Test 3- 8910 - Accounting 201 Test 3 (Chapters 8,9,10) Name...

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Accounting 201 Name ________________________ Test 3 (Chapters 8,9,10) Chapter 8 Northwest Fur Co. started 2009 with $94,000 of merchandise inventory on hand. During 2009, $400,000 in merchandise was purchased on account with credit terms of 1/15, n/45. All discounts were taken. Purchases were all made f.o.b. shipping point. Northwest paid freight charges of $7,500. Merchandise with an invoice amount of $5,000 was returned for credit. Cost of goods sold for the year was $380,000. Northwest uses a perpetual inventory system. 1. Assuming Northwest uses the gross method to record purchases, what is the cost of goods available for sale? A. $492,500. B. $496,500. C. $490,500. D. $492,550. 2. During periods when costs are rising and inventory quantities are stable, cost of goods sold will be: A. Higher under FIFO than LIFO. B. Higher under FIFO than average cost. C. Lower under average cost than LIFO. D. Lower under LIFO than FIFO. 3. Company C is identical to Company D in every respect except that Company C uses LIFO and Company D uses average costs. In an extended period of rising inventory costs, Company C's gross profit and inventory turnover ratio, compared to Company D's, would be: A. B. C. D. 4-6 Nueva Company reported the following pretax data for its first year of operations.
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4. What is Nueva's gross profit ratio if it elects FIFO? A. 30%. B. 32%. C. 10.7%. D. 60%. 5. What is Nueva's net income if it elects FIFO? A. $440. B. $264. C. $620. D. $372. 6. What is Nueva's net income if it elects LIFO? A. $440. B. $264. C. $620. D. $372. Inventory records for Herb's Chemicals revealed the following: March 1, 2009, inventory - 1,000 gallons @ $7.20 = $7,200 7. Ending inventory assuming LIFO in a periodic inventory system would be: A. $5,040. B. $5,055. C. $5,075. D. $5,135. 8-9 Texas Petrochemical reported the following April activity for its VC-30 lubricant, which had a balance of 300 qts. @ $2.40 on April 1. 8. The ending inventory assuming LIFO and a periodic inventory system is: A. $1,580. B. $1,510. C. $1,575. D. $1,470.
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A. $1,545. B. $1,470. C. $1,580. D. $1,510. 10-11 Thompson TV and Appliance reported the following in its 2009 financial statements: 10. Thompson's 2009 gross profit ratio is: A. 25%. B. 19%. C. 20%. D. None of these is correct. 11. Thompson's 2009 inventory turnover ratio is: A. 3.91. B. 4.00. C. 4.88. D. 5.00. 12. Robertson Corporation's inventory balance was $22,000 at the beginning of the year and $20,000 at the end. The inventory turnover ratio for the year was 6.0 and the gross profit ratio 40%. What were net sales for the year? A. $126,000 B. $200,000 C. $120,000 D. $210,000 13. Ramen Inc. adopted dollar-value LIFO (DVL) as of January 1, 2009, when it had a cost inventory of $600,000. Its inventory as of December 31, 2009, was $667,800 at year-end costs and the cost index was 1.06. What was DVL inventory on December 31, 2009? A. $630,000.
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Test 3- 8910 - Accounting 201 Test 3 (Chapters 8,9,10) Name...

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