Question

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QUESTION 42

1. A company purchased $3300 worth of merchandise. Transportation costs were an additional $290. The company returned $230 worth of merchandise and then paid the invoice within the 3% cash discount period. The total cost of this merchandise is:

$3267.90.

$3360.00.

$3261.00.

$3240.00.

$3093.00.

Q

1. A company's current assets are $28,920, its quick assets are $16,090 and its current liabilities are $12,770. Its acid-test ratio equals:

1.26.

2.26.

1.23.

0.79.

0.44.

Q

Wiley Hill opened Hill's Repairs on March 1 of the current year. During March, the following transactions occurred:

1. Wiley invested $26,000 cash in the business in exchange for common stock.

2. Wiley contributed $101,000 of equipment to the business in exchange for common stock.

3. The company paid $2100 cash to rent office space for the month of March.

4. The company received $17,000 cash for repair services provided during March.

5. The company paid $6300 for salaries for the month of March.

6. The company provided $3100 of services to customers on account.

7. The company paid cash of $600 for utilities for the month of March.

8. The company received $3200 cash in advance from a customer for repair services to be provided in April.

9. The company paid $5100 in cash dividends.

Based on this information, the total amount of stockholders' equity reported on the balance sheet at the end of March would be:

$136,200.

$14,500.

$8300.

$127,800.

$133,000.

QUESTION

1. A company has beginning inventory of 11 units at a cost of $29 each on February 1. On February 3, it purchases 39 units at $31 each. 17 units are sold on February 5. Using the FIFO periodic inventory method, what is the cost of the 17 units that are sold?

$493

$522

$532

$505

$509

QUESTION

1. A company's balance sheet shows: cash $42,000, accounts receivable $48,000, equipment $86,000, and equity $90,000. What is the amount of liabilities?

$166,000.

$176,000.

$89,000.

$266,000.

$86,000.

Answer 1

1. Answer: $3,267.90

Purchases	$3,300.00
Transportation costs	$290.00
Returns	($230.00)
Purchase discount [($3,300-$230) x 3%]	($92.10)
Total cost of the merchandise	$3,267.90

2. Answer:1.26

Acid test ratio = Quick assets ÷ Current liabilities = $16,090 ÷ $12,770 = 1.26

3. Answer: $ 133,000

Cash contribution	$26,000
Equipment contribution	$101,000
Total contribution	$127,000
Add; Cash services	$17,000
Credit services	$3,100
Less: Rent expense	($2,100)
Salaries expense	($6,300)
Utilities expense	($600)
Less: Dividends	($5,100)
Total stockholders' Equity	$133,000

4. Answer: $505

	FIFO (Periodic)
	Cost of goods sold
	Units	x	Unit cost	=	Total cost
Beginning inventory	11	x	$29	=	$319
Feb. 3 Purchase	6	x	$31	=	$186
Total					$505

5. Answer: $86,000

Cash	$42,000
Accounts receivable	$48,000
Equipment	$86,000
Total assets	$176,000
Less: Equity	($90,000)
Liabilities	$86,000