Solutions for Exam 2 Review Problems

# Solutions for Exam 2 Review Problems - Exam 2 Review...

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Exam 2 Review Problems – Answers Chapter 5 1. a. Jan. 14 Merchandise Inventory 25,000 Accounts Payable 25,000 Jan. 16 Accounts Payable 800 Merchandise Inventory 8000 Jan. 17 Merchandise Inventory 750 Cash 750 Jan. 23 Accounts Payable 24,200 Cash 23,474 Merchandise Inventory 726 b. Increased by \$24,224 2. Feb. 6 Accounts Receivable 60,000 Sales 60,000 Cost of Goods Sold 30,000 Merchandise Inventory 30,000 Feb. 7 Freight-out 1,100 Cash 1,100 Feb. 8 10,000 Accounts Receivable 10,000 Merchandise Inventory 5,000 Cost of Goods Sold 5,000 Feb. 15 Cash 49,000 Sales Discount 1,000 Accounts Receivable 50,000 3. a. b. \$311,000 (711,000 net sales – 400,000 cost of goods sold) c. 43.7% (311,000 gross profit / 711,000 net sales) d. 15.6% (111,0000 net income* / 711,000 net sales) * net income = 311,000 gross profit – 200,000 operating expenses

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4. a. Cost of goods sold = Beginning Inventory + Cost of Purchases – Ending Inventory 45,000 + 583,000* - 55,000 = 573,000 * Cost of purchases = Net Purchases + Freight-In = 564,000** + 19,000 = 628,000 ** Net Purchases = = 600,000 – 25,000 – 11,000 = 564,000 b. Gross Profit = Net Sales – Cost of Goods Sold = 750,000 – 573,000 = 177,000 Chapter 7 5. 1. b 5. a, c and e 2. c 6. b, d, and e 3. b and c 7. f 4. c 6. 1. D 6. A 2. B 7. B 3. B 8. E 4. C 9. C 5. B 10. A 7.

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8. Oct. 1 Petty Cash Fund …………………………………………… 150 Cash ………………………………………………. .. 150 (To establish a petty cash fund) 31 Cash Over and Short ………………………………………. 5 Inventory …………………………………………………. . 23
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## This note was uploaded on 01/17/2009 for the course ACC 211 taught by Professor Bunch during the Fall '08 term at SUNY Albany.

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Solutions for Exam 2 Review Problems - Exam 2 Review...

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