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Cornerstones Of Financial Accounting
2nd Edition Rich Test Bank

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Chapter 6--Cost of Goods Sold and Inventory
Student: ___________________________________________________________________________
1. For a merchandising company, the cost of goods sold is subtracted from net sales to arrive at gross profit.
True False
2. Cost of goods sold represents an outflow of a resource, inventory, which is caused by the sale of products.
True False
3. If cost of goods sold does not equal the cost of merchandise purchased during the period, an adjustment must
be made to correct the error.
True False
4. Cost of goods sold is the difference between costs of goods available for sale and ending inventory.
True False
5. With the perpetual inventory system, the inventory account is updated after each sale or purchase.
True False
6. Under the periodic inventory system, a physical inventory must be taken to determine cost of goods sold.
True False
7. Under a perpetual inventory system, each time goods are purchased, the inventory account is transferred to
sales revenue.
True False
8. A company using a periodic inventory system must total the selling prices of the units on hand at the end of
the period in order to value the ending inventory.
True False
9. Sales discounts decrease the cost of inventory acquired.
True False
10. The buyer must include goods purchased FOB shipping point in its inventory account if the goods are still in
transit.
True False
11. When merchandise is sold FOB destination, the seller is responsible for the shipping costs.
True False
12. The weighted average cost is calculated by adding the units' costs from each purchase and then dividing by
the number of purchases.
True False
13. Under the FIFO method of inventory costing, the units in the ending inventory represent the oldest
purchase(s).
True False
14. The difference between the FIFO, LIFO, and average cost methods is that each of these methods of
inventory costing makes a specific assumption about the flow of costs.
True False
15. Under the LIFO method of inventory costing, the units in the ending inventory represent the most recent
purchase(s).
True False
16. A LIFO liquidation occurs when a company sells more units than it buys during the period.
True False
17. A LIFO reserve represents the amount by which cost of goods sold on a FIFO basis exceeds the cost of
goods sold on a LIFO basis for the current year.
True False
18. During periods of stable purchase prices, FIFO produces the highest ending inventory relative to the other
inventory costing methods.
True False
19. During periods of declining purchase prices, LIFO produces the lowest amount of ending inventory relative
to the other inventory costing methods.
True False
20. The lower of cost or market (LCM) rule violates the historical cost principle.
True False
21. A loss in inventory value caused by application of the lower of cost or market (LCM) rule is recorded in a
"Loss from Impairment" account.
True False
22. The inventory turnover ratio is defined as cost of goods sold divided by average inventory.
True False
23. The inventory turnover ratio is a measure of how many times during a period a company sells off its
inventory.
True False
24. If ending inventory is understated, then cost of goods sold is understated.

True False
25. If ending inventory is overstated, then net income is overstated as well.

True False
26. Under a periodic inventory system, the Purchases account accumulates the cost of the inventory acquired
during the period.
True False
27. A Purchases account is not needed under a periodic inventory system.
True False
28. When the shipping terms are FOB destination, the buyer must record transportation costs as an additional
cost of acquiring the inventory under the perpetual inventory system.
True False
29. Under the periodic method, the information on sales can be combined within any period because all
purchases are assumed to occur before any sales transactions.
True False
30. The weighted average cost per unit must be continually updated under the perpetual inventory system.
True False
31. The inventory of a(n) ____________________ consists of three categories: raw materials, work-in-process,
and finished goods.
________________________________________
32. Cost of goods sold is equal to beginning inventory plus the net cost of purchases minus _____.
________________________________________
33. Under the _______________ inventory system, the inventory account is updated after each purchase or
sale.
________________________________________
34. The amount recognized on the balance sheet as the cost of inventory will ultimately be recognized as a(n)
____________________.
________________________________________
35. Shipping terms of ____________________ mean that the buyer pays shipping costs.
________________________________________
36. Shipping terms of FOB Destination means that the shipping costs are paid by the ______.
________________________________________
37. The _______________ method most closely approximates replacement cost of inventory on the balance
sheet.
________________________________________
38. During periods of rising prices, the ____________________ method results in the cost of goods sold
expense on the income statement being a close approximation of the replacement cost of the goods sold.
________________________________________
39. When a company using LIFO experiences a partial or complete liquidation of its older, lower-priced
inventory, its gross margin will be ____________________ for the period.
________________________________________
40. The excess of an inventory's value stated on a FIFO basis over its value stated on a LIFO basis is called
a(n) ____________________.
________________________________________
41. A departure from the cost basis of accounting may be necessary when the ____________________ of the
inventory is less than its cost to the company.
________________________________________
42. Accountants define the market value of inventory as its ____________________.

________________________________________
43. The ratio of a company's cost of goods sold to its average inventory is called its __________.
________________________________________
44. A company can calculate its average days to sell inventory by dividing 365 days per year by its _____.
________________________________________
45. The understatement of ending inventories in one period leads to a(n) ____________________ of cost of
goods sold in the same period.
________________________________________
46. An overstatement error in the inventory account in the current period will result in an understatement of
____________________ in the subsequent period.
________________________________________
47. Under a periodic inventory system, the ____________________ account accumulates the cost of inventory
acquired during the period.
________________________________________
48. Under a periodic inventory system, shipping costs are not charged to the inventory asset account. Instead,
such costs are charged to the ____________________ account.
________________________________________
49. Under the periodic inventory system, all purchases are assumed to occur before any ______.
________________________________________
50. Under the periodic inventory system, Net purchases = Purchases + ______________ - Purchase Discounts -
Purchase Returns and Allowances.
________________________________________
51. Match the inventory-related accounts to costs that may be included in inventories for retailers and
manufacturers.
1. Costs of completed items that have been sold to

customers. raw materials ____
2. Costs to purchase goods ready to sell. finished goods ____
merchandise
3. Cost of completed, unsold items. inventory ____
4. Cost of ingredients used to make a product. work-in-process ____
5. Cost of material, labor, and other
production-related costs incurred to date in
unfinished goods. cost of goods sold ____
52. Match the terms with the descriptions related to merchandise sales and purchases.
Perpetual inventory
1. Shipping costs paid to acquire merchandise. system ____
2. Relies on a count of inventory on the last day
of the year to determine the amount on hand. Transportation-in ____
3. Requires updating of the inventory account at
the time of each purchase and each sale. FOB destination ____
Periodic inventory
4. The buyer must pay the shipping costs. system ____
5. The seller is responsible for the cost of
delivering the merchandise to the buyer. FOB shipping point ____
53. Match the terms with the descriptions provided.
1. Term referring to transportation costs paid by

the seller. Gross margin ____
2. Generally speaking, the lower this measure the Average days to sell
better. inventory ____
3. Measures how quickly merchandise is
purchased and sold. Freight-in ____
4. Transportation costs paid by the buyer. Gross profit ratio ____
5. The difference between a company's net sales
and its cost of goods sold. Freight-out ____
6. For a given level of sales, the higher the cost of Inventory turnover
goods sold, the lower this measure. ratio ____
1. The time span during which purchase discounts

are available. Consignment ____
2. Represents a departure from reporting assets at
their historical cost. Purchase returns ____
3. Reduce the amount that is owed to the seller for
payment within the discount period. Inventory ____
4. Merchandise held for sale in the normal course of
business. Purchase discounts ____
5. Under the perpetual inventory system, a reduction
in the inventory account balance not caused by a
sale or return. LIFO Reserve ____
6. The amount that the inventory would increase or
decrease if the company had used FIFO instead of
LIFO. Discount period ____
7. Arrangement whereby goods owned by one party Lower of cost or
are held and offered for sale by another party. market rule ____
8. In the periodic inventory system, the account used
to record the cost of merchandise acquired for
resale. Purchases ____
9. A reduction in the amount of goods available for Purchase
sale caused by defective merchandise. allowance ____
1. Companies that maintain three separate inventory Service

accounts. companies ____
2. Companies that sell to other retailers. Manufacturers ____
3. General term for companies who sell goods to other
companies as well as to the final consumer. Wholesalers ____
4. Companies such as Macy's and Target. Retailers ____
5. Companies such as advertising agencies and auto
repair shops. Merchandisers ____
56. Which of the following types of inventory accounts would be used by a wholesaler or retailer?
A. Merchandise inventory
B. Raw materials inventory
C. Work in process inventory
D. Finished goods inventory
57. The inventory account a manufacturer uses to record the cost of products completed and available for sale is
called
A. Raw materials inventory
B. Work in process inventory
C. Finished goods inventory
D. Merchandise inventory
58. Items should be included as part of the company's inventory if they are
A. Purchased from a creditor, although not paid for by year end.
B. Held in anticipation of an increase in market value.
C. Determined to be part of cost of goods sold.
D. Sold during the period.
59. Determine the amount of inventory on the balance sheet of a manufacturing company from the following
account balances:
Finished goods $24,000 Merchandise inventory $50,000
Raw materials 30,000 Work in process 6,000
A. $24,000
B. $60,000
C. $74,000
D. $104,000
60. A manufacturing company reported total inventory of $75,000. Assuming the following account balances,
what is this company’s work in process inventory?
Finished goods $15,000 Merchandise inventory $10,000
Raw materials $40,000
A. $10,000
B. $20,000
C. $60,000
D. $65,000
61. Which of the following accounts would most likely appear on the income statement of a merchandise
company, but not on the income statement of a service company?
A. Cost of Goods Sold
B. Selling Expenses
C. Administrative Expenses
D. Income Tax Expense
62. Which of the following best describes "cost of goods available for sale"?
A. Cost of goods available for sale is an expense account.
B. Cost of goods available for sale is added to beginning inventory to determine cost of purchases during the
period.
C. Cost of goods available for sale is subtracted from net sales to arrive at the gross margin.
D. Cost of goods available for sale is allocated into cost of ending inventory and cost of goods sold.
63. Aaron Corporation

Aaron Corporation is a merchandising company. Selected account balances are listed below:
Sales $250,000
Purchases 112,500
Beginning Inventory 8,000
Ending Inventory 15,000
Operating Expenses 74,000
Income Tax Expense 5,000
Beginning Retained Earnings 26,500
Dividends 7,500
Refer to the information provided for Aaron Corporation. Calculate gross margin.
A. $120,500
B. $137,500
C. $144,500
D. $212,500

Sales $250,000
Purchases 112,500
Dividends 7,500
Refer to the information provided for Aaron Corporation. Calculate the Cost of Goods Sold.
A. $137,500
B. $129,500
C. $120,500
D. $105,500
Sales $250,000
Purchases 112,500
Dividends 7,500
Refer to the information provided for Aaron Corporation. Calculate net income.
A. $144,500
B. $70,500
C. $65,500
D. $58,000
66. Bihary Company has a beginning balance in its inventory account of $2,250 and the ending balance is
$1,500. Cost of goods sold is $9,750. According to the cost of goods sold model, what was the amount of
inventory purchased during the year?
A. $ 750
B. $ 9,000
C. $10,500
D. $11,250
67. Cost of goods sold is equal to:

A. the total amount of merchandise purchased during the year.
B. the cost of merchandise purchased plus transportation costs less ending inventory.
C. the cost of merchandise purchased plus transportation costs plus beginning inventory minus purchase returns
and allowances and purchased discounts minus ending inventory.
D. the cost of merchandise purchased plus transportation costs plus beginning inventory minus purchase returns
and allowances and purchase discounts.
68. In a periodic inventory system, the cost of purchases is recognized as:

A. an integral part of the calculation of cost of goods sold.
B. the only part of the calculation of cost of goods sold.
C. an increase in the inventory account.
D. an increase in an asset account.
69. The cost of goods sold is equal to:
A. purchases less beginning inventory plus ending inventory.
B. the inventory account as reported on the balance sheet.
C. the cost of goods available for sale less ending inventory.
D. the amount of inventory on hand at the end of the accounting period.
70. Which of the following statements is false?

A. The inventory account is updated after every sale and after every merchandise purchase under the perpetual
inventory system.
B. The inventory account is updated only at the end of the accounting period under the periodic inventory
system.
C. A cost of goods sold account is updated after each sale of merchandise under the periodic inventory system.
D. A purchases account is used only under the periodic inventory system.
71. In order to determine inventory for its balance sheet, a company must count the inventory at the end of its
accounting period according to:
A. the periodic inventory system.
B. the perpetual inventory system.
C. both the periodic and perpetual inventory systems.
D. neither the periodic nor perpetual inventory systems.
72. Which of the following statements is true?

A. Inventory data can be identified and controlled better under the perpetual system.
B. Inventory can only be sold at the end of an accounting period under the periodic system.
C. There is no difference in cost to implement a perpetual as compared to a periodic system.
D. The perpetual system eliminated the need for an annual inventory count.
73. Which of the following statements is false regarding the reason that inventory costs are recorded as
expenses when sold rather than when incurred?
A. It gives the user's of the company's financial statements a clearer picture of profitability.
B. It helps the company achieve a better matching of expenses with related revenues.
C. It gives the company's accounting personnel more time to record inventory transactions.
D. Inventory is an asset at the time it is acquired.
74. Which of the following statements is true regarding just-in-time inventory management?
A. It requires a perpetual inventory system.
B. It requires an average cost inventory costing method.
C. It requires detailed information about profitability and the users of the company's financial statements.
D. It requires detailed information about order-to-delivery times, receiving-to-sales times, and inventory
quantities.
75. The amount recognized on the balance sheet as the cost of inventory will ultimately be recognized as:
A. sales revenue
B. cost of goods sold
C. operating expenses
D. administrative expenses
76. A customer returned damaged goods for credit. Under a perpetual system, which of the seller's accounts
decreases?
A. Purchase returns
B. Accounts receivable
C. Sales returns
D. Sales revenue
77. Ending inventory is equal to the cost of items on hand plus:

A. merchandise in transit sold to customers with terms FOB shipping point.
B. merchandise in transit sold to customers with terms FOB destination.
C. merchandise returned to sellers in transit with terms FOB shipping point.
D. merchandise purchased from buyers in transit with terms FOB destination.
78. Dollar Town
Dollar Town is a merchandising company that uses the periodic inventory system. Selected account balances
are listed below:
Sales $105,000
Purchases 54,000
Purchase Returns and Allowances 1,800
Purchase Discounts 4,200
Transportation-in 2,400
Sales Discounts 4,800
Sales Returns and Allowances 3,000
Refer to the information provided for Dollar Town. Calculate net sales.
A. $97,200
B. $100,200
C. $102,000
D. $105,000
79. Dollar Town

are listed below:
Sales $105,000
Purchases 54,000
Refer to the information provided for Dollar Town. Calculate the net cost of goods purchased.
A. $50,400
B. $54,000
C. $61,800
D. $70,200
80. Dollar Town
are listed below:
Sales $105,000
Purchases 54,000
Refer to the information provided for Dollar Town. Calculate the company’s gross margin.
A. $40,800
B. $43,200
C. $46,800
D. $51,000
81. What effects on a retail store's accounting equation occur when it records merchandise purchased for cash,
assuming the use of a perpetual inventory system?
A. Assets and stockholders' equity increase.
B. Assets and stockholders' equity decrease.
C. Assets and liabilities increase.
D. No net effect.
82. What effects on a retail store's accounting equation occur when merchandise returned by customers is
recorded?
A. Assets and stockholders' equity decrease.
B. Assets and stockholders' equity increase.
C. Assets decrease and liabilities increase.
D. Stockholders' equity decreases and liabilities increase.
83. Coffski, Inc. sold merchandise to a customer on credit. The invoice amount was $1,000; the invoice date
was June 10th; credit terms were 1/10, n/30. Which of the following statements is true?
A. The customer can take a 10% discount if the invoice is paid by June 30th.
B. The customer should pay $1,000 if the invoice is paid on July 9th.
C. The customer must pay a $10 penalty if payment is made after July 9th.
D. The customer must pay $1,010 if payment is made after June 20th.
84. Dietz, Inc. sells merchandise on credit. If a customer pays its balance due within the discount period, what is
the effect of the payment on Dietz's accounting equation?
D. Stockholders' equity decreases and liabilities increase.
85. Echols Company sells merchandise on credit. If a customer pays its balance due after the discount period
has passed, what is the effect of the payment on seller's accounting equation?
D. No net effect.
86. Eli Company

Eli Company sells novelty items and offers terms of 1/10, n/30 to credit customers. One customer, Faulkner,
Inc., purchased 100 Sweet-16 party decor packs with a list price of $20 each on March 5, 2013.
Refer to the information provided for Eli Company. If the customer pays the amount of the invoice for its
purchase on March 14, 2013, how much cash will Eli Company receive?
A. $1,400
B. $1,800
C. $1,980
D. $2,000
87. Eli Company

Eli Company sells novelty items and offers terms of 1/10, n/30 to credit customers. One customer, Faulkner,
Inc., purchased 100 Sweet-16 party decor packs with a list price of $20 each on March 5, 2013.
Refer to the information provided for Eli Company. If the customer pays the invoice on March 31, 2013, how
much sales discount will Eli Company recognize?
A. $ -0-
B. $ 20
C. $200
D. $600
88. Gbane Company
The following information is from Gbane Company's 2013 accounting records:
Purchases $218,400
Inventory, January 1, 2013 31,800
Inventory, December 31, 2013 34,560
Refer to the information provided for Gbane Company. How much will the company report as net purchases
for 2013?
A. $221,520
B. $231,600
C. $241,680
D. $253,320
89. Refer to the information provided for Gbane Company. Using the cost of goods sold model, how much will
the company report as its cost of goods sold in its 2013 income statement?
A. $215,880
B. $218,760
C. $224,280
D. $228,840
90. Gools, Inc. buys designer clothing to sell in its retail stores. Since much of the merchandise comes from
Europe, the company must pay freight charges. Which of the following statements must be true?
A. Transportation-in is added to the inventory account under the periodic system.
B. Transportation-in is subtracted from purchases under the periodic system.
C. Freight charges are only paid by a buyer in a periodic system.
D. Transportation-in is included in the total cost of purchases used to determine cost of goods sold in a periodic
system.
91. Harris Corp. sold merchandise to Ichay Company on December 28, 2012, with shipping terms of FOB
destination. The buyer received the merchandise on January 3, 2013. Which of the following is true?
A. The seller should record the sales revenue on December 28, 2012.
B. The buyer should pay the transportation costs.
C. The buyer should include the merchandise in its inventory at December 31, 2012.
D. The buyer should record a liability for the purchase on January 3, 2013.
92. Transportation-in is:

A. an operating expense.
B. part of purchase returns and allowances.
C. added to transportation-out as part of the calculation of cost of goods sold.
D. part of the net cost of purchases.
93. Irwin Company counted its ending inventory as $178,000 at year-end, January 31, 2013. Upon review of the
records, it was noted that the following items were in transit during the count:
- Goods totaling $2,000 shipped by the supplier FOB destination on January 31 were received February 5th and
were not counted by Irwin Company.
- Goods totaling $5,000 shipped by the supplier FOB shipping point on January 30 were received February 2nd
and were not counted by Irwin Company.
- Goods totaling $6,000 shipped by Irwin Company to a customer FOB shipping point on January 31 were
received by the customer on February 3rd and were counted by Irwin Company.
What is Irwin Company’s correct inventory balance on January 31, 2013?
A. $172,000
B. $174,000
C. $177,000
D. $178,000
94. At the year-end inventory count, if goods in transit are shipped FOB destination, they should be included in
the inventory count of:
A. the seller
B. the buyer
C. the shipping company
D. neither the buyer nor the seller.
95. At the year-end inventory count, if goods in transit are shipped FOB shipping point, they should be included
in the inventory count of:
A. the seller.
B. the buyer.
C. the shipping company.
D. both the seller and the buyer.
96. The journal entries required for purchase and sales transactions using the perpetual system are more
complex than under the periodic system but offer the advantage of:
A. requiring the additional control of a physical inventory count whenever accurate inventory amounts are
needed.
B. delaying the majority of the accounting effort until year-end.
C. requiring the use of the average cost method.
D. providing management with more complete information from which to control inventories.
97. The following journal entry was included in the accounting records of Jentzen Corp.:
Oct. 15 Accounts Payable 4,000
Merchandise Inventory 40
Cash 3,960
Based on this information, it is likely that the company:
A. Purchased inventory for cash.
B. Paid for inventory purchased on credit, and took advantage of a 1% purchase discount.
C. Sold inventory for cash.
D. Collected cash for inventory sold on credit, and recognized a 1% sales discount.
98. The following journal entry was included in the accounting records of Jumani Company:
Feb. 11 Merchandise Inventory 7,000
Cost of Goods Sold 7,000
This entry is needed to record the:
A. cost of merchandise sold.
B. sales price of merchandise sold.
C. cost of merchandise returned by a customer.
D. net effect of a sales transaction.
99. Which of the following statements is true?

A. The flow of inventory costs should match the physical flow of the merchandise.
B. Accounting standards require that merchandise costs be specifically traced to units left in inventory and to
units that have been sold.
C. Accountants have developed methods which make assumptions concerning how costs should be assigned to
inventory and cost of goods sold.
D. Alternative inventory cost flow assumptions have the same effect on the amount of net income reported.
100. Which inventory cost flow method assigns the cost of the most recent items purchased to ending
inventory?
A. Specific identification
B. Weighted average cost
C. FIFO
D. LIFO
101. Which inventory cost flow method assigns the cost of the most recent items purchased to cost of goods
sold?
C. FIFO
D. LIFO
102. Which inventory cost flow method assigns the same cost to all units whether sold or left in ending
inventory?
C. FIFO
D. LIFO
103. For which type of merchandise would a company most likely use the specific identification method of
inventory costing?
A. Gasoline held in storage tanks
B. Cases of bottled water
C. Custom-made boats
D. Barbie dolls
104. Klinc Company

Klinc Company uses a perpetual inventory system and had the following inventory transactions for the month of
June:
June 1 On hand, 50 units at $14.00 each $ 700
4 Purchased 115 units at $15 each 1,725
5 Sold 100 units
24 Sold 50 units
Total cost of goods available for sale $3,625
30 On hand, 90 units
The June 30th inventory included 45 units from the June 4th purchase and 45 units from the June 10th purchase.
Refer to the information provided for Klinc Company. What is the cost of ending inventory at June 30th under
the specific identification method?
A. $1,350
B. $1,359
C. $1,375
D. $1,395
105. Klinc Company
Klinc Company uses a perpetual inventory system and had the following inventory transactions for the month of
June:
June 1 On hand, 50 units at $14.00 each $ 700
5 Sold 100 units
24 Sold 50 units
Total cost of goods available for sale $3,625
The June 30th inventory included 45 units from the June 4th purchase and 45 units from the June 10th purchase.
Refer to the information provided for Klinc Company. What is the cost of goods sold for June under the
specific identification method?
A. $2,230
B. $1,575
C. $1,500
D. $1,450
106. Klump Co.

Klump Co. uses a perpetual inventory system and had the following inventory transactions for the month of
June.
June 1 On hand, 50 units at $18.00 each $ 900.00

4 Purchased 115 units at $18.20 each 2,093.00
5 Sold 100 units
24 Sold 40 units
Total cost of goods available for sale $4,361.75
Refer to the information provided for Klump Co. If the company uses the FIFO inventory costing method, the
amount of ending inventory reported on the balance sheet is:
A. $1,800.00
B. $1,810.00
C. $1,823.75
D. $1,825.00
107. Klump Co.
June.

5 Sold 100 units
24 Sold 40 units
Refer to the information provided for Klump Co. If the company uses the FIFO inventory costing method, cost
of goods sold for the month of June is:
A. $2,520.00
B. $2,538.00
C. $2,540.00
D. $2,550.00
108. Klump Co.

June.

5 Sold 100 units
24 Sold 40 units
Refer to the information provided for Klump Co. If the company uses the LIFO inventory costing method,
ending inventory at June 30th is:
A. $1,823.25
B. $1,811.75
C. $1,810.00
D. $1,806.25
109. Klump Co.
June.

5 Sold 100 units
24 Sold 40 units
Refer to the information provided for Klump Co. If the company uses the LIFO inventory costing method, cost
of goods sold for the month of June is:
A. $2,538.00
B. $2,550.00
C. $2,551.25
D. $2,555.00
110. Klump Co.

June.

5 Sold 100 units
24 Sold 40 units
Refer to the information provided for Klump Co. If the company uses the (moving) Average Cost inventory
costing method, ending inventory at June 30th is:
A. $1,815.00
B. $1,817.40
C. $1,818.00
D. $1,819.86
111. Klump Co.
June.

5 Sold 100 units
24 Sold 40 units
Refer to the information provided for Klump Co. If the company uses the (moving) Average Cost inventory
costing method, cost of goods sold for the month of June is:
A. $2,539.52
B. $2,541.89
C. $2,544.35
D. $2,555.00
112. Lemke Corp.

Lemke Corp. uses a perpetual inventory system with a (moving) weighted average inventory costing method.
The following information is available for the month of April:
Apr. 1 On hand, 30 units at $5.00 each $150
8 Purchased 40 units at $5.35 each 214
15 Sold 50 units
Refer to the information provided for Lemke Corp. How much is the cost of goods sold for the units sold on
April 15th?
A. $245
B. $255
C. $260
D. $270
113. Lemke Corp.
Lemke Corp. uses a perpetual inventory system with a (moving) weighted average inventory costing method.
The following information is available for the month of April:
Apr. 1 On hand, 30 units at $5.00 each $150
15 Sold 50 units
Refer to the information provided for Lemke Corp. How much is ending inventory on April 30th?
A. $265.45
B. $312.00
C. $318.55
D. $324.00
114. Lowery Company

Lowery Company uses a perpetual inventory system. The following information is available for the month of
March:
Mar. 1 On hand, 10 units at $2 each $ 20
4 Sold 8 units for $10 each 80
22 Purchased 50 units at $4 each 200
Refer to the information provided for Lowery Company. If the company uses the FIFO inventory costing
method, how much is cost of goods sold for March?
A. $560
B. $212
C. $208
D. $204
115. Lowery Company

March:
Refer to the information provided for Lowery Company. If the company uses the FIFO inventory costing
method, how much is ending inventory at March 31st?
A. $40
B. $16
C. $12
D. $ 8
116. Lowery Company
March:
Refer to the information provided for Lowery Company. If the company uses the LIFO inventory costing
method, how much is cost of goods sold for the month of March?
A. $560
B. $212
C. $208
D. $204
117. Which of the following statements is false regarding the choice between alternative inventory costing
methods?
A. Each alternative method provides for the same amount of cost of goods available for sale to be allocated
between ending inventory and cost of goods sold.
B. In terms of current costs, FIFO presents a more realistic balance sheet; whereas LIFO presents a more
realistic income statement.
C. Companies sometimes choose FIFO because it is easier and less expensive to implement; whereas LIFO is
often chosen for the tax benefits.
D. Companies sometimes choose FIFO because it presents a more realistic income statement in terms of current
market values.
118. All of the following are acceptable for financial accounting purposes EXCEPT:
B. FIFO
C. LIFO
D. Retail cost
119. Which inventory costing method results in the highest inventory balance during a period of rising purchase
prices?
A. Weighted average cost
B. FIFO
C. LIFO
D. Both FIFO and LIFO result in the same inventory balance.
120. Which inventory costing method might allow a company to manipulate income by making significant
inventory purchases at year end?
A. FIFO
B. LIFO
C. Specific identification
D. Weighted average cost
121. Which inventory costing method results in the lowest income tax expense during a period of decreasing
purchase prices?
A. FIFO
B. LIFO
C. Specific identification
122. During a period of increasing purchase prices, which inventory costing method will yield the lowest cost of
goods sold?
A. Any method in which the company uses a periodic system.
B. FIFO
C. LIFO
123. Madlock Company, which started business at the beginning of 2013, selected the FIFO method for its
inventory costing. In order to maximize profits for 2013 under this method, purchase prices must be:
A. Increasing
B. Decreasing
C. Stable
D. fluctuating up and down at the same amount consistently throughout the year.
124. Noland, Inc. uses the LIFO method of inventory costing and is facing the possibility of a LIFO liquidation
for the current year. Merchandise purchase prices have increased since the LIFO method was adopted. If the
company does not purchase additional merchandise before year-end, which one of the following effects will
occur as a result of a LIFO liquidation?
A. Reported earnings for the current year will be higher.
B. Income taxes for the current year will be lower.
C. Cost of goods sold for the current year will be higher.
D. Gross margin for the current year will be lower.
125. A LIFO inventory liquidation occurs when a company that uses the LIFO inventory costing method:
A. buys more merchandise during the accounting period than it sells.
B. cannot determine the ending inventory because it has been destroyed or stolen.
C. changes its inventory method from FIFO to LIFO.
D. sells more merchandise during the accounting period than it purchased.
126. Oliver & Co. has been in business for fifteen years. During that time, the company has consistently used
the LIFO inventory costing method. Because of inflation, purchase prices for merchandise have increased
consistently over the fifteen years. The company has maintained the same inventory quantities over the fifteen
years. Which of the following statements is true for the company?
A. The company's total net income for the past fifteen years is greater than it would have reported using another
inventory method.
B. The company will have paid more income taxes over the past fifteen years than it would have if it had used
the FIFO method.
C. The company will have to continue to use the LIFO method indefinitely because of federal income tax rules.
D. The ending inventory amount reported on the balance sheet may be significantly lower than its current value.
127. Which one of the following statements regarding changing inventory costing methods is true?
A. A change in inventory methods can be justified if the change is made to better match profits with revenue.
B. Changing inventory costing methods violates consistency.
C. One place that the reader of an annual report would be able to identify that a company changed inventory
costing methods is the statement of stockholders' equity.
D. Tax advantages are valid justification for changing inventory costing methods.
128. When the market value of inventory items has declined below their cost, which method would be the most
appropriate in complying with GAAP?
A. Retail
B. LIFO
C. Lower of cost or market
D. FIFO
129. When inventories are written down due to the application of the lower of cost or market (LCM) rule, which
of the following is usually increased?
A. Cost of goods sold
B. Inventories
C. Operating expenses
D. Accumulated depreciation--inventory
130. Which of the following statements regarding the application of the lower of cost or market method is true?
A. Generally, historical cost is greater than replacement cost.
B. When the lower of cost or market method is used, inventories are valued at their selling price.
C. The lower of cost or market method is most commonly applied on a total inventory basis because it is a more
conservative approach.
D. The lower of cost or market method is an exception to the historical cost principle.
131. The lower of cost or market rule applies to the write-down of inventory values when market value exceeds
cost. Why does this rule not allow for write-ups in inventory value?
A. Write-ups in inventory value are more uncertain than write-downs.
B. The most prudent approach to preparing financial statements involves avoidance of pessimistic projections
regarding the company's future prospects.
C. Writing up inventory to market value would be inconsistent with the conservatism principle.
D. Write-ups in inventory value are inconsistent with the matching principle.
132. Parlato Corp. has an inventory turnover rate of 8 times. If its cost of goods sold is $150,000, then the
company:
A. will report sales of $1,200,000.
B. will report gross margin of $1,200,000.
C. will have average inventory of $18,750.
D. sells its inventory 1,200 times per year.
133. Parlato Corp. has an inventory turnover rate of 8 times. Calculate the company's average days to sell
inventory.
A. 1,200
B. 150
C. 120
D. 45.625
134. Pham Enterprises

The following selected financial information is available for Pham Enterprises for the year ended December 31,
2013:
Net sales $450,000 Inventory, 1/1/10 $48,400
Cost of goods sold $299,500 Inventory, 12/31/10 $49,670
Refer to the information provided for Pham Enterprises. What is the company's gross profit ratio for 2013?
A. 33.44%
B. 50.25%
C. 66.55%
D. 299.00%
2013:
Refer to the information provided for Pham Enterprises. What is the company's inventory turnover ratio for
2013?
A. 6.188
B. 6.030
C. 6.108
D. 16.372

2013:
Refer to the information provided for Pham Enterprises. What is the company's average-days-to-sell inventory
measure?
A. 58.98
B. 60.53
C. 22.29
D. 59.78
137. If the amount assigned to ending inventory is incorrect,

A. the balance sheet is affected, but the income statement is not.
B. the income statement is affected, but the balance sheet is not.
C. the balance sheet is affected, but cost of goods sold is not.
D. both the balance sheet and income statement are affected.
138. Qualls Department Store counted some of its inventory items twice. As a result, its operating expenses will
be:
A. Correct assuming the company calculates its cost of goods sold correctly.
B. Correct since operating expenses are not affected by inventory costs.
C. Overstated.
D. Understated.
139. If a company understates its inventory, what are the effects on cost of goods sold and net income for the
current year?
A. Cost of goods sold will be understated and net income will be overstated.
B. Cost of goods sold will be overstated and net income will be understated.
C. Both cost of goods sold and net income will be understated.
D. Both cost of goods sold and net income will be overstated.
140. Regan Company

Regan Company reported net income of $95,000 for 2013. Early in 2014, the company discovered that its 2013
ending inventory was overstated by $5,000.
Refer to the information provided for Regan Company. Determine the effects of the inventory errors for
2013.
A. Assets and stockholders' equity would have been overstated by $5,000 on the balance sheet; expenses and
net income would have been understated by $5,000 on the income statement.
B. Assets and stockholders' equity would have been overstated by $5,000 on the balance sheet; expenses would
have been overstated by $5,000 on the income statement, thus net income would have been understated by
$5,000.
C. Assets and stockholders' equity would have been understated by $5,000 on the balance sheet; expenses
would have been overstated by $5,000 on the income statement, thus net income would have been understated
by $5,000.
D. Assets and stockholders' equity would have been overstated by $5,000 on the balance sheet; expenses would
have been understated by $5,000 on the income statement, thus net income would have been overstated by
$5,000.
141. Regan Company

Regan Company reported net income of $95,000 for 2013. Early in 2014, the company discovered that its 2013
ending inventory was overstated by $5,000.
Refer to the information provided for Regan Company. Determine the financial statement effects of the
inventory error for 2014.
A. Expenses will be understated and net income will be overstated.
B. Expenses will be overstated and net income will be understated.
C. Both expenses and net income will be overstated.
D. Both expenses and net income will be understated.
142. How are purchase returns and purchase discounts recorded by a company using the periodic inventory
system?
A. As a reduction to the Purchases account
B. In contra-accounts to the Purchases account
C. As operating expenses
D. As miscellaneous expenses
143. Roe Company purchased merchandise on account from Rodriguez Company on December 12, 2013. On
December 13, 2013, Roe Company returned damaged merchandise to Rodriguez Company and was granted an
adjustment on its account. Roe Company uses the periodic inventory system. What effect does the merchandise
return have on Roe Company's accounting equation?
B. Assets and liabilities decrease.
C. Liabilities decrease and stockholders' equity increases.
D. Liabilities and stockholders' equity decrease.
144. Satoor, Inc.

Satoor, Inc., which uses a periodic inventory system, purchased merchandise from Taye Company on July 7,
2013, for $15,000. The credit terms were 1/10, n/30. The goods were shipped FOB shipping point on July 7,
2013. Satoor, Inc. received the merchandise on July 10 and paid the amount due on July 15.
Refer to the information provided for Satoor, Inc. When did title to the merchandise transfer from the seller to
the buyer?
A. July 7
B. July 10
C. July 15
D. Cannot be determined from the information provided.
145. Satoor, Inc.

Refer to the information provided for Satoor, Inc. Who is responsible for payment of the transportation costs
on the merchandise sold?
A. Seller
B. Buyer
C. Split equally between the two companies
D. Cannot be determined from the information provided.
146. Satoor, Inc.

Refer to the information provided for Satoor, Inc. What effect does recording the purchase of merchandise on
July 7, 2013 have on the buyer's accounting equation?
A. Assets and liabilities increase.
B. Liabilities increase and stockholders' equity decreases.
C. Assets and stockholders' equity increase.
D. Liabilities and stockholders' equity decrease.
147. Satoor, Inc.
Refer to the information provided for Satoor, Inc. When the buyer records the payment on July 15th, its journal
entry will include:
A. A decrease to Purchases for $15,000.
B. An increase to Inventory for $14,850.
C. A decrease to Cash for $15,000.
D. A decrease to Accounts Payable for $15,000.
148. Stallworth Corp.

Stallworth Corp. uses a periodic inventory system. The following information is available for the month of
November:
Nov. 1 On hand, 50 units at $15 each $ 750.00
5 Purchased, 115 units at $15.10 each 1,736.50
Refer to the information provided for Stallworth Corp. How many units did the company sell during
November?
A. 240
B. 140
C. 100
D. 50

November:
Refer to the information provided for Stallworth Corp. If the company uses the FIFO inventory costing
method, the amount assigned to the November 30th inventory would be:
A. $1,505.00
B. $1,517.50
C. $2,109.00
D. $2,121.50
November:
Refer to the information provided for Stallworth Corp. If the company uses the LIFO inventory costing
method, the cost of goods sold for November would be:
A. $1,505.00
B. $1,517.50
C. $2,109.00
D. $2,121.50

November:
Refer to the information provided for Stallworth Corp. If the company uses the weighted average cost method,
the cost assigned to each unit in ending inventory would be:
A. $15.00
B. $15.10
C. $15.11
D. $15.20
152. Tedder Co.
Tedder uses a periodic inventory system. At the end of January, 20 units were on hand. The following
additional information is available for the month of January:
Jan. 1 Beginning inventory: 10 units at $2 each $ 20
20 Purchased 90 units for $3 each 270
Cost of goods available for sale $290
Refer to the information provided for Tedder Co. Which of the following entries correctly records the purchase
assuming the units were acquired on credit under terms of 2/10, n/30?
A. Inventory 270.00
Cash 270.00
B. Inventory 270.00
Accounts payable 270.00
C. Purchases 264.60
Purchase discounts 5.40
D. Purchases 270.00
153. Tedder Co.

Refer to the information provided for Tedder Co. If the company uses FIFO inventory costing, how much is
cost of goods sold for January?
A. $230
B. $232
C. $240
D. $250
154. Tedder Co.

Refer to the information provided for Tedder Co. If the company uses the LIFO inventory method, how much
is inventory on the balance sheet at the end of January?
A. $40
B. $50
C. $58
D. $60
155. Tedder Co.
Refer to the information provided for Tedder Co. If the company uses the weighted average method of
inventory costing, how much is cost of goods sold for January?
A. $230
B. $232
C. $240
D. $250
156. Touchton Company reported the following financial results for 2012 and 2013:
2013 2012
Sales $500,000 $600,000
Sales returns & allowances 10,000 D
Net sales 490,000 580,000
Cost of goods sold:
Beginning inventory 30,000 E
Net purchases A 340,000
Cost of goods available for sale 250,000 380,000
Ending inventory 40,000 30,000
Cost of goods sold B F
Gross profit C G
Provide the answer for each missing letter above.
157. Tarpley & Underwood
Selected data from the financial statements for Tarpley & Underwood are presented below:
Net sales $170,000

Cost of goods sold 136,000
Selling, general, & administrative expenses 63,000
Other operating expenses 600
Income tax expense 3,000
Beginning inventory 13,000
Ending inventory 11,000
Ending retained earnings 39,000
Refer to the information presented for Tarpley & Underwood. First, determine the dollar amount of cost of goods purchased. Then, prepare a cost
of goods sold schedule using the cost of goods sold model illustrated in the text.
158. Tarpley & Underwood
Selected data from the financial statements for Tarpley & Underwood are presented below:
Net sales $170,000

Selling, general, & administrative expenses 63,000
Other operating expenses 600
Income tax expense 3,000
Ending retained earnings 39,000
Refer to the information presented for Tarpley & Underwood. What is the gross profit ratio?
159. The cost of goods sold for Uzzi Corp. totaled $750,000. Sales returns and purchase returns were $3,000
and $5,000, respectively. Purchases totaled $800,000. Purchase discounts totaled $7,000, while sales discounts
totaled $9,000. Beginning inventory was $100,000. Determine the amount of ending inventory to be reported on
the company's balance sheet.
160. Vaden Company uses the periodic inventory system. The data presented below is from the company's
accounting records for the year ended December 31, 2013:
Sales $600,000
Sales discounts 10,000
Purchases 350,000
Purchase returns 5,000
Operating expenses 150,000
Beginning retained earnings 71,000
Calculate the company's cost of goods sold for 2013.
161. Presented below is a partially-completed income statement for Waddy Corp. for 2013. Determine the
missing amounts for each letter.
Net sales $ A
Cost of goods sold:
Beginning inventory B
Net purchases 140,000
Cost of goods available for sale 160,000
Ending inventory C
Gross profit 75,000
Selling, general & administrative expenses D
Operating income 10,000
162. Ward Company had beginning inventory of $40,000 on January 1, 2013. During 2013, the company
purchased $660,000 of goods from a supplier. On December 31, 2013, the cost of unsold inventory was
$50,000. Compute Ward Company's cost of goods available for sale and cost of goods sold for 2013.
163. Xu, Inc. reported the following information for 2013 and 2012:
2013 2012
Sales $850,000 $890,000
Sales discounts 15,000 23,000
Purchases 500,000 600,000
Ending inventory 50,000 40,000
Transportation-in 10,000 19,000
Purchase discounts 5,000 5,000
Determine the following amounts for Xu, Inc. for 2013:

A) Net cost of inventory purchases
B) Cost of goods available for sale
C) Cost of goods sold
D) Net sales
E) Gross profit ratio
F) Inventory turnover ratio
G) Average days to sell inventory
164. Yancey Company
The following information is available for Yancey Company, a retail store, for the year 2013. The company
uses a periodic inventory system.
Beginning inventory was $32,000. During the year, Yancey Company purchased goods totaling $634,000 on
account with terms of 2/10, n/30, FOB shipping point. Yancey Company paid $1,000 in total freight charges
directly to the freight company. At the end of the year, inventory on hand totaled $45,000. Net sales reported on
the income statement for the year totaled $1,300,000.
Refer to the information provided for Yancey Company. How much would Yancey Company pay its supplier
if it paid for one-half of the goods acquired within the discount period, and the other half after the expiration of
the discount period?
165. Yancey Company
Refer to the information provided for Yancey Company. How much is cost of goods available for sale for 2013
assuming that Yancey Company take advantage of one-half of the cash discounts?
166. Yancey Company
Refer to the information provided for Yancey Company. How much is cost of goods sold assuming that
Yancey Company takes advantage of one-half of the cash discount?
167. White Appliances
On August 1, 2013, White Appliances purchased 75 refrigerators for $45,000 cash and also paid $1,500
transportation costs related to this purchase. On the same date, White purchased 100 dishwashers for $20,000
on credit; however, the seller paid the $1,200 freight. The credit terms for the dishwashers were 2/10, n/30. On
August 3rd, White determined that 5 of the refrigerators were defective, so they were returned to the seller.
White paid for the dishwashers on August 9th. On August 10th, White purchased 90 microwave ovens for
$9,000 on credit with terms 1/10, n/30. The seller paid the freight. White paid for the microwave ovens on
August 21st.
Refer to the information presented for White Appliances. Prepare all of the company's journal entries for
August assuming the use of a perpetual inventory system.
168. White Appliances
On August 1, 2013, White Appliances purchased 75 refrigerators for $45,000 cash and also paid $1,500
transportation costs related to this purchase. On the same date, White purchased 100 dishwashers for $20,000
on credit; however, the seller paid the $1,200 freight. The credit terms for the dishwashers were 2/10, n/30. On
August 3rd, White determined that 5 of the refrigerators were defective, so they were returned to the seller.
White paid for the dishwashers on August 9th. On August 10th, White purchased 90 microwave ovens for
$9,000 on credit with terms 1/10, n/30. The seller paid the freight. White paid for the microwave ovens on
August 21st.
Refer to the information presented for White Appliances. On August 12th, White sold 10 dishwashers to
customers for $550 each. White paid $200 each for these dishwashers when it purchased them from the supplier
on August 1st. On August 15th, customers returned 2 of these dishwashers for a cash refund.
Record the journal entries for this sale and sales return.
169. The following inventory transactions occurred at Zapata, Inc. which uses a perpetual inventory system:
October 2 Purchased 50 units of inventory from a supplier on credit. The goods cost $30 each and the credit terms were 2/10, n/15.
The shipping costs were $100 under the terms FOB destination.
October 4 Returned 5 units of inventory to the supplier for credit on account.
October 6 Sold 15 units for $50 each to customers for cash.
October 7 Accepted a return of one unit of inventory from the customer for a cash refund.
October 11 Paid the supplier for one-half of the inventory purchased on October 2nd.
October 17 Paid the remaining balance owed to the supplier.
Record the appropriate journal entry for each of these transactions.

170. L.A. Sports Novelties has the following information related to purchases and sales of one of its popular
products, autographed photographs of the local lacrosse star, Christian Chance. Each photograph is unique, so
the inventory is accounted for under the specific identification method.
Dec. 1 Beginning inventory, 4 units at $50 each
3 Purchase, 6 units at $52 each
11 Sale, 8 units for $77 each
20 Purchase, 5 units for $54 each
27 Purchase, 5 units for $55 each
29 Sale, 8 units for $77 each
A review of purchase and sale information reveals that the following units remain in ending inventory at the end
of the month:
Description Units Sold Units Remaining
Beginning inventory 4 0
Dec. 3rd purchase 4 2
Dec. 20th purchase 4 1
Dec. 27th purchase 4 1
Total 16 4
Compute cost of goods sold and cost of ending inventory.
171. The following data is available for one of the products sold by Chancet Company, which uses a perpetual
inventory system:
April 1 On hand, 10 units at $8 each $ 80

20 Sold 75 units for $13 each
24 Purchased 20 units for $8.25 each 165
Chancet Company's ending inventory for April was 25 units.
Complete the table by determining the amounts of April 30th inventory, cost of goods sold, and gross margin under each of the inventory costing
methods listed below.
Ending Inventory Cost of Goods Sold Gross Margin
A) FIFO
B) LIFO
C) Moving Average Cost
172. Paschal Exports
The following data are available for one of the products sold by Paschal Exports, which uses a perpetual
inventory system.
July 1 Beginning inventory, 1,000 units at $2 each $2,000

5 Purchased 2,000 units at $2.75 each 5,500
10 Sold 2,500 units for $16 each
15 Purchased 2,000 units at $4 each 8,000
31 Ending inventory, 1,000 units
Refer to the information provided for Paschal Exports. If the LIFO method of inventory costing is used, determine the following amounts:
A) Cost of goods sold for the units sold on July 10th?
B) Ending inventory on July 31st?
inventory system.

Refer to the information provided for Paschal Exports. If the FIFO method of inventory costing is used, determine the following amounts:
inventory system.

Refer to the information provided for Paschal Exports. If the moving average cost method of inventory costing is used, determine the following
amounts:
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we’ve got the right one, anyhow. This bird don’t look to me like a
feller who would do a girl a meanness.”
“Hmp! You always was soft in the head, Burt,” his companion
grunted.
But he left his prisoner in peace after that. Burt had said one true
word. Clint Reed would not want a half-dead hobo dragged to the
Diamond Bar K. He would prefer one that he could punish himself.
Tug plodded through the fine white dust that lay inches deep on the
road. A cloud of it moved with them, for the horses kicked it up at
every step until they ascended from the valley into the hills. The man
who walked did not have the reserve of strength that had been his
before he had gone to the hospital. There had been a time when he
could go all day and ask for more, but he could not do it now. He
stumbled as he dragged his feet along the trail.
They reached the summit of the pass and looked down on the
Diamond Bar K. Its fenced domain was a patchwork of green and
gold with a background of pineclad ridges. The green patches were
fields of alfalfa, the gold squares were grain ripe for the mower.
Downhill the going was easier. But by the time the horsemen and
their prisoner drew up to the ranch house, Tug was pretty well
exhausted.
While Dusty went in to get Reed, the tramp sat on the floor of the
porch and leaned against a pillar, his eyes closed. He had a
ridiculous feeling that if he let go of himself he would faint.
CHAPTER VI
“NOTHING BUT A GAY-CAT ANYHOW”
With an unusual depression Betty had watched the tramp move

down the dusty road to the railroad track after he had declined her
offer of employment. An energetic young person, she was
accustomed to having her own way. One of her earliest delightful
discoveries had been that she could nearly always get what she
wanted by being eager for it and assuming that, of course, the others
involved would recognize her plan as best, or at least would give up
theirs cheerfully when she urged hers.
But this ragged scamp, out of whose heart youth and hope had been
trampled, was leaving her dashed and rebuffed. She liked to make
conquests of people in bending them to the schemes she made for
the regulation of her small universe, though she would have denied
even to herself that she liked to manage her friends. In the case of
this drear-eyed boy, the hurt was not only to her vanity. He might be
five or six years older than she, but the mothering instinct—the
desire to save him from himself and his fate—fluttered yearningly
toward him.
She did not blame him. There was at least a remnant of self-respect
in his decision. Nobody wants to be done good to. Perhaps she had
seemed smug to him, though she had not meant to be.
He was on her mind all the way back to the ranch, so much so that
she blurted out the whole story to her father as soon as she saw him.
Clint Reed moved to prompt action. He did not see eye to eye with
his daughter. What concerned him was that these bums should
waylay and insult Betty. It was a nice state of affairs when a girl was
not safe alone on the roads. He gathered his men and gave them
orders to find the hoboes and bring them to the ranch.
The girl’s protest was lost on Reed. It hardly reached his mind at all.
Besides, this had become public business. It was not her personal
affair. If hoboes needed to be taught a sense of decency, the men of
the community would attend to that.
Betty went into the house dissatisfied with herself. She had not
meant to make more trouble, but to enlist her father’s sympathy in
the cause of the young fellow who had saved her from the other
tramp. As for the one who had attacked her, she did not care
whether he was punished or not. She had much rather no hue and
cry over the country was made about it. Though she did not say so,
she hoped the vagrants would get away uncaught.
She busied herself with household duties. Under her direction and
with her help, Bridget the cook was putting up half a dozen boxes of
peaches. The two women worked into the middle of the hot
afternoon before they had finished.
“An’ that’s that,” Bridget said with a sigh of relief as she sealed the
last jar. “Fegs, I don’t mind a hotter day this summer. It’s a b’iler.”
She was an old family servant and was in part responsible for the
bringing up of Betty. More than one rancher in the neighborhood had
attempted the adventure of wooing Bridget Maloney, but none of
them had been able to lure her from the Diamond Bar K to become
the mistress of a home of her own.
“You’d better lie down and sleep an hour, dear,” the girl advised.
“An’ phwat would I be doin’ that for wid all these kettles an’ pots to
be cleaned up? Scat! Get ye out o’ my kitchen now, mavourneen, an’
I’ll redd up in a jiff.”
Betty found a magazine and walked out to the shade of a pine grove
where a hammock hung. She settled herself comfortably and began
to read. It was delightfully cool among the pines after the hot kitchen.
She grew drowsy. Her eyes closed.
The sound of far-away voices was in her ears when she wakened.
As her thoughts cleared, so did the voices. She heard Dusty’s,
strident, triumphant.
“It’s up to the old man now.”
The girl turned in the hammock and saw the squat cowpuncher go
jingling into the house. Burt lounged on a horse, his right leg thrown
round the horn of the saddle. Some one else, partly hidden from her
by the ponies, was sitting on the porch.
She got up quickly and walked toward the house. The man on the
porch, she saw presently, had a rope around his waist the other end
of which was fastened to the saddle of Dusty’s mount. An eyeflash
later she recognized him.
“You!” she cried.
The tramp called Tug rose. He did not lift his hat, for he no longer
had one. But his bow and sardonic smile gave an effect of ironic
politeness.
“The bad penny back again,” he said.
“What have they been doing to you?” she asked breathlessly.
He had been a disreputable enough specimen when she had last
seen him. The swollen and discolored face, the gaping shoes, the
ragged coat; all of these he had carried then. But there were
scratches like skin burns down one side of the jaw and on his hands
that had come since. His coat was in shreds. From head to foot dust
covered every available inch.
“Your men have been having a little sport. Why not? The boss had
his first and they had to follow his example. They’re good obedient
boys,” he scoffed bitterly.
“What do you mean? What did they do?” she demanded sharply.
He shrugged his shoulders and she turned imperiously to the man
on horseback. “Burt, you tell me.”
The lank cowboy showed embarrassment. “Why, Dusty he—he
kinda dragged him when the fellow lagged. Jus’ for a ways.”
“On the ground? That what you mean?” The dark eyes flashed
anger.
“Well, you might say so. He sorta stumbled, an’ he’d been right
sassy to Dusty, so—” Burt’s explanation died away. He felt he was
not getting very far with it.
“So you acted like brutes to him—to a man who had just fought for
me when—when—” A sob of chagrin and vexation choked up in her
throat. She stamped her foot in exasperation.
“Don’t get excited about me,” the victim gibed. “I’m nothing but a
gay-cat anyhow. What’s it matter?”
Dusty strutted out of the house, his spurs making music.
The girl turned on him with pantherish swiftness.
“Who told you to torture this man, Dusty? What right have you got to
make yourself law on the Diamond Bar? You’re only a drunken
lunkhead, aren’t you? Or did Father ask you to be judge and jury on
the ranch?”
It was ludicrous to see the complacency vanish from the fatuous
face. The jaw fell and the mouth opened.
“Why, Miss Betty, I figured as how he’d done you a meanness, an’ I
thought—”
She cut his explanation short with stinging ruthlessness. “What for?
You weren’t hired to think, but to obey orders. You’d better get back
into the wheatfield before Father comes. Pronto.”
The cowboy shut his mouth with a view to opening it again in self-
defense, but Betty would have none of his excuses. She shooed him
from the scene indignantly. While she was busy with Dusty, the lank
rider quietly vanished.
The prisoner watched her, the rope still about his waist. His mind
paid tribute to the energy with which she got results.
“Greatly obliged,” he said with sarcasm. “I suppose your father won’t
have me hanged now.”
“Take off that rope,” she said.
“That’s an order, is it?”
“I don’t blame you for hating us all,” she flamed. “I would in your
place. The whole place is bewitched to-day, I believe. We’re all
acting like bullies instead of the quiet, decent people we are. Take
Dusty now. He’s a good little fellow, but he thought you’d attacked
me. He wouldn’t stand that. Men in the ranch country won’t, you
know. They look after us women.”
“That’s a peculiarity of the ranch country, I suppose.”
She ignored the derisive gleam in his eyes. “No ... no! Good men
always do. I wish I could tell you—could show you—my thanks
because you stood up for me. I’ll never forget. It was fine, the way
you fought for me.”
“Nothing to that. I’d been saving a punch or two for him. Don’t forget
that I’m a good-for-nothing bum, on the authority of your own father.
No need of getting sentimental. Don’t make the mistake of putting
me in a class with him and other such truly good men as your friend
Dusty and the lamblike foreman who beat up Cig because he
wouldn’t apologize for being alive.”
Voice and manner both fleered at her, but she was determined to
accept no rebuff.
“Did Dusty hurt you? Can I do anything for you? Tell me. I’d be so
glad to. Let me get you a drink.”
Like a flash, she was off at her own suggestion to the kitchen. His
impulse was to go at once, but he could not escape his past and be
deliberately discourteous to a woman whose only desire was to help
him. He waited, sullenly, for her return. Why could she not let him
alone? All he asked of the Diamond Bar K was for it to let him get
away and forget it as soon as possible.
When the girl came back, it was with a pitcher and a glass. The
outside of the jug was beaded with moisture. From within came the
pleasant tinkle of ice.
Betty filled the tumbler with lemonade.
The vagabond had no desire to accept the hospitality of the ranch,
but he found it impossible to affront her churlishly again.
“Thank you,” he said, and drank.
The drink was refreshing. Two fresh-beaten eggs had been stirred
into it for nutrition.
“Another?” she begged, and poured without waiting for an answer.
The ghost of a smile crept into his eyes. It was the first hint of
wholesome humor she had yet seen in him. He offered her, with a
little bow, a quotation.
“‘I can no other answer make, but thanks,
And thanks, and ever thanks.’”
The dimples broke into her cheeks as her smile flashed out in the
pleasure of having broken the crust of his reserve.
“That’s Shakespeare, isn’t it? I’m dreadfully illiterate, but it sounds
like him.”
“It does a little, doesn’t it?” He raised the glass before drinking.
“Happy days, Miss Reed.”
“That goes double,” she said quickly.
The sardonic mask, that had for a moment been lifted, dropped
again over his face. “Many more like this one,” he fleered.
“You may look back on it and find it a good day yet,” she said
bravely.
He handed back the empty tumbler. “Afraid I’m not an optimist. Now,
if you don’t mind, I’ll be going. The ranch might change its mind
about that hanging bee.”
“But I do mind,” she protested. “I don’t want you to go yet. Please
stay and meet my father. He’s not really hard and cruel as you think.”
Again she saw on his lips the dry, bitter smile.
“Think I’ll take your word for it. I’ve met him once.”
“No, you haven’t met him—not to know him,” she cried softly, giving
rein to swift impulse. “You’ve not met my Daddy—the best man in
Paradise Valley. You can ask any one about him. He’s the squarest
that ever was. The man you met was exasperated and—and not
himself. Dad’s not like that—really.”
“Indeed!” His voice was a compound of incredulity and indifference.
It put her out of court.
But her good impulses were not easily daunted. She had already
learned that this young fellow wore armor of chain-mail to protect his
sensitive pride. In her horoscope it had been written that she must
give herself, and still give and give. The color beat through her dusky
cheeks beneath the ardent eyes. She stabbed straight at his
jaundiced soul.
“If it were my father only that you don’t like—but it isn’t—you don’t
find joy in anything. Your mind’s poisoned. I was reading the other
day how Mr. Roosevelt used to quote from Borrow’s ‘Lavengro’: ‘Life
is sweet, brother—there’s day and night, brother; both sweet things;
sun, moon, and stars, all sweet things—and likewise there’s a wind
on the heath.’ It’s because he felt this in everything he did that they
called him ‘Greatheart.’”
It came to him that the name might not inaptly be applied to her. He
thought of Browning’s “My Last Duchess”:
“... She had
A heart—how shall I say?—too soon made glad,
Too easily impressed: she liked whate’er
She looked on, and her looks went everywhere.”
He hardened his heart to her generous appeal to him. “It’s a very
comfortable point of view to have,” he said with no spring of life in his
voice.
“And a true one,” she added swiftly.
“If you say so, of course.” His skeptical smile made no concessions.
He turned to leave, but stopped to look at a cloud of white dust
moving down the road toward them.
CHAPTER VII
TUG SAYS, “NO, THANK YOU”
The advancing dust cloud rose from a little group of horses and men.
Some of the latter were riding. Others were afoot.
“Lon’s caught them,” said Betty. “I’m sorry.”
“Not so sorry as they’ll be,” returned the ragged youth grimly.
The foreman swung heavily from his horse. Though he was all
muscle and bone, he did not carry his two hundred pounds
gracefully.
“We got the birds all right, Miss Betty, even if they were hittin’ the trail
right lively,” he called to the girl, an ominous grin on his leathery
face. “I guess they’d figured out this wasn’t no healthy climate for
them.” He added, with a swift reversion to business, “Where’s yore
paw?”
“Not back yet. What’ll he do with them, Lon?” the girl asked, her
voice low and troubled.
Distressed in soul, she was looking for comfort. The big foreman
gave her none.
“He’ll do a plenty. You don’t need to worry about that. We aim to
keep this country safe for our womenfolks.”
“Oh, I wish he wouldn’t. I wish he’d let them go,” she said, almost in
a wail.
“He won’t. Clint ain’t that soft.” Forbes stared at the disreputable
vagrant standing beside Betty. “What’s he doing here?”
“Dusty dragged him back. That’s all the sense he has.”
Lon spoke just as though the vagrant were not present. “Lucky for
him he’s got an alibi this time.”
“Is it necessary to insult him after he protected me?” the girl
demanded, eyes flashing. “I’m ashamed of you, Lon.”
He was taken aback. “I reckon it takes more’n that to insult a hobo.”
“Is a man a hobo because he’s looking for work?”
The foreman’s hard gaze took in the man, his white face and soft
hands. “What would he do if he found it?” he asked bluntly.
“You’ve no right to say that,” she flung back. “I think it’s hateful the
way you’re all acting. I tell you he fought for me—after what Father
did to him.”
“Fought for you?” This was news to Lon. His assumption had been
that the young fellow had merely entered a formal protest in order to
clear himself in case retribution followed. “You mean with his fists?”
“Yes—against the thin-faced one. He thrashed him and put me on
my horse and started me home. Then Dusty ropes him and drags
him here on the ground and you come and insult him. He must think
we’re a grateful lot.”
As they looked at the slim, vital girl confronting him with such
passionate and feminine ferocity, the eyes of the foreman softened.
All her life she had been a part of his. He had held her on his knee, a
crowing baby, while her dimpled fingers clung to his rough coat or
explored his unshaven face. He had fished her out of an irrigation
ditch when she was three. He had driven her to school when for the
first time she started on that great adventure. It had been under his
direction that she had learned to ride, to fish, to shoot. He loved her
as though she had been flesh of his flesh and blood of his blood. It
was a delight to him to be bullied by her and to serve her whims.
“I renig,” he said. “Clint never told me the boy done that. I had it
doped out he was just savin’ his own hide. But I’ll take it all back if
it’s like you say. Shake, son.”
The tramp did not refuse to grip the big brown hand thrust at him.
Nor did he accept the proffered alliance. By a fraction of a second he
forestalled the foreman by stooping to knot a broken lace in one of
the gaping shoes.
Cig, who had been edging closer, gave Tug a rancorous look. “I ain’t
forgettin’ this,” he promised. “I’ll get youse good some day for rappin’
on me.”
“He didn’t tell on you. Some of my men brought him here in the
gather like we did you,” Forbes explained.
“Wot’ell youse givin’ me? He rapped. That’s wot he done, the big
stiff. An’ I’ll soitainly get him right for it.”
“That kind of talk ain’t helpin’ you any,” the foreman said. “If you got
any sense, you’ll shut yore trap an’ take what’s comin’.”
“I’ll take it. Don’t youse worry about that. You’d better kill me while
youse are on the job, for I’ll get you, too, sure as I’m a mont’ old.”
Reed drove up in the old car he used for a runabout. He killed the
engine, stepped down, and came up to the group by the porch.
“See you rounded ’em up, Lon.”
“Yep. Found ’em in the cottonwoods acrost the track at Wild Horse.”
The ranchman’s dominant eyes found Tug. “Howcome you here?” he
asked.
The gay-cat looked at him in sullen, resentful silence. The man’s
manner stirred up in the tramp a flare of opposition.
“Dusty brought him here. I want to tell you about that, Dad,” the girl
said.
“Later.” He turned to Tug. “I want a talk with you—got a proposition
to make you. See you later.”
“Not if I see you first,” the ragged nomad replied insolently. “I never
did like bullies.”
The ranchman flushed angrily, but he put a curb on his temper. He
could not afford to indulge it since he was so much in this youth’s
debt. Abruptly he turned away.
“Bring the other two to the barn,” he ordered Forbes. “We’ll have a
settlement there.”
York shuffled forward, in a torment of fear. “See here, mister. I ain’t
got a thing to do with this. Honest to Gawd, I ain’t. Ask Tug. Ask the
young lady. I got respeck for women, I have. You wouldn’t do dirt to
an old ’bo wot never done you no harm, would you, boss?”
His voice was a whine. The big gross man was on the verge of
blubbering. He seemed ready to fall on his knees.
“It’s true, Dad. He didn’t touch me,” Betty said in a low voice to her
father.
“Stood by, didn’t he? Never lifted a hand for you.”
“Yes, but—”
“You go into the house. Leave him to me,” ordered Reed. “Keep this
young man here till I come back.”
Betty knew when words were useless with her father. She turned
away and walked to the porch.
The cowpunchers with their prisoners moved toward the barn. York,
ululating woe, had to be dragged.
Left alone with the tramp called Tug, Betty turned to him a face of
dread. “Let’s go into the house,” she said drearily.
“You’d better go in. I’m taking the road now,” he said in answer.
“But Father wants to see you. If you’ll wait just a little—”
“I have no business with him. I don’t care to see him, now or any
time.” His voice was cold and hard. “Thank you for the lemonade,
Miss Reed. I’ll say good-bye.”
He did not offer his hand, but as he turned away he bowed.
There was nothing more for Betty to say except “Good-bye.”
In a small voice of distress she murmured it.
Her eyes followed him as far as the road. A sound from the barn
drove her into the house, to her room, where she could cover her
ears with the palms of her small brown hands.
She did not want to hear any echo of what was taking place there.
CHAPTER VIII
A RIFT IN THE LUTE
In the cool of the evening Justin Merrick drove down from the
Sweetwater Dam to the Diamond Bar K ranch. It was characteristic
of him that his runabout was up to date and in perfect condition. He
had an expensive taste in the accessories of life, and he either got
the best or did without.
Hands and face were tanned from exposure to the burning sun of the
Rockies, but he was smooth-shaven and immaculate in the
engineer’s suit which fitted his strong, heavy-set figure so snugly.
He drove with precision, as he did everything else in his well-ordered
life. There was in his strength no quality of impatience or turbulence.
He knew what he wanted and how to get it. That was why he had
traveled so far on the road to success and would go a great way
farther.
To-night he anticipated two pleasant hours with Betty Reed. He
would tell her about the work and how it was getting along, his
difficulties with the sand formation at the head gates and how he was
surmounting them. Even before she spoke, he would know from her
eager eyes that she was giving him the admiration due a successful
man from his sweetheart.
Afterward he would pass to more direct and personal love-making,
which she would evade if possible or accept shyly and reluctantly.
She was wearing his ring, but he doubted whether he had really
stormed the inner fortress of her heart. This uncertainty, and the
assurance that went with it of a precious gift not for the first chance
comer, appealed to his fastidious instinct, all the more that he was
sure she would some day come to him with shining eyes and
outstretched hands.
To-night Merrick found Betty distrait and troubled. Her attention to
the recital of his problems was perfunctory. He was conscious of a
slight annoyance. In spite of his force, Justin was a vain man, always
ready to talk of himself and his achievements in a modest way to an
interested and interesting young woman.
It appeared that her father had had a difficulty with some tramps,
which had eventuated in insolence that had brought upon the
vagrants summary physical punishment. From her account of it,
Justin judged that Reed had not handled the matter very wisely.
There was a way to do such things with a minimum of friction.
But he saw no need of worrying about it. The tramps had been given
what they deserved and the affair was closed. It was like a woman to
hold it heavily on her conscience because one of the ne’er-do-wells
chanced to be young and good-looking.
“If you’d seen him,” Betty protested. “A gentleman by the look of him,
or had been once, fine-grained, high-spirited, and yet so down-and-
out.”
“If he’s down-and-out, it’s his own fault. A man’s never that so long
as he holds to self-respect.”
This was incontrovertibly true, but Betty chose to be irritated. Justin
was so obviously successful. He might have had a little sympathy for
the underdog, she thought. Everybody did not have a square, salient
jaw like his. Weakness was not necessarily a crime.
“He looks as though life had mauled him,” she said. “It’s taken
something vital out of him. He doesn’t care what happens any more.”
“If he can only mooch his three meals a day and enough cash to
keep him supplied with bootleg poison,” the engineer added.
They were walking up to the Three Pines, a rocky bluff from which
they could in the daytime see far down the valley. She stopped
abruptly. If she did not stamp her foot, at least the girl’s manner gave
eloquently the effect of this indulgence.
“He’s not like that at all—not at all. Don’t you ever sympathize with
any one that’s in hard luck?” she cried out, her cheeks glowing with a
suffusion of underlying crimson.
“Not when he lies down under it.”
She flashed at him a look resentful of his complacency. It held, too,
for the first time a critical doubt. There was plenty to like about Justin
Merrick, and perhaps there was more to admire. He got things done
because he was so virile, so dominant. To look at the lines and
movements of his sturdy body, at the close-lipped mouth and
resolute eyes, was to know him a leader of men. But now a
treasonable thought had wirelessed itself into her brain. Had he a
mind that never ranged out of well-defined pastures, that was quite
content with the social and economic arrangement of the world? Did
there move in it only a tight little set of orthodox ideas?
“How do you know he lies down under it?” she asked with spirit.
“How do we know what he has to contend with? Or how he struggles
against it?”
If his open smile was not an apology, it refused, anyhow, to be at
variance with her. “Maybe so. As you say, I didn’t see him and you
did. We’ll let it go at that and hope he’s all you think he is.”
Betty, a little ashamed of her vagrant thoughts, tried to find a
common ground upon which they could stand. “Don’t you think that
men are often the victims of circumstance—that they get caught in
currents that kinda sweep them away?”
“‘I am the captain of my soul,’” he quoted sententiously.
“Yes, you are,” she admitted, after one swift glance that took in the
dogged, flinty quality of him. “But most of us aren’t. Take Dad. He’s
strong, and he’s four-square. But he wouldn’t have gone as far as he
did with these tramps if he hadn’t got carried away. Well, don’t you
think maybe this boy is a victim of ‘the bludgeonings of chance’? He
looked like it to me.”
“We make ourselves,” he insisted. “If the things we buck up against
break us, it’s because we’re weak.”
“Yes, but—” Betty’s protest died away. She was not convinced, and
she made another start. “It seems to me that when I read the new
novelists—Wells, Galsworthy, or Bennett, say—one of the things I
get out of them is that we are modified by our environment, not only
changed by it, but sometimes made the prey of it and destroyed by
it.”
“Depends on how solid on our feet we are,” answered the engineer.
“That’s the plea of the agitator, I know. He’s always wanting to do
impossible things by law or by a social upheaval. There’s nothing to
it. A man succeeds if he’s strong. He fails if he’s weak.”
This creed of the individualist was sometimes Betty’s own, but to-
night she was not ready to accept it. “That would be all very well if
we all started equal. But we don’t. What about a man who develops
tuberculosis, say, just when he is getting going? He’s weak, but it’s
no fault of his.”
“It may or may not be. Anyhow, it’s his misfortune. You can’t make
the world over because he’s come a cropper. Take this young tramp
of yours. I’d like to try him out and show you whether there’s
anything to him. I’d put him on the work and let him find his level.
Chances are he’d drift back to the road inside of a week. When a
man’s down-and-out, it isn’t because he doesn’t get a chance, but
because of some weakness in himself.”
Betty knew that in the case of many this was true. For a year or more
she had been an employer of labor herself. One of the things that
had impressed her among the young fellows who worked for her was
that they did find their level. The unskilled, shiftless, and less reliable
were dropped when work became slack. The intelligent and
energetic won promotion for themselves.
But she did not believe that it was by any means a universal truth.
Men were not machines, after all. They were human beings.
However, she dropped the subject.
“He’s gone, so you won’t have a chance to prove your case,” she
said. “Tell me about the work. How is it going?”
The Sweetwater Dam project had been initiated to water what was
known as the Flat Tops, a mesa that stretched from the edge of the
valley to the foothills. It had been and still was being bitterly opposed
by some of the cattlemen of Paradise Valley because its purpose
was to reclaim for farming a large territory over which cattle had
hitherto ranged at will. Their contention held nothing of novelty. It had
been argued all over the West ever since the first nesters came in to
dispute with the cattle barons the possession of the grazing lands. A
hundred districts in a dozen States had heard the claim that this was
a cattle country, unfit for farming and intensive settlement. Many of
them had seen it disproved.
The opposition of powerful ranching interests had not deterred Justin
Merrick. Threats did not disturb him. He set his square jaw and
pushed forward to the accomplishment of his purpose. As he rode or
drove through the valley, he knew that he was watched with hostile
eyes by reckless cowpunchers who knew that his success would put
a period to the occupation they followed. Two of them had tried to
pick a quarrel with him at Wild Horse on one occasion, and had
weakened before his cool and impassive fearlessness.
But he did not deceive himself. At any hour the anger of these men
might flare out against him in explosive action. For the first time in
his life he was carrying a revolver.
Clint Reed was a stockholder and a backer of the irrigation project.
He owned several thousand acres on the Flat Tops, and it was
largely on account of his energy that capital had undertaken the
reclamation of the dry mesa.
The head and front of the opposition was Jake Prowers, who had
brought down from early days an unsavory reputation that rumor
said he more than deserved. Strange stories were whispered about
this mild-mannered little man with the falsetto voice and the skim-
milk eyes. One of them was that he had murdered from ambush the
successful wooer of the girl he wanted, that the whole countryside
accepted the circumstantial evidence as true, and in spite of this he
had married the young widow within a year and buried her inside of
two. Nesters in the hills near his ranch had disappeared and never
been seen again. Word passed as on the breath of the winds that
Prowers had dry-gulched them. Old-timers still lived who had seen
him fight a duel with two desperadoes on the main street of Wild
Horse. He had been carried to the nearest house on a shutter with
three bullets in him, but the two bad men had been buried next day.
The two most important ranchmen in the valley were Clint Reed and
Jake Prowers. They never had been friendly. Usually they were
opposed to each other on any public question that arose. Each was
the leader of his faction. On politics they differed. Clint was a
Republican, Jake a Democrat. There had been times when they had
come close to open hostilities. The rivalry between them had
deepened to hatred on the part of Prowers. When Reed announced
through the local paper the inception of the Sweetwater Dam project,
his enemy had sworn that it should never go through while he was
alive.
Hitherto Prowers had made no move, but everybody in the district
knew that he was biding his time. Competent engineers of the
Government had passed adversely on this irrigation project. They
had decided water could not be brought down from the hills to the
Flat Tops. Jake had seen the surveys and believed them to be
correct. He was willing that Reed and the capitalists he had
interested should waste their money on a fool’s dream. If Justin
Merrick was right—if he could bring water through Elk Creek Cañon
to the Flat Tops—it would be time enough for Prowers to strike.
Knowing the man as he did, Clint Reed had no doubt that, if it
became necessary in order to defeat the project, his enemy would
move ruthlessly and without scruple. It was by his advice that Justin
Merrick kept the dam guarded at night and carried a revolver with
him when he drove over or tramped across the hills.
CHAPTER IX
UNDER FIRE
All day the faint far whir of the reaper could have been heard from
the house of the Diamond Bar K ranch. The last of the fields had
been cut. Much of the grain had been gathered and was ready for
the thresher.
The crop was good. Prices would be fair. Clint Reed rode over the
fields with the sense of satisfaction it always gave him to see
gathered the fruits of the earth. His pleasure in harvesting or in
rounding-up beef steers was not only that of the seller looking to his
profit. Back of this was the spiritual gratification of having been a
factor in supplying the world’s needs. To look at rippling wheat
ripening under the sun, to feed the thresher while the fan scattered a
cloud of chaff and the grain dropped into the sacks waiting for it,
ministered to his mental well-being by justifying his existence. He
had converted hundreds of acres of desert into fertile farm land. All
his life he had been a producer of essentials for mankind. He found
in this, as many farmers do, a source of content. He was paying his
way in the world.
To-day Reed found the need of vindication. He was fonder of Betty
than he was of anything or anybody else in the world, and he knew
that he was at the bar of her judgment. She did not approve of what
he had done. This would not have troubled him greatly if he had
been sure that he approved of it himself. But like many willful men he
sometimes had his bad quarter of an hour afterward.
It was easy enough to make excuses. The Diamond Bar K had been
troubled a good deal by vagrants on the transcontinental route. They
had robbed the smokehouse only a few weeks before. A gang of
them had raided the watermelon patch, cut open dozens of green
melons, and departed with such ripe ones as they could find.
Naturally he had been provoked against the whole breed of them.
But he had been too hasty in dealing with the young scamp he had
thrashed. Clint writhed under an intolerable sense of debt. The boy
had fought him as long as he could stand and take it. He had gone
away still defiant, and had rescued Betty from a dangerous situation.
Dragged back at a rope’s end to the ranch by the luckless Dusty, he
had scornfully departed before Reed had a chance to straighten out
with him this added indignity. The owner of the Diamond Bar K felt
frustrated, as though the vagabond had had the best of him.
He was not even sure that the severe punishment he had meted out
to the other tramps had been wise. The man Cig had endured the
ordeal unbroken in spirit. His last words before he crept away had
been a threat of reprisal. The fellow was dangerous. Clint read it in
his eyes. He had given orders to Betty not to leave the ranch for the
next day or two without an escort. Yet he still felt uneasy, as though
the end of the matter had not come.
It was now thirty hours since he had last seen the hoboes. No doubt
they were hundreds of miles away by this time and with every click of
the car wheels getting farther from the ranch.
He rode back to the stable, unsaddled, and walked to the house.
Betty was in the living-room at the piano. She finished the piece,
swung round on the stool, and smiled at him.
“Everything fine and dandy, Dad?”
His face cleared. It was her way of telling him that she was ready to
forgive and be forgiven.
“Yes.” Then, abruptly, “Reckon I get off wrong foot first sometimes,
honey.”
He was in a big armchair. She went over to him, sat down on his
knees, and kissed him. “’S all right, Dad,” she nodded with an effect
of boyish brusqueness. Betty, too, had a mental postscript and
expressed it. “It’s that boy. Nothing to do about it, of course. He
wouldn’t let me do a thing for him, but—Oh, well, I just can’t get him
off my mind. Kinda silly of me.”

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Cornerstones Of Financial Accounting

2nd Edition Rich Test Bank

24. If ending inventory is understated, then cost of goods sold is understated.

25. If ending inventory is overstated, then net income is overstated as well.

42. Accountants define the market value of inventory as its ____________________.

1. Costs of completed items that have been sold to

53. Match the terms with the descriptions provided.

1. Term referring to transportation costs paid by

1. The time span during which purchase discounts

55. Match the terms with the descriptions provided.

1. Companies that maintain three separate inventory Service

63. Aaron Corporation

64. Aaron Corporation

67. Cost of goods sold is equal to:

68. In a periodic inventory system, the cost of purchases is recognized as:

70. Which of the following statements is false?

72. Which of the following statements is true?

77. Ending inventory is equal to the cost of items on hand plus:

79. Dollar Town

86. Eli Company

87. Eli Company

92. Transportation-in is:

99. Which of the following statements is true?

104. Klinc Company

106. Klump Co.

June 1 On hand, 50 units at $18.00 each $ 900.00

June 1 On hand, 50 units at $18.00 each $ 900.00

108. Klump Co.

June 1 On hand, 50 units at $18.00 each $ 900.00

June 1 On hand, 50 units at $18.00 each $ 900.00

110. Klump Co.

June 1 On hand, 50 units at $18.00 each $ 900.00

June 1 On hand, 50 units at $18.00 each $ 900.00

112. Lemke Corp.

114. Lowery Company

115. Lowery Company

134. Pham Enterprises

136. Pham Enterprises

137. If the amount assigned to ending inventory is incorrect,

140. Regan Company

141. Regan Company

144. Satoor, Inc.

145. Satoor, Inc.

146. Satoor, Inc.

148. Stallworth Corp.

149. Stallworth Corp.

151. Stallworth Corp.

153. Tedder Co.

154. Tedder Co.

Provide the answer for each missing letter above.

157. Tarpley & Underwood

Net sales $170,000

158. Tarpley & Underwood

Net sales $170,000

Calculate the company's cost of goods sold for 2013.

Determine the following amounts for Xu, Inc. for 2013:

165. Yancey Company

167. White Appliances

Record the appropriate journal entry for each of these transactions.

Compute cost of goods sold and cost of ending inventory.

April 1 On hand, 10 units at $8 each $ 80

C) Moving Average Cost

172. Paschal Exports