# Mastering Inventory Questions.

### Question Description:

24.99

Mastering Inventory Questions.docx Question 1 BaCo Company opens its business in 20X1 and purchases merchandise on account for \$88,000. In 20X2, BaCo pays \$67,000 cash on the \$88,000 due, sales are \$145,000, and ending inventory is \$24,000. BaCo’s gross profit for 20X2 is \$57,000 \$78,000 \$81,000 \$102,000 Question 2 GeCo begins 20X4 with merchandise costing \$69,000. Sales are \$233,000, purchases are \$198,000 and ending inventory is \$81,000. GeCo’s 20X4 cost of goods sold is \$186,000 \$210,000 \$221,000 \$245,000 Question 3 On December 3, HuCo purchases merchandise for \$47,000 on account, F.O.B. destination. Freight charges are \$800. On December 26, HuCo pays the vendor \$14,000. On HuCo’s December 31 balance sheet, the Accounts Payable balance will be \$33,000 \$33,800 \$47,000 \$47,800 Question 4 MoCo begins operations in April, uses the perpetual method, and records merchandise purchases at net. MoCo makes two purchases on account. Terms are 1/15, n/45. On April 4, MoCo purchases merchandise for \$3,000, which it pays for on April 16. On April 11, it makes a \$9,000 purchase that it pays for on April 29, but there are no sales in April. On April 30, the balance in MoCo’s Inventory ledger account is \$11,880 \$11,910 \$11,970 \$12,000 Question 5 PiCo uses the perpetual method. On February 17, PiCo sells \$30,000 in merchandise on account that cost \$10,000. On February 23, 10% of these goods are returned. Prepare the entry that PiCo makes on February 23 to record the sales return. Debit Sales Returns \$3,000 and credit Accounts Receivable \$3,000 Debit Sales Returns \$1,000; debit Gross Profit \$2,000; and credit Accounts Receivable \$3,000 Debit Sales Returns \$3,000 and credit Accounts Receivable \$3,000 and then debit Inventory \$1,000 and credit Cost of Goods Sold \$1,000 Debit Sales Returns \$3,000 and credit Accounts Receivable \$3,000 and then debit Inventory \$1,000 and credit Purchase Returns \$1,000 Question 6 RiCo uses the perpetual method for inventory and records purchases at gross. In 20X4, it has total merchandise purchases of \$324,000. It returns \$19,000 of the merchandise for full credit and receives \$7,000 in allowances from its vendors for defective merchandise and takes cash discounts of \$1,000. The net cost of RiCo’s 20X4 merchandise purchases is \$297,000 \$298,000 \$305,000 \$324,000 Question 7 VeCo, which uses the perpetual method, records merchandise purchases at gross. On October 3, VeCo buys \$42,000 of merchandise on account. Terms are 2/10, n/40. On October 9, VeCo returns goods that cost \$10,000. On October 11, VeCo pays \$31,360. What entry does VeCo record on October 11? Debit Accounts Payable \$31,360 and credit Cash \$31,360 Debit Accounts Payable \$32,000; credit Cash \$31,360; and credit Purchase Discounts \$640 Debit Accounts Payable \$32,000; credit Cash \$31,360; and credit Inventory \$640 Debit Accounts Payable \$31,360; credit Purchase Discounts \$640; credit Cash \$31,360; and credit Inventory \$640 Question 8 JaCo uses the periodic method and records merchandise purchases at net. Its 20X4 ending inventory is \$69,000. During 20X5, JaCo purchases merchandise for \$878,000, with freight-in of \$11,000. Purchase returns are \$17,000, purchase discounts lost are \$4,000, and the cost of merchandise on hand at year end is \$91,000. At year-end, JaCo records the following entry to close out all inventory-related accounts and compute cost of goods sold. Ending Inventory 91,000 Purchase Returns 17,000 Cost of Goods Sold 850,000 Purchases 878,000 Freight-In 11,000 Beginning Inventory 69,000 Ending Inventory 91,000 Purchase Returns 17,000 Cost of Goods Sold 846,000 Purchase Discounts Lost 4,000 878,000 Purchases 11,000 Freight-In 69,000 Beginning Inventory Ending Inventory 91,000 Purchase Returns 17,000 Cost of Goods Sold 854,000 Purchases 878,000 Freight-In 11,000 Beginning Inventory 69,000 Purchase Discounts Lost 4,000 Ending Inventory 6