Question

On a multi-step income statement, Gains and Losses are reported as which of the following:

Select one:

a. Gross Margins

b. Operating Income

c. Selling, General and Administrative Expenses

d. Nonoperating Items

Question 17

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ABC Company purchased an order of new shoes that cost $500, shipping costs of $50, and added shoe laces that cost $20. The shoes were all sold for $800. What is the Cost of Goods Sold?

(Consider total product cost)

Select one:

a. $500

b. $570

c. $800

d. $230

Question 18

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A company reported the following inventory transactions during the month:

1/1/2015	Beginning Inventory	8 units	@ $12
1/7/2015	Purchase	10 units	@ $14
1/17/2015	Sale	12 units	@ $20
1/25/2015	Purchase	14 units	@ $16

What is the cost of goods sold using the LIFO cost flow method?

Select one:

a. $192

b. $152

c. $164

d. $157

Question 19

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Assuming the LIFO cost flow method is used, calculate the ending inventory balance on 1/31/2015:

1/1/2015	Beginning Inventory	8 units	@ $12
1/7/2015	Purchase	10 units	@ $14
1/17/2015	Sale	12 units	@ $20
1/25/2015	Purchase	14 units	@ $16

Select one:

a. $296

b. $268

c. $308

d. $303

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A company received an invoice totaling $2,000. Credit terms were 1/10, net 30. Assuming the discount is taken, what is the total cash payment?

Select one:

a. $1980

b. $2000

c. $1960

d. $1800

Answer 1

Answer 1:-

On a multi-step income statement, Gains and Losses are reported as

a. Gross Margins

Answer 2:-

Cost of Goods Sold for ABC Company

= (b) $570 and is calculated as under:

Cost =$ 500

Shipping Costs= $ 50

Shoe Laces cost= $ 20

Total Cost of goods sold= $ 500=50+20= $ 570

Answer 3:-

Cost of Goods sold using LIFO method=

Units sold on 1/17/2015= 12 units

10 units @$14=$140

2 units @ 12=$ 24

Hence cost of goods sold using LIFO cost flow method=C=$164 (140+24)

Answer 4:-

Assuming the LIFO cost flow method is used, calculation of the ending inventory balance on 1/31/2015:

Total inventory=32-12= 20 units

Ending inventory balance=6 units@ 12= 72

Add: 14 units @ 16= 224

Hence correct answer is option a= $ 296 (72+224)

Answer 5:-

A company received an invoice totaling $2,000. Credit terms were 1/10, net 30. Assuming the discount is taken, total cash payment= $2000-1% cash discount

= $ 2000-20=$1980

Hnece correct option is a