1.A 60-day, 12% note for $10,000, dated May 1, is received from a customer on account. The maturity value of the note is
|
a. |
$10,200 |
|
b. |
$10,000 |
|
c. |
$11,200 |
|
d. |
$9,800 |
2. Who pays the freight cost when the terms are FOB destination?
|
a. |
the buyer |
|
b. |
either the buyer or the seller |
|
c. |
the customer |
|
d. |
the seller |
3. Use the following information to answer the following questions.
The Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1.
| Date |
Product Z |
Units |
Cost |
| May 3 |
Purchase |
5 |
$30 |
| May 10 |
Sale |
3 |
|
| May 17 |
Purchase |
10 |
$34 |
| May 20 |
Sale |
6 |
|
| May 23 |
Sale |
3 |
|
| May 30 |
Purchase |
10 |
$40 |
|
|
|
|
Assuming that the company uses the perpetual inventory system, determine the ending inventory for the month of May using the LIFO inventory cost method. Answer
|
a. |
$494 |
|
b. |
$520 |
|
c. |
$422 |
|
d. |
$502 |
7. If the physical count of the inventory revealed $72,000 of merchandise on hand and the inventory records reported $73,200, what would be the necessary adjusting entry to record inventory shortage?
|
a. |
Cost of Merchandise Sold debit $1,200; Merchandise Inventory credit $1,200. |
|
b. |
Merchandise inventory debit $1,200; Cost of Merchandise Sold credit $1,200. |
|
c. |
Merchandise inventory debit $72,000; Cost of Merchandise Sold credit $72,000. |
|
d. |
Cost of Merchandise Sold debit $73,200; Merchandise Inventory credit $72,000. |