FOR WIZARD KIM

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University of Maryland University College

ACCT310 Intermediate Accounting I

PART 1

Use the following to answer questions 1-3, pertaining to periodic inventory system:

A company just starting business made the following four inventory purchases in June:

June 1 150 units $ 390

June 10 200 units 585

June 15 200 units 630

June 28 150 units 495

$2,100

A physical count of merchandise inventory on June 30 reveals that there are 300 units on hand.

1. Using the LIFO inventory method, the value of the ending inventory on June 30 is

A) $830.

B) $653.

C) $1,447.

D) $1,564.

2. Using the FIFO inventory method, the amount allocated to cost of goods sold for June is

A) $653.

B) $1,272.

C) $1,447.

D) $968.

3. Using the average-cost method, the amount allocated to the ending inventory on June 30

is

A) $2,100.

B) $1,500.

C) $575.

D) $900.

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Use the following to answer questions 4-6:

July 1 Beginning inventory 10 units at 90$

5 Purchases 60 units @ 84$

14 Sale 45 units

21 Purchases 30 units @ 87$

30 Sale 30 units

4. Assuming that a perpetual inventory system is used, what is the ending inventory on a

FIFO basis?

A) $2,748

B) $2,754

C) $2,175

D) $5,796

5. Assuming that a perpetual inventory system is used, what is the ending inventory on a

LIFO basis?

A) $2,748

B) $2,754

C) $2,160

D) $5,796

6. Assuming that a perpetual inventory system is used, what is the ending inventory

(rounded) under the average-cost method?

A) $2,750

B) $2,151

C) $2,406

D) $2,772

Use the following to answer questions 7-8:

Blue Company had the following transactions during 2008:

1. Issued $45,000 of par value common stock for cash.

2. Repaid a 6 year note payable in the amount of $13,000.

3. Acquired land by issuing common stock of par value $60,000.

4. Declared and paid a cash dividend of $2,000.

5. Sold a long-term investment (cost $3,000) for cash of $7,000.

6. Acquired a long-term investment in stock for cash of $5,000.

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7. What is the net cash provided by financing activities?

A) $13,000

B) $25,000

C) $14,000

D) $30,000

8. What is the net cash provided by investing activities?

A) $6,000

B) $16,000

C) ($3,000)

D) $2,000

9. Largor Company reported a net income of $3,000 for the year ended December 31,

2008. During the year, accounts receivable increased $7,000, merchandise inventory

decreased $5,000, accounts payable decreased by $10,000, and depreciation expense of

$5,000 was recorded. During 2007, operating activities

A) used net cash of $4,000.

B) used net cash of $14,000.

C) provided net cash of $14,000.

D) provided net cash of $9,000.

10. Using the percentage of receivables method for recording bad debts expense, estimated

uncollectible accounts are $12,000. If the balance of the Allowance for Doubtful

Accounts is $2,000 credit before adjustment, what is the amount of bad debts expense

for that period?

A) $10,000

B) $8,000

C) $12,000

D) $2,000

11. A company has net credit sales of $900,000 for the year and it estimates that

uncollectible accounts will be 2.5% of sales. If Allowance for Doubtful Accounts has a

credit balance of $1,000 prior to adjustment, its balance after adjustment will be a credit

of

A) $18,000.

B) $19,000.

C) $23,500.

D) $17,000.

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12. JV issued 8% stated rate bonds with a face amount of $200 million. The bonds mature on

December 31, 2033 (20 years). The market rate of interest for similar bond issues was 10%

(5% semiannual rate). Interest is paid semiannually (3%) on June 30 and December 31,

beginning on June 30, 2014. What is the issue price of the bonds? Write only the final

answer on the final answer. Do not show work.

Data related to the inventories of XYZ Medical Supply are presented below:

Surgical Surgical

Equipment Supplies

Selling price 260$ 120$

Cost 170 90

Replacement cost 240 80

Disposal cost 30 5

Normal gross profit 78 36

13. In applying the LCM rule, the inventory of surgical equipment would be valued at:

A. $230.

B. $240.

C. $170.

D. $152.

14. In applying the LCM rule, the inventory of surgical supplies would be valued at:

A. $115.

B. $90.

C. $80.

D. $69 .

E. $79