6. Blue Company's accounting records show the following at the year ending on December 31, 2020:

Purchase Discounts $ 15,000

Freight - In 12,500

Purchases 425,000

Beginning Inventory 40,000

Ending Inventory 50,000

Purchase Returns 10,000

Using the periodic system, the cost of goods sold is

a. $390,000.

b. $402,500.

c. $415,000.

d. $425,000

7. If goods in transit are shipped FOB shipping point

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.

8. Copper Bookstore had 100 units on hand at November 1, costing $5 each. Purchases and sales during the month of November were as follows:

Date Purchases Sales

November 5 50 @ $7.50

15 75 @ $6

20 50 @ $7

29 100 @ $9.50

Copper does not maintain perpetual inventory records. According to a physical count, 75 units were on hand at November 30.

The cost of the inventory at November 30, under the FIFO method is:

a. $375.

b. $500.

c. $750.

d. $950.

9. Rusty Supply House had 150 units on hand at July 1, costing $8 each. Purchases and sales during the month of July were as follows:

Date Purchases Sales

July 10 100 @ $12

15 150 @ $10

25 200 @ $11

28 225 @ $14

Rusty does not maintain perpetual inventory records. According to a physical count, 175 units were on hand at July 31.

The cost of the inventory at July 31, under the LIFO method is:

a. $1,450.

b. $1,760.

c. $1,925.

d. $2,450

10. In a period of rising prices, FIFO will have

a. lower net income than LIFO.

b. lower cost of goods sold than LIFO.

c. lower income tax expense than LIFO.

d. lower net purchases than LIFO.