1. For 20X0, Big-Co, which uses the periodic method and records purchases at net, has beginning inventory of $200,000. Big-Cos data for 20X1 includes the following: Purchases $150,000 Freight-in 8,000 Purchase discounts lost 7,000 Purchase returns 15,000 If Big-Cos ending inventory is $110,000, what is the year-end adjusting journal entry? a. Ending Inventory 110,000 Purchase Returns 15,000 Cost of Goods Sold 232,000 Purchase Discounts Lost 7,000 Purchases 150,000 Beginning Inventory 200,000 b. Ending Inventory 110,000 Purchase Returns 15,000 Cost of Goods Sold 233,000 Purchases 150,000 Freight-In 8,000 Beginning Inventory 200,000 c. Ending Inventory 110,000 Purchase Returns 15,000 Purchase Discounts Lost 7,000 Cost of Goods Sold 226,000 Purchases 150,000 Freight-In 8,000 Beginning Inventory 200,000 d. None of the above

2. When a sale is recorded under the periodic method: a. only the income statement is affected. b. only the balance sheet is affected. c. both the balance sheet and the income statement are affected. d. none of the above.

3. Your company purchases $10,000 of inventory, 2/10, n/30, debits Purchases for $10,000 and credits Accounts Payable for $10,000. If your company pays for the merchandise before the discount period lapses, you will: a. debit Purchase Discounts Lost for $200. b. credit Purchase Discounts for $200. c. debit Accounts Payable for $9,800. d. credit Purchases for $9,800.

4. Your company purchases $10,000 of inventory 2/10, n/30, debits Inventory for $10,000 and credits Accounts Payable for $10,000. If your company pays for the merchandise before the discount period lapses, you will: a. debit Accounts Payable for $9,800. b. debit Cash for $9,800. c. credit Inventory for $200. d. credit Purchase Discounts for $200.