Practice Quiz 2 Multiple Choice and Word Problems

# Practice Quiz 2 Multiple Choice and Word Problems - ACCT...

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ACCT 1201 Financial Accounting – Spring 2015 Quiz 2 Professor Devon Erickson STUDENT NAME: __________________________________________ STUDENT SECTION (circle one): 8:00 AM 9:15 AM 1:35 PM 1

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Multiple Choice (10 points) TOTAL SCORE: ______ 1. Bungee Company purchased \$50,000 of inventory on credit with credit terms of 2/10, n/30. Bungee paid for the purchase within the discount period. How much did Bungee pay for the inventory? a.\$45,000 b. \$49,000 c.\$50,000 d. \$51,000 e.None of the above ______ 2. Belly Co had a beginning inventory of 6,500 units. They made purchases of 4,000 units on May 1, and 2,500 units on Sept 15. An end of year count of inventory identified Belly Co had 5,000 units on hand. How many units did Belly Company sell during the year? ______ 3. The 2012 records of Coles Company showed beginning inventory of \$50,000; cost of goods sold of \$210,000; and ending inventory of \$40,000. The purchases of inventory during 2012 equal: ______ 4. Moore Company purchased an item of inventory that originally cost \$40 and was expected to sell for \$60. It was determined that the current market value (replacement cost) of the inventory is \$36. Using the lower-of-cost-or-market rule, what amount should be reported on the balance sheet for inventory? 2
______ 5. Taylor Co. purchased 1,000 units for \$6 each; the shipment cost for all 1,000 units was \$1,000. Once in possession of the units Taylor Co. also spent \$0.50 on each unit to get it ready for sale. Insurance on the warehouse used to store the finished inventory cost \$700. Calculate the total cost of this inventory for Taylor Co. a. \$6,000 b. \$7,000 c. \$7,500 d. \$8,200 e. None of the above

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