanation / Answer

1 Gross margin for Viola Company = 80000-(25000+40000+500-1500-500-20000)= $36500 2 Failure to record interest expense accrued on a note payable for the period.

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