11 Use the following information to answer the following questions The Boxwood Company sells blankets for $60 each The following was taken from the inventory records during May The company had no beginning inventory on May 1 Date Product Z Units Cost May 3 Purchase 5 $30 May 10 Sale 3 May 17 Purchase 10 $34 May 20 Sale 6 May 23 Sale 3 May 30 Purchase 10 $40 Assuming that the company uses the perpetual inventory system, determine the ending inventory value for the month of May using the FIFO inventory cost method Answer a $494 b $520 c $422 d $502 12 A debit balance in the Allowance for Doubtful Accounts Answer a is the normal balance for that account b indicates that actual bad debt write offs have been less than what was estimated c cannot occur if the percentage of receivables method of estimating bad debts is used d indicates that actual bad debt write offs have exceeded previous provisions for bad debts 13 Use the following information to answer the following questions The Boxwood Company sells blankets for $60 each The following was taken from the inventory records during May The company had no beginning inventory on May 1 Date Product Z Units Cost May 3 Purchase 5 $30 May 10 Sale 3 May 17 Purchase 10 $34 May 20 Sale 6 May 23 Sale 3 May 30 Purchase 10 $40 Assuming that the company uses the perpetual inventory system, determine the cost of merchandise sold for the sale of May 20 using the LIFO inventory cost method Answer a $240 b $196 c $124 d $204 14 Which of the following accounts has a normal debit balance Answer a Sales Returns and Allowances b Interest Revenue c Sales d Accounts Payable 15 Merchandise with a sales price of $800 is sold on account with term 2 10, n 30 The journal entry to record the sale would include a Answer a Credit to Sales for $800 b Debit to Accounts Receivable for $784 c debit to Cash for $800 d Debit to Sales Discounts for $16 16 A retailer purchases merchandise with a catalog list price of $15,000 The retailer receives a 15 trade discount and credit terms of 2 10, n 30 How much cash will be needed to pay this invoice within the discount period Answer a $15,000 b $12,495 c $12,750 d $14,700 17 Abbott Company uses the allowance method of accounting for uncollectible accounts Abbott estimates that 3 of net credit sales will be uncollectible On January 1, 2010, the Allowance for Doubtful Accounts had a credit balance of $2,400 During 2010, Abbott wrote off accounts receivable totaling $1,800 and made credit sales of $100,000 There were no Sales Returns or Sales Discounts during the year After the adjusting entry, the December 31, 2010, balance in the Bad Debt Expense would be Answer a $7,200 b $1,200 c $3,000 d $3,600 18 During periods of increasing costs, the use of the FIFO method of costing inventory will yield an inventory amount for the balance sheet that is higher than LIFO would produce Answer True False

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11. Use the following information to answer the following questions. The Boxwood Company sells blankets for $60 each. The following was taken from the inventory

11. Use the following information to answer the following questions.

The Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1.

Date	Product Z	Units	Cost
May 3	Purchase	5	$30
May 10	Sale	3
May 17	Purchase	10	$34
May 20	Sale	6
May 23	Sale	3
May 30	Purchase	10	$40

Assuming that the company uses the perpetual inventory system, determine the ending inventory value for the month of May using the FIFO inventory cost method.

Answer

	a.	$494
	b.	$520
	c.	$422
	d.	$502

12. A debit balance in the Allowance for Doubtful Accounts

Answer

	a.	is the normal balance for that account.
	b.	indicates that actual bad debt write-offs have been less than what was estimated.
	c.	cannot occur if the percentage of receivables method of estimating bad debts is used.
	d.	indicates that actual bad debt write-offs have exceeded previous provisions for bad debts.

13. Use the following information to answer the following questions.

The Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1.

Date	Product Z	Units	Cost
May 3	Purchase	5	$30
May 10	Sale	3
May 17	Purchase	10	$34
May 20	Sale	6
May 23	Sale	3
May 30	Purchase	10	$40

Assuming that the company uses the perpetual inventory system, determine the cost of merchandise sold for the sale of May 20 using the LIFO inventory cost method.

Answer

	a.	$240
	b.	$196
	c.	$124
	d.	$204

14. Which of the following accounts has a normal debit balance?

Answer

	a.	Sales Returns and Allowances
	b.	Interest Revenue
	c.	Sales
	d.	Accounts Payable

15. Merchandise with a sales price of $800 is sold on account with term 2/10, n/30. The journal entry to record the sale would include a

Answer

	a.	Credit to Sales for $800
	b.	Debit to Accounts Receivable for $784
	c.	debit to Cash for $800
	d.	Debit to Sales Discounts for $16

16. A retailer purchases merchandise with a catalog list price of $15,000. The retailer receives a 15% trade discount and credit terms of 2/10, n/30. How much cash will be needed to pay this invoice within the discount period?

Answer

	a.	$15,000
	b.	$12,495
	c.	$12,750
	d.	$14,700

17. Abbott Company uses the allowance method of accounting for uncollectible accounts. Abbott estimates that 3% of net credit sales will be uncollectible. On January 1, 2010, the Allowance for Doubtful Accounts had a credit balance of $2,400. During 2010, Abbott wrote-off accounts receivable totaling $1,800 and made credit sales of $100,000. There were no Sales Returns or Sales Discounts during the year. After the adjusting entry, the December 31, 2010, balance in the Bad Debt Expense would be

Answer

	a.	$7,200
	b.	$1,200
	c.	$3,000
	d.	$3,600

18. During periods of increasing costs, the use of the FIFO method of costing inventory will yield an inventory amount for the balance sheet that is higher than LIFO would produce.

Answer

True
False