5) A customer uses the Better Life Gymcredit card to charge tre e $1.000 and the Interest charges ner Life Gym. The price per the is not paid in a day. The customer to pay the ball within 30 days and interesadded to the customer's What is the on e interest? a) 530 b) S15 c) S 180 d) 56 6) in a perpetual inventory system using the earnings approach, cost of goods sold is recorded a) on a daily basis. b) at the end of the accounting period c) on an annual basis d) with each sale. 7) A company purchased Inventory as follows: 200 units at $ 9 300 units at $ 10 The weighted average unit cost for inventory is a) $ 9.00. b) $ 9.50. c) $ 9.60 d) $ 10.00. 8) Water Inc. maintains a petty cash fund with a balance of $100. A disbursement of $10 from the fund for postage is recorded as an expense in the accounting records a) at the time the cash is taken from the fund. b) when the postage is used. c) when the petty cash fund is replenished. d) when the adjusting entries are prepared at year end. N Can't 2) Accounts Receivable Transactions 7 marks) Megacup Company sells beverage supplies. The company has a return policy of 10 days from the date of e and uses the perpetual inventory system. The following transactions occurred during the month of November Nov. 4 Sold merchandise for S 800 on account to Java Joe, terms 2/10, n/30. The original cost of the merchandise to MegaCup was $ 300 Java Joe returned goods with a selling price of $ 100 and a cost of $38. The goods are restored to inventory 14 Received the correct payment from Java Joe. Instructions Prepare journal entries to record the transactions for Moca Capa Company 3. SHORT ANSWERS (9 Marks) "When the buyer pays the freet costs which account would be debited in the entry to record the payment under a perpetual inventory system? (1 mark! the normal operating cycle of a merchandising company longer or shorter than for a service company Briefly explain the main difference between their operating cycles (2 marks 3) Goods that were purchased FOB destination are still in transit when a physical inventory is being done. Will the seller include these goods in their physical inventory count ? Explain (2 mark) 4) Give a brief explanation of what an EFT is, and why a company may prefer EFT payments. (3 marks) 5) What is the purpose of recording estimated uncollectible accounts using the allowance method? (1 mark) Brita MGT 1100 INVENTORY ERRORS AND ESTIMATION 10 Marks For who dependent sted belowing a perpetual inventory system, analyze the ima the addicted items at the end of the current wear by placing the appropriate code letter in the box under echtem Code Net en overstated - misunderstated em is not affected N Owner's Cost of Goods Sold Income Equity Assets was overstated 2 A physical count of goods on hand at the end of the current year resulted in some goods being counted twice. Goods purchased on account in December of the current year and shipped FOB destination were recorded as purchases, but were not included in the count of goods on hand on December 31 because they had not arrived by December 31 4. Goods purchased on account in December of the current year and shipped FOB shipping point were recorded as purchases, but were not included in the count of goods on hand on December 31 because they had not arrived by December 31. 5. The internal auditors discovered that the ending inventory in the previous period was understated $ 15,000 and that the ending inventory in the current period was overstated $ 25,000. mbia Institute of Technology FMGT 1100 - Accounting 1 D. INVENTORY COSTING METHODS (1 Marks) for the Mana Company uses the perpetualmente following information is available for the month of une tem and the wested average Date Explanation Units Unit Cost Jun 1 Beginning inventory 200 $ 10 Jun 15 Purchase 300 Jun 17 Sale 250 Jun 24 Purchase 400 Instructions Prepare a schedule to show cost of goods sold and the value of the ending Inventory for the month of June. NC FOR RECEIVABLES (14 Marks) Of Technology - Accounting 1 Bad Debts Expense (7 marks) Customer T 0-0 del _790 Logan Pratt Timball Zack O's accounts receivable ledger provides the following aged trial bstance at December 30 day51-00293 days 5 1.500 $ 220 12,000 975 1.000 $ 16,265 $9,320 The related general ledger account balances are: Accounts Receivable (control account)....... Allowance for Doubtful Accounts... SOO 5250 Total $ 1,750 8.600 $1.400 2.750 22.000 $1,400 1.000 $3,000 $ 29,95 Pango estimates that the estimated percenta es that the estimated percentage of uncollectible accounts are as follows account between 0 and 30 days, 1%, accounts between 31 and 60 days, 3%, accou o accounts between 31 and 60 days 39 accounts between 61 and 90 days, 5%; and accounts over 90 days old, 20%. $ 29,985 Debit 900 Debit Instructions Prepare the adjusting entry to record the current year's bad debt expense. British Columbia Insu FMGT 1100 - Accounting STRST paid on the purchase of inventory an additional cost that must be absorbed by the merchandise company b) not included in inventory because it is recoverable recorded as an operating expense on the income statement Additional freight costs and included in the calculation of the cost of goods sold, d) recorded as additional freight costs 10) ment of credit is a[n) The receivable that is usually evidenced by a formal instrument of che a) trade receivable, b) note receivable. c) accounts receivable. d) note payable. 11) I ending inventory is overstated in 2021. and no further errors are made in 2022, then profit will be a) overstated in 2021 and understated in 2022. b) understated in 2021 and overstated in 2022. c) overstated in both 2021 and 2022. d) overstated in 2021 and correct in 2022. 12) Revaluation of inventories to net realizable value should occur a) only if the amount is material. b) at year end only. c) in the period during which the decline occurs. d) at management's discretion. Accounting 1 13) its books while the bank mata A company maintains the asset account Cash in Bank reciprocal account that is a) a contra-asset account. b) a liability account c) also an asset account d) an owner's equity account. 14) Bank errors a) occur because of time lags. b) must be corrected by debits. c) must be corrected by the bank. d) are corrected by making an adjusting entry on the depositor's books 14) The collection period ratio is a measure of the company's a) liquidity. b) solvency. c) efficiency. d) profitability 15) Which of the following does not belong on a single-step income statement? a) net sales b) salaries expense c) gross profit d) rent revenue