The Xu Corporation uses a periodic inventory system. The company has a beginning

Question

The Xu Corporation uses a periodic inventory system. The company has a beginning inventory of 300 units at $5 each on January 1. Xu purchases 500 units at $4 each in February and 200 units at $6 each in March. There were no additional purchases or sales during the remainder of the year.

Use the information above to answer the following question. Xu sells 300 units during the quarter. If Xu uses the LIFO method, what is its cost of goods sold?

$1,600

$1,400

$1,500

$1,800

Use the information above to answer the following question. Xu sells 150 units during the quarter. If Xu uses the weighted average method, what is its cost of goods sold?

$600

$705

$750

$900

Cary Inc. reported net credit sales of $300,000 for the current year. The unadjusted credit balance in its Allowance for Doubtful Accounts is $500. The company has experienced bad debt losses of 1% of credit sales in prior periods. Using the percentage of credit sales method, what amount should the company record as an estimate of Bad Debt Expense?

$2,500

$3,000

$2,980

$3,200

Blossom Inc. has an unadjusted debit balance of $3,500 in its Allowance for Doubtful Accounts. The company has experienced bad debt losses of 2% of credit sales in prior periods. Blossom reported net credit sales of $1,500,000 for the current period. The required journal entry to record Bad Debt Expense should include a debit to:

Allowance for Doubtful Accounts for $30,000.

Allowance for Doubtful Accounts for $33,500.

Bad Debt Expense for $33,500.

Bad Debt Expense for $30,000.

On July 1, 2016, Empire Inc. lends $8,000 to a customer and receives a 9% note due in two years. Interest is due in full on July 1, 2018, the due date of the note. What is the amount of Interest Revenue that will be reported on Empire's income statement for the year ended December 31, 2016?

$1,440

$720

$420

$360

Explanation / Answer

Units Cost Total 1 Beginning 300 5 1500 Purchases 500 4 2000 Purchases 200 6 1200 Total 4700 Sold 200 6 1200 100 4 400 (1200+400) Cost of goods sold 1600 The correct option is A. $ 1600 2 150 units sold using weighted average method Units Cost Total Cost per unit Beginning 300 5 1500 Purchases 500 4 2000 2000+1500/800 4.375 Purchases 200 6 1200 3500+1200/1000 4.7 Total 4700 Units sold 150 4.7 705 Cost of goods sold= $ 705 The correct option is B. $ 705 5 Interest 8000*9% * 6/12 360 The correct option is E. $ 360

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.