Liberty_University_ACCT_211_Exam_2_Complete_solution

. A company's net sales were $749,600, its cost of goods sold was $247,370 and its net income was $74,750. Its gross margin ratio equals: 2. 3. A company's gross profit (or gross margin) was $88,890 and its net sales were $366,100. Its gross margin ratio is: 4. 5. A company purchased $4,800 worth of merchandise. Transportation costs were an additional $420. The company returned $330 worth of merchandise and then paid the invoice within the 3% cash discount period. The total cost of this merchandise is: 6. 7. Cushman Company had $812,000 in sales, sales discounts of $12,180, sales returns and allowances of $18,270, cost of goods sold of $385,700, and $279,330 in operating expenses. Gross profit equals: 8. 9. Sandoval needs to determine its year-end inventory. The warehouse contains 33,000 units, of which 4,300 were damaged by flood and are not sellable. Another 3,300 units were purchased from Markor Company, FOB shipping point, and are currently in transit. The company also consigns goods and has 5,300 units at a consignee's location. How many units should Sandoval include in its year-end inventory? 10. 11. Grays Company has inventory of 24 units at a cost of $12 each on August 1. On August 3, it purchased 34 units at $10 each. 26 units are sold on August 6. Using the FIFO perpetual inventory method, what amount will be reported as cost of goods sold for the 26 units that were sold? 12. 13. The following information is available for Fenton Manufacturing Company at June 30: 14. Cash in bank account 15. Inventory of postage stamps 16. Money market fund balance 17. Petty cash balance 18. NSF checks from customers returned by bank 19. Postdated checks received from customers 20. Money orders 21. A nine-month certificate of deposit maturing on December 31 of current year 22. Based on this information, Fenton Manufacturing Company should report Cash and Cash Equivalents on June 30 of: 23. 24. If the assets of a company increase by $55,000 during the year and its liabilities increase by $25,000 during the same year, then the change in equity of the company during the year must have been: 25. 26. Determine the net income of a company for which the following information is available for the month of July. 27. Employee salaries expense 28. Interest expense 29. Rent expense 30. Consulting revenue 31. 32. Sanders Co. has total assets of $385 million. Its total liabilities are $100.1 million and its equity is $284.9 million. Calculate its debt ratio. 33. 34. At the beginning of the current year, Snell Co. total assets were $248,000 and its total liabilities were $174,200. During the year, the company reported total revenues of $93,000, total expenses of $76,000 and dividends of $5,000. There were no other changes in equity during the year and total assets at the end of the year were $260,000. The company’s debt ratio at the end of the current year is: 35. 36. The Unadjusted Trial Balance columns of a work sheet total $84,000. The Adjustments columns contain entries for the following: 37. 37. 38. 1. Office supplies used during the period, $1,200. 39. 2. Expiration of prepaid rent, $700. 40. 3. Accrued salaries expense, $500. 41. 4. Depreciation expense, $800. 42. 5. Accrued service fees receivable, $400. 43. 44. The Adjusted Trial Balance columns total is: 45. 46. A physical count of supplies on hand at the end of May for Masters, Inc. indicated $1,250 of supplies on hand. The general ledger balance before any adjustment is $2,100. What is the adjusting entry for office supplies that should be recorded on May 31? 47. 48. A company purchased a new delivery van at a cost of $45,000 on July 1. The delivery van is estimated to have a useful life of 6 years and a salvage value of $3,000. The company uses the straight-line method of depreciation. How much depreciation expense will be recorded for the van during the first year ended December 31? 49. Question 1 50. Using the following year-end information for Bauman, LLC, calculate the current ratio and acid-test ratio: 51. 52. Question 2 53. A company's quick assets are $173,000 and its current liabilities are $151,000. This company's acid-test ratio is 1.15. 54. 55. Question 3 56. Using the following year-end information for Calvin’s Clothing, calculate the current ratio and acid-test ratio for the business: 57. 58. Question 4 59. KLM Corporation's quick assets are $5,929,000, its current assets are $12,075,000 and its current liabilities are $8,025,000. Its acid-test ratio equals: 60. 61. Question 5 62. A company's gross profit was $121,260 and its net sales were $475,900. Its gross margin ratio equals: 63. 64. Question 6 65. A company had net sales of $768,400 and cost of goods sold of $551,770. Its net income was $21,150. The company's gross margin ratio equals: 66. 67. Question 7 68. A company has sales of $385,800 and its gross profit is $162,300. Its cost of goods sold equals: 69. 70. Question 8 71. A company had net sales of $559,000 and cost of goods sold of $352,000. Its gross margin equals $911,000. 72. 73. Question 9 74. Cushman Company had $836,000 in net sales, $365,750 in gross profit, and $209,000 in operating expenses. Cost of goods sold equals: 75. 76. Question 10 77. A company purchased $10,200 of merchandise on June 15 with terms of 3/10, n/45, and FOB shipping point. The freight charge, $600, was added to the invoice amount. On June 20, it returned $960 of that merchandise. On June 24, it paid the balance owed for the merchandise taking any discount it is entitled to. The cash paid on June 24 equals: 78. 79. Question 11 80. A company purchased $8,200 of merchandise on June 15 with terms of 3/10, n/45. On June 20, it returned $410 of that merchandise. On June 24, it paid the balance owed for the merchandise taking any discount it was entitled to. The cash paid on June 24 equals: 81. 82. Question 12 83. A company purchases merchandise with a catalog price of $20,500. The company receives a 30% trade discount from the seller. The seller also offers credit terms of 2/10, n/30. Assuming no returns were made and that payment was made within the discount period, what is the net cost of the merchandise? 84. 85. Question 13 86. Garza Company had sales of $146,200, sales discounts of $2,200, and sales returns of $3,510. Garza Company's net sales equals: 87. 88. Question 14 89. Cushman Company had $842,000 in sales, sales discounts of $12,630, sales returns and allowances of $18,945, cost of goods sold of $399,950, and $289,650 in operating expenses. Net income equals: 90. 91. Question 15 92. Prentice Company had cash sales of $95,200, credit sales of $84,000, sales returns and allowances of $2,075, and sales discounts of $3,850. Prentice’s net sales for this period equal: 93. 94. Question 16 95. Hull Company reported the following income statement information for the current year: 96. The beginning inventory balance is correct. However, the ending inventory figure was overstated by $27,000. Given this information, the correct gross profit would be: 97. 98. Question 17 99. Use the following information for Shafer Company to compute inventory turnover for year 2. 100. 101. Question 18 102. Giorgio had cost of goods sold of $9,625 million, ending inventory of $2,293 million, and average inventory of $2,169 million. Its inventory turnover equals: 103. 104. Question 19 105. Bedrock Company reported a December 31 ending inventory balance of $415,500. The following additional information is also available: 106. The ending inventory balance of $415,500 included $73,900 of consigned inventory for which Bedrock was the consignor. 107. The ending inventory balance of $415,500 included $25,800 of office supplies that were stored in the warehouse and were to be used by the company's supervisors and managers during the coming year. 108. Based on this information, the correct balance for ending inventory on December 31 is: 109. 110. Question 20 111. Jammer Company uses a weighted average perpetual inventory system and reports the following: 112. What is the per-unit value of ending inventory on August 31? (Round your per unit answers to 2 decimal places.) 113. 114. Question 21 115. A company had the following purchases during its first year of operations: 116. On December 31, there were 58 units remaining in ending inventory. These 58 units consisted of 10 from January, 12 from February, 14 from May, 12 from September, and 10 from November. Using the specific identification method, what is the cost of the ending inventory? 117. 118. Question 22 119. Grays Company has inventory of 21 units at a cost of $9 each on August 1. On August 3, it purchased 31 units at $11 each. 23 units are sold on August 6. Using the FIFO perpetual inventory method, what amount will be reported as cost of goods sold for the 23 units that were sold? 120. 121. Question 23 122. A company had beginning inventory of 12 units at a cost of $15 each on March 1. On March 2, it purchased 12 units at $24 each. On March 6 it purchased 7 units at $20 each. On March 8, it sold 28 units for $63 each. Using the FIFO perpetual inventory method, what was the cost of the 28 units sold? 123. 124. Question 24 125. A company’s inventory records report the following in November of the current year: 126. On November 8, it sold 14 units for $36 each. Using the LIFO perpetual inventory method, what was the amount recorded in the cost of goods sold account for the 14 units sold? 127. 128. Question 25 129. A company’s normal selling price for its product is $30 per unit. However, due to market competition, the selling price has fallen to $25 per unit. This company's current inventory consists of 300 units purchased at $26 per unit. Replacement cost has fallen to $23 per unit. Calculate the value of this company's inventory at the lower of cost or market. 130. 131. Question 26 132. The following information is taken from Reagan Company's December 31 balance sheet: 133. If net credit sales for the current year were $612,000, the firm's days' sales uncollected for the year is: (Use 365 days a year.) 134. 135. Question 27 136. The following information is available for Fenton Manufacturing Company at June 30: 137. Based on this information, Fenton Manufacturing Company should report Cash and Cash Equivalents on June 30 of: 138. 139. Question 28 140. At the end of the day, the cash register tape shows $1,160 in cash sales but the count of cash in the register is $1,210. The proper entry to account for this excess is: 141. 142. Question 29 143. Havermill Co. establishes a $500 petty cash fund on September 1. On September 30, the fund is replenished. The accumulated receipts on that date represent $98 for Office Supplies, $187 for merchandise inventory, and $47 for miscellaneous expenses. The fund has a balance of $168. On October 1, the accountant determines that the fund should be increased by $100. The journal entry to record the reimbursement of the fund on September 30 includes a: 144. 145. Question 30 146. Spencer Co. has a $390 petty cash fund. At the end of the first month the accumulated receipts represent $62 for delivery expenses, $203 for merchandise inventory, and $31 for miscellaneous expenses. The fund has a balance of $94. The journal entry to record the reimbursement of the account includes a: 147. 148. Question 31 149. Assume that the custodian of a $555 petty cash fund has $97.50 in coins and currency plus $445.50 in receipts at the end of the month. The entry to replenish the petty cash fund will include: 150. 151. Question 32 152. A company had $54 missing from petty cash that was not accounted for by petty cash receipts. The correct procedure is to: 153. 154. Question 33 155. If a check correctly written and paid by the bank for $322 is incorrectly recorded in the company's books for $272, how should this error be treated on the bank reconciliation? 156. 157. Question 34 158. In the process of reconciling its bank statement for April, Donahue Enterprises' accountant compiles the following information: 159. 160. Question 35 161. Clayborn Company deposits all cash receipts on the day they are received and makes all cash payments by check. At the close of business on May 31, its Cash account shows a debit balance of $29,525. Clayborn's May bank statement shows $25,800 on deposit in the bank. Determine the adjusted cash balance using the following information: 162. 163. Question 36 164. If a check correctly written and paid by the bank for $501 is incorrectly recorded in the company's books for $510, how should this error be treated on the bank reconciliation? 165. 166. Question 37 167. The description of the relation between a company's assets, liabilities, and equity, which is expressed as Assets = Liabilities + Equity, is known as the: 168. 169. Question 38 170. An exchange of value between two entities that yields a change in the accounting equation is called: 171. 172. Question 39 173. Grandmark Printing pays $2,000 rent to the landlord of the building where its facilities are located. How does this transaction affect the accounting equation for Grandmark? 174. 175. Question 40 176. The accounting concept that requires financial statement information to be supported by independent, unbiased evidence is: 177. 178. Question 41 179. The statement of cash flows reports all of the following except: 180. 181. Question 42 182. If a company uses $1,300 of its cash to purchase supplies, the effect on the accounting equation would be: 183. 184. Question 43 185. Identify the account below that is classified as a liability in a company's chart of accounts: 186. 187. Question 44 188. A $15 credit to Sales was posted as a $150 credit. By what amount is the Sales account in error? 189. 190. Question 45 191. Lu Lu’s Catering has a debt ratio equal to .3 and its competitor, Able’s Bakery, has a debt ratio equal to .7. Determine the statement below that is correct. 192. 193. Question 46 194. Identify the correct formula below used to calculate the debt ratio. 195. 196. Question 47 197. Which of the following accounts showing a balance on the post-closing trial balance indicate an error? 198. 199. Question 48 200. Closing entries are required: 201. 202. Question 49 203. The Unadjusted Trial Balance columns of a company's work sheet shows the Store Supplies account with a balance of $750. The Adjustments columns shows a credit of $425 for supplies used during the period. The amount shown as Store Supplies in the Balance Sheet columns of the work sheet is: 204. 205. Question 50 206. A company earned $3,000 in net income for October. Its net sales for October were $10,000. Its profit margin is: 207. A company's current assets are $27,920, its quick assets are $15,690 and its current liabilities are $12,670. Its acid-test ratio equals: 208. A company's current ratio is 1.4 and its quick ratio is 0.27. This company is probably an excellent credit risk because the ratios reveal no indication of liquidity problems. 209. A company's quick assets are $161,000 and its current liabilities are $150,000. This company's acid-test ratio is 1.07. 210. Mega Skateboard Supplier had net sales of $2.4 million, its cost of goods sold was $1.2 million, and its net income was $.8 million. Its gross margin ratio equals: 211. A company had sales of $388,000 and cost of goods sold of $219,000. Its gross profit equals $169,000. 212. A company purchased $3,700 of merchandise on July 5 with terms 3/10, n/30. On July 7, it returned $410 worth of merchandise. On July 8, it paid the full amount due. The amount of the cash paid on July 8 equals: 213. A company purchased $12,000 of merchandise on June 15 with terms of 3/10, n/45, and FOB shipping point. The freight charge, $1,500, was added to the invoice amount. On June 20, it returned $2,400 of that merchandise. On June 24, it paid the balance owed for the merchandise taking any discount it is entitled to. The cash paid on June 24 equals: 214. On February 3, Smart Company sold merchandise in the amount of $2,600 to Truman Company, with credit terms of 2/10, n/30. The cost of the items sold is $1,800. Smart uses the perpetual inventory system and the gross method. Truman pays the invoice on February 8, and takes the appropriate discount. The journal entry that Smart makes on February 8 is: 215. A company has net sales of $766,600 and cost of goods sold of $553,600. Its net income is $21,030. The company's gross margin and operating expenses, respectively, are: 216. A company has net sales of $919,000 and cost of goods sold of $609,500. Its net income is $110,000. The company's gross margin and operating expenses, respectively, are: 217. Lucia Company reported cost of goods sold for Year 1 and Year 2 as follows: 218. Lucia Company made two errors: 1) ending inventory at the end of Year 1 was understated by $16,100 and 2) ending inventory at the end of Year 2 was overstated by $7,100. Given this information, the correct cost of goods sold figure for Year 2 would be: 219. Beckenworth had cost of goods sold of $10,621 million, ending inventory of $3,289 million, and average inventory of $2,085 million. Its days' sales in inventory equals: (Use 365 days a year.) 220. A company had inventory on November 1 of 5 units at a cost of $25 each. On November 2, they purchased 15 units at $27 each. On November 6 they purchased 11 units at $30 each. On November 8, 12 units were sold for $60 each. Using the LIFO perpetual inventory method, what was the value of the inventory on November 8 after the sale? 221. Given the following information, determine the cost of the inventory at June 30 using the LIFO perpetual inventory method. 222. The cost of the ending inventory is: 223. Marquis Company uses a weighted-average perpetual inventory system and has the following purchases and sales: 224. What is the amount of the cost of goods sold for this sale? (Round average cost per unit to 2 decimal places.) 225. A company had net sales of $30,300 and ending accounts receivable of $3,900 for the current period. Its days' sales uncollected equals: (Use 365 days a year.) 226. The following information is available for Birch Company at December 31: 227. Based on this information, Birch Company should report Cash and Cash Equivalents on December 31 of: 228. At the end of the day, the cash register's record shows $1,274, but the count of cash in the cash register is $1,257. The correct entry to record the cash sales is 229. A company wants to decrease its $200.00 petty cash fund to $125.00. The entry to reduce the fund is: 230. Havermill Co. establishes a $460 petty cash fund on September 1. On September 30, the fund is replenished. The accumulated receipts on that date represent $94 for Office Supplies, $179 for merchandise inventory, and $43 for miscellaneous expenses. The fund has a balance of $144. On October 1, the accountant determines that the fund should be increased by $92. The journal entry to record the establishment of the fund on September 1 is: 231. Childers Company, which uses a perpetual inventory system, has an established petty cash fund in the amount of $500. The fund was last reimbursed on November 30. At the end of December, the fund contained the following petty cash receipts: 232. If, in addition to these receipts, the petty cash fund contains $267.00 of cash, the journal entry to reimburse the fund on December 31 will include: 233. During the month of July, Clanton Industries issued a check in the amount of $945 to a supplier on account. The check did not clear the bank during July. In preparing the July 31 bank reconciliation, the company should: 234. Easton Co. deposits all cash receipts on the day they are received and makes all cash payments by check. At the close of business on June 30, its Cash account shows a debit balance of $70,209. Easton's June bank statement shows $66,349 on deposit in the bank. Determine the adjusted cash balance using the following information: 235. If assets are $300,000 and liabilities are $192,000, then equity equals: 236. The International Accounting Standards Board (IASB): 237. At year-end, a trial balance showed total credits exceeding total debits by $4,950. This difference could have been caused by: 238. Identify the account below that is classified as an asset account: 239. Identify the item below that would cause the trial balance to not balance. 240. Unearned revenue is reported in the financial statements as: 241. The accounting principle that requires revenue to be recorded when earned is the: 242. Adjusting entries: