Net sales is calculated by: Select one: O a. Subtracting gross profit from sales. O b. Subtracting sales returns and sales discounts from sales. O c. Subtracting sales returns, cost of goods sold and sales discounts from sales. O d. Subtracting cost of sales from sales. Canary Corp sold a depreciable plant asset for cash of $135,000. The accumulated depreciation amounted to $170,000, and a loss of $15,000 was recognized on the sale. Under these circumstances, the original cost of the asset must have been: Select one: a. $185,000 b. $305,000 O c. $320,000 O d. $155,000 Avis Computers started the year with no batteries on hand and purchased 2,000 batteries on January 5 at a per-unit cost of $50, and another 2,000 units on January 31 at a per-unit cost of $65. In the period from February 1 through year-end, the company sold 3,000 units of this product for $75 per unit. (ii). Assume that Avis uses the LIFO flow assumption. The cost of the units in the year-end inventory is: Select one: O a. $65,000. O b. $57,500 O c. $75,000 d. $50,000 Which of the four inventory cost flow assumptions is best suited to inventories of high-priced, low-volume items? Select one: O a Average O b. Specific identification, O. FIFO. d. LIFO. Your Favorite Merchanaising Company (YFMC uses a perpetua inventory system. A partial chart or accounts is shown on page 2 of the accompanying supplement (Note: some of the accounts on the accompanying supplement may not be used, while other accounts may be used more than once). Indicate the account(s) that should be debited and credited in recording each of the following transactions. Transactions Account(s) Account(s) Debited Credited Example: Purchased common stock of XYZ Corporation for cash A Purchased equipment, with a 5-year useful life, from ABC Corp in exchange for a 5-year note. B Purchased merchandise (from domestic supplier) on account, terms 2/10 n/30 (net purchase method) C Purchased patent on special production process for cash, providing YEMC with exclusive use of this patent process for 10 years. Sold merchandise on account (perpetual system), terms 3/10, n/20 E Collected partial payment in cash from the customer in D above. Customer made partial payment within the discount period and deducted the discount from the amount received F Sold a portion of the common stock acquired (see above example) for more than the amount originally paid for such stock G Paid supplier for some of the merchandise purchased in transaction B, within the discount period (net purchase method) IUCHU H Customer in transaction D above, returned some of the merchandise and received full credit for the original sales price (returned items were in good condition and were returned to inventory) 1 Took a physical inventory at year-end and recorded the amount representing inventory shrinkage J Paid for the remaining merchandise purchased in transaction B, after the discount period (net purchase method) K Recorded adjusting entry related to the equipment purchased in transaction A L Recorded mark-to-market adjustment associated with the remaining investment in common stock of XYZ Corporation as of the end of the year (note: the market value of the stock was lower than the original cost of such stock) A BI EE - 2 22 US Xxx lil 3 I G FE T: + At the end of January, the unadjusted trial balance of Conway, Inc. included the following accounts: Unadjusted Trial Balance January 31, 2019 Debit Credit Sales (80% represent credit $800,000 sales) Accounts Receivable $100,000 Allowance for Doubtful $500 Accounts (1). Conway uses the balance sheet approach in estimating uncollectible accounts expense, and aging the accounts receivable indicates the estimated uncollectible portion to be $7,000. What is the amount of uncollectible accounts expense recognized in Conway's income statement for January? Select one: a. $6,500 O b. $7,500 O c. $7,000 d. $500 A bank statement shows a balance of $10,085 at June 30. A bank reconciliation is prepared and includes outstanding checks of $3,390, deposits in transit of $1,150, and a bank service charge of $30. Among the paid checks returned by the bank was check no. 900 in the amount of $900, which the company had erroneously recorded in the accounting records as $90. The "adjusted cash balance" at June 30 is: Select one: a. $5,855 O b. $6,085 c. $7,845. d. $8,095. On May 22, 2020, Colossal Corporation purchased machinery for $80,000. The useful life of this machinery is estimated at 10 years, with a $10,000 residual value. (ii). Assume that Colossal uses the 200%-declining-balance method and the half-year convention. Depreciation expense will be: Select one: O a $14,000 in 2020 and $11,200 in 2021 Ob. $7,000 in 2020 and $12,600 in 2021 c. $16,000 in 2020 and $12,800 in 2021 O d. $8,000 in 2020 and $14,400 in 2021 On November 17, 2020, Ice Corporation invested $700,000 in short-term available-for-sale marketable securities. The market value of this investment was $730,000 at December 31, 2020, but had slipped to $725,000 by December 31, 2021. (ii). Assuming Ice Corporation does not sell this investment, the mark-to-market adjustment necessary at December 31, 2021, includes: Select one: O A $5,000 debit to unrealized gain/loss on Investments, O b. A $725,000 debit to Investments in Marketable Securities, O c. A $25,000 credit to unrealized gain/loss on Investments, d. A $5,000 debit to Investments in Marketable Securities. Machinery acquired new on January 1 at a cost of $100,000 was estimated to have a useful life of five years and a residual salvage value of $20,000. Straight-line depreciation was used. On January 1, following two full years of use of the machinery, management decided that the estimate of useful life had been too short and that the machinery would have to be retired after four more years, that is, at the end of the sixth year of service. Additionally, the market for the equipment had changed and management estimated that the salvage value at the end of the sixth year would be $10,000. Under this revised estimate, the depreciation expense for the third year of use would be: Select one: a. $15,000 b. $16,667 c. $17,000 O d. $14,500 At the beginning of 2020, Venture Apparel has an inventory of $1,000,000. Because sales growth was strong during 2019, the owner wants to increase inventory on hand to $1,400,000 at December 31, 2020. If net sales for 2020 are expected to be $7,000,000, and the gross profit rate is expected to be 45%, compute the cost of the merchandise the owner should expect to purchase during 2018. Select one: O a. $4,250,000 O b. $3,550,000. c. $7,400,000 d. $3,850,000