1. Chen\'s Department Store Chen\'s Department Store is a merchandising company
ID: 2744831 • Letter: 1
Question
1. Chen's Department Store
Chen's Department Store is a merchandising company that uses the periodic inventory system. Selected account balances are listed below:
Refer to the account information for Chen's Department Store:
Calculate Chen's cost of goods purchased:
117,000
103000
90000
84000
2. What effects on a retail store's accounting equation occur when merchandise returned by customers is recorded?
a. Assets and stockholders equity decrease
b. Stockholders equity decreases and liabilities increase
c. Assets and stockholders equity increase
d. Assets decrease and liabilities increase.
3. Floors, Inc. offers terms of 2/10, n/30 to credit customers. Tile Magic Corp. purchased 100 tile cutters with a list price of $20 each on August 5, 2015, on account.
If Tile Magic Corp. pays the amount of the invoice for its purchase on August 14, 2015, how much cash will Floors receive from Tile Magic Corp.?
1764
1800
1960
2000
4. Which of the following items would not be a reconciling item?
a. NSF Check
b. Deposits in transit
c. Canceled Checks
d. Outstanding Checks
5. Which one of the following items would be added to the balance per bank statement in a bank reconciliation?
a. Service Charge
b. Outstanding checks
c. Deposits in Transit
d. Interest on Customer Note
6. How would bank service charges be dealt with in a bank reconciliation?
a. Deducted from bank statement balance
b. Added to company’s book balance
c. Deducted from company’s book balance
d. Added to bank statement balance
1. Chen's Department Store
Chen's Department Store is a merchandising company that uses the periodic inventory system. Selected account balances are listed below:
$175,000 90,000 23,000 17,000 3,000 7,000 4,000 8,000 5,000 Sales Purchases Inventory (begmmmg) Inventory (ending) Purchase returns and allowances Purchase discounts Transportation-in rain Sales discounts Sales retums and allowancesExplanation / Answer
1 Purchases 90000 Purchase Return and Allowances -3000 Purchase Discounts -7000 Transportation in 4000 Cost of Goods Purchased 84000 The correct answer is D. $ 84000 2 The correct answer is C Assets and Stockholders Equity Increases 3 Cash received 100*20*98% 1960 As the payment has been received within 15 days, the discount of 2% will be availed The correct answer is C. 1960 4 C. Canceled Checks
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