11. Martock Company uses the periodic inventory system. The following information is available for the period ending December 31:(1) Sales: $30,000 (2) Beginning inventory: $17,500 (3) Ending inventory: $8,000 (4) Purchases: $10,000. What is the cost of goods sold for the period? 5 12. S&R Company uses the aging of accounts receivable approach to estimate bad debt expense. On December 31, 2020, an analysis of accounts receivable revealed the following: Schedule of Accounts Receivable by Age December 31, 2020 Accounts Receivable Age of Accounts Receivable Expected Percentage Uncollectible Allowance for doubtful accounts 140,000 Not yet due 0.75% 60,000 1-30 days past due 4% 19,000 31-60 days past due 10% 5,000 61-90 days past due 60% 7,000 Over 90 days past due 90% 13. Each December 31, Charity Company ages its accounts receivable to determine the arnount of its adjustment for bad debts. At the end of this year, management estimated that $56,900 of the accounts receivable balance would be uncollectible. The Allowance for Doubtful Accounts account had a credit balance of $4,200. Prepare the adjusting journal entry that Charity Company should make on December 31 of the current year, to estimate bad debts expense. 5 14. Toys"R" Ltd. had cost of goods sold of $6,000 million, ending inventory of $2,500 million, and average inventory of $2,000 million. Calculate the merchandise turnover ratio. 5 15. A company sells a single product and had the following beginning inventory, purchases, and sales during March. Date Number of units Price per unit Beginning Inventory 20 8 March 6 Purchase 40 10 8 Purchase 50 9 10 Sale 45 13 12 Sale 35 13 30 Purchase 25 7 Calculate the cost of goods sold and cost of the ending inventory using FIFO method assuming that the company follows perpetual system. 10 1. Merchandise inventory includes A. All goods owned by a company and held for sale B. Goods in transit C. Goods on consignment D. Damaged goods E. All of the above 2. Which inventory cost flow assumption results in the highest tax expense in a period of inflation? A. Retail method B. FIFO C. Average cost D. Specific identification E. Moving weighted average 3. Damaged or obsolete goods A. Are not counted as saleable inventory B. Are counted at full cost C. Are included in inventory at net realizable value if that is less than cost D. Are not counted as saleable inventory or are counted at full cost E. Are not counted as saleable inventory and are included in inventory at net realizable value if that is less than cost 4. Costs included in the value of inventory are A. Purchase price less discounts B. Transportation-in C. Storage D. Insurance E. All of the above 5. During a period of steadily rising prices, which inventory cost flow assumption results in reporting the highest inventory value? A. Specific identification B. Average cost C. Moving weighted average D. FIFO E. Any of the above 6. If an inventory amount is reported in error, it can cause a misstatement in A. Cost of goods sold B. Gross profit C. Net income D. Current assets E. All of the above 7. Accounts receivable accounts for specific customers are important because they show A. How much each customer purchases B. How much each customer has paid C. How much each customer still owes D. The basis for sending bills to customers E. All of these 8. During the current year, Tech Com concluded that a customer's $4,400 account receivable was uncollectible and that the account should be written off. What effect will this write-off have on Tech Com's current year net income and balance sheet assuming the allowance method is used to account for bad debts? A. No effect on net income or on total assets B. Decrease in net income; no effect on total assets c. Decrease in net income; decrease in total assets D. Increase in net income; no effect on total assets 9. A method of estimating bad debts expense that involves a detailed examination of outstanding accounts and that is usually the most reliable is the A. Direct write-off method B. Income statement method C. Aging of accounts receivable method D. Simplified balance sheet method E. Accounts receivable method 10. A promissory note A. Is an account receivable B. Is a written promise to pay a specified amount of money at a certain date C. Is a liability to the payee D. is a written promise to pay a specified amount of money at a certain date and is a liability to the payee E. All of these 10