Homework 4
Question 1Alpha Company used the periodic inventory system
for purchase & sales of merchandise. Discount terms for both purchase &
sales are, FOB Destination, 2/10, n30 and the gross method is used.
> Alpha Company purchased on account $2,550 of
merchandise from Bravo Company on May 2, 2016.
> Alpha Company returned, to Bravo Company, $200 of this
merchandise on May 3, 2016.
> Freight charges related to this transaction of $150
were paid by Bravo Company.
Use this information to prepare the compound General Journal
entry (without explanation) for the payment for merchandise on May 12. If no
entry is required then write “No Entry Required.”
Question 2 Alpha Company used the periodic inventory system
for purchase & sales of merchandise. Discount terms for both purchase &
sales are, FOB Destination, 2/10, n30 and the gross method is used.
> Alpha Company purchased on account $2,500 of
merchandise from Bravo Company on May 2, 2016.
> Alpha Company returned, to Bravo Company, $250 of this
merchandise on May 3, 2016.
> Freight charges related to this transaction of $150
were paid by Bravo Company.
Use this information to prepare the General Journal entries
(without explanation) for May 2 & May 3 entries. If no entry is required
then write “No Entry Required.”
Question 3 Alpha Company used the periodic inventory system
for purchase & sales of merchandise. Discount terms for both purchase &
sales are, FOB Destination, 2/10, n30 and the gross method is used.
> Alpha Company sold on account $2,500 of merchandise to
Bravo Company on May 2, 2016. Selling price was $4,000
> Bravo Company returned, to Alpha Company, $250 of this
merchandise on May 3, 2016. Merchandise was sold for $400
> Freight charges related to this transaction of $150
were paid by Alpha Company.
Use this information to prepare Alpha Company’s compound
General Journal entry (without explanation) for the payment for merchandise on
May 12. If no entry is required then write “No Entry Required.”
Question 4 Alpha Company used the periodic inventory system
for purchase & sales of merchandise. Discount terms for both purchase &
sales are, FOB Destination, 2/10, n30 and the gross method is used.
> Alpha Company sold on account $3,000 of merchandise to
Bravo Company on May 2, 2016. Selling price was $4,500
> Bravo Company returned, to Alpha Company, $300 of this
merchandise on May 3, 2016. Merchandise was sold for $450
> Freight charges related to this transaction of $150
were paid by Alpha Company.
Use this information to prepare Alpha Company’s Journal
entry (without explanation) for the payment for merchandise on May 15. If no
entry is required then write “No Entry Required.”
Question 5 Alpha Company used the periodic inventory system
for purchase & sales of merchandise. Discount terms for both purchase &
sales are, FOB Destination, 2/10, n30 and the net method is used.
> Alpha Company purchased on account $2,700 of
merchandise from Bravo Company on May 2, 2016.
> Alpha Company returned, to Bravo Company, $300 of this
merchandise on May 3, 2016.
> Freight charges related to this transaction of $150
were paid by Bravo Company.
Use this information to prepare the General Journal entries
(without explanation) for May 2 & May 3 entries. If no entry is required
then write “No Entry Required.”
Question 6 Alpha Company used the periodic inventory system
for purchase & sales of merchandise. Discount terms for both purchase &
sales are, FOB Destination, 2/10, n30 and the net method is used.
> Alpha Company purchased on account $2,500 of
merchandise from Bravo Company on May 2, 2016.
> Alpha Company returned, to Bravo Company, $250 of this
merchandise on May 3, 2016.
> Freight charges related to this transaction of $150
were paid by Bravo Company.
Use this information to prepare the compound General Journal
entry (without explanation) for the payment for merchandise on May 15. If no
entry is required then write “No Entry Required.”
Question 7 Alpha Company uses the periodic inventory system
and had the following inventory & sales activity for the month of May 2016:
Date
Activity
Quantity
Unit Price
5/1
Beginning Inventory
175
$10
5/5
Purchase
200
$12
5/15
Purchase
300
$15
5/25
Purchase
150
$16
Sales were 545 units at $25.
Using the LIFO method, determine the dollar values following for the
month of May:
1. Ending Inventory
2. Cost of Goods Available for Sale
3. Cost of Goods Sold
Question 8 Alpha Company uses the periodic inventory system
and had the following inventory & sales activity for the month of May 2016:
Date
Activity
Quantity
Unit Price
5/1
Beginning Inventory
175
$10
5/5
Purchase
200
$12
5/15
Purchase
300
$15
5/25
Purchase
150
$16
Sales were 545 units at $25.
Using the FIFO method, determine the dollar values following for the
month of May:
1. Ending Inventory
2. Cost of Goods Available for Sale
3. Cost of Goods Sold
Question 9 Alpha Company uses the periodic inventory system
and had the following inventory & sales activity for the month of May 2016:
(Round all per unit calculations to the nearest penny.)
Date
Activity
Quantity
Unit Price
5/1
Beginning Inventory
100
$10.10
5/5
Purchase
200
$11.15
5/15
Purchase
300
$13.00
5/25
Purchase
150
$15.00
Sales were 525 units at $22.00. Using weighted-average method, determine the
dollar values following for the month of May: (Enter only whole dollar values.)
1. Ending Inventory
2. Cost of Goods Available for Sale
3. Cost of Goods Sold
Question 10 The following is a partial Adjusted Trial
Balance for Alpha Company for the month:
Alpha Company
Adjusted Trial Balance (partial)
January 31, 2016
Accounts
Debit
Credit
Inventory
$2,750
Sales
$12,500
Sales Discounts
200
Sales Returns & Allowances
1,200
Purchases
4,000
Purchases Discounts
150
Purchase Returns & Allowances
450
Freight In
50
Advertising Expense
150
Depreciation Expense
145
Freight Out
70
Income Tax Expense
500
Salaries Expense
500
Utilities Expense
100
Additionally, Inventory for December 31, 2015 was $2,700.
Prepare a multiple-step income statement.
What amount should Alpha Company report on a Multi-Step
Income Statement for the following items:
1. Net Sales
2. Cost of Goods Available for Sales
3. Gross Profit
4. General & Administrative Expenses
5. Income before Taxes
Question 11 On May 15, 2016 the Smoky Bear Company inventory
storage facility was completely destroyed in a fire. Offsite accounting records
reflect the normal gross profit rate is 45% of sales. Sales to the date of the fire were
$1,600,000. The April 30, 2016 inventory
value was $550,000. Two purchases were made during May, before the fire, for
the values of $500,000 and $700,000.
Using the Gross Profit Method determine the estimated inventory loss due
to the fire.
Question 12 The following are selected account balances for
Charlie Company’s operations for the FY ended December 31, 2016. (All balances
are normal):
Accounts
Amount
Net Sales
$100,500
Administrative Expenses
22,000
Selling Expenses
12,000
Cost of Goods Sold
46,000
Interest Expense
2,000
Income Tax Expense
1,000
Prepaid Expenses
$5,000
Interest Receivable
$1,000
What is the Net Profit on Sales ratio for the year 2016?
(Enter the value as a percentage rounded to one decimal place. Example,
0.105134 would be entered as 10.5%)
Question 13 The following are selected account balances for
Charlie Company’s operations for the FY ended December 31, 2016. (All balances
are normal):
Accounts
Amount
Net Sales
$100,500
Administrative Expenses
22,000
Selling Expenses
12,000
Cost of Goods Sold
46,000
Interest Expense
2,000
Income Tax Expense
1,000
Prepaid Expenses
$5,000
Interest Receivable
$1,000
What is the Gross Profit Margin ratio for the year 2016?
(Enter the value as a percentage rounded to one decimal place. Example,
0.105134 would be entered as 10.5%)
Question 14 Alpha Company has the following account balances
information for fiscal year 2015 & 2016 (all balances are normal):
Alpha Company
December 31
Accounts
2016
2015
Merchandise Inventory
$1,200,000
$800,000
Office Supplies
25,000
20,000
Sales
3,000,000
2,500,000
Cost of Goods Sold
2,500,000
1,600,000
Freight Out
15,000
10,000
What is the FY 2016 inventory turnover ratio? Enter the
answer as a number rounded to one decimal place followed by a space and the
word times. (Example 1.123 would be entered 1.1 times)
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