1.In a merchandising company's income statement, which of the following would NOT be included in theCost of Goods Sold calculation?

A.Shipping costs from the manufacturer to the merchandiser

B.Sales commissions

C.Returns of inventory purchases

D.Sales taxes on inventory purchases, as shown on the invoices

2.The inventory system that does not keep a running record of all goods bought, sold, and on hand and thereforemust take a physical count of the inventory on hand to determine the ending inventory is:

A.the cost of goods sold inventory system.

B.the periodic inventory system.

C.the perpetual inventory system.

D.all of the above.

3.Exter Co. receives terms of 2/10, n/30 on all invoices from Garn Industries.On January 15, 2011, Exterpurchased items from Garn for $4,200, excluding taxes and shipping costs.What amount would Exter use as the purchase discount if the invoice was paid on January 28, 2011?

A.0

B.$84

C.$4,116

D.$4,200

4.On July 16, 2011, Martson and Co. made the following journal entry:

Dr: Accounts Receivable 25,000

Cr:Sales Revenue 25,000

Dr: Cost of Goods Sold 10,000

Cr: Inventory 10,000

Martson and Co. is using the _________ Inventory system.

A.Periodic

B.Perpetual

C.FIFO

D.LIFO

5.On July 16, 2011, Martson and Co. made the following journal entry:

Dr: Accounts Receivable 25,000

Cr:Sales Revenue 25,000

Dr: Cost of Goods Sold 10,000

Cr: Inventory 10,000

What is the Gross Profit from this sale?

A.$10,000

B.$15,000

C.$25,000

D.$0

6.A company purchased inventory for $800 per unit.The inventory was marked up to sell for $1,000 per unit.The entries to record the sale for cash and the cost of a unit of inventory would include debits to which of the following accounts?

A.Sales, $1,000; Inventory, $800

B.Cash, $1,000; Cost of Goods Sold, $800

C.Cash, $800; Cost of Goods Sold, $1,000

D.Sales, $800; Inventory, $800

7.BMX Co. sells item XJ15 for $1,000 per unit, and has a cost of goods sold percentage of 80%.The grossprofit to be found for selling 20 items:

A.is $20,000.

B.is $16,000.

C.is $4,000.

D.cannot be calculated with a cost of goods sold percentage greater than 50%.

8.Net sales is computed as:

A.sales revenue less freight-out.

B.sales revenue less sales returns and allowances plus sales discounts.

C.sales less cost of goods sold.

D.sales revenue less sales returns and allowances less sales discounts.

9.Bonz, Inc. is using a perpetual inventory system with a December 31 year end date.The balance in this company's inventory account as of September 30 would be equal to:

A.beginning inventory as of January 01.

B.beginning inventory as of January 01 plus all purchases from the beginning of the year through September 30, less all items sold from the beginning of the year through September 30.

C.beginning inventory as of January 01 plus all purchases from the beginning of the year through September 30.

D.all purchases from the beginning of the year through September 30.

10.The purchasing manager for East Coast Hoggs is attempting to determine how much inventory to purchase for the upcoming month.The following information has been collected:

Current inventory $ 32,000

Budgeted cost of goods sold $80,000

The manager wishes to end the month with ending inventory of $25,000.How much inventory must the company purchase?

A.$85,000

B.$82,000

C.$73,000

D.$67,000

11.Given the following data, what is the value of the cost of goods sold as determined by the FIFO method?

Sales revenue 300 units at $15 per unit

Purchases 240 units at $10 per unit

Beginning inventory 120 units at $9 per unit

A.$2,880

B.$2,912

C.$2,940

D.$4,500

12.Given the following data, what is the value of the gross profit as determined by the LIFO method?

Sales revenue 300 units at $15 per unit

Purchases 240 units at $10 per unit

Beginning inventory 120 units at $9 per unit

A.$2,880

B.$600

C.$540

D.$1,560

13.Given the following data, what is the value of the ending inventory as determined by the LIFO method?

Sales revenue 300 units at $15 per unit

Purchases 240 units at $10 per unit

Beginning inventory 120 units at $9 per unit

A.$2,880

B.$2,940

C.$540

D.$600

14.The following data was extracted from the records of Winsam Company:

Sales revenue 450 units @ $35 per unit

Purchases 400 units @ $20 per unit

Beginning inventory 100 units @ $16 per unit

Winsam's most recent balance sheet showed ending inventory of $800.Which method was used for valuing inventory?

A.FIFO

B.LIFO

C.Average cost

D.Specific identification

15.Given the following data, calculate the cost of ending inventory using the FIFO costing method.

Date Item Unit

1/1 Beginning inventory 30 units at $10 per unit

2/25 Purchase of inventory 15 units at $12 per unit

5/20 Purchase of inventory 25 units at $13 per unit

8/15 Purchase of inventory 20 units at $14 per unit

10/17 Purchase of inventory 25 units at $15 per unit

12/31 Ending inventory 65 units

A.$915

B.$740

C.$720

D.$545

16.Tonga Industries reported the following:

Net Sales $450,000

Cost of goods sold $360,000

Operating expense $60,000

Tax Rate40%

1. What's the gross profit percentage?
2. What's net income?

17.Coastal Sporting Goods started April with an inventory of nine sets of golf clubs that cost a total of $1,620. During April, Coastal purchased 25 sets of clubs for $4,750. At the end of the month, Coastal had eight sets of golf clubs on hand. The store manager must select an inventory costing method, and he asks you to tell him both cost of goods sold and ending inventory under these three accounting methods:

a. Average cost (round average unit cost to the nearest cent)

b. FIFO

c. LIFO