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

69,000

Purchase Returns

17,000

Cost of Goods Sold

894,000

Purchases

878,000

Freight-In

11,000

Beginning Inventory

91,000

Question 9

JiCo uses the periodic method. Its
beginning inventory is $43,000, purchases are $321,000, F.O.B.

destination, purchase returns are $17,000,
and freight is $9,000. The balance in JiCo’s ledger Purchases

account is

$304,000

$317,000

$321,000

$330,000

Question 10

LoCo, which uses the periodic method,
purchases merchandise on account for $56,000, F.O.B. shipping

point. Freight charges are $900 C.O.D. LoCo
should record these purchases as

debit Purchases $56,000; credit Accounts
Payable $55,100; and credit Cash $900

debit Purchases $56,900; credit Accounts
Payable $56,000; and credit Cash $900

debit Purchases $56,000; debit Freight-In
$900; credit Accounts Payable $56,000; and

credit Cash $900

debit Purchases $55,100; debit Freight-In
$900; credit Accounts Payable $55,100; and

credit Cash $900

Question 11

NuCo uses the periodic method and has the
following account balances: Purchase Returns $17,000;

Beginning Inventory $4,000; Purchases
$193,000; Freight-In $11,000; and Accounts Payable $23,000.

What are NuCo’s net purchases?

$183,000

$187,000

$191,000

$210,000

Question 12

VaCo, which uses the periodic method, is
preparing its year-end journal entry to record cost of goods

sold. It debits all of the following
accounts except

Beginning Inventory

Cost of Goods Sold

Purchase Discounts

None of the above

Question 13

WeCo uses the periodic method and has the
following account balances: Purchase Returns, $19,000;

Purchases, $812,000; Purchase Discounts,
$8,000; Beginning Inventory, $21,000; Freight-In, $30,000; and

Ending Inventory, $37,000. What is Demo’s
cost of goods sold?

$769,000

$783,000

$799,000

$815,000

Question 14

XaCo begins business in June and uses the
periodic method. Its June merchandise purchases are

$195,000 on account, F.O.B. shipping point.
Merchandise that cost $3,000 is returned for credit. Goods

that XaCo sells for $11,000 and that cost
$7,000 are returned to XaCo for cash refunds. On July 6, XaCo

pays a $6,000 freight bill for its June
purchases. The net cost of XaCo’s June purchases is

$192,000

$198,000

$205,000

$209,000

Question 15

YiCo buys 800 cases of tennis balls listed
at $130 per case and for which YiCo is given a 15% volume

discount. YiCo sells 70% of the cases for
cash. The cost of the unsold merchandise is

$15,600

$26,520

$31,200

$77,350

Question 16

XoCo, which begins business in May and uses
the perpetual method and moving average costing, shows

the following data:

Purchases

May 4

Sales

1,000 @ $7

May 11

400 @ $11

May 14

1,400 @ $8

May 19

2,000 @ $10

May 21

1,500 @

$15

The balance in XoCo’s inventory account on
May 31 is

$20,833

$21,705

$22,125

$23,875

Question 17

FoCo uses the periodic method and
weighted-average costing. The cost of the 2,500 units in FoCo’s 20X3

ending inventory is $32,500. FoCo has the
following merchandise purchases during 20X4: 1,700 units in

May @ $14; 3,500 units in June @ $19; and
2,300 units in October @ $21. Calculate the cost of the 1,200

units in ending inventory.

$16,632

$20,532

$22,176

$25,200

Question 18

HuCo begins operations in 20X4, uses the
periodic method and makes the following merchandise

purchases:

Total

Units

Unit

Cost

Total

Cost

April

900

$6

$5,400

September

1,300

7

9,100

March

1,100

$ 8

$8,800

November

500

10

5,000

20X4

20X5

Assume HuCo uses weighted-average costing
and has 700 units in 20X4 ending inventory. If HuCo sells

1,600 units in 20X5, what is its 20X5 cost
of goods sold (round unit costs in the computation to the

nearest penny)?

$11,040

$11,760

$12,816

$13,800

Question 19

LiCo uses the periodic method and
weighted-average costing. On December 31, 20X7, LiCo’s inventory

consists of 1,800 units costing $5 each. In
January, 20X8, LiCo purchases 4,000 units @ $9, of which it

returns 700 units in March. It purchases
4,400 units in October @ $7, of which it returns 500 units in

December. The weighted-average cost per
unit of goods available for sale during 20X8 is

$6.47

$6.79

$7.33

$7.92

Question 20

SeCo begins operations in 20X6 and uses the
periodic method and weighted-average costing. SeCo has

the following merchandise purchases during
20X6: 700 units in March @ $4; $1,100 units in July @ $6;

and 2,200 units in October @ $7. A physical
count of ending inventory finds 1,000 units. Calculate the

cost of goods sold.

$6,200

$7,000

$18,600

$24,000

Question 21

TuCo begins operations in 20X1 and uses the
perpetual method and moving average costing. On January

4, TuCo buys 1,200 units of merchandise @
$3. On January 8, it sells 300 units. On January 11, it buys

1,100 units @ $4, and on January 30, it
sells 600 units. On January 30, what does TuCo record as the cost

of goods sold? (pp 68-74 #19)

$1,800

$2,130

$2,400

$2,430

Question 22

HuCo Company begins operations in 20X4,
uses the periodic method, and makes the following

merchandise purchases:

Total

Units

Unit

Cost

Total

Cost

April

900

$6

$5,400

September

1,300

7

9,100

March

1,100

$ 8

$8,800

November

500

10

5,500

20X4

20X5

If HuCo uses FIFO costing and its December
31, 20X5 ending inventory is 800 units, then ending

inventory on its balance sheet will be

$5,600

$7,400

$8,800

$9,400

Question 23

HuCo begins operations in 20X4, uses the
periodic method and makes the following merchandise

purchases:

Total

Units

Unit

Cost

Total

Cost

April

900

$6

$5,400

September

1,300

7

9,100

March

1,100

$ 8

$8,800

November

500

10

5,500

20X4

20X5

If HuCo uses FIFO costing and sold 1,800
units each year, what is its 20X5 cost of goods sold?

$10,300

$10,700

$14,200

$14,600

Question 24

JoCo uses the periodic method and FIFO
costing. JoCo’s December 31, 20X2 inventory consists of 400

units bought in November, 20X2 @ $11.
During 20X3, JoCo made the following purchases: 1,800 units @

$14 in January; 2,200 units @ $17 in July;
and 2,300 units @ $13 in October. The December 31, 20X3

inventory consists of 1,300 units. JoCo’s
20X3 cost of goods sold is

$78,700

$79,900

$80,000

$80,800

Question 25

MaCo begins operations in 20X1 and uses the
periodic method and first-in, first-out (FIFO) costing. In

March, 20X1, MaCo buys 700 units @ $4; in
July, it buys 2,700 units @ $6; and in November, it buys

1,600 units @ $8. The cost of the 1,900
units in MaCo’s December 31 ending inventory is

$7,600

$10,000

$14,600

$15,200

Question 26

NiCo begins operations in 20X4, makes all
sales on account, uses the perpetual method and FIFO costing,

and shows the following data:

Purchases

February 4

Sales

700 @ $7

May 11

400 @

$15

July 14

1,100 @

$8

September 19

3,000 @

$10

December 21

1,500 @

$18

On December 21, what entries does NiCo
record?

Accounts Receivable

27,000

Sales

27,000

Cost of Goods Sold

15,000

Inventory

15,000

Accounts Receivable

27,000

Sales

27,000

Cost of Goods Sold

9,200

Inventory

9,200

Accounts Receivable

27,000

Sales

27,000

Cost of Goods Sold

11,900

Inventory

11,900

Accounts Receivable

27,000

Sales

Cost of Goods Sold

27,000

12,000

Inventory

12,000

Question 27

TeCo uses the perpetual method and FIFO
costing. TeCo’s December 31, 20X5, inventory consists of 800

units @ $7. In 20X6, TeCo’s merchandise
purchases and sales are as follows:

Purchases

February 24

1,700 @

$9

June 11

August 18

September 1

Sales

2,000 @

$25

2,100 @

$11

1,600 @

$28

October 19

3,000 @

$14

November

29

2,700 @

$30

TeCo’s December 31, 20X6 ending inventory
is

$10,100

$11,700

$12,600

$18,200

Question 28

CuCo, which begins business in 20X8, uses
the periodic method and LIFO costing. CuCo’s 20X8

merchandise purchases are as follows:

January 3

2,200 @ $5

April 16

1,800 @ $8

September

25

3,000 @ $6

December 4

1,100 @ $9

If CuCo’s December 31, 20X8 ending
inventory is 300 units, its 20X8 cost of goods sold is

$49,900

$50,600

$51,800

$52,100

Question 29

HuCo begins operations in 20X4, uses the
periodic method and makes the following merchandise

purchases:

Total

Units

Unit

Cost

Total

Cost

April

900

$6

$5,400

September

1,300

7

9,100

March

1,100

$ 8

$8,800

November

500

20X4

20X5

10

If HuCo uses LIFO costing and sold 2,000
units in 20X4, what is its 20X4 cost of goods sold?

$13,000

$13,100

$13,300

$14,000

Question 30

HuCo begins operations in 20X4, uses the
periodic method and makes the following merchandise

purchases:

Total

Units

Unit

Cost

Total

Cost

20X4

April

900

$6

$5,400

September

1,300

7

9,100

March

1,100

$ 8

$8,800

November

500

20X5

10

If HuCo uses LIFO costing and sold 1,700
units each year, what is its 20X5 cost of goods sold?

$12,700

$12,800

$14,300

$14,400

Question 31

HuCo begins operations in 20X4, uses the
periodic method and makes the following merchandise

purchases:

Total

Units

Unit

Cost

Total

Cost

April

900

$6

$5,400

September

1,300

7

9,100

March

1,100

$ 8

$8,800

November

500

20X4

20X5

10

Assume HuCo uses LIFO costing. It sold
1,500 units in 20X4 and has 1,000 units in its December 31, 20X5

ending inventory. What is ending inventory
on its December 31, 20X5 balance sheet?

$6,200

$6,600

$7,000

$8,000

Question 32

KoCo begins business in 20X1 and uses the
periodic method. In March, 20X1, KoCo buys 700 units @ $4;

in July, it buys 2,700 units @ $6; and in
November, it buys 1,600 units @ $8. Using LIFO, what is the cost

of the 1,900 units in ending inventory?

$7,600

$10,000

$14,600

$15,200

Question 33

LuCo begins operations in 20X4 and uses the
periodic method and LIFO costing. Its merchandise

purchases are as follows:

20X4

20X5