Part I choose the best answer from the given alternatives 1.

At the end the fiscal year ,before the A/R are adjusted ,A/R has a balance of $200,000 and allowance for doubt full account has accredit balance of $2,500.if the estimate of uncollectible accounts determined by aging of the receivables is $8,500,the current provision to be made for uncollectible accounts expense would be: a. $2,500 d. $250,000 b. $6,000 e. none of the above c. $8,500 2. What is the maturity value of 90days, 12% note for $120,000 a. $88,000 d. $111,000 b. $100,000 e. none of the above c. $103,000 3. The following units of a particular commodity were available for sale during the CURRENT PERIOD. Beginning inventory _____________________40 units@$20 First purchase__________________________50 units@$21 Second purchase________________________60 units@$23 Third purchase__________________________40 units@$24 What is the unit cost of the 40 units on hand and the 39 units sold respectively, at the end of the period as determined under periodic system FIFO costing method? A. $24 ,$23 B. $23 ,$20 C. $21 ,$20 D. $23 ,$21 E. none of the above

4.________ is a method of accounting for uncollectible receivables whereby advance provision for the uncollectable is made. A. aging the receivable B. direct write-off method C. allowance method 5. Which of the following items should not be, generally, included in the ending inventory of a merchandising business? D. discounting notes receivable E. none of the above

A. merchandises purchased but in transit, FOB destination terms B. owned and unsold merchandises in the store C. merchandises out on consignment basis D. merchandises purchased but in transit, FOB shipping point terms E. merchandises sold but in transit, FOB destination terms 6. Notes receivable is normally preferable to accounts receivable by: A. being negotiable instrument B. possibility of having interest C. being legally and readily transferable among parties 7. The amount of money that is due at the due date of a note is referred to as: A. proceed B. principal C. Maturity value 8. Which inventory system is advisable for high unit cost and low volume of items? A. perpetual B. periodic C. retail 9. Which of the following accounts wouldnt be affected by misstatement of inventory? A. current asset B. owners equity C. fixed asset Consider the following data to answer questions no.10 and 11. Assume that the price of an item having original selling price of Br 15 and cost of Br 10 is raised to Br 18 due to increase in demand. Subsequently, the demand of an item is declined due to high price and the management decides to reduce the price to Br 16. D. net income E. None of above D. physical E. none of the above D. interest E. face value D. all of the above E. none of the above

10. What would be the original selling price? A. Br 10 B. Br 15 C. Br 18 D. Br 16 E. none of the above

11. The value of markup and net markup, respectively. A. Br 5 and Br1 B. Br8 and Br 2 C. Br 3 and Br 0 D. Br 6 and Br 4 E. none of the above

Based on the following data, answer question 12 and 13. Beginning inventory --------------------------------200,000 Net purchase -----------------------------------------300,000 Net sales -----------------------------------------------400,000 Estimated cost percentage based on net sales --75% 12. What would be estimated cost of goods sold? A. Br 300,000 B. Br500, 000 C. Br 200,000 D. Br 400,000 E. none of the above

13. What would be the estimated cost of ending inventory lost if all inventories were destroyed because of flood? A. Br 300,000 B. Br 200,000 C. Br500, 000 D. Br 400,000 E. none of the above

14. What amount of interest revenue/interest expense be reported for the year 2011 if Br 36, 000, 10%, 60 days note is issued on dec.21, 2011(assume year ended on dec.31) A. Br 100 B. Br200 C. Br 600 D. Br 500 E. none of the above

15. A costing method which matches current revenue with current cost (CGS). A. FIFO B. LIFO C. average D. all of the above E. none of the above

Workout
(SHOW STEPS CLEARLY) 1. The following data is available in Xyz Company for the month of July. Merchandise inventory, July 1991-------------------$125 000 Merchandise inventory, July 1990----------------115,000 Purchases-----------------------------------------------550,000 Purchase returns and allowances--------------------4,250 Purchase discounts------------------------------------3,200 Transportation in----------------------------------------3,950 Instructions :( 3 pts each) A. compute the cost of goods sold section of the income statement for the year ended July 31, 1991. B. prepare adjusting entries for merchandise inventory 2. The following selected transactions were completed during the month of July in Xerox company.(2 pts each) July1. Purchased merchandise on account $15, 000, terms fob shipping point 1/10, n/30. 5. Sold merchandise on account $10,000, terms fob destination 1/15, n/eom. 8. Returned merchandise purchase on July 1, $3,000. 11. Paid liabilities for purchases made on account of July 1 purchase 20. Received cash for credit sales made on july5. 3. ZENGENA CO. received a promissory note of 90 days, birr 20,000 ,10% interest on april15 from a customer who desired to delay payment on his credit account. The co. was in need of cash and discounted the note on June 14 at 12% by DASHEN bank (1 year=360 days) Required: I determine the maturity value of the note (1.5 pts) II determine the due date (1.5 pts) III compute the proceed (1 pt) IV record the transaction on April 15(1pt)
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4. based on the following data determine the estimated cost of inventory at the end of dec.31 using retail average cost method.(5pts)

Cost Inventory jan1. ________________________ Net purchase_______________________ Br 270,000 330,000

retail 300,500 500,000 3,000 2,000 2,000 1,500 600,000

Additional mark up _________________________________ Mark up cancellation _________________________________ Mark down _________________________________________ Mark down cancellation _______________________________ Net sales _______________________________________ 5. Consider the following Data Inventory item Category a tape calculator Category b TV refrigerator Items on hand 50 60 40 20 Cost per unit 700 100 4000 10,000

Market price per unit 500 120 3,800 12,000

Instruction: determine cost of inventory using LCM METHOD based on: a. Each item (1.5 pts) b. Major Category/group ( 1.5 pts) c. Inventory as a whole (1 pt )