Question 13Excess inventory results in all of the following excepta.increased storage expenseb.lost salesc.tied-up funds that could be used to improve operationsd.increased risk of loss due to damage2 points Question 14Determine the total value of the merchandise using net realizable value.ItemQuantitySelling PriceCommissionDoll10$7$2Horse5 9 3a.$25b.$115c.$80d.$352 points Question 15When using a perpetual inventory system, the journal entry to record the cost of merchandise sold is:a.debit Cost of Merchandise Sold; credit Salesb.debit Cost of Merchandise Sold; credit Merchandise Inventoryc.debit Merchandise Inventory; credit Cost of Merchandise Soldd.No journal entry is made to record the cost of merchandise sold.2 points Question 16During the taking of its physical inventory on December 31, 2014, Barry’s Bike Shop incorrectly counted its inventory as $350,000 instead of the correct amount of $280,000. The effect on the balance sheet and income statement would bea.assets overstated by $70,000; retained earnings understated by $70,000; andnet income statement understated by $70,000b.assets and retained earnings overstated by $70,000; andnet income understated by $70,000c.assets overstated by $70,000; retained earnings understated by $70,000; andno effect on the income statementd.assets, retained earnings, and net income all overstated by $70,0002 points Question 17Emma Co. sold to Isabella Co. merchandise on account FOB shipping point, 2/10, net 30, for $15,000. Emma Co. prepaid the $750 shipping charge. Using the perpetual inventory method, which of the following entries will Isabella Co. make to record payment of the merchandise if Isabella Co. pays within the discount period?a.Accounts Payable—Emma Co., debit $15,000; Cash, credit $15,000b.Accounts Payable—Emma Co., debit $15,450; Cash, credit $15,450c.Accounts Payable—Emma Co., debit $15,750; Merchandise Inventory, debit $300; Cash, credit $16,050d.Accounts Payable—Emma Co., debit $15,000; Freight-In, debit $750; Cash, credit $15,7502 points Question 18Pierce Company sold to Stanton Company merchandise on account FOB shipping point, 2/10, net 30, for $20,000. Pierce prepaid the $500 shipping charge. Which of the following entries does Pierce make to record this sale?a.Accounts Receivable—Stanton, debit $19,600; Sales, credit $19,600, andAccounts Receivable—Stanton, debit $500; Cash, credit $500b.Accounts Receivable—Stanton, debit $20,000; Sales, credit $20,000, andDelivery Expense, debit $500; Cash, credit $500c.Accounts Receivable—Stanton, debit $20,100; Sales, credit $20,100d.Accounts Receivable—Stanton, debit $20,000; Sales, credit $20,0002 points Question 19A company using the periodic inventory system has merchandise inventory costing $210 on hand at the beginning of the period. During the period, merchandise costing $635 is purchased. At year-end, merchandise inventory costing $160 is on hand. The cost of merchandise sold for the year isa.$795b.$685c.$265d.$6352 points Question 20A company using the periodic inventory system has the following account balances: Merchandise Inventory at the beginning of the year, $3,600; Freight-In, $650; Purchases, $10,700; Purchases Returns and Allowances, $1,950; Purchases Discounts, $330.


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The cost of merchandise purchased is equal toa.$8,420b.$9,070c.$12,670d.$17,2302 points Question 21The inventory system employing accounting records that continuously disclose the amount of inventory is calleda.periodicb.physicalc.retaild.perpetualQuestion 11The following lots of a particular commodity were available for sale during the year:Beginning inventory10 units at $30First purchase25 units at $32Second purchase30 units at $34Third purchase10 units at $35The firm uses the periodic system and there are 20 units of the commodity on hand at the end of the year. What is the amount of inventory at the end of the year rounded to nearest dollar according to the average cost method?a.$620b.$690c.$659d.$655