Bus230AGrpExm2 - Sonoma State University Bus 230A Group...

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Sonoma State University Bus 230A Group Exam 2 Spring 2008 – Mark LeVine 1. The following is a list of accounts that are typically found in a merchandising company.  Indicate whether each  account has a normal debit or normal credit balance. Cost of Goods Sold _________________ Merchandise Inventory _________________ Sales Revenue _________________ Purchases _________________ _________________ Sales Discounts _________________ Purchase Discounts _________________ Selling Expense _________________ Freight-in _________________ Freight-out _________________ 2.  recorded the following transactions for its first quarter ending March 31, 2006.  Assume  that the company uses a perpetual inventory system. Jan. 1 Purchased merchandise on account for $54,000 Feb. 23 Merchandise originally costing $20,000 sold on account for $28,000  Goods shipped FOB destination for $200 cash  Mar. 30 Paid quarterly salaries of $5,000 for cash Mar. 30 Conducted physical inventory and found that there was $32,000 worth of inventory on hand Required: a. Based on the information provided above, prepare the journal entries for each transaction. b. Based on the physical inventory count, did there appear to be any inventory shrinkage?  How did you  determine your answer? c. Prepare a multi-step income statement for   for the quarter. d. Compute the gross margin ratio and the profit margin ratio for the quarter.  Interpret your results.
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      3. The following is a partially completed income statement for  Rabid Rabbit Robotics  for their last three years.  Based on the information provided, determine the missing amounts.  Note:  Rabid Rabbit Robotics  uses a periodic  inventory system. Year 1
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Bus230AGrpExm2 - Sonoma State University Bus 230A Group...

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