In a periodic inventory system, purchases of merchandise on account are recorded by debiting: Select one: a. Cost of Goods Sold O b. Accounts Payable O c. Purchases O d. Inventory O e. Cash During 2014, Paul Company discovered that the ending inventories reported on its financial statements were incorrect by the following amounts: 2012 2013 $60,000 understated $75,000 overstated Paul uses the periodic inventory system. Prior to any adjustments for these errors and ignoring income taxes, Paul's retained earnings at January 1, 2014, would be: Select one: O a. Correct O b. $15,000 overstated c. $75,000 overstated d. $135,000 overstated A store uses the gross profit method to estimate inventory and cost of goods sold for interim reporting purposes. Past experience indicates that the markup on cost is 25%. The following data relate to the month of March: Inventory cost, March 1 Purchases during the month at cost Sales Sales returns $25,000 67,000 84,000 3,000 Using the data above, what is the estimated ending inventory at March 31? Select one: O a. $20,250 O b. $24,800 O c. $27,200 O d. $71,750 O e. $31,250 Clear my choice The Packard Company fails to record depreciation at year-end. Indicate the error on the Net Income and Accumulated Depreciation, respectively. Select one: O a. No error, Overstated O b. No error, Understated O c. Overstated, Understated O d. Overstated, No error O e. Overstated, Overstated Maghielse Company incurred the following expenses: Filing fees for patent applications $30,000 Depreciation on research equipment $100,000 Updating packaging of existing products $25,000 Evaluating designs of various prototypes $45,000 Overhaul of assembly line production equipment $70,000 The total amount to be expensed as Research and Development is: Select one: O a. $45,000 O b. $175,000 O c. $145,000 od $215.000