EXAM #2SAMPLE PROBLEMS
(Lessons 5 - 10
)
Use the following information to respond to problems 1 - 6 assuming Zee Corp. maintainstheir inventory records on a
perpetual
basis:1/12 Zee Corp., a wholesaler of unicycles, buys 20 unicycles on account from asupplier at $100/unit with terms of 2/10,n/30.1/13 Zee returns one of the unicycles to the supplier because of a defect andreceives credit on their account.1/22Zee pays the supplier in full (net of the discount) for the 1/12 purchase.1/24Zee sells 10 of the unicycles purchased on 1/12 to a customer for $200/uniton account with terms of 1/10,n/30.1/25The customer returns one of the unicycles for credit on account (assume theunicycle is in good condition and can be resold).2/2The customer pays in full the net amount due from the 1/24 sale, net of thediscount.1.Zee’s journal entry to record the 1/12 transaction would bea.Purchases2,000Accounts Payable2,000b.Inventory2,000Accounts Payable2,000c.Purchases 1,960Accounts Payable1,960d.Accounts Payable 2,000Inventory2,000e.None of the above2.Zee’s journal entry to record the 1/13 transaction would include a credit toa.Purchases for $98.b.Purchases for $100.c.Accounts Payable for $98.d.Inventory for $100.e.None of the above.3.Zee’s journal entry to record the 1/22 transaction would include a credit toa.Cash for $1,900.b.Accounts Payable for $1900.c.Inventory for $38.d.Purchases for $38.e.None of the above.4.Zee’s journal entry to record the 1/24 transaction will include debits toa.Accounts Receivable for $2,000 and Cost of Goods Sold for $1,000.b.Sales Revenues for $2,000 and Inventory for $1,000.c.Accounts Receivable for $1,980 and Cost of Goods Sold for $1,000.d.Accounts Receivable for $2,000 and Cost of Goods Sold for $980.e.None of the above.
5.Zee’s journal entry to record the 1/25 transaction will include debits toa.Sales Returns and Allowances and Inventory. b.Accounts Receivable and Cost of Goods Sold.c.Accounts Receivable and Inventory.d.Sales Revenues and Cost of Goods Sold.e.None of the above.6.Zee’s journal entry to record the 2/2 transaction will include a debit toa.Cash for $1,800. b.Accounts Receivable for $1,800.c.Sales Discounts for $18.d.Sales Revenues for $18.e.None of the above.7.Which of the following accounts is a contra asset account?a.Sales Discounts b.Sales Returns and Allowancesc.Unearned Rental Revenued.Both a and b.e.None of the above.8.Before closing entries at the end of any accounting period, Sales Discounts will typicallyhavea.a debit balance. b.a credit balance.c.no balance.d.Sales discount is not an account that is typically used.9.Given the following information:Sales Revenues$100,000Sales Returns and Allowances 7,000Sales Discounts 3,000Selling Expenses 20,000Administrative Expenses 15,000and assuming Cost of Goods Sold as a percentage of Net Sales Revenues equals 40%, thenthe Gross Margin would amount to:a.$19,000. b.$34,000.c.$40,000.d.$54,000.e.$60,000.
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