Question: 1 2 i. Jake's Market recorded the following events involving a recent purchase of merchandise: Received goods for $60,000, terms 2/10, n/30. Returned $1,200 of the shipment for credit. Paid $300 freight on the shipment. Paid the invoice within the discount period. As a result of these events, what will be the balance of inventory? 2 ii. Arquette Company's financial information is presented below. Sales Revenue $ ???? Cost of Goods Sold Sales Returns and Allowances 40,000 Gross Profit Net Sales 900,000 Calculate the missing figures. 540,000 ???? 3 iii. Charlie Company uses a perpetual inventory system. During May, the following transactions and events occurred. May 13 Sold 8 motors at a cost of $45 each to Scruffy Brothers Supply Company, terms 4/10, n/30. The motors cost Charlie $26 each. May 16 One defective motor was returned to Charlie. May 23 Received payment in full from Scruffy Brothers. Round to nearest dollar. Instructions Journalize the May transactions for Charlie Company (seller) assuming that Charlie uses a perpetual inventory system. You may omit explanations. Round amounts to nearest dollar. Question: 2 i. 'If a company has no beginning inventory and the unit cost of inventory items does not change during 2 the year, the value assigned to the ending inventory will be the same under LIFO and average cost flow assumptions'. Do you agree with this statement? Why or Why not? Justify. 3 ii. Pegasus company just starting in business purchased three merchandise inventory items at the following prices. First purchase $85; Second purchase $97; Third purchase $88. If the company sold two units for a total of $250 and used FIFO costing, what will be the cost of goods sold and ending inventory for the period? What will be the gross profit? Page 1