QUESTION 5 Smith Company engaged in the following transactions during 2016: 1) Started the business by issuing $7,500 of common stock for cash. 2) The company paid cash to purchase $4,500 of inventory. 3) The company sold inventory that cost $3,000 for $7,250 cash. 4) Operating expenses incurred and paid during the year, $2,500. Smith Company engaged in the following transactions during 2017: 1) The company paid cash to purchase $5,800 of inventory. 2) The company sold inventory that cost $7,000 for $15,150 cash. 3) Operating expenses incurred and paid during the year, $3,500. Note: Smith uses the perpetual inventory system. The balance in the inventory account shown at December 31, 2017 is: 1. $300 2. $1,500 3. $4,500 4. $11,150

QUESTION 22 The inventory records for Shrewd Co. reflected the following: Beginning Inventory @ May 1 200 units @ $1.00 First Purchase @ May 7 300 units @ $1.10 Second Purchase @ May 17 400 units @ $1.20 Third Purchase @ May 23 100 units @ $1.30 Sales @ May 31 900 units @ $1.50 Determine the amount of cost of goods sold assuming the LIFO cost flow method. A) $1,140 B) $1,040 C) $1,000 D) $940 The correct answer is

QUESTION 23 The inventory records for Shrewd Co. reflected the following: Beginning Inventory @ May 1 200 units @ $1.00 First Purchase @ May 7 300 units @ $1.10 Second Purchase @ May 17 400 units @ $1.20 Third Purchase @ May 23 100 units @ $1.30 Sales @ May 31 900 units @ $1.50 Determine the amount of ending inventory assuming the FIFO cost flow method. A) $100 B) $130 C) $110 D) $120 The correct answer is

QUESTION 24 Which inventory costing method will produce a cost of goods sold closest to market value? A) Weighted average. B) Specific identification. C) FIFO. D) LIFO. The correct answer is The year-end adjusting entry to recognize bad debts expense will act to: A) increase assets and decrease equity. B) decrease assets and decrease equity. C) increase liabilities and increase equity. D) decrease liabilities and increase equity. The correct answer is