33) Garza Company had sales of $135,000, sales discounts of $2,000, and sales re

Question

33) Garza Company had sales of $135,000, sales discounts of $2,000, and sales returns of $3,200. Garza Company's net sales equals: 33). A) $129,800. B) $133,000. C) $135,000. D) $5,200. E) $140,200. 34) A company uses the periodic inventory system and had the following activity during the current monthly period. November 1: Beginning inventory 100 units @ $20 November 5: Purchased 100 units @ $22 November 8: Purchased 50 units @ $23 November 16: Sold 200 units @ $45 November 19: Purchased 50 units @ $25 Using the weighted-average inventory method, the company's ending inventory would be: 34). A) S4,400 B) $2,250 C) $2,000 D) $2,200 E) $2,400 35) Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $185,000, expenses of $103,700, and withdrew $18,000 from the business during the current year. The owner's capital account before closing had a balance of $297,000. The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is: 35). A) Debit T. Westmont, Capital $63,300; credit Income Summary $63,300 B) Debit Income Summary $63,300; credit T. Westmont, Capital $63,300 c) Debit T. Westmont, Capital $81,300; credit Income Summary $81,300 D) Debit T. Westmont. Capital $297,000; credit Income Summary $297,000 E) Debit Income Summary $81,300, credit T. Westmont, Capital $81,300

Explanation / Answer

33. Answer : A. $129800

Sales $135000

sales discounts ($2000)

sales returns and allowances ($3200)

Net sales $129800.

34. Answer : D. $2200

Units available for sale 300 units

Units sold 200 units

Units in ending inventory 100 units

Cost of goods available for sale = 100 units * $20 + 100 units * $22 + 50 units * $23 + 50 units * $25

= $2000 + $2200 + $1150 + $1250

= $6600

Weighted average cost per unit = $6600 / 300 units

= $22

Ending inventory = 100 units * $22

= $2200.

35. Answer : E.

Income summary $81300

To Westmont capital $81300

$81300 = $185000 - $103700.

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