1. Assume that when purchasing inventories, P-Toys took advantage of the buy one get one free deal. Originally, the inventory costs $10 per item. With 10$, we got two inventory items. In this case, what is the value of the two inventory items on B/S?

A.$10

B.$20

2. B Limited purchased merchandise on account for $10,000 with terms 2/10, n/30. B utilizes the perpetual inventory system. How would the payment of the invoice be recorded assuming the invoice is paid within the discount period?

A. Debit Accounts Payable $10,000, credit Cash $9,800, and credit Purchase Discounts $200.

B. Debit Accounts Payable $9,800, credit Cash $9,800.

C. Debit Accounts Payable $10,000, credit Cash $9,800, and credit Inventory $200.

D. Debit Accounts Payable $10,000, credit Cash $9,800, and credit Purchase Allowances $200.

3. Suppose that a company used a perpetual inventory system and purchased inventory on account. Beginning balance of A/P = $100, Ending balance of A/P = $400, Purchase return & allowance = $50, Purchase discount plus cash payment = $50. What is the gross purchase amount this year? (Assume purchase return & allowance affect A/P only rather than cash).

A. 200

B. $300

C.$400

D.$500