ACCO 310 Lecture 11: ACCO 310 - March 14 exercices

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19 Mar 2017

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+ purchases = ending + 1,020 + cogs. Cogs is understated by ,020, net income is overstated by ,020 and r/e is overstated by ,020. Ca is overstated by ,020, cl is ok, but if it was purchase the error, it would impact cl wc is overstated by 1,020 and cr is overstated by 1,020/cl. (2) 2017. The only error is in the beginning balance. Cogs = beginning + 1,020 ending + purchases. Cogs are overstated by ,020, net income is understated by ,020 and r/e is good! It counterbalances, because ending balance is good. Ca is ok, cl is ok wc is ok. (1) 2016. Beginning + purchases 1,500 = cogs + ending 1,500. Cogs = beginning + purchases ending 1,500 + 1,500. Wc = ca cl = ca 1,500 (cl 1,500) Beginning - 1,500 + purchases + 1,500 = cogs + ending. Cogs = beginning + purchases ending (1) 2016. Beginning + purchases -850 = cogs + ending.

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QUESTION 8

If a company overstates its ending inventory balance for 2017 by$10,000, and overstates its ending inventory balance for 2016 by$5,000 what are the effects on its net income for 2017 and2016?

	A.	Effect on 2017 Net Income Effecton 2016 Net Income Overstated by$15,000 Overstatedby $10,000
	B.	Effect on 2017 NetIncome Effecton 2016 Net Income Understated by $5,000 Overstated by$10,000
	C.	Effect on 2017 NetIncome Effecton 2016 Net Income Overstated by $5,000 Overstated by $5,000
	D.	Effect on 2017 NetIncome Effecton 2016 Net Income Overstated by $10,000 Overstated by $5,000

1 points

QUESTION 9

Which of these is not an acceptable inventorycosting method under IFRS?

	A.	FIFO
	B.	LIFO
	C.	Specific Identification
	D.	Average cost

1 points

QUESTION 10

A company lost all but $50 of its inventory in a fire on Feb.22, 2017. The companyâs financial records are listed below:

2015 2016

NetSales 10,000 12,300

COGS 6,500 7,995

GrossProfit 3,500 4,305

OperatingExp. 2,000 2,500

NetIncome 1,500 1,805

For2017 the companyâs records showed beginning inventory of $350,purchases of $500 and purchase returns of $90.

Net sales for thefirst part of the year totaled $1,000.

Determine the amount of inventorydestroyed in the fire. (You must first calculate thecompanyâs historical gross profit percentage.)

	A.	$240
	B.	$360
	C.	$ 60
	D.	$150
	E.	$110

Poppy Co. uses a periodic inventory system. Beginning inventory on January 1 was understated by $30,000, and its ending inventory on December 31 was understated by $17,000. In addition, a purchase of merchandise costing $20,000 was incorrectly recorded as a $2,000 purchase. None of these errors were discovered until the next year. As a result:

Required: Using the information given in the first paragraph of this problem, read each statement and circle either UNDERSTATED or OVERSTATED as the effect of the error. Also calculate the total effect on cost of goods sold and put it in a blank in statement D.

A. Poppy's cost of goods sold for this year was UNDERSTATED or OVERSTATED because of beginning inventory.

B. Poppy's cost of goods sold for this year was UNDERSTATED or OVERSTATED because of ending inventory.

C. Poppy's cost of goods sold for this year was UNDERSTATED or OVERSTATED because of purchases.

D. Total cost of goods sold for this year was UNDERSTATED or OVERSTATED by_________.

E. Net income for this year was UNDERSTATED or OVERSTATED.

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17 accounting 1 questions! HELP

9. The following amounts and costs of platters were availablefor sale by Corpus Christy Ceramics during 2016:

Beginning inventory	10 units at $41
First purchase	15 units at $55
Second purchase	30 units at $70
Third purchase	25 units at $65

Corpus Christy Ceramics has 35 platters on hand at the end ofthe year.

What is the dollar amount of inventory at the end of the yearaccording to the weighted-average cost method?

Select one:

A. $4,340

B. $9,920

C. $3,465

D. $6,200

32. Santa Fe Corporation uses the perpetual inventory method. OnMarch 1, it purchased $60,000 of merchandise inventory, terms 2/10,n/30. On March 3, Santa Fe returned goods (not damaged) that cost$6,000. On March 9, Santa Fe paid the supplier.

On March 9, Santa Fe should credit:

Select one:

A. Purchase discounts for $1,200

B. Purchase discounts for $1,080

C. Inventory for $1,080

D. Inventory for $1,200

33. Rocky Company has beginning equity of $600,000, net incomeof $100,000, dividends of $60,000 and investments by owners inexchange for stock of $20,000. Its ending equity is:

Select one:

A. $660,000

B. $480,000

C. $536,000

D. $446,000

35. On September 1, 2016, Chopper, Inc. reported RetainedEarnings of $272,000. During the month of September, Choppergenerated revenues of $40,000, incurred expenses of $24,000,purchased equipment for $10,000 and paid dividends of $12,000.

What is the balance in Retained Earnings on September 30,2016?

Select one:

A. $272,000 debit

B. $276,000 credit

C. $ 16,000 credit

D. $274,000 credit

36. Savannah Company purchases $120,000 of inventory during theperiod and sells $36,000 of it for $60,000. Beginning of the periodinventory was $6,000.

What is the companyâs inventory balance to be reported on itsbalance sheet at year end?

Select one:

A. $36,000

B. $90,000

C. $ 4,000

D. $ 6,000

37. Assuming rising prices, which method will give the highestdollar value for cost of goods sold on the income statement?

Select one:

A. FIFO

B. Average Cost

C. LIFO

D. All of these give equal values for cost of goods sold

38. Kali Company began the period with $20,000 in inventory. Thecompany also purchased an additional $20,000 of inventory andreturned $2,000 for a full credit. A physical count of theinventory at yearâend revealed an inventory on hand of $16,000.What was Kaliâs cost of goods sold for the period?

Select one:

a. $50,000

b. $22,000

c. $48,000

d. $16,000

39. The periodic inventory system differs from the perpetualinventory system:

Select one:

because the periodic system is not compatible with moderntechnology.

because the periodic system continually updates inventory, whilethe perpetual inventory system only updates inventory at the end ofthe period.

because the perpetual system continually updates inventory,while the periodic inventory system only updates inventory at theend of the period.

because the periodic system is more complex and costly.

40. Which one of the following is included in currentassets?

Select one:

A. Common stock

B. Accounts receivable

C. Taxes payable

D. Automobiles

41. For the balance sheet to be in balance, the following mustexist:

Select one:

Total assets must be less than total liabilities

Total assets must be greater than total liabilities

Total assets must equal total liabilities plus stockholders'equity

Total liabilities must equal total stockholders' equity

43. Using a perpetual inventory system, the buyerâs journalentry to record the freight costs includes a:

Select one:

A. Debit to Purchases

B. Debit to Inventory

C. Debit to Freight In

D. Debit to Cost of Goods Sold

44. Joshua records purchases at invoice price and uses theperpetual inventory system. On July 5, Joshua returned $6,000 ofgoods purchased on account to the seller.

How would Joshua record this transaction?

Select one:

Accounts Payable		6,000
	Purchases		6,000

Accounts Receivable		6,000
	Inventory		6,000

Accounts Payable		6,000
	Inventory		6,000

Cash		6,000
	Purchases		6,000

45. Smith & Sons purchased $5,000 of merchandise from theClaremont Company with terms of 3/10, n/30. How much discount isSmith & Sons entitled to take if it pays within the alloweddiscount period of 10 days?

Select one:

$100

$50

$300

$150

46. The accounting record for Max III Company reported thefollowing selected information:

Operating Expenses	$180,000
Sales Returns and Allowances	52,000
Sales Discounts	24,000
Sales Revenue	700,000
Cost of Goods Sold	268,000

Determine Max III Company's gross profit.

Select one:

A. $332,000

B. $280,000

C. $308,000

D. $356,000

48. Using a a perpetual inventory system, the sellerâs journalentry to record the payment for merchandise, received from thebuyer, within the discount period includes a:

Select one:

A. Debit to Accounts Receivable

B. Debit to Cost of Goods Sold

C. Credit to Sales Discounts

D. Debit to Sales Discounts

49.Geraldoâs Groceries purchased milk cartons at an invoiceprice of $6,000 and terms of 2/10, n/30. On arrival of the goods,Geraldoâs realized that half of the milk was past the expirationdate, and returned them immediately to the supplier.

If Geraldoâs pays the remaining amount of the invoice within thediscount period, the amount paid should be:

Select one:

A. $2,880

B. $5,880

C. $2,940

D. $6,000

50. Which one of the following is not a current liability?

Select one:

A. Wages payable

B. Accounts payable

C. Wage expense

D. Taxes payable

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ACCO 310 Lecture 11: ACCO 310 - March 14 exercices

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