Accounting Final Exam with correct answers graded A+ 2023

A company has sales of $695,000 and cost of goods sold of $278,000. Its gross profit equals - 417,000 (Gross Margin= Sales-Cost of Goods Sold) Merchandise inventory - is a current asset The current period's ending inventory is - The next period's beginning inventory Beginning inventory plus net purchases is - Merchandise (goods) available for sale A company uses the perpetual inventory system and recorded the following entry: Accounts Payable 2,500 Merchandise Inventory 50 Cash 2,450 This entry reflects a - Payment of the account payable less a 2% cash discount taken A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $200 worth of merchandise. On July 28, it paid the full amount due. The correct journal entry to record the purchase on July 5 is - Debit Merchandise Inventory $1,800; credit Accounts Payable $1,800 A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $200 worth of merchandise. On July 28, it paid the full amount due. The correct journal entry to record the merchandise return on July 7 is - Debit Accounts Payable $200; credit Merchandise Inventory $200 A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $200 worth of merchandise. On July 28, it paid the full amount due. The correct journal entry to record the payment on July 28 is - Debit Accounts Payable $1,600; credit Merchandise Inventory $32; credit Cash $1,568 A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $200 worth of merchandise. On July 8, it paid the full amount due. The amount of the cash paid on July 8 equals: - 1568 (Cash Paid= (1800 - 200) * .98=1568 On February 3, Smart Company sold merchandise in the amount of $5,800 to Truman Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Smart uses the perpetual inventory system. Truman pays the invoice on February 8, and takes the appropriate discount. The journal entry that Smart makes on February 8 is: - Cash Debit 5,684 Sales discounts Debit 116 Accounts receivable Credit 5800 During a period of steadily rising costs, the inventory valuation method that yields the highest reported net income is - FIFO method The inventory valuation method that tends to smooth out erratic changes in costs is - Weighted Average The inventory valuation method that results in the lowest taxable income in a period of inflation is - LIFO Method The inventory turnover ratio is calculated as - Cost of goods sold divided by average merchandise inventory Perfection Company had cost of goods sold of $853,000, ending inventory of $70,500, and average inventory of $71,600. Its inventory turnover equals - 11.9 Beckenworth had cost of goods sold of $9,421 million, ending inventory of $2,089 million, and average inventory of $1,965 million. Its days' sales in inventory equals - 80.9 days A company had the following purchases during the current year: