1. A company purchases inventory at a cost of $11,000. Shipping terms are FOB shipping point. Assume that the purchaser pays the freight invoice of $400 upon arrive of the items. The company uses the periodic inventory method. To record the payment for shipping, the company will ... A. Debit Purchases for $400 B. Credit Transportation-in for $400 C. Debit Merchandise Inventory for $600 D. Credit Freight-out for $600 E. None of the above 2. A company purchases merchandise inventory for $4,000 on account. Assume that the company uses the perpetual inventory method. To record the purchase, the company will ... A. Debit Accounts Payable for $4,000 B. Debit Cost of Goods Sold for $4,000 C. Debit Purchases for $4,000 D. Debit Merchandise Inventory for $4,000 E. None of the above 3. A company sells an inventory item for $1,000 on account. The item sold had a cost of $650. The company uses the periodic inventory method. To record the event the company will ... A. Debit Cost of Goods Sold for $650 B. Credit Accounts Receivable for $1,000 C Credit Merchandise Inventory for $650 D Credit Sales Revenue for $350 E None of the above 4. A company's general ledger reports end-of-year balances in selected accounts as set out below. Merchandise Inventory $ 40,000 dr Purchases 200,000 dr After taking a physical inventory, the company determines that its cost of goods sold is $215,000 for the year, What is the amount of the company's ending inventory? A. $30,000 B. 20,000 C. 40.000 D. 15,000 E. None of the above 5. A company purchases inventory on account for $100,000. Term are 2,10, n/30. As of day #10, the company will not have sufficient cash to make payment and claim the discount. The company will use its line of credit and borrow cash in an amount in an amount sufficient to satisfy the invoice and claim the discount. The line of credit interest rate is 6% per annum and the company will pay off the loan on day #30. How much better off will the company be by borrowing on day #10? Remember that all final answers have been rounded to the nearest $10. A. $2,000 B. 1,800 C. 320 D. 1,680 E. None of the above 6. A company sells an inventory item for $3,000 on account. The item sold had a cost of $2,000. The company uses the perpetual inventory method. To record the event the company will ... A. Debit Cost of Goods Sold for $1,000 B. Debit Accounts Receivable for $1,000 C. Credit Merchandise Inventory for $2,000 D. Credit Cost of Goods Sold for $2,000 E None of the above