Multiple Choice questions

1. Square9 Corporation has provided the following information about one of its laptop computers:

Date	Transaction	Number of Units	Cost per Unit
1/1	Beginning Inventory	100	$400
5/5	Purchase	200	$450
8/10	Purchase	300	$500
10/15	Purchase	200	$550

During the year, Square9 sold 750 laptop computers.

What was ending inventory using the FIFO cost flow assumption?

Multiple Choice

$30,000.

$27,500.

$22,500.

$20,000.

2. Under the FIFO cost flow assumption during a period of rising costs, which of the following is false?

Multiple Choice

Income tax expense will be higher under FIFO than under LIFO.

Net income will be higher under FIFO than under LIFO.

Ending inventory will be lower under FIFO than under LIFO.

Cost of goods sold will be lower under FIFO than under LIFO.

3. Merchandise was sold on credit for $10,000, terms 2/10, n/30. Which of the following journal entry descriptions correctly describes the cash collection?

Multiple Choice

Cash is debited for $10,000 and accounts receivable is credited for $10,000 if the collection is within the discount period.

Cash is debited for $10,000, accounts receivable is credited for $9,800, and sales discounts is credited for $200 if the collection is within the discount period.

Cash is debited for $10,000, accounts receivable is credited for $9,800, and sales discounts is credited for $200 if the collection is after the discount period.

Cash is debited for $10,000 and accounts receivable is credited for $10,000 if the collection is after the discount period.

4. Newark Company has provided the following information:

Cash sales, $560,000

Credit sales, $1,460,000

Selling and administrative expenses, $440,000

Sales returns and allowances, $101,000

Gross profit, $1,470,000

Increase in accounts receivable, $66,000

Bad debt expense, $44,000

Sales discounts, $54,000

Net income, $1,030,000

How much are Newark's net sales?

Multiple Choice

$2,020,000.

$1,821,000.

$1,954,000.

$1,865,000.