Question
Question Part A and B A. Cinnamon Buns Co. (CBC) started 2018 with $54,000 of merchandise on hand. During 2018, $291,000 in merchandise was purchased
Question Part A and B
A. Cinnamon Buns Co. (CBC) started 2018 with $54,000 of merchandise on hand. During 2018, $291,000 in merchandise was purchased on account with credit terms of 1/10 n/30. All discounts were taken. Purchases were all made f.o.b. shipping point. CBC paid freight charges of $9,500. Merchandise with an invoice amount of $3,200 was returned for credit. Cost of goods sold for the year was $312,000. CBC uses a perpetual inventory system.
Assuming CBC uses the gross method to record purchases, ending inventory would be:
Multiple Choice
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$26,922.
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$36,422.
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$39,300.
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$36,390.
B. Fulbright Corp. uses the periodic inventory system. During its first year of operations, Fulbright made the following purchases (listed in chronological order of acquisition):
- 43 units at $92
- 71 units at $74
- 173 units at $60
Sales for the year totaled 271 units, leaving 16 units on hand at the end of the year.
Ending inventory using the FIFO method is:
Multiple Choice
-
$960.
-
$1,472.
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$1,092.
-
$1,010.
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