Fall 2011 - term test #2.doc - solutions(2)

# Fall 2011 - term test #2.doc - solutions(2) - RSM219 Term...

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RSM219 Term Test #2 Fall 2011 Part A (10 marks) 1. D 2. A 3. A 4. B 5. D 6. D 7. D 8. B 9. D 10. D Part B (10 marks) 1. Calculate the missing amounts and identify them by letter (6 marks) (a) \$475,000 (d) \$825,000 (b) \$220,000 (e) \$553,000 (c) \$200,000 (f) \$250,000 2. (2 marks) Gross Margin Company A – 44.4% Company B – 30.3% Profit Margin % Company A – 33.44% Company B – 20.7% Reasonable conclusion that Company A is more profitable compared to Company B and the industry average

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3. (2 marks) A B Average Inventory = Beginnning Inventory \$220,000 \$325,000 Ending Inventory \$170,000 \$303,000 Divided 2 \$195,000 \$314,000 Turnover = CGS \$250,000 \$575,000 Avg. Inv. \$195,000 \$314,000 = 1.28 1.83 Days Says In Inventory = 365 days 365 days 1.28 1.83 = 285 days = 199 days Reasonable conclusion that Company B has a better inventory management system. Part C (10 marks) Calculate: Perpetual inventory system Periodic inventory system Cost of goods sold assuming Pacioli uses FIFO \$618 = \$60 +\$264 +\$126 +(35*\$4.80) ( 1 points ) \$618 = \$60 +\$264 +\$126 +(35*\$4.80) ( 1 points ) Ending inventory assuming Pacioli uses FIFO \$48 = 10*\$4.80 ( 1 points ) \$48 = 10*\$4.80 ( 1 points ) Cost of goods sold assuming Pacioli uses average cost Jan. 7 sale \$280.80 = (\$60 +\$264) / (15 +60) *65 ( 1 point ) Jan. 29 sale \$339.88 = (\$60 +\$264 -­૒\$280.80 +\$126 +\$216) /(15
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