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.