Exam 4: Accounting for Merchandising Operations

A company had cash sales of $49,527, credit sales of $38,540, sales returns and allowances of $7,100 and sales discounts of $4,375. The company's net sales for this period equal:

Quick assets include cash, inventory and current receivables.

A company has sales of $2,530,000, sales discounts of $200,000, sales returns and allowances of $323,000, shipping charges of $115,000, sales commissions of $234,000, net income totaled $863,500, and cost of goods sold of $1,012,000. What is the gross profit/margin for the period?

A company had sales of $695,000 and its cost of goods sold of $278,000. Its gross margin equals:

Purchase discounts are the same as trade discounts.

A company's net sales were $676,600, its cost of good sold was $236,810 and its net income was $33,750. Its gross margin ratio equals:

A single-step income statement includes cost of goods sold as another expense and shows only one subtotal for total expenses.

Assets tied up in inventory are referred to as non productive assets.

A ___________ inventory system updates the accounting record for inventory only at the end of a period.

Describe the recording process (including costs) for purchasing merchandise inventory using a perpetual inventory system.

Successful use of a just-in-time inventory system can narrow the gap between the acid-test and the current ratio.

A company has the following accounts. What is the acid test ratio? Cash \ 6,754 Dividends \ 2,000 Accounts receivable 13,733 Consulting fees earned 13,718 Office supplies 2,625 Rent expense 3,673 Land 37,153 Salaries expense 6,642 Office equipment 14,535 Telephone expense 560 Accounts payable 6,463 Miscellaneous expense 280 Common stock 54,490 Retained Earnings 13,847

A company has sales of $1,500,000, sales discounts of $102,000, sales returns and allowances of $123,000, shipping charges of $15,000, sales commissions of $34,000,net income totaled $263,500, and cost of goods sold of $420,000. What is the net sales amount for the period?

Steve's Skateboards uses the periodic inventory system and had the following sales transactions during April: Prepare the journal entries that Steve's Skateboards must make to record these transactions.

Cost of goods sold:

Under the perpetual inventory system, the cost of merchandise purchased is recorded in the Purchases account.

The profit margin ratio is gross margin divided by total assets.

ABC Corporation had total quick assets $5,888,000, current assets $11,700,000 and current liabilities $8,000,000. Its acid-test ratio equals:

Merchandise inventory is reported in the long-term assets section of the balance sheet.

Which of the following accounts would be closed out with a debit?