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1/ Excerpts from Huckabee Company's December 31, 2018 and 2017, financial statements are presented below: 2018 2017 Accounts receivable $ 100,000 $ 92,000 Merchandise inventory

1/ Excerpts from Huckabee Company's December 31, 2018 and 2017, financial statements are presented below:

2018 2017
Accounts receivable $ 100,000 $ 92,000
Merchandise inventory 78,000 92,000
Net sales 420,000 392,000
Cost of goods sold 260,000 240,000

Huckabee's 2018 receivables turnover (rounded to 2 decimal places) is:

Multiple Choice

  • 2.71.

  • 3.06.

  • 4.38.

  • 4.20.

2/As of December 31, 2018, Amy Jo's Appliances had unadjusted account balances in accounts receivable of $305,000 and $930 in the allowance for uncollectible accounts, following 2018 write-offs of $6,390 in bad debts. An analysis of Amy Jo's December 31, 2018, accounts receivable suggests that the allowance for uncollectible accounts should be 2% of accounts receivable. Bad debt expense for 2018 should be:

Multiple Choice

  • $6,390.

  • $6,100.

  • $5,170.

  • None of these answer choices are correct.

3/ Nu Company reported the following pretax data for its first year of operations.

Net sales 2,970
Cost of goods available for sale 2,380
Operating expenses 800
Effective tax rate 30 %
Ending inventories:
If LIFO is elected 940
If FIFO is elected 1,080

What is Nu's gross profit ratio if it elects LIFO? (Round your answer to the nearest whole percentage.)

Multiple Choice

  • 61%.

  • 21%.

  • 52%.

  • 56%.

4/ Bond Company adopted the dollar-value LIFO inventory method on January 1, 2018. In applying the LIFO method, Bond uses internal cost indexes and the multiple-pools approach. The following data were available for Inventory Pool No. 3 for the two years following the adoption of LIFO:

Ending Inventory
Year At Current Cost At Base Year Cost Cost Index
1/1/2018 $ 306,000 $ 306,000 1.00
12/31/2018 339,560 326,500 1.04
12/31/2019 433,100 355,000 1.22

Under the dollar-value LIFO method, the inventory at December 31, 2019, should be

Multiple Choice

  • $362,090.

  • $355,000.

  • $355,820.

  • None of these answer choices are correct.

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