1. The following information is available for Bronco Company for 2007:

Freight-in $ 20,000 Purchase returns 80,000 Sales 400,000 Ending inventory 250,000 The cost of goods sold is equal to 50% of sales. What is the cost of goods available for sale? a. $350,000 b. $650,000 c. $150,000 d. $450,000 e. None of the above.

2. The major accounting difference between wage expense incurred during a period and cash dividends declared during the same period is: a Wage expense decreases retained earnings while dividend declared increases retained earnings b Wage expense reduces net income while dividends declared do not affect net income c Wage expense does not affect net income while dividends reduce net income d There is no major difference. Both are treated identically for accounting purposes.

3. Which of the following accounts does not appear in the general ledger of a firm using a perpetual inventory system? a. Purchases. b. Inventory. c. Cost of Goods Sold. d. Sales. e. None of these.

4. During the past several years, Liter Company's gross profit has averaged 25% of its net sales. For the first three months of the current year, net sales were $800,000 and net purchases were $420,000. Inventory at the beginning of year was $260,000. The estimated inventory at the end of the first three months, under the gross profit method is a. $480,000 b. 80,000 c. 120,000 d. 600,000 e. None of these.