Company A sold merchandise with a list price of $4,200 and costing $2,300 on account to Company B. The sale was subject to the following terms: FOB destination, 2/10, n/30. Company A prepays the freight costs of $85 (debit Delivery Expense for the freight costs). Prior to payment for the goods, Company A issues a credit memo for $750 to Company B for merchandise costing $425 that is returned. Company A received payment from Company B within the discount period. Company A uses a perpetual inventory system. Which of the following statements is true about the net amount of cost of merchandise sold that Company A will record as a result of these transactions?

The invoice amount is greater than $3,400 and less than $3,500.

The invoice amount is greater than $2,000 and less than $2,100.

The invoice amount is greater than $1,700 and less than $1,800.

The invoice amount is greater than $2,200 and less than $2,400.

The invoice amount is greater than $3,500 and less than $3,600.

The invoice amount is greater than $1,900 and less than $2,000.

None of these answers are correct.

The invoice amount is greater than $2,100 and less than $2,200.

The invoice amount is greater than $2,300 and less than $3,400.

The invoice amount is greater than $1,800 and less than $1,900.

Question 2 of 5

Company A sold merchandise with a list price of $4,200 and costing $2,300 on account to Company B. The sale was subject to the following terms: FOB destination, 2/10, n/30. Company A prepays the freight costs of $85 (debit Delivery Expense for the freight costs). Prior to payment for the goods, Company A issues a credit memo for $750 to Company B for merchandise costing $425 that is returned. Company A received payment from Company B within the discount period. Company A uses a perpetual inventory system. Which of the following statements is true about the amount Company A receives from Company B for the sale?

The invoice amount is greater than $2,700 and less than $2,800.

The invoice amount is greater than $3,000 and less than $3,100.

The invoice amount is greater than $3,200 and less than $3,300.

The invoice amount is greater than $2,900 and less than $3,000.

The invoice amount is greater than $3,300 and less than $3,400.

The invoice amount is greater than $3,100 and less than $3,200.

The invoice amount is greater than $3,400 and less than $3,500.

None of these answers are correct.

The invoice amount is greater than $2,800 and less than $2,900.

The invoice amount is greater than $3,500 and less than $3,600.

Question 3 of 5

The following information was from the accounting records for Company A, which uses a periodic inventory system: Merchandise inventory, June 1, 2015: $393,250 Merchandise inventory, May 31, 2016: $380,100 Purchases for the fiscal year: $1,579,600 Purchases returns and allowances for the fiscal year: $81,200 Purchases discounts for the fiscal year: $16,500 Sales for the fiscal year: $2,060,000 Freight-in for the fiscal year: $59,250 Which of the following statements is true about the total cost of merchandise sold for Company A for the fiscal year ended on May 31, 2016?

It is greater than $500,000 and less than $600,000.

It is greater than $600,000 and less than $700,000.

It is greater than $1,300,000 and less than $1,400,000.

None of these answers are correct.

It is greater than $400,000 and less than $500,000.

It is greater than $1,800,000 and less than $1,900,000.

It is greater than $1,600,000 and less than $1,700,000.

It is greater than $1,700,000 and less than $1,800,000.

It is greater than $1,500,000 and less than $1,600,000.

It is greater than $1,400,000 and less than $1,500,000.