1. Which of the following transactions could explain the journal entry below?

dr	Cash (+A)......................................................		4,000
dr	Notes Receivable (+A)...................................		6,000
	cr	Equipment (-A).................................		10,000

1. The company buys $10,000 of equipment for $4,000 in cash and $6,000 on credit.
2. The company pays $4,000 in cash and $6,000 in notes payable to buy $10,000 of equipment.
3. The company sells $10,000 of equipment, for $4,000 in cash and $6,000 on credit.
4. The company sells $10,000 of equipment, for $4,000 in cash and pays off $6,000 it owes on the equipment.
5. None of the above.

Use this information to answer the next two questions. During 2020, MJX Company recorded the following amounts (in thousands of dollars): sales revenue $3,180, selling and administrative expenses $870, net income $630. Its opening and closing inventory balances were 370 and 310 respectively.

2. What was MJXs inventory turnover ratio?

1. 4.94
2. 5.42
3. 4.54
4. 4.41
5. Insufficient information to compute

3. What was MJXs COGS as a percentage of sales revenue?

1. Approximately 47%
2. Approximately 28%
3. Approximately 53%
4. Insufficient information to compute
5. None of the above

4. On February 15, 2021 Cool Caps purchased 400 caps at $18 per cap on credit (2/10, n/30) and paid $500 in shipping costs upon receipt. Cool caps returned 25 caps within two days of receipt for a full refund and paid the balance amount to the supplier on February 23, 2020. What is Cool Caps cost per cap?

1. $18.00
2. $18.95
3. $19.25
4. $18.97
5. None of the above