paper distribution) Question 1 (2 points) Indicate whether each of following statements presented below is true or false. 1. Perpetual inventory system is an inventory system under which the company does not keep detailed inventory records throughout the accounting period but determines the cost of goods sold only at the end of an accounting period. 2. 3. 4. Gross profit is the excess of net sales over the cost of goods sold. Inventory turnover measures the average number of days that inventory is held. Permitting only designated personnel to handle cash receipts is an application of the principle of segregation of duties. 5. 6. The principles of internal control do not include management responsibility. Cash cannot be combined with cash equivalents in the Balance sheet (Statement of financial position) 7. Direct method (to prepare statement of cash flows) is a method that shows operating cash receipts and payments, making it more consistent with the objective of the statement of cash flows 8. Investing activities is cash flow activities that include (a) purchasing and disposing of investments and property, plant, and equipment using cash and (b) lending money and collecting the loans. Question 2 (3 points) Cinco TVs uses a perpetual inventory system. For its flat-screen television sets, the following data is provided in Jan, 2021. During Jan, 2021, the company sold 60 units for $1,000 each on January 8 and 40 units for $1,050 each on January 28. Date Explanation Jan 1, 2021 Beginning Unit 40 Unit cost 600 Total 24,000 inventory Jan 5, 2021 Purchase 50 609 30,450 Jan 8, 2021 Sale 60 Jan 15, 2021 Purchase 30 620 18,600 Jan 28, 2021 Sale 40 Requirement: (1) Compute the cost of goods available for sales (2) Compute the ending inventory, cost of goods sold, and gross profit under (a) FIFO method