Answers to Practice Test for Chap 5,6

Multiple Choice

1 d
2 c
3 c
4 a
5 b
6 d
7 d
8 c
9 e
10 b
11 d
12 a
13 a
14 c
15 e
16 c
17 c
18 d
19 b

Answers to Problems.

#1
2-Apr A/R 4,800
Sales 4,800

CGS 2,700
Merch Inventory 2,700

4-Apr Sales Ret and Allow 200

A/R 200

Merch Inventory 110

CGS 110

13-Apr Cash 4,554

Sales Discounts 46
A/R 4,600

#2 GM Ratio = 28.3%

Sales 50475
Less:
Sales Disc 235
Sales R&A 2840
= Net sales 47400
Net Sales 47400
Less: CGS 33975
=Gross Profit 13425

GM Ratio = Gross profit/net sales = 28.3%

#3 under over
over under
over under
under over

#4
CGS End Inv
FIFO $ 157.50 $ 114.50
LIFO $ 149.00 $ 123.00
Weigh Av $ 153.00 $ 119.00
(details below)
FIFO
1-Apr Beg Inv 3 18 54.00

4-Apr Purch 8 17.25 138.00 3 18 54.00

8 17.25 138.00
192.00

6-Apr Purch 5 16 80.00 3 18 54.00

8 17.25 138.00
5 16 80.00
272.00

7-Apr Sales 3 18 54.00 2 17.25 34.50

6 17.25 103.50 5 16 80.00
157.50 114.50
****************************************

LIFO
1-Apr Beg Inv 3 18 54.00

4-Apr Purch 8 17.25 138.00 3 18 54.00

8 17.25 138.00
192.00

6-Apr Purch 5 16 80.00 3 18 54.00

8 17.25 138.00
5 16 80.00
272.00

7-Apr Sales 5 16 80.00 3 18 54.00

4 17.25 69.00 4 17.25 69.00
149.00 123.00
**************************

Weighted Avg

1-Apr Beg Inv 3 18 54.00

4-Apr Purch 8 17.25 138.00 3 18 54.00

8 17.25 138.00
192.00

6-Apr Purch 5 16 80.00 3 18 54.00

8 17.25 138.00
5 16 80.00
16 272.00

7-Apr Sales 9 17 153.00 7 17 119.00

#5
BUYER: (Simmons)

Merch Inv 168,000

A/P 168,000

A/P 168,000
Merch Inv 3,360
Cash 164,640

SELLER: (Crystal)

A/R 168,000
Sales 168,000

CGS 140,000
Merch Inv 140,000

Cash 164,640
Sales Discounts 3,360
A/R 168,000