AC201Exam2CWOA

# Physical counts of inventory a are not necessary

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9. Physical counts of inventory: A) Are not necessary under the perpetual system. B) Are necessary to measure and adjust for inventory shrinkage. C) Must be taken at least once a month. D) Requires the use of hand-held portable computers. E) Are not necessary under the cost-to benefit constraint. Page 3

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10. A company had inventory of 5 units at a cost of \$20 each on November 1. On November 2, they purchased 10 units at \$22 each. On November 6 they purchased 6 units at \$25 each. On November 8, they sold 18 units for \$54 each. Using the LIFO perpetual inventory method, what was the cost of the 18 units sold?
Problem #1 ( 25 points ) The summary amounts below appear in the Income Statement and Balance Sheet columns of a company's December 31 work sheet. Prepare the necessary closing entries. I n c o m e S t a t e m e n t B a l a n c e S h e e t D e b i t C r e d i t D e b i t C r e d i t A s s e t s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2 , 0 0 0 L i a b i l i t i e s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 , 0 0 0 K a t e S m i t h , C a p i t a l . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 , 5 0 0 K a t e S m i t h , W i t h d r a w a l s . . . . . . . . . . . . . . . . . . . . . 1 , 5 0 0 R e v e n u e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 9 , 5 0 0 S a l a r i e s e x p e n s e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 , 2 5 0 O t h e r o p e r a t i n g e x p e n s e s . . . . . . . . . . . . . . . . . . . . . 5 , 2 5 0 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ T o t a l s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 6 , 5 0 0 1 9 , 5 0 0 1 3 , 5 0 0 1 0 , 5 0 0 N e t i n c o m e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 , 0 0 0 _ _ _ _ _ _ _ _ _ _ 3 , 0 0 0 T o t a l s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 9 , 5 0 0 1 9 , 5 0 0 1 3 , 5 0 0 1 3 , 5 0 0 Dec 31 Revenue………………… ..................... 19,500 Income Summary…… ............... 19,500 Dec 31 Income Summary……………………... 16,500 Salaries Expense……………… 11,250 Other Operating Expense……... 5,250 Dec 31 Income Summary……………………... 3,000 K. Smith Capital……………… 3,000 Dec 31 K. Smith Capital……………………….

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