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WIT Financial Accounting Test Chapters 5 and 6
1.
From the adjusted trial balance for
Worker Products Company
given below, prepare a multiple-step income statement in good form.
Worker Products Company
Adjusted Trial Balance
December
3
1
Debit
Credit
Cash
$ 9,400
Accounts receivable
25,000
Merchandise inventory
3
6,000
Office supplies
900
Store equipment
75,000
Accumulated depreciation – store equipment
$ 22,000
Office equipment
60,000
Accumulated depreciation -office equipment
15,000
Accounts payable
42,000
Notes payable
10,000
F. Worker, Capital
110,700
F. Worker, Withdrawals
48,000
Sales
325,000
Sales discounts
Sales returns and allowances
16,500
Cost of goods sold
195,000
Sales salaries expense
32,500
Depreciation expense – store equipment
11,000
Depreciation expense – office equipment
7,500
Office supplies expense
1,300
Interest expense
600
Totals
$524,700
$524,700
2. From the adjusted trial balance for Worker Products Company given below, prepare the necessary closing entries.
|
Worker Products Company Adjusted Trial Balance December 31 |
3. A company made the following merchandise purchases and sales during the month of May:
May 1
Purchased
380 units at
$15 each
May 5
Purchased
270 units at
$17 each
May 10
Sold
400 units at
$50 each
May 20
Purchased
300 units at
$22 each
May 25
Sold
400 units at
$50 each
There was no beginning inventory. If the company uses the LIFO periodic inventory method, what would be the cost of the ending inventory?
4. A company made the following merchandise purchases and sales during the month of May:
May 1
Purchased
380 units at
$15 each
May 5
Purchased
270 units at
$17 each
May 10
Sold
400 units at
$50 each
May 20
Purchased
300 units at
$22 each
May 25
Sold
400 units at
$50 each
There was no beginning inventory. If the company uses the FIFO periodic inventory method, what would be the cost of the ending inventory?
5. Flaxco purchases inventory from overseas and incurs the following costs: the cost of the merchandise is $50,000, credit terms are 2/10, n/30 that apply only to the $50,000; FOB shipping point freight charges are $1,500; insurance during transit is $500; and import duties are $1,000. Flaxco paid within the discount period and incurred additional costs of $1,200 for advertising and $5,000 for sales commissions. Compute the cost that should be assigned to the inventory.
A. $50,000
B. $53,000
C. $52,000
D. $51,500
E. $53,200
6. A company had inventory of 10 units at a cost of $20 each on November 1. On November 2, it purchased 10 units at $22 each. On November 6 it purchased 6 units at $25 each. On November 8, it sold 22 units for $54 each. Using the FIFO perpetual inventory method, what was the cost of the 22 units sold?
A. $470
B. $490
C. $450
D. $570
E. $520
]
7. Perch Company reported the following purchases and sales for its only product. Perch uses a perpetual inventory system. Determine the cost assigned to cost of goods sold using FIFO.
Date
Activities
Units Acquired at Cost
Units Sold at Retail
May 1
Beginning Inventory
150 units @ $10.00
5
Purchase
220 units @ $12.00
10
Sales
140 units @ $20.00
15
Purchase
100 units @ $13.00
24
Sales
150 units @ $21.00
A. $2,260
B. $3,180
C. $1,860
D. $3,580
E. $2,100
8. Perch Company reported the following purchases and sales for its only product. Perch uses a perpetual inventory system. Determine the cost assigned to ending inventory using LIFO.
Date
Activities
Units Acquired at Cost
Units Sold at Retail
May 1
Beginning Inventory
150 units @ $10.00
5
Purchase
220 units @ $12.00
10
Sales
140 units @ $20.00
15
Purchase
100 units @ $13.00
24
Sales
150 units @ $21.00
A. $2,260
B. $3,180
C. $1,860
D. $3,580
E. $2,100
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