1./ In 2010, Garrison Corporation reported net income of $70,000. A recount of the company's inventories revealed that 2010 ending inventory was overstated by $10,000. What is Garrison's corrected net income? a. $60,000 $80,000 C. $70,000 d. $75,000 Use the following information for questions 2 to 4. Chu Company uses FIFO to cost its inventory. The following information is available for Chu's inventory of product # 101: Beginning inventory: 120 units @ $3.14 per unit March 1, 2010: Purchase of 250 units @ $3.50 per unit April 10, 2010: Sale of 100 units @ $5.10 per unit 2./ Assuming Chu uses a periodic inventory system, the entry to account for the March 1 purchase is: a. Debit: "Inventory" and Credit: "Accounts Payable" $875 b. Debit: "Purchases" and Credit: "Accounts Payable" $875 c. Debit: "Accounts Payable" and Credit: "Purchases" $875 d. Debit: "Accounts Payable" and Credit: "Inventory" $875 3./ Assuming Chu uses a perpetual inventory system, the entry to account for the March 1 purchase is a. Debit: "Inventory" and Credit: "Accounts Payable" $875 b. Debit: "Purchases" and Credit: "Accounts Payable" $875 c. Debit: "Accounts Payable" and Credit: "Purchases" $875 d. Debit: "Accounts Payable" and Credit: "Inventory" $875 4./ Assuming Chu uses a perpetual inventory system, which entry would have been made to account for the April 1 sale? a. Debit: "Cost of goods sold" and Credit: "Inventory" $350 b. Debit: "Cost of goods sold" and Credit: "Purchases" $350 c. Debit: "Cost of goods sold" and Credit: "Purchases" $314 d. Debit: "Cost of goods sold" and Credit: "Inventory" $314