11. Purple Company made an inventory count on December 31, 2020. During the count, one of the clerks made the error of not counting an inventory item (not including it in inventory). For the balance sheet at December 31, 2020, the effects of this error are

Assets Liabilities Stockholders Equity

a. overstated understated overstated

b. understated no effect understated

c. overstated no effect overstated

d. overstated overstated understated

12. At February 1, 2020, Magenta Company had beginning inventory consisting of 200 units with a unit cost of $8. During February, the company purchased inventory as follows:

400 units at $10

600 units at $12

The company sold 1,000 units during the month for $14 per unit. Magenta uses the average cost method. The value of Magentas inventory at February 28, 2020 is (rounded)

a. $1,600.66

b. $1,750.66

c. $2,133.33

d. $2,400.00

13. Uno Company's records indicate the following information for the year:

Merchandise inventory, 1/1 $ 350,000

Purchases 1,650,000

Net sales 2,500,000

On December 31, a physical inventory determined that ending inventory of $325,000 was in the warehouse. Uno's gross profit on sales has remained constant at 35%. Uno suspects some of the inventory may have been taken by some new employees. At December 31, what is the estimated cost of missing inventory?

a. $25,000

b. $50,000

c. $75,000

d. $100,000

14. A petty cash fund of $100 is replenished when the fund contains $4 in cash and receipts for $98. The entry to replenish the fund would

a. debit Cash Over and Short for $2.

b. debit Miscellaneous Expense for $2

c. credit Cash Over and Short for $2.

d. credit Miscellaneous Revenue for $2.

15. In preparing its bank reconciliation for the month of December 2020, Thomas, Inc. has available the following information.

Balance per bank statement, 12/31/20 $65,000

NSF check returned with 12/31/20 bank statement 650

Deposits in transit, 12/31/20 5,000

Outstanding checks, 12/31/20 3,600

Bank service charges for December 35

What should be the adjusted cash balance at October 31, 2017?

a. $65,715.

b. $66,400.

c. $70,000.

d. $72,500.