Biscuit Bakery had the following activity in its inventory account during August 20X3. $\begin{array}{lllcc} \text { Date } & \text { Activity } & \text { Units } & \begin{array}{c} \text { Cost per } \\ \text { Unit Cost } \end{array} & \text { Total } \\ \hline \text { August 1 } & \text { Beginning inventory } & 100 & \$ 3.00 & \$ 300 \\ \text { August 3 } & \text { Purchase } & 40 & 3.10 & 124 \\ \text { August 7 } & \text { Sale } & 50 & & \\ \text { August 12 } & \text { Purchase } & 50 & 3.20 & 160 \\ \text { August 16 } & \text { Sale } & 70 & & \\ \text { August 23 } & \text { Sale } & 40 & & \\ \text { August 30 } & \text { Purchase } & 60 & 3.30 & 198 \end{array}$ What is the ending inventory at August 31,20X3,for Biscuit Bakery if the company uses periodic weighted average as its inventory valuation method (round all calculations to the nearest penny)?

A) $281.70 B) $285.60 C) $290.22 D) $290.70 E) $294.00 A) $281.70 B) $285.60 C) $290.22 D) $290.70 E) $294.00

Queen Mattresses,Inc.had the following transactions occur during May 20X3.Assume there is no beginning inventory. $\begin{array}{ll} \text { May } 2 & \text { Inventory was purchased on account for } \$ 5,000 \text {, terms } 2 / 10, n / 30 . \\ \text { May } 3 & \text { Inventory costing } \$ 1,000 \text { was returned. } \\ \text { May } 9 & \text { Paid for the inventory. } \\ \text { May 15 } & \text { Inventory costing } \$ 2,200 \text { was sold on account for } \$ 3,800 \text {, terms } 3 / 10, n / 45 \text {, } \\ \text { May } 31 & \text { Closing entries are prepared for the month-end financial statements. } \end{array}$ If Queen Mattresses,Inc.were using a periodic inventory system,what is the journal entry on May 15?

A) $\begin{array}{lll} \text { Accounts Receivable } & 3,800 \\ \quad \text { Sales } & & 3,800 \\ \end{array}$ B) $\begin{array}{lccc} \text { Accounts Receivable } & 3,800 & \\ \quad \text { Sales } & & 3,800 \\ \text { Cost of Goods Sold } &2,134 & \\ \text { Cash Discounts on Sales } &66 & \\ \quad \text { Inventory } & & 2,200\\ \end{array}$ C) $\begin{array}{lccc} \text { Accounts Receivable } & 3,800\\ \quad \text { Sales } & & 3,800 \\ \text { Cost of Goods Sold } &2,200 & \\ \quad \text { Inventory } & & 2,200\\ \end{array}$ D) $\begin{array}{lccc} \text { Accounts Receivable } & 3,686 \\ \text { Cash Discount on Sales } & 114 \\ \quad \text { Sales } & & 3,800 \\ \end{array}$ E) $\begin{array}{lccc} \text { Accounts Receivable } & 3,686 \\ \text { Cash Discount on Sales } & 114 & \\ \quad \text { Sales } & & 3,800 \\ \text { Cost of Goods Sold } & 2,200 &\\ \text { Inventory }& & 2,200 \end{array}$ A) $\begin{array}{lll} \text { Accounts Receivable } & 3,800 \\ \quad \text { Sales } & & 3,800 \\ \end{array}$ B) $\begin{array}{lccc} \text { Accounts Receivable } & 3,800 & \\ \quad \text { Sales } & & 3,800 \\ \text { Cost of Goods Sold } &2,134 & \\ \text { Cash Discounts on Sales } &66 & \\ \quad \text { Inventory } & & 2,200\\ \end{array}$ C) $\begin{array}{lccc} \text { Accounts Receivable } & 3,800\\ \quad \text { Sales } & & 3,800 \\ \text { Cost of Goods Sold } &2,200 & \\ \quad \text { Inventory } & & 2,200\\ \end{array}$ D) $\begin{array}{lccc} \text { Accounts Receivable } & 3,686 \\ \text { Cash Discount on Sales } & 114 \\ \quad \text { Sales } & & 3,800 \\ \end{array}$ E) $\begin{array}{lccc} \text { Accounts Receivable } & 3,686 \\ \text { Cash Discount on Sales } & 114 & \\ \quad \text { Sales } & & 3,800 \\ \text { Cost of Goods Sold } & 2,200 &\\ \text { Inventory }& & 2,200 \end{array}$

Queen Mattresses,Inc.had the following transactions occur during May 20X3.Assume there is no beginning inventory. $\begin{array}{ll} \text { May } 2 & \text { Inventory was purchased on account for } \$ 5,000 \text {, terms } 2 / 10, \text { n } / 30 . \\ \text { May } 3 & \text { Inventory costing } \$ 1,000 \text { was returned. } \\ \text { May } 9 & \text { Paid for the inventory. } \\ \text { May } 15 & \text { Inventory costing } \$ 2,200 \text { was sold on account for } \$ 3,800, \text { terms } 3 / 10,n / 45 \text {. } \\ \text { May } 31 & \text { Closing entries are prepared for the month-end financial statements. } \end{array}$ If Queen Mattresses,Inc.were using a periodic inventory system,what is the journal entry to close sales on May 31?

A) $\begin{array}{lcc} \text { Sales } & 3,800 & \\ \quad \text { Cost of Goods Sold } & &3,800 & \\ \end{array}$ B) $\begin{array}{lccc} \text { Cost of Goods Sold } & 3,800 \\ \quad \text { Sales } & &3,800 & \\ \end{array}$ C) $\begin{array}{lccc} \text { Income Summary } & 3,800 \\ \quad \text { Sales } && 3,800 & \\ \end{array}$ D) $\begin{array}{lccc} \text { Sales } & 3,800\\ \text { Income Summary } && 3,800 \\ \end{array}$ E) No entry is necessary on a monthly basis. A) $\begin{array}{lcc} \text { Sales } & 3,800 & \\ \quad \text { Cost of Goods Sold } & &3,800 & \\ \end{array}$ B) $\begin{array}{lccc} \text { Cost of Goods Sold } & 3,800 \\ \quad \text { Sales } & &3,800 & \\ \end{array}$ C) $\begin{array}{lccc} \text { Income Summary } & 3,800 \\ \quad \text { Sales } && 3,800 & \\ \end{array}$ D) $\begin{array}{lccc} \text { Sales } & 3,800\\ \text { Income Summary } && 3,800 \\ \end{array}$ E) No entry is necessary on a monthly basis.

Queen Mattresses,Inc.had the following transactions occur during May 20X3.Assume there is no beginning inventory. $\begin{array}{ll} \text { May } 2 & \text { Inventory was purchased on account for } \$ 5,000 \text {, terms } 2 / 10, n / 30 . \\ \text { May } 3 & \text { Inventory costing } \$ 1,000 \text { was returned. } \\ \text { May } 9 & \text { Paid for the inventory. } \\ \text { May 15 } & \text { Inventory costing } \$ 2,200 \text { was sold on account for } \$ 3,800 \text {, terms } 3 / 10, n / 45 \text {, } \\ \text { May } 31 & \text { Closing entries are prepared for the month-end financial statements. } \end{array}$ If Queen Mattresses,Inc.were using the perpetual inventory system,what is the journal entry for May 9?

A) $\begin{array}{lll} \text { Accounts Payable } & 4,000 & \\ \quad \text { Inventory } & & 100 \\ \quad \text { Cash } & & 3,900 \\ \end{array}$ B) $\begin{array}{lccc} \text { Accounts Payable } & 4,000& \\ \quad \text { Inventory } & & 80\\ \quad \text { Cash } & & 3,920\\ \end{array}$ C) $\begin{array}{lccc} \text { Accounts Payable } & 5,000& \\ \text { Inventory } & 100\\ \quad \text { Cash } & & 4,900 \\ \end{array}$ D) $\begin{array}{lccc} \text { Accounts Payable } & 4,000 & \\ \quad \text { Cash Discounts on Purchases } & & 100 \\ \text { Cash } & & 3,900 \\ \end{array}$ E) $\begin{array}{lccc} \text { Accounts Payable } & 4000& \\ \quad \text { Cash Discounts on Purchases } &&80 \\ \text { Cash } & &3,920 \end{array}$ A) $\begin{array}{lll} \text { Accounts Payable } & 4,000 & \\ \quad \text { Inventory } & & 100 \\ \quad \text { Cash } & & 3,900 \\ \end{array}$ B) $\begin{array}{lccc} \text { Accounts Payable } & 4,000& \\ \quad \text { Inventory } & & 80\\ \quad \text { Cash } & & 3,920\\ \end{array}$ C) $\begin{array}{lccc} \text { Accounts Payable } & 5,000& \\ \text { Inventory } & 100\\ \quad \text { Cash } & & 4,900 \\ \end{array}$ D) $\begin{array}{lccc} \text { Accounts Payable } & 4,000 & \\ \quad \text { Cash Discounts on Purchases } & & 100 \\ \text { Cash } & & 3,900 \\ \end{array}$ E) $\begin{array}{lccc} \text { Accounts Payable } & 4000& \\ \quad \text { Cash Discounts on Purchases } &&80 \\ \text { Cash } & &3,920 \end{array}$

Given the following data,what is cost of goods sold? \[\begin{array} { l l } \text { Sales revenue } & \$ 10,00 \\ \text { Bpginninginventory } & 3,000 \\ \text { Endinginventory } & 7,000 \\ \text { purchesef of inventory } & 5,000 \end{array}\]

A) $12,000 B) $ 9,000 C) $ 8,000 D) $ 7,000 E) $ 1,000 A) $12,000 B) $ 9,000 C) $ 8,000 D) $ 7,000 E) $ 1,000

Queen Mattresses,Inc.had the following transactions occur during May 20X3.Assume there is no beginning inventory. $\begin{array}{ll} \text { May } 2 & \text { Inventory was purchased on account for } \$ 5,000 \text {, terms } 2 / 10, n / 30 . \\ \text { May } 3 & \text { Inventory costing } \$ 1,000 \text { was returned. } \\ \text { May } 9 & \text { Paid for the inventory. } \\ \text { May 15 } & \text { Inventory costing } \$ 2,200 \text { was sold on account for } \$ 3,800 \text {, terms } 3 / 10, n / 45 \text {, } \\ \text { May } 31 & \text { Closing entries are prepared for the month-end financial statements. } \end{array}$ If Queen Mattresses,Inc.were using the periodic inventory system,what is the journal entry for May 9?

A) $\begin{array}{lll} \text { Accounts Payable } & 4,000 & \\ \quad \text { Inventory } & & 100 \\ \quad \text { Cash } && 3,900 \\ \end{array}$ B) $\begin{array}{lccc} \text { Accounts Payable } & 4000& \\ \quad \text { Inventory } & &80 \\ \quad \text { Cash } && 3,920\\ \end{array}$ C) $\begin{array}{lccc} \text { Accounts Payable } &5000 & \\ \quad \text { Inventory } & &100 \\ \quad \text { Cash } & & 4900 \\ \end{array}$ D) $\begin{array}{lccc} \text { Accounts Payable } &4000 & \\ \quad \text { Cash Discounts on Purchases } &&100 \\ \quad \text { Cash } & & 3,900 \\ \end{array}$ E) $\begin{array}{lccc} \text { Accounts Payable } &4000 & \\ \quad \text { Cash Discounts on Purchases } &&80 \\ \quad \text { Cash } & & 3,920 \\ \end{array}$ A) $\begin{array}{lll} \text { Accounts Payable } & 4,000 & \\ \quad \text { Inventory } & & 100 \\ \quad \text { Cash } && 3,900 \\ \end{array}$ B) $\begin{array}{lccc} \text { Accounts Payable } & 4000& \\ \quad \text { Inventory } & &80 \\ \quad \text { Cash } && 3,920\\ \end{array}$ C) $\begin{array}{lccc} \text { Accounts Payable } &5000 & \\ \quad \text { Inventory } & &100 \\ \quad \text { Cash } & & 4900 \\ \end{array}$ D) $\begin{array}{lccc} \text { Accounts Payable } &4000 & \\ \quad \text { Cash Discounts on Purchases } &&100 \\ \quad \text { Cash } & & 3,900 \\ \end{array}$ E) $\begin{array}{lccc} \text { Accounts Payable } &4000 & \\ \quad \text { Cash Discounts on Purchases } &&80 \\ \quad \text { Cash } & & 3,920 \\ \end{array}$

Exam 7: Inventories and Cost of Goods Sold

Biscuit Bakery had the following activity in its inventory account during August 20X3. Date Activity Units Cost per Unit Cost Total August 1 Beginning inventory 100 \ 3.00 \ 300 August 3 Purchase 40 3.10 124 August 7 Sale 50 August 12 Purchase 50 3.20 160 August 16 Sale 70 August 23 Sale 40 August 30 Purchase 60 3.30 198 What is the ending inventory at August 31,20X3,for Biscuit Bakery if the company uses periodic weighted average as its inventory valuation method (round all calculations to the nearest penny)?

(Multiple Choice)

(Multiple Choice)

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Question 79

Queen Mattresses,Inc.had the following transactions occur during May 20X3.Assume there is no beginning inventory. May 2 Inventory was purchased on account for \ 5,000 , terms 2/10,n/30. May 3 Inventory costing \ 1,000 was returned. May 9 Paid for the inventory. May 15 Inventory costing \ 2,200 was sold on account for \ 3,800 , terms 3/10,n/45 , May 31 Closing entries are prepared for the month-end financial statements. If Queen Mattresses,Inc.were using the periodic inventory system,what is the journal entry for May 9?

(Multiple Choice)

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Question 80

The lower-of-cost-or-market practice is based on the

The journal entry to sell merchandise on account under a periodic inventory system includes a

Using the FIFO method,the earliest purchases of inventory are assumed to be contained

Resale Sports had inventory of $8,000 on Jan 1,20X3,and $12,000 on Dec 31,20X3.Sales for 20X3 were $250,000 and the company's gross profit percentage was 35%.What was the inventory turnover for Resale Sports for 20X3?

An increase in the replacement cost of the inventory held during the current period is called a

If ending inventory is overstated by $3,000 in 20X3,retained earnings at the end of 20X4 will be correctly stated.

If replacement costs rise after the inventory is written down,then the inventory value must be increased.

The specific identification method is frequently used for items with common characteristics,such as tons of coal.

When using a perpetual inventory system,a business will debit inventory and credit cost of goods sold each time a sale is recorded.

Which of the following statements best describes how management selects an inventory valuation method?

The calculation of cost of goods sold under the periodic system is

The cost of goods available for sale is determined by taking the cost of inventory purchased during the year combined with the cost of goods sold.

Given the following data,what is cost of goods sold? Sales revenue \ 10,00 Bpginninginventory 3,000 Endinginventory 7,000 purchesef of inventory 5,000

Accounting: the Language of Business

Measuring Income to Assess Performance

Recording Transactions

Accrual Accounting and Financial Statements

Statement of Cash Flows

Accounting for Sales

Long-Lived Assets

Liabilities and Interest

Stockholders Equity

Intercorporate Investments and Consolidations

Financial Statement Analysis

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