ACC 231 (ACC231) at Arizona State University, 6 Current Combined Version

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Question 1 of 40 Score: 2.5 (of possible 2.5 points) Michelin Jewelers completed the following transactions. Michelin Jewelers uses the perpetual inventory system. On April 2, Michelin sold $9,000 o... f merchandise to a customer on account with terms of 3/15, n/30. Michelin’s cost of the merchandise sold was $5,500. On April 4, the customer reported damaged goods and Michelin granted a $1,000 sales allowance. On April 10, Michelin received payment from the customer. If this were the only transaction for the period, what amount would be shown on the income statement for Gross profit? A. $2,260 B. $3,500 C. $3,260 D. $3,230 Answer Key: A Question 2 of 40 Score: 0 (of possible 2.5 points) A company that uses the perpetual inventory method purchased inventory for $2,000 from a vendor on account, FOB shipping point, with terms of 2/10, n/30. The company paid the shipper $100 cash for freight in. The company then returned $200 of damaged goods and got an allowance from the vendor. The company paid the vendor 8 days after the sale. Assuming this was the only transaction affecting inventory, and that there was no beginning balance, what would the cost basis of the inventory be? A. $1,764 B. $1,864 C. $2,100 D. $1,900 Answer Key: B Question 3 of 40 Score: 2.5 (of possible 2.5 points) One hundred units of inventory on hand at the end of the year are recorded at their cost of $10 each using LIFO. Current replacement cost is $8.00. What amount would be reported as Inventory on the balance sheet? A. $1,000.00 B. $10.00 C. $800.00 D. $8.00 Answer Key: C [Show More]

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