20. M&N Company's accounting records show the following at the year ending on December 31, 2014.

Purchase Discounts $ 3,400

Freight-In 6,100

Purchases 162,500

Beginning Inventory 18,000

Ending Inventory 20,000

Purchase Returns and Allowances 5,200

Using the periodic system, the cost of goods sold is

a. $178,000.

b. $138,000.

c. $158,000

d. $141,000.

21. If goods in transit are shipped FOB destination

a. the seller has legal title to the goods until they are delivered.

b. the buyer has legal title to the goods until they are delivered.

c. the transportation company has legal title to the goods while the goods are in transit.

d. no one has legal title to the goods until they are delivered.

22. Automobile Audio has the following inventory data:

Nov. 1 Inventory 30 units @ $4.00 each

8 Purchase 120 units @ $4.30 each

17 Purchase 60 units @ $4.20 each

25 Purchase 90 units @ $4.40 each

A physical count of merchandise inventory on November 30 reveals that there are 100 units on hand. Ending inventory under FIFO is

a. $438

b. $846

c. $421

d. $863

23. In a period of increasing prices, which inventory flow assumption will result in the lowest amount of income tax expense?

a. FIFO

b. LIFO

c. Average cost method

d. Income tax expense for the period will be the same under all assumptions.

24. The use of prenumbered checks is an example of

a. documentation procedures.

b. independent internal verification.

c. establishment of responsibility.

d. segregation of duties.

25. Cargin Company gathered the following reconciling information in preparing its April bank reconciliation:

Cash balance per books, 4/30 $13,200

Deposits in transit 1,800

Notes receivable and interest collected by bank 4,440

Bank charge for check printing 150

Outstanding checks 9,000

NSF check 840

The adjusted cash balance per books on April 30 is

a. $18,450.

b. $17,640.

c. $16,650.

d. $18,330.

26. On January 15, Nifty Company sells merchandise on account to Martinez Associates for $3,000 with terms 3/10, n/30. On January 20, Martinez returns merchandise worth $600 to Nifty. On January 24, payment is received from Martinez for the balance due. What is the amount of cash received?

a. $2,400

b. $2,328

c. $2,310

d. $1,680

27. An aging of a company's accounts receivable indicates that $4,500 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $1,600 debit balance, the adjustment to record bad debts for the period will require a

a. debit to Bad Debt Expense for $4,500.

b. debit to Bad Debt Expense for $6,100.

c. debit to Bad Debt Expense for $2,900.

d. credit to Allowance for Doubtful Accounts for $4,500.

28. Doane Company receives a $7,000, 3-month, 6% promissory note from Ray Company in settlement of an open accounts receivable. What entry will Doane Company make upon receiving the note?

a. Notes Receivable 7,035

Accounts ReceivableRay Company 7,035

b. Notes Receivable 7,105

Accounts ReceivableRay Company 7,000

Interest Revenue 105

c. Notes Receivable 7,000

Interest Receivable 105

Accounts ReceivableRay Company 7,000

Interest Revenue 105

d. Notes Receivable 7,000

Accounts ReceivableRay Company 7,000

29. The maturity value of a $5,000, 6%, 60-day note receivable dated February 10th is

a. $5,050.

b. $5,025.

c. $5,000.

d. $5,300.