A-Determine whether each of the following characteristics relates to a merchandising or service business.

a. At year end, the company holds merchandise inventory that was not sold during the year.

b. The companys financial statements do not list cost of merchandise.

c. The companys largest current asset is inventory that is listed on the companys balance sheet.

B. Jeffs Bikes had sales on account of $3,900 and cash sales of $1,200. If the companys cost of the merchandise was $1,100, what is the companys gross profit?

C. A company had a gross profit of $4,500. If the cost of the merchandise was $2,150, what were the companys total sales?

D. Torti Co. had cash sales of $2,760 and sales on account of $8,200. The companys gross profit at the end of the year totaled $5,590. What was the cost of the merchandise for Torti Co.?

E. A companys manager would like to know how many of a certain product is on hand in order to fulfill a large upcoming order. If the manager can pull up a report to show the inventory on hand at any time, what kind of inventory system does the business use?

F. Before preparing the balance sheet at year end, a company must count all inventory on hand. To find the cost of the merchandise sold, the accountants compare the inventory at the beginning of the year to the amount of inventory counted at the end of the year and purchases during the year. Does the company operate using a perpetual or periodic inventory system?

G. A company records the sales and purchases of merchandise as the transactions occur. The accountant also reviews the totals regularly to check the totals among journals. Does the company use a perpetual or periodic inventory system?