8. The largest expense on a retailer\'s income statement is typically: 1. Salari

Question

8. The largest expense on a retailer's income statement is typically: 1. Salaries and Wages 3. Income tax expense 2. Cost of Goods Sold 4. Depreciation expense 9. Baker Fine Foods has beginning inventory for the year of $12,000. During the year Baker purchases inventory for $150,000 and ends the year with $20,000 of inventory. What is Baker's COGS? 10. Davis Hardware Company uses a perpetual inventory system. How should Davis record the sale of merchandise costing $629 for $960 on account? Make the journal entry(s) 11. Below is year-end information for Spitzer Inc. $420,000 $800,000 $10,000 $170,000 $80,000 What is Spitzer's Gross Profit COGS Net sales Non-operating expenses Operating expenses Income tax Expense 800- $ Y20,000- $ 380,006 12. The practice of using the lower-of-cost-or-market to evaluate inventory reflects which of the following 3.)Conservatism 4. Materiality 13. Under the principle of lower-of-cost-or-market, when a company has 10 items with a market value of accounting principles? 1. Neutrality 2. Matching principle $50 and a cost of $60, what is the adjusting entry?

Explanation / Answer

8

The largest expense on a retailer's income statement is typically:

Answer:

B. Cost of goods sold.

_______________________________________________

10

Description

Debit $

Credit $

Dr: Accounts receivable

960

Cr: Sales revenue

960

Dr: Cost of goods sold

629

Cr: Inventory

629

__________________________________________

13

Description

Debit $

Credit $

Dr: Cost of goods sold

100

Cr: Inventory (60-50)*10

100

Description

Debit $

Credit $

Dr: Accounts receivable

960

Cr: Sales revenue

960

Dr: Cost of goods sold

629

Cr: Inventory

629

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