Exam 4: Reporting and Analyzing Merchandising Operations

On July 22,a company purchased merchandise inventory at a cost of $5,250 with credit terms 2/10,net 60.If the company borrows money at 12% to pay for the purchase on the last day of the discount period and pays the loan off on the last day of the credit period,what would be the net savings for the company?

A trade discount is:

What is the difference between the periodic and perpetual inventory systems?

Merchandise inventory consists of products that a company acquires to resell to customers.

A company had net sales of $741,800.Its cost of goods sold must have been _________ to yield a gross profit of $282,884.

Schurz Company uses the periodic inventory method.After negotiations with one of its customers concerning the color of the merchandise sold to that customer,Schurz allowed the customer to return all of the merchandise and issued a credit memorandum to that customer for $3,000.The merchandise,which had a cost of $1,750,was restored to inventory.How would the company record this transaction?

A company has net sales of $1,500,000,sales commissions in the amount of $194,000,net income of $366,400,and the gross profit ratio of 60%.What amount is listed as gross profit on the income statement for the period?

A company purchased $1,500 of merchandise on credit with terms 3/15,n/30.How much will be debited to Accounts Payable if the company pays $485 cash on this account within 10 days?

Cost of goods sold is also called cost of sales.

Carlton Company uses the perpetual inventory method.On April 15,Carlton Company purchased merchandise inventory from Dixie Inc.with an invoice price of $70,000 and credit terms of 2/10,n/30.How would Carlton Company record this transaction?

An account used in the periodic inventory system that is not used in the perpetual inventory system is:

Fill in the blanks (a) through (g) for the Hendricks Company for each of the income statements for 2012,2013,and 2014.

A company has the following accounts.What is the acid test ratio?

Alpha Company had cash sales of $94,275,credit sales of $83,450,sales returns and allowances of $1,700,and sales discounts of $3,475.Alpha's net sales for this period equal:

Scuba Company had net income on the current year's income statement in the amount of $800,000,other expense in the amount of $400,000,and a gross profit ratio of 58%.What was the amount of net sales on the income statement?

Mooncake Company uses the perpetual inventory method.The unadjusted balance in the company's Merchandise Inventory account is $120,000 at December 31,2014.A physical count of its inventory on that date discloses that the cost of the merchandise inventory available is $119,000.How would the company record the adjusting entry relating to the inventory shrinkage at December 31,2104?

A company purchased $8,750 worth of merchandise,with terms of 2/10,n/30.The invoice was paid within the cash discount period.Accordingly,the company received a cash discount of _______________.

A multiple-step income statement format shows detailed computations of net sales and other costs and expenses and reports subtotals for various classes of items.

A company's cost of goods sold was $4,000.Determine net purchases and ending inventory given goods available for sale were $11,000 and beginning inventory was $5,000.

On October 1,Robertson Company sold merchandise in the amount of $5,800 to Alberts,with credit terms of 2/10,n/30.The cost of the items sold is $4,000.Robertson uses the periodic inventory system.Alberts pays the invoice on October 8 and takes the appropriate discount.The journal entry that Robertson makes on October 8 is: