Longoria company purchased merchandise inventory on account


1.

Schumacher Company uses the perpetual inventory system, and it engaged in the following transactions during 2014:

1) Started the business by issuing common stock for $7,590 cash

2) Paid cash to purchase $5,030 of inventory

3) Sold inventory that cost $3,045 for $7,340 cash

4) Incurred and paid operating expenses, $253

Schumacher Company engaged in the following transactions during 2015:

1) Paid cash to purchase $5,875 of inventory

2) Sold inventory that cost $7,090 for $15,330 cash

3) Incurred and paid operating expenses, $506

The gross margin for the year 2014 is:

o $8,240.

o $4,295.

o $8,949.

o $7,340.

2.

Schumacher Company uses the perpetual inventory system, and it engaged in the following transactions during 2014:

1) Started the business by issuing common stock for $7,650 cash

2) Paid cash to purchase $5,050 of inventory

3) Sold inventory that cost $3,075 for $7,400 cash

4) Incurred and paid operating expenses, $255

Schumacher Company engaged in the following transactions during 2015:

1) Paid cash to purchase $5,925 of inventory

2) Sold inventory that cost $7,150 for $15,450 cash

3) Incurred and paid operating expenses, $510

The balance in the Merchandise Inventory account at December 31, 2014 is:

o $430.

o $11,375.

o $1,975.

o $1,465.

3.

Schumacher Company uses the perpetual inventory system, and it engaged in the following transactions during 2014:

1) Started the business by issuing common stock for $7,650 cash

2) Paid cash to purchase $5,050 of inventory

3) Sold inventory that cost $3,075 for $7,400 cash

4) Incurred and paid operating expenses, $255

Schumacher Company engaged in the following transactions during 2015:

1) Paid cash to purchase $5,925 of inventory

2) Sold inventory that cost $7,150 for $15,450 cash

3) Incurred and paid operating expenses, $510

The amount of Retained Earnings at December 31, 2014 is:

o $11,860.

o $4,070.

o $4,325.

o $11,375.

4.

Schumacher Company uses the perpetual inventory system, and it engaged in the following transactions during 2014:

1) Started the business by issuing common stock for $8,070 cash

2) Paid cash to purchase $5,190 of inventory

3) Sold inventory that cost $3,285 for $7,820 cash

4) Incurred and paid operating expenses, $269

Schumacher Company engaged in the following transactions during 2015:

1) Paid cash to purchase $6,275 of inventory

2) Sold inventory that cost $7,570 for $16,290 cash

3) Incurred and paid operating expenses, $538

The gross margin for the year 2015 is:

o $10,015.

o $8,720.

o $4,535.

o $8,182.

5.

Schumacher Company uses the perpetual inventory system, and it engaged in the following transactions during 2014:

1) Started the business by issuing common stock for $7,680 cash

2) Paid cash to purchase $5,060 of inventory

3) Sold inventory that cost $3,090 for $7,430 cash

4) Incurred and paid operating expenses, $256

Schumacher Company engaged in the following transactions during 2015:

1) Paid cash to purchase $5,950 of inventory

2) Sold inventory that cost $7,180 for $15,510 cash

3) Incurred and paid operating expenses, $512

The balance in the Merchandise Inventory account at December 31, 2015 is:

o $718.

o $1,458.

o $740.

o $11,420.

6.

Schumacher Company uses the perpetual inventory system, and it engaged in the following transactions during 2014:

1) Started the business by issuing common stock for $7,650 cash

2) Paid cash to purchase $5,050 of inventory

3) Sold inventory that cost $3,075 for $7,400 cash

4) Incurred and paid operating expenses, $255

Schumacher Company engaged in the following transactions during 2015:

1) Paid cash to purchase $5,925 of inventory

2) Sold inventory that cost $7,150 for $15,450 cash

3) Incurred and paid operating expenses, $510

The amount of Retained Earnings at December 31, 2015 is:

o $4,325.

o $6,640.

o $11,375.

o $11,860.

7.

Assume Beta Company uses the perpetual inventory method and engaged in the following transactions:

1) Purchased $20,000 of merchandise on account under terms 3/10, n/30.

2) Returned $2,000 (list price) of merchandise to the supplier before payment was made.

3) Paid the account payable within the discount period.

4) Sold the merchandise for $26,000 cash.

The amount of gross margin from the four transactions is

o $8,540.

o $8,600.

o $5,460.

o $6,000.

8.

Assume Beta Company uses the perpetual inventory method and engaged in the following transactions:

1) Purchased $8,000 of merchandise on account under terms 3/10, n/30.

2) Returned $800 (list price) of merchandise to the supplier before payment was made.

3) Paid the account payable within the discount period.

4) Sold the merchandise for $10,400 cash.

The net cash flow from operating activities as a result of the four transactions is:

o $3,416.

o $3,200.

o $1,840.

o $2,088.

9.

Longoria Company purchased merchandise inventory on account with a list price of $20,000 and credit terms of 3/10, n/30. What was the net or cash cost for the merchandise?

o $19,600

o $19,400

o $19,880

o $18,000

10.

Barney Company uses the perpetual inventory system. The company purchased $7,250 of merchandise from Bittiker Company under the terms n/30. Barney also paid $290 freight to obtain the goods under terms FOB shipping point. All of the merchandise purchased was sold for $15,500 cash. The amount of gross margin for this merchandise is:

o $8,250.

o $6,960.

o $7,250.

o $7,960.

11.

On January 1, 2014, Shaffer Co. purchased inventory for $3,200 cash with credit terms of 3.00/10, n/30. If Shaffer does not pay within the discount period, what is the effective annual interest rate? (Do not round intermediate calculations and round your final answer to 2 decimal places.)

o 3.60%

o 24.00%

o 10.80%

o 54.75%

12.

Kehoe Co. uses a periodic inventory system. The company had beginning inventory of $1,200 and ending inventory of $600. Kehoe's cost of goods sold was $4,800. Based on this information, Kehoe must have purchased inventory amounting to:

o $5,400.

o $6,600.

o $4,200.

o $4,800.

13.

The following information for the year 2014 is taken from the accounts of Thornwood Company. The company uses the periodic inventory method.

  Inventory, January 1, 2014

$

3,600

  Purchases

 

26,000

  Purchase Returns and Allowances

 

520

  Purchase Discounts

 

260

  Freight on goods purchased under Terms FOB shipping point

 

1,040

  Cost of Goods Sold

 

18,460

Based on this information, the inventory at December 31, 2014 is

o $11,140.

o $10,360.

o $29,860.

o $11,400.

14.

Hanson Company uses a periodic inventory system. For 2014, its beginning inventory was $80,080; purchases of inventory were $364,000; and inventory at the end of the period was $98,280. What was the amount of Hanson's cost of goods sold for 2014?

o $382,200

o $345,800

o $364,000

o $185,640

15.

Royal Company uses the periodic inventory method. The following balances were drawn from the accounts of Royal Company prior to the closing process:

  Sales Revenue

$

4,650

  Beginning Inventory Balance

$

1,240

  Purchase

$

3,100

  Transportation-in

$

155

  Purchases Discounts

$

62

  Ending Inventory Balance

$

1,395

The amount of gross margin appearing on the income statement should be:

o $3,038.

o $4,402.

o $1,395.

o $1,612.

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Cost Accounting: Longoria company purchased merchandise inventory on account
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