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Accounting Principles I - Online Exam - Part II

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Question;Accounting Principles I - Online Exam - Part II;Complete the following exam and save this file on your;hard drive. Then submit your file to;your instructor on Canvas.;NAME;PART A (26 Points);Use the general journal below;to record the following transactions for the Linn Wholesale Company. Linn;Wholesale uses a perpetual inventory system. Linn's cost of all;merchandise sold was 60% of the sales price.;Mar. 2 Purchased $1,100 in;merchandise on account from Sac Supply, terms 2/10, N/30.;Mar. 4 Found $300 of the;merchandise from Sac Supply to be defective and returned it for credit.;Mar. 8 Sold merchandise on;account to Strib Company in the amount of $1,500, terms 2/10, N/30.;Mar. 9 Purchased merchandise;on account from Ander Company at an invoice price of $2,200, terms 2/10, N/30.;Mar. 10 Paid the freight company;their freight bill of $75 on a shipment received.;Mar. 11 Paid Sac Supply the amount;due on March 2, invoice. (Don't forget the return on Mar 4.);Mar. 15 Sold merchandise on account;to Exiter Company in the amount of $700, terms 2/10, N/30.;Mar. 24 Received check from Exiter;for the amount due on the March 15 sale.;Mar. 30 Paid Ander Company amount;due on March 9 purchase.;Mar. 31 Received check for amount;due from Strib Company for March 8 sale.;Linn;Wholesale Company - General Journal;Date;Account Title;Dr;Cr;PART;B;(12 Points, 4 points each);The following information is available for Miley Company.;Administrative Expenses;$30,000;Cost of Goods Sold;$245,000;Sales;$350,000;Sales Returns and Allowances;$10,000;Selling Expenses;$50,000;Compute the following (show all your work);a. Net Sales;b. Gross Profit;c. Income from operations;PART C (24 Points, 4 points each);The beginning inventory;balance of boodles on August 1 and the purchases of boodles during Augustwere as follows;August 1 Beginning Inventory;600 units @ $4.00;$2,400;August 9 Purchase;900 units @ $5.00;$4,500;August 23 Purchase;500 units @ $6.00;$3,000;Totals;2,000 units;$9,900;At August 31, the ending;inventory was 700 units. Using the periodic inventory system;determine both;ending inventory and the cost of;goods sold based on;each of the following methods of inventory;valuation. (Show;Computations);Ending Inventory Cost of Goods Sold;a. First-in, first-out;(FIFO)..................... $______________ $;b. Last-in, first-out;(LIFO).....................$______________ $;c. Weighted Average;Cost......................$______________ $;PART D(30 Points, 3 points each);For each of the following;transactions indicate the journal which should be used by placing the;appropriate symbol in the space provided: SJ = Sales Journal, PJ = Purchase Journal, CR = Cash Receipts Journal, CP = Cash;Payments Journal;GJ = General Journal.;A. Sold merchandise on;credit.......................................................;B. Returned merchandise to;supplier for credit..............................;C. Purchased merchandise on;credit..............................................;D. Purchased equipment used in;the business on credit................;E. Purchased merchandise for;cash...............................................;F. Collected accounts;receivable and allowed a cash discount.....;G. Made an adjusting entry to;accrue salaries at end of month.....;H. Sold merchandise for;cash........................................................;I. Recorded depreciation for the;period.......................................;J. Paid employees monthly;salaries..............................................;PART E (10 Points);Ron Carter is a new accountant;with Quartz Company. Quartz Company purchased merchandise onaccount for $4,000. The credit terms are 2/10;N/30. Ron has talked with the company's banker andlearned that the company could earn 10% on any money;invested in the company's savings account. Should;Ron pay the invoice within the discount period, or should he keep the $4,000 in;the savingsaccount and pay at the end of the credit period? Write;a memo to Ron with your recommendation and support;your recommendation with a calculation showing which action would be;best. (Remember that bank interest rates are always stated in yearly;terms.);MEMO;TO;FROM;SUBJECT;DATE

 

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