SampleTest2F2 - SAMPLE TEST 2-FORM 2 1. Kevin's Kevlar and...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
SAMPLE TEST 2-FORM 2 1. Kevin’s Kevlar and Kanvas purchased a copy machine on January 3, 2007 from Zeerocks, Inc. The following information related to this purchase was available: Invoice price is $20,000, terms 2/10/n/30 Shipping paid FOB Shipping point, $500 Sales tax is $1,200 Kevin intends to pay the entire amount in cash by January 12, 2007. At what cost should Kevin record the copy machine on his books? a. $20,000 b. $21,700 c. $21,300 d. None of the above 2. Shilpa’s Shoes ‘R Us had the following information taken from its December 31, 2007, adjusted trial balance: Sales $200,000 Sales Discounts $ 4,000 Beginning Inventory $ 10,000 Purchases $140,000 Ending Inventory $ 20,000 Compute the gross profit (also called gross margin) that would appear on the income statement. a. $70,000 b. $74,000 c. $66,000 d. $62,000 3. Which of the following statements is TRUE ? a. The actual physical flow of goods in a company usually determines a company’s choice of inventory costing method. b. LIFO can be used for tax purposes and FIFO can be used for financial reporting for a company in a given year. c. During a period of rising prices, LIFO results in a lower income tax payable (less tax paid) than does FIFO. d. When the weighted average inventory costing method is used, ending inventory and cost of goods sold are valued using a different cost per unit. 1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
4. During 2007, Rick’s Rickety Rafts had credit sales of $750,000 (sales discounts were $15,000). On January 1, 2007, the Allowance for Doubtful Accounts had a credit balance of $30,000. During 2007, $18,000 of uncollectible accounts receivable were written off. Past experience indicates that 3% of net credit sales become uncollectible. What should be the
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/12/2012 for the course ACC 201 taught by Professor Bokmier during the Fall '10 term at Michigan State University.

Page1 / 7

SampleTest2F2 - SAMPLE TEST 2-FORM 2 1. Kevin's Kevlar and...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online