27-28

34

and 39

Question 27 2.5 pts On June 10, a $5,000 account receivable from a customer has been determined to be uncollectible. Using the direct write-off method, what effect would the write off of the account have on the financial statements? Total assets would decrease and stockholders' equity would increase. Total assets would increase and stockholders' equity would decrease. Total assets and stockholders' equity would decrease. Total assets and stockholders' equity would increase. Question 28 2.5 pts On June 10, a $5,000 account receivable from a customer was written off using the direct write-off method. On November 1, the account was collected from the customer. How would the reinstatement of the account (reversal of the write-off) on November 1 affect the accounting equation? Accounts receivable would increase and retained earnings would decrease. Accounts receivable and retained earnings would decrease. o Accounts receivable would decrease and retained earnings would increase. Accounts receivable and retained earnings would increase. Question 34 2.5 pts Jensen Company had the following inventory data for the year: Jan. 1 Beginning inventory Mar. 15 Purchase 1,000 units @ $2 = $2,000 5,000 units @ $2.50 - $12,500 4,000 units @ $3 = $12,000 6,000 units @ $3.50 = $21,000 June 30 Purchase Oct. 1 Purchase On December 31, there are 2,000 units of the item in the physical inventory. Calculate cost of goods sold for the year assuming Jensen uses FIFO. O $47,500 O $40,500 O $43,000 O $7,000 Question 39 2.5 pts On December 31, Barnes Company had 1,000 identical units of Item X in ending inventory. The following information is available: Unit purchase cost = $25 per unit Replacement cost on December 31 - $20 per unit Using the lower-of-cost-or-market rule, which of the following statements would be true? Barnes should not record any transaction because inventory is always recorded at cost. Barnes should decrease inventory and increase retained earnings $5,000, Barnes should increase inventory and retained earnings $5,000. Barnes should decrease inventory and retained earnings $5,000