207Exam2practiceF09 - Page 1 of 9 ACCT 207 PRACTICE EXAM...

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Page 1 of 9 ACCT 207 PRACTICE EXAM AND ANSWERS covering Chapters 6 and 8 1. ABC Toys received an order from a customer on March 1. The toys were shipped on March 18. The customer sent a check for full payment on April 10. ABC received the check on April 12 and deposited it in the bank account. ABC should record sales revenue related to this series of transactions on a. March 1 b. March 18 c. April 10 d. April 12 e. None of the above is correct 2. A company had the following partial list of account balances at year-end: Sales Returns and Allowances $ 800 Accounts Receivable 25,000 Sales Discounts (a contra account) 1,200 Sales Revenue 83,000 Allowance for Doubtful Accounts 750 Bad Debt Expense 500 The amount of Net Sales shown on the income statement would be a. $81,000 b. $80,250 c. $81,800 d. $82,200 e. $80,500 3. When goods are sold on credit, revenue usually should be recognized at the date of a. receipt of the sales order b. passage of title from the seller to the buyer c. receipt of the goods by the buyer d. manufacture of the goods e. cash collection of the sales price 4. Birdman Co. reported the following data at year-end. Sales, $200,000; beginning inventory, $10,000; ending inventory, $8,000; cost of goods sold, $120,000; and gross margin, $80,000. What was the amount of merchandise purchased during the year? a. $128,000 b. $118,000 c. $ 42,000 d. $ 38,000 e. None of the above
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Page 2 of 9 5. Which of the following inventory costing methods is subject to manipulation with regard to the resulting inventory cost? a. LIFO b. FIFO c. Weighted-average cost Use the following information to answer questions 6– 7 Johnstone Co. uses the periodic inventory system. The following information about their inventory of Model ZZ Mountain Bicycles is available: Date Transaction No. of Units Cost per Unit 1/1 Beginning Inventory 50 $800 4/12 Purchase 80 $820 7/8 Purchase 75 $840 9/22 Purchase 90 $850 During the year, 235 bicycles were sold at a price of $1,500 each. Other operating costs Equaled $80,000 and their tax rate is 30%. Round final answers to the nearest dollar. 6. What was ending inventory on 12/31 under the FIFO cost flow assumption a. $51,000 b. $48,200 c. $49,851 d. None of the above 7. What was cost of goods sold on 12/31 under the LIFO cost flow assumption? a. $194,100 b. $196,900 c. $195,249 d. None of the above
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Page 3 of 9 Use the following information to answer questions 8 – 9 Varus Corporation uses the periodic inventory system and the following information about their slim-line laptop computer is available Date Transaction No. of Units Cost per Unit 1/1 Beginning Inventory 500 $1,500 5/5 Purchase 250 $1,450 8/10
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207Exam2practiceF09 - Page 1 of 9 ACCT 207 PRACTICE EXAM...

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