QUESTION 29 an. 1 Beginning ietory 600 units 500.00 Compute the cost of the endi

Question

QUESTION 29 an. 1 Beginning ietory 600 units 500.00 Compute the cost of the ending inventory based on the FIFO method of inventory valuation, A $6800 8 $10,000 $11,000 $14,200 C. QUESTION 30 Atthe start of the current year, Mike Company had credit balanceinthe Alowance lor Doubtful Accounts of $6.000. During the year anacaustment of 29% of sales was made for uncollectible accounts. Sales for the year were $2,000,000 and $30,000 of accounts eceivable were writen off as worthless No recoveries of accounts previously written off were made during the y0 The yoared Sancial statements should show AAllowance for Doubtful Accounts with a credit balance of $16,000 Allowance for Doubtful Accounts with a credit balance of $10,000 Bad Debts expense of $34,000 Bad Dobts exporse of $46,000 None of the above QUESTION 31 Which of the following staternents is a characteristic of the LIFO method of pricing inventory in a period of rising prices? A. The cost of goods sold is measured in relatively cument costs 8 Ending inventory on the balance sheet is valued at relatively current costs CDuring a period of rising prices, LIFO tends to maximize the amounts of income taxes owed DNone of the above QUESTION 32 Following is selected information (in millions) for Bill Company, AFTER year-end adjusting entries: BW Company 2007 2006 S 50,000 $40.000 Net sales Bad debt expense 1.200 3,000 $$.000 Gross Accounts Receivable Allewance for Doubrfal Accounts 200 On the basis of the information provided for Bill Company, the Accounts Receivable written off in 2007 were A $1.400 B. $340 C. $1,540 $1.200 E. None of the above. QUESTION 33 On November 1. May Corporation sold merchandise in return for a 12%. 90-day note receivable in the amount of $50,000. The proper adjusting entry at December 31 (ond of May's focal yoa) includos a: A Debit to Cash of $1.000 Credit to Interest Receivable of $1,000 Credit to Notes Receivable of $1,500 D. Credit to Interest Revenue of $1,000 QUESTION 34 Aphabet Company, which uses the periodic inventory method, purchases different letters for resale. Alphabet had no beginning inventory. Iit purchased A thru G in January at $8.50 per letter. In February, it purchased H thru L at $10.50 per letter it purchased M thru R in March at $11.50 per letter, It sold A, D, E. H, J and N in October. There were no additional purchases or sales during the remainder of the year. If Alphabet Company uses the FIFO method, what is the cost of its ending inventory? $69 $130 $51 $112

Explanation / Answer

Question No 29: Option B ($10,000) - Closing Inventory is 800 units (200*$14 + 600*$12 = $10,000)

Question No 30: Option A - { Opening Balance $6000 (Credit) + Provision during year $40,000 (Credit) - Written Off $30,000 (Debit) = $16,000 (Credit) }

Question 31: Option A

Question 32: Option A (As Bad Debt expense is - $ 1400 given)

Question 33: Option D (Credit to Interest Revenue $ 1000)

Question 34: Option B ($130)

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