Exam 5: Merchandising Operations and the Accounting Cycle

Table 5-5 The following items were taken from the December 31, 2019, records of Speedy Boat Company, which uses a periodic inventory system: Salary payable \ 1,100 Sales revenue 480,000 Interest revenue 3,000 Freight in 20,000 Beginning inventory 35,000 Sales discounts 18,000 Purchases of inventory 240,000 Purchase retarns and allowances 35,000 Purchase discounts 10,000 Sales returns and allowances 35,000 Ending inventory 80,000 Operating expenses 85,000 Interest expense 7,000 Owner withdrawals 12,000 -Refer to Table 5-5. The net purchases for Speedy Boat Company are:

Under a perpetual inventory system, the entries to record a $3,400 sales return for undamaged goods on an original cash sale when the merchandise had a cost of $1,500 include a debit to:

The gross margin percentage is determined by dividing the gross margin by the net sales revenue.

Beginning inventory plus net purchases and plus freight in equals:

Fill in the missing amounts for each case in the table presented below: A B C D Beginning inventory \ 6,000 \ 7,200 \ 9,100 Net purchase 9,000 32,700 32,000 Freight in 500 950 1,200 Cost of goods avail. for sale 50,000 17,250 45,600 Ending inventory 5,375 14,850 Cost of goods sold 32,600 14,800

Table 5-5 The following items were taken from the December 31, 2019, records of Speedy Boat Company, which uses a periodic inventory system: Salary payable \ 1,100 Sales revenue 480,000 Interest revenue 3,000 Freight in 20,000 Beginning inventory 35,000 Sales discounts 18,000 Purchases of inventory 240,000 Purchase retarns and allowances 35,000 Purchase discounts 10,000 Sales returns and allowances 35,000 Ending inventory 80,000 Operating expenses 85,000 Interest expense 7,000 Owner withdrawals 12,000 -Refer to Table 5-5. Cost of goods sold for Speedy Boat Company is:

Sales revenue minus sales returns and allowances and sales discounts equals:

Which of the following is true about freight in?

Under a perpetual inventory system, the entry to record a sale on account would include a debit to:

Eastern Outfitters sold $2,500 of inventory to a customer on account, terms 3/15 n/40. Freight terms were FOB shipping point and freight charges totalled $150. The entry to record the sale would include a:

Under a periodic inventory system, which accounts would be closed to income summary with credits?

In a periodic inventory system, the entry to record the purchase of merchandise on account would include a:

If a purchaser returns goods purchased on account to the supplier under a perpetual inventory system, the purchaser would debit:

A single-step format of the income statement will always have fewer sub-totals than the multi-step income statement format.

Table 5-1 Sales revenue \ 480,000 Cost of goods sold 300,000 Sales discounts 20,000 Sales retums and allowances 15,000 Operating expenses 85,000 Interest revenue 5,000 -Referring to Table 5-1, what is the net income?

Table 5-5 The following items were taken from the December 31, 2019, records of Speedy Boat Company, which uses a periodic inventory system: Salary payable \ 1,100 Sales revenue 480,000 Interest revenue 3,000 Freight in 20,000 Beginning inventory 35,000 Sales discounts 18,000 Purchases of inventory 240,000 Purchase retarns and allowances 35,000 Purchase discounts 10,000 Sales returns and allowances 35,000 Ending inventory 80,000 Operating expenses 85,000 Interest expense 7,000 Owner withdrawals 12,000 -Refer to Table 5-5. The net income for Speedy Boat Company is:

Mars Company purchased $2,500 of merchandise on account, terms 3/10 n/60. If payment was made within the discount period, the entry to record the payment under a perpetual inventory system would include a credit to:

In a periodic inventory system, the entry to record the sale of $2,000 of merchandise on account with a cost of $1,400 would include a:

Net sales is equal to sales revenue plus sales returns and minus sales discounts.

A merchandiser purchases inventory on account under a perpetual inventory system with terms of 2/10 n/30. The merchandiser would: