1. Breanna Boutique Reported the Following Year-End Information

1. Breanna Boutique reported the following year-end information:

Cash $53,000 Short-term 11,000 investments Accounts receivable 55,000 Inventory 326,000 Prepaid expenses 15,500 Accounts payable 102,500 Other current payables 29,000

The current ratio and acid-test ratio for the boutique are ______and ______, respectively: 3.50 and .90 2.21 and 1.31 2.48 and 1.31 None of these 1.16 and

2. Karen Betz had net sales of $28,119 million, its cost of goods sold was $19,011 million, and its net income was $957 million. Its gross margin ratio (rounded) equals: 32.4%. 64.2%. 3.4%. 35.6%. 67.6%

($28,119- $19,011) = $28,119

= 32.4%

3. A company had sales of $388,000 and its gross profit was $155,000. Its cost of goods sold equals: $155,000. $233,000. $543,000. $(233,000). $(543,000).

4. A buyer failed to take advantage of the vendor's credit terms of 2/12, n/43, but instead paid the invoice in full at the end of 55 days. By not taking advantage of the cash discount, the buyer lost the equivalent of ______annual interest on the amount of the purchase. 9.2% 13.3% 30.4% 17.0% 23.5%

5. A company had sales of $699,000 and cost of goods sold of $284,000. Its gross margin equals: $(983,000). $983,000. $284,000. $415,000. $(415,000).

6. A company's gross profit was $83,150 and its net sales were $349,200. Its gross margin ratio (rounded) equals: .24%. .04%. 23.8%. $83,150. $349,200.

7. A company purchased $6,000 worth of merchandise. Transportation costs were an additional $450. The company later returned $245 worth of merchandise and paid the invoice within the 4% cash discount period. The total amount paid for this merchandise is: $5,524.80. $5,974.80. $5,092.80. $5,573.00. $6,445.20.

8. ABC Company had cash sales of $95,550, credit sales of $83,390, sales returns and allowances of $1,600, and sales discounts of $3,635. ABC's net sales for this period equal: $175,305. $90,315. $177,340. $180,975. $173,705.

9. A company records the following journal entry: debit Cash $1,330, debit Sales Discounts $70, and credit Accounts Receivable $1,400. This means that a customer has taken a ___ cash discount for early payment. 3% 4% 9% 8% 5%

10. A company purchased $3,500 of merchandise on January 5. On January 7, it returned $700 worth of merchandise. On January 8, it paid the balance in full, taking a 3% discount. The amount of the cash paid on January 8 equals: $4,074. $3,395. $2,016. $700. $2,716.

11. XYX Corporation total quick assets were $5,886,000, its current assets were $11,800,000 and its current liabilities were $8,000,000. Its acid-test ratio (rounded) equals: 1.48. 1.36. .74. .50. .74.

12. A company records the following journal entry: debit Cash $1,316, debit Sales Discounts $84, and credit Accounts Receivable $1,400. This means that a customer has taken a ___ cash discount for early payment. 5% 9% 4% 10% 6%

13. A company's current assets were $17,790, its quick assets were $11,750 and its current liabilities were $12,210. Its quick ratio (rounded) equals: 1.46. .96. .49. .69. 1.04

$11,750 Quick ratio = = 0.96 $12,210

14. A company had sales of $385,000 and its gross profit was $153,000. Its cost of goods sold equals: $232,000. $(538,000). $538,000. $(232,000). $153,000.

15. On October 1, Courtland Company sold merchandise in the amount of $5,600 to Carter Company, with credit terms of 3/10, n/30. The cost of the items sold is $4,000. Courtland uses the periodic inventory system. Carter pays the invoice on October 8, and takes the appropriate discount. The journal entry that Courtland makes on October 8 is: Cash 5,432 Accounts receivable 5,432

Cash 5,432 Sales discounts 168 Accounts receivable 5,600

Cash 5,600 Accounts receivable 5,600

16. A company's net sales were $671,600, its cost of good sold was $237,800 and its net income was $33,150. Its gross margin ratio (rounded) equals: 64.59%. 35.4%. 135.4%. 69.7%. 13.1%. 17. MNC Corporation total quick assets were $5,880,000, its current assets were $11,900,000 and its current liabilities were $7,000,000. Its acid-test ratio (rounded) equals: 1.19. .86. .49. .84. 1.70.

18. Herald Company had sales of $105,000, sales discounts of $1,700, and sales returns of $3,900. Herald Company's net sales equals: $99,400. $101,100. $5,600. $103,300. $110,600.

19. On August 1, Michele Company sold merchandise in the amount of $3,500 to Alberts, with credit terms of 1/10, n/30. The cost of the items sold is $4,000. Michele uses the perpetual inventory system. Alberts pays the invoice on August 8, and takes the appropriate discount. The journal entry that Michele makes on August 8 is: Cash 3,500 Accounts receivable 3,500

Cash Discount = $3,500 ×0.01 = $35 Cash Paid on August 8 = 43,500 - $35 = $3,645

Journal entry:

Cash $3,465 Sales Discount $35 Accounts Receivable $3,500

20. A company had sales of $685,000 and cost of goods sold of $294,000. Its gross margin equals: $391,000. $294,000. $(391,000). $979,000. $(979,000).

21. A company has net sales and cost of goods sold of $747,000 and $545,000, respectively. Its net income is $17,450. The company's gross margin and operating expenses are ______and ______, respectively. $202,000; $184,550 $730,000; $202,000 $202,000; $729,550 $184,550; $202,000 $729,550; $527,550

22. The credit terms 2/10, n/30 are interpreted as: 30% discount if paid within 2 days. 30% discount if paid within 10 days. 10% cash discount if the amount is paid within 2 days, with balance due in 30 days. 2% cash discount if the amount is paid within 10 days, with the balance due in 30 days. 2% discount if paid within 30 days.

23. n August 1, Robertson Company sold merchandise in the amount of $5,300 to Adam, with credit terms of 3/10, n/30. The cost of the items sold is $4,400. Robertson uses the perpetual inventory system. On August 4, Adam returns some of the merchandise. The selling price of the merchandise is $530 and the cost of the merchandise returned is $440.The entry or entries that Robertson must make on August 4 is: Accounts receivable 530 Sales returns and allowances 530 Cost of goods sold 440 Merchandise inventory 440

Sales returns and allowances 530 Accounts receivable 530 Merchandise inventory 440 Cost of goods sold 440

Accounts receivable 530 Sales returns and allowances 530

Sales returns and allowances 530 Accounts receivable 530

Sales returns and allowances 440 Accounts receivable 440

24. On August 1, Fernanda Company sold merchandise in the amount of $5,000 to Alberts, with credit terms of 3/10, n/30. The cost of the items sold is $4,200. Fernanda uses the perpetual inventory system. The journal entry or entries that Fernanda will make on August 1 is: Accounts receivable 4,200 Sales 4,200

Sales 5,000 Accounts receivable 5,000

Accounts receivable 5,000 Sales 5,000 Sales 5,000 Accounts receivable 5,000 Cost of goods sold 4,200 Merchandise Inventory 4,200

Accounts receivable 5,000 Sales 5,000 Cost of goods sold 4,200 Merchandise inventory 4,200

25. A buyer failed to take advantage of the vendor's credit terms of 3/19, n/44, but instead paid the invoice in full at the end of 63 days. By not taking advantage of the cash discount, the buyer lost the equivalent of ______annual interest on the amount of the purchase. 24.9% 43.8% 17.4% 28.8% 9.9%